The research shows that despite policy and institutional reforms and recognition of river basins as the domains of water management, the IWRM process in the Awash Basin suffers in its key implementation phases. Continued efforts to translate the principles and policies into practice have been faced with a number of interdependent challenges and gaps. These relate to the three pillars of IWRM implementation, namely the enabling environment, the institutional arrangements and management instruments. Among the challenges that have contributed to the overall difficulties in IWRM implementation are: the inherent gaps in the water policy in providing a proper mechanism of cross-sectoral coordination and progressive system of multi-stakeholder participation; limitations in the basic legal and regulatory frameworks; and underdefined inter-institutional power relations. These are evident from the existence of unclear institutional mandates, overlapping functions and competencies, and hence limited institutional collaboration. These have further led to the lack of policy coordination across multiple sectors and scales throughout the whole process of water management decision making, planning and actions.The scenario-based quantitative analysis has indicated that the current IWRM based system in the basin is increasingly far from achieving water security goals for various socio-economic sectors and the environment. Despite the intense competition for water between sectors and users, a comprehensive management information system and an upto-date basin development plan are lacking. Therefore, knowledge and awareness on long-term impacts of the existing water use and future development needs are limited. Development scenarios with planned irrigation expansions and estimated population growth point to a widening gap in demand satisfaction to nearly double the current amount in the next couple of decades, even with the incorporation of IWRM demand management measures. The Awash basin exemplifies the situation of an increasing need to expand irrigation to meet food security targets. Nonetheless, water resources in the current state are insufficient to serve the increasing demands of development sectors, even when realistic demand management options are explored. The demand and supply gap will further widen with the introduction of the minimum environmental flows required for ecosystems maintenance. ix 6.4 Discussion .