Abstract: Ethiopia is the "water tower" of East Africa. Ethiopia is blessed with a vast array of waters called "White Oil" or "Blue Oil" and has 12 major rivers and 11 large lakes. The countrys maximum water supply is only 44%, the countrys annual clean water capacity is 123 mm3, of which only 3% remains in the country. It has a surface capacity of 54.4 bm3 and 2.6 bm3 of groundwater. In general, less than 5% of the surface water is used. It is estimated that 3.7 million hectares of land can be used for irrigation development. Water is an invaluable resource and is essential for sustainable developments and livelihoods. Ethiopia has vast potential for water resources, but it has not used water resources properly or wisely. Achieving the goals of household consumption and sustainable development, access to adequate water will contribute significantly to improved economic sectors. The main management issues and challenges are climate change, transboundary water resources conflicts, drawbacks of institutions, and water weeds.