Improving the Quality of General Education in Ethiopia
Business Case
October 2011
TABLE OF CONTENTS
ACRONYMS……………………………………………………………………………………………………………………..………4
INTERVENTION SUMMARY: Improving the quality of general education in Ethiopia…..……….5
WHAT SUPPORT WILL THE UK PROVIDE…………………………………………………………………………..……….5
WHY IS UK SUPPORT REQUIRED……………………………………………………………………………………..………..5
WHAT ARE THE EXPECTED RESULTS…………………………………………………………………………….…….……..6
STRATEGIC CASE…………………………………………………………………………………………………………..………7
A. CONTEXT AND NEED FOR DFID INTERVENTION………..…………….…………………………………………….7
A1. THE ETHIOPIAN CONTEXT…………………………………………………………………………………………………..7
A2. The Ethiopian Education context……………………………………………….…………………………………8
A3. The policy context…………………………………………………………………………………….…………………..….11
A4. Interventions to improve the quality of education……………………..……………………………..………12
A5. Feasibility of intervening………………………………………………………………………..………………………....13
A6. Consequences of not intervening…………………………………………………….……………………………....14
A7. Sustainability………………………………………………………………………………………….……………………..….14
Appraisal case………………………………………………… ……………..………….…..…………………………………….17
A. Determining Critical Success Criteria (CSC)………………………………………………………………………….17
B. Feasible options………………………………………………………..………………………..……………………………….17
Option 1: Additional finance through GEQIP…………………………………..………………………....18
Option 2: Do nothing………………………………………………………………………………..………………….20
Climate change and the environment……………………………………………………………………………………...20
Theory of change………………………………………………………………………………………………………………………21
C. Appraisal of options……………………………………………………………………………………………………………..26
C1. Appraisal against the Critical Success Criteria ……………………………………………26
C2. The World Bank as a partner…………………………………………….…………………………...28
D. COMPARISON OF OPTIONS…………………………………………………………………………………………………28
E. MEASURES TO BE USED OR DEVELOPED TO ASSESS VALUE FOR MONEY (VfM)…………………..31
E1. Economy……………………………………………………………………………………………………………….31
E2. Efficiency……………………………………………………………………………………………………………...31
E3. Effectiveness…………………………………………………………………………………………………………32
E4. Cost Effectiveness…………………………………………………………………………………………………33
COMMERCIAL CASE…………………………………………………………………………………..…………………….36
A. Why is the proposed funding mechanism/Form of agreement the right one for this
intervention, with this development partner?............................................................................36
B. Value for Money through procurement………………..……………………………………………………….……38
FINANCIAL CASE………………………………………………………………………………………………..……39
A. How much it will cost……………………………………………………………………………………………..39
B. How it will be funded: capital/programme/ Admin…………………………………………………39
C. How Funds will be paid out…………………………………………………………………………………….39
D. How Expenditure will be Monitored, Reported and Accounted for………………………..42
D1. Accounting…………………………………………………………………………………………………………..42
D2. Financial Reporting……………………………………………………………………………………………..42
D3. Auditing……………………………………………………………………………………………………………….43
D4. Costs related to financial Management……………………………………..…………………………43
D5. Asset Management……………………………………………………………………………………….…..…43
MANAGEMENT CASE……………………………………………………………………………………………...44
A. Oversight…………………………………………………………………………………………………………………………….44
B. management……………………………………………………………………………………………………………………….46
C. conditionality……………………………………………….………………………………………….…………… ……………46
D. Monitoring and Evaluation………………………………………………………………………………………………….47
E. Risk Assessment……………………………………………………..…………………………………………………………..49
F. Results and Benefits Management………………………………………………..…………………………………….50
Reference……………………………………………………………………………………………………………………………51
Technical Annex 1……………………………………………………………………………………………………………….53
Acronyms
BAR
BoFED
CSC
CTE
DP
EPRDF
ESDP
ETP
FTI-CF
GDI
GDP
GEQIP
GER
GoE
GTP
IDA
IFR
IFRS
JICA
M&E
MAR
MDG
MDTF
MoE
MoFED
MoU
NER
NLA
OFAG
OVC
PBS
PDP
PFM
REB
SCIP
SIDA
TDP
TVET
TWG
UNICEF
USAID
WOFED
Woreda
Bilateral Aid Review
Bureau of Finance and Economic Development
Critical Success Criteria
College of Teachers Education
Development/Donor Partner
Ethiopian People’s Revolutionary Democratic Front
Education Sector Development Plan
Education and Training Policy
Fast Truck Initiative – Catalytic Fund
Gender Related Development Index
Gross Domestic Product
General Education Quality Improvement Program
Gross Enrolment Ratio
Government of Ethiopia
Growth and Transformation Plan
International Development Association
Interim Financial Report
International Financing Reporting Standards
Japan International Cooperation Agency
Monitoring and Evaluation
Multilateral Aid Review
Millennium Development Goal
Multi Donor Trust Fund
Ministry of Education
Ministry of Finance and Economic Development
Memorandum of Understanding
Net Enrolment Ratio
National learning Assessment
Office of Federal Auditor General
Orphan and Vulnerable Children
Protection of Basic Services
Peace and Development Program
Public Financial Management
Regional Education Bureau
Strategic Climate Institutions Program
Swedish International Development Cooperation Agency
Teachers Development Program
Technical, Vocational Education and Training
Technical Working Group
United Nations Children’s Fund
United States Agency for International Development
Woreda Office of Finance and Economic development
An administration division of Ethiopia managed by local Government/
equivalent to District
Summary: Improving the quality of general education in Ethiopia
What support will the UK provide?
DFID will provide £50 million over the next two years (2011/12 – 2012/13)
Why is UK support required?
What need are we trying to address?
Ethiopia remains one of the world’s poorest countries, with more than 30 million people living in
extreme poverty. The Government of Ethiopia (GoE) sees education as one of the main drivers of
development. Getting more children into school and providing them with a high quality education
have been two of their priorities since they came into power. Impressive progress has been made,
particularly with respect to increasing enrolment in primary schools. There were 2.5 million more
children in primary school in 2011 compared to 2006 and the net enrolment is now 85%. However,
despite funding increases from both the GoE and development partners, education sector financing is
inadequate to meet the scale of the challenge. The current five year Education Sector Development
Plan (ESDP 2010- 2015) has a funding gap of approximately £1.2 billion. Around 3 million children in
Ethiopia are still not going to school and many children who are going to school are not receiving a
high quality education. The main issues faced with respect to quality education are:
Poor learning outcomes National Learning Assessments (NLA) have shown learning outcomes to
actually be deteriorating.
Lack of trained teachers: Although there has been a massive expansion of the teaching force (there
are over 80,000 more primary teachers in 2011 compared to 2006) there are still many underqualified teachers (only 15% trained in lower primary) and teaching approaches are weak.
Lack of resources available at school level: Even though Ethiopia spends over 20% of its budget on
education, resources available for non salary costs at school level is exceedingly low at around $2.00
per pupil per yeari which leaves little space for schools to make changes that will improve quality.
Weak planning and management: Some regional and woreda governments have weak capacity to
gather and report on key performance indicators on time in order to manage and monitor effectively
the implementation of education reforms.ii Capacity to supervise is also weak.
Inequalities in provision: Inequalities in access to quality education are widespread, as better
resourced schools are generally located in urban areas and in the larger central regions. There are
cultural barriers to school participation (especially for girls in rural areas) and there are financial
constraints, with households making significant contributions to the costs of children’s education.
What will we do to tackle this problem?
This business case proposes providing an additional £50 million contribution for the last two years of
the first phase of the General Education Quality Improvement Programme (GEQIP). The rationale for
the additional financing to the existing project is that: a) the project was launched only in 2009iii after
a lengthy design stage; b) DFID is already a major contributor to the project (£45 million in the first
two years); c) it is showing good results; d) it is currently the MoE’s preferred modality for education
quality support; and e) the project currently has a funding gap of $99 million. The Business case only
considers this option against a do nothing option. We intend to completely review the options for our
direct support to the education sector in late 2012 at which point the design of GEQIP phase II should
have started. The project supports an integrated set of inputs designed to improve the quality of
teaching and learning in schools (see below).
Who will be implementing the support we provide?
The key implementing partner for this programme is the Ministry of Education, regional education
offices, universities, teacher training colleges, and schools. Development partners currently directly
supporting the programme are DFID, the World Bank ($50 million), the Netherlands ($26.4 million),
Italy ($20.4 million) and the Fast Track Initiative ($168 million).
What are the expected results?
What will change as a result of our support?
The impact of our support will be improved completion rates and learning outcomes for boys and girls
in primary ands secondary schools. The major changes will be more students (especially girls) finishing
primary and secondary school with improved learning outcomes. The additional UK support will help
the number of students supported to complete grade 5 of primary to increase from 166,000 (80,000
girls) in 2010/11 to 208,000 (101,000 girls) in 2012/13.
The outcome will be improved quality of general education as measured by availability of textbooks
and trained teachers. Based on progress to date, the outcome is likely to be achieved over the next
two years if sufficient funds are available to support the GoE’s plans.
What are the planned outputs attributable to UK support?
Over the next two years, DFID support will be directed at four main outputs in line with the overall
programme allocations (see table 10). The outputs that this £50 million contribution will purchase are:
o
Improved curriculum, textbooks and assessment - 19 million new primary and secondary
textbooks at an average unit cost of £1.00
o
Strengthened teacher training programme - Enhanced pre-service training for 20,000 primary
and secondary teachers at an average cost of £84/teacher per year; Support for upgrading of
30,000 teachers at a cost of £72 each per year
o
Improved school improvement programme - School grants at £1/pupil for 8 million primary
school children per year; School grants of £1.50 per pupil for 1 million secondary school students
per year
o
Strengthened education management and planning at all levels – training for 3,000 primary
supervisors and directors at an average cost of £30 per participant
How will we determine whether the expected results have been achieved?
Impact, outcome and output indicators will be monitored throughout the lifetime of the programme.
Improvements in learning outcomes are being monitored through sample based National Learning
Assessments which are conducted every three years. Other data will be obtained through a
combination of data from management information systems and programme monitoring instruments.
The latter include a bi-annual school grant survey and textbook distribution tracking. A
comprehensive evaluation, including qualitative data on changes in instructional approaches in
Ethiopian classrooms, will be undertaken by an independent consultancy firm.
Strategic Case
A. Context and need for DFID intervention
A1 The Ethiopian Contextiv
Ethiopia matters to the UK for a range of development, foreign policy and security priorities. It is
populous, poor, vulnerable but comparatively stable in the Horn of Africa. From a low base, Ethiopia’s
growth and expansion of basic services in recent years have been among the most impressive in
Africa. The UK Government has an opportunity to make our support more transformational and
accelerate Ethiopia’s graduation from aid dependency. The Government of Ethiopia (GoE) is capable
and committed to growth and development, and is a proven partner in making rapid progress
towards the Millennium Development Goals (MDGs). But its approach to political governance
presents both substantive challenges to sustainable development and reputational risks to partners.
Ethiopia lies at the heart of an unstable region that has experienced almost continuous conflict and
environmental shocks in recent decades. Ethiopia and its neighbours – including Somalia, Sudan and
Eritrea – languish at the bottom of the Human Development Index. Poverty and instability in the Horn
of Africa are among the drivers of migration to Europe, and also contribute to an environment in
which fundamentalism and radicalisation can prosper. UK interests in the region include progress
towards the MDGs, resolving conflict, bolstering stability, accelerating sustainable growth and
development, mitigating the impact of climate change, tackling migration, and countering terrorism. A
stable, secure and prosperous Ethiopia is critical to UK interests.
Ethiopia has come a long way in a short time, and has achieved stability through decentralised
regional government. But Ethiopia has yet to successfully manage its democratic transition. The
Ethiopian People’s Revolutionary Democratic Front (EPRDF) took power in 1991 and have held it since
then. Ethiopia has a capable government that is demonstrably committed to addressing poverty, with
an impressive record of pro-poor spending, sound financial management and relatively little
corruption. Prime Minister Meles and others in GoE play a role on global issues, including climate
change, reform of the international financial architecture, and global health.
Ethiopia has made impressive progress towards the MDGs. In the last five years, with substantial
support from the UK and others, Ethiopia has: halved the incidence of malaria; deployed 32,000 more
health extension workers; doubled the immunisation ratev; rolled out an innovative social safety net
to protect almost 8 million of the most vulnerable peoplevi; and put 4 million more children in primary
schoolvii. Strong macroeconomic leadership has helped Ethiopia achieve annual growth of over 7 per
cent for the last decade. GoE’s new Growth and Transformation Plan (GTP) targets a doubling of the
economy and achievement of the MDGs by 2015, and a greater (if still limited) role for the private
sector and accelerated industrialisation. The GTP provides a platform to align UK support with GoE’s
ambitions, make it more transformational, and accelerate Ethiopia’s graduation from aid dependency.
Despite recent progress, Ethiopia remains one of the world’s poorest countries, with more than 30
million people living in extreme poverty. It is comparatively under-aided, receiving less than the
African average per capita aid (still ranking in the bottom quartile). Aid per capita levels are the fifth
smallest among the 17 current DFID priority countries in Africa.viii. Strong progress towards some of
the MDGs is from a very low base, and will be difficult to maintain as the needs of harder to reach
populations are prioritised. Population momentum will see the current estimated population of 83
million people rise to around 120 million by 2030ix, which is likely to be accompanied by rapid urban
growth. Ethnic nationalism and underdevelopment fuel instability and insurgency in parts of the
Ethiopian periphery, threatening the delivery of Ethiopia’s development objectives. External shocks,
including climate change and fluctuating commodity prices, threaten growth. Ethiopia was badly
affected by the oil and food price shocks in 2008, and will find it difficult to avoid price rises as global
prices rise again in early 2011.
Ethiopia can absorb more aid and use it well. DFID is a leader within the development community,
championing results, aid effectiveness and transparency. DFID works closely with UK Government
partners in pursuit of shared objectives for a stable, secure and prosperous Ethiopia.
A2 The Ethiopian Education context
Increasing access to and quality of education has been one of the priorities of the GoE in the last five
years and impressive progress has been made, however this was from a very low baseline.
The GoE prepared the National Education and Training Policy (ETP) in 1994, and within this framework
of the ETP launched the first five year Education Sector Development Program (ESDP I) in 1997 as part
of a twenty-year education sector plan. As a result of a series of important organizational, financial
and programmatic measures, the target set for ESDP I of raising primary enrollment from 3.7 million
to 7 million was surpassed with enrollment reaching 8.1 million in 2000/01.
By 2010/11 primary enrolment had reached 16.7 million (85% Net Enrolment Rate - NER). The number
of out of school children dropped from 6.5 million to around 3 million between 1999 and 2008x.
Enrolment of girls has shown a steady increase with the gender parity index (girl to boy ratio) now
standing at 0.94 in primary. First cycle secondary enrollment trends show significant increases (Gross
Enrolment Ratio – GER - from 17.1% in 2001/02 to 38% overall and 35% for girls in 2010/11) and
although second cycle secondary enrolment is low (GER of 8% overall and 7% for girls in 2010/11), it is
increasing. These achievements have been remarkable and have occurred at the same time as a
major expansion of both the Technical and Vocational Education and Training (TVET) and higher
education sub-sectors.
Table 1 below shows the progress Ethiopia has made in the last decade on key indicators and how
they compare with the average for countries in Sub Saharan Africa.
Table 1 Education indicators Ethiopian and Sub Saharan Africa (SSA) Average (Source: Education for All Global
Monitoring Report, Statistical Tables 2011)
Indicator
Ethiopia
1999
Ethiopia
2009
Average for
SSA 2009
Primary NER
36%
83%
76%
Gender Parity Index in
primary (girls to boys ratio)
0.69
0.93
0.95
Secondary NER
12%
25%
26%
Despite these remarkable achievements in expanding access to schooling, especially for girls, some
real challenges remain. The Quality of education has not kept pace with the expansion, and in some
cases has deteriorated:
o
The 2007 National Learning Assessment (NLA) shows 50% of sampled students below basic
proficiency in grade 4 and 60% in grade 8 (boys performed better than girls across subjects)xi
These results were worse than the average scores achieved in 2003 (see figure 1 below).
o
The 2010 NLA shows 63.7% of sampled students below a basic level of achievement/proficiency in
grade 10 and 55% in grade 12 (boys performed better than girls in all subjects)xii
o
The 2010 Early Grade Reading Assessment shows that at least 80% of students were not reading
at the expected oral fluency rate in their mother tongue (rural girls consistently performed below
boys)xiii
o
Completion rates at grade 5 are 75% and 48% at grade 8 (Lower for girls in both grades)xiv
o
Drop out rate in primary is 60% (2007) compared to a Sub Saharan average of 30%xv
o
Survival rate to grade 5 is 47%(2007) compared to a Sub Saharan average of 72%xvi
Figure 1: Grade 4 and Grade 8 NLA Results: 2001, 2004 and 2007
50
% score
45
Grade 4
Grade 8
40
35
30
2000
2004
2007
Year
Access to education is not equitable as better resourced schools are generally located in urban areas
and bigger more developed regions. Additionally, some children face barriers to accessing education
especially females, the “most vulnerable children”1, poor students and children in pastoral areas (e.g.
Somali and Afar where GER is significantly lower than the national average).
Access to secondary education is still low (GER is 38%). Girls’ enrolment and completion rates lag
behind those of boys, especially in secondary school and beyond. Inequalities in access to quality
education are widespread. There are socio-cultural barriers to participation in education (especially
for girls in rural areas) such as poverty and food insecurity, child labour both at home and
commercially, distance (especially to secondary school), early marriage, and a pastoralist way of life.
There are also financial constraints with households paying a large share of non-salary recurrent
education expendituresxvii. Attempts have been made to widen access through Alternative basic
Education Centres (small community schools with flexible calendars and locally recruited facilitators).
Although the quality of the provision is often poor, and ABEs are not always in tune with the lifestyles
of mobile populations, over 800,000 children (36,000 girls) are now reached through this modality.
Conflict and insecurity limit access to a number of woredas, particularly in Somali Region, for
1
The most vulnerable children in Ethiopia are “rural & pastoralist children, orphans, children in remote locations, street children and
drop outs”, as well as those with disabilities (see GEQIP Social Assessment 2010).
government workers, and NGOs alike. Useful lessonsxviii have been learned about how services can be
strengthened in conflict areas through the Somali Education pilot and these are being rolled out in a
separate service delivery programme under the umbrella of the Peace and Development Programme
(PDP).
Education is grossly under-funded As Figure 2 below shows available financing is not commensurate
with the scale of the challenge. During the first four years of ESDP III the gap between forecasted
expenditure in the five year planxix and actual expenditurexx averaged around 2 billion birr annually
($117 million at current exchange rates)
Figure 2: Education spending 2004 - 2009
14
Billion birr
12
10
Planned under
ESDP"
Actual spending
8
6
4
2
0
2005/06
2006/07
2007/08
2008/09
Year
In addition, a high proportion of the education budget (over 95 % in primary and 87% in secondary) is
allocated for salary expenditure constraining the availability and predictability of resources for other
inputs critical to support effective teaching and learning (e.g., training, textbooks and other materials,
assessment, monitoring and evaluation systems, etc.) to enhance learning outcomes.
GEQIP has improved the situation with non salary expenditure share now accounting for 15% of
recurrent expenditure overall (based on figures provided in the 2010 GEQIP mid-term review) , but it
will be a challenge to maintain as the system continues to expand to reach the most marginalised
groups. Alternative Basic Education Centres are a low cost solution to tackling inequities in access but
there are challenges with respect to their quality and flexibility. Resources for basic services are very
limited. While phase one of GEQIP was re-appraised to cost $455 million only $337 million is currently
available. Failure to fill the funding gap will mean that GoE will not be able to fully implement
elements of the education program.
The capacity to plan, manage and monitor is weak. In Ethiopia, the management and financing of
primary and secondary education is the responsibility of regions and woredas based on the national
policy and standards developed and approved by the Ministry of Education (MOE). However, some
regional and woreda governments have weak capacity to gather and report on key performance
indicators on time in order to manage and monitor effectively the implementation of education
reforms.
The key challenges related to policy making, management and monitoring capacity include: (i) weak
institutional capacity for the delivery of general education, hampering implementation of a consistent
and effective education policy; (ii) inadequate strategic planning and management capacity to support
tasks such as policy development and medium to long term planning; (iii) limited monitoring and
evaluation systems making the reform process difficult to operationalise. These were confirmed in a
recent studyxxi and a GEQIP action plan was agreed to address them.
A3 The policy context
Achieving the millennium development goal targets Given the size of the country and scale of the
problem, achieving the education related MDG targets in Ethiopia will make a significant contribution
to achieving the MDG targets in sub-Saharan Africa and globally. Ethiopia accounts for about 3 million
(of whom 55% are girls) of the estimated 32 million children out of school in sub Saharan Africaxxii.
DFID’s Business Plan commitments - In its Business Plan (2011-2015) DFID committed to supporting
actions to help achieve the MDGs, and specifically committed to increasing the number of girls
completing primary and secondary education.
DFID Ethiopia – DFID Ethiopia’s Operational plan sets out its vision to (i) protect the most vulnerable:
by building the resilience of the very poorest by reducing food insecurity and improving livelihoods
and security in fragile and/or conflict-affected areas; (ii) consolidate recent gains and help achieve the
MDGs: by continuing to support, extend and improve proven programmes to expand access to quality
basic services; and (iii) make the impact of the UK’s support more transformational.
Based on our analysis of need in the sector, the objectives for DFID’s support for education (as well as
for health and water and sanitation) in Ethiopia are:

Increasing access to and quality of services

Increasing and measuring results and impact

Increasing equity.
The DFID E Operational plan includes a headline result for education – 1.94 million children supported
in primary education by 2015 (of whom almost half will be girls).
National policy context: The GoE is ambitious in its goals, and its vision for the next five years is set
out in the Ethiopia Growth and Transformation Plan (2010 – 2015)xxiii. This document includes very
stretching targets for almost full primary enrolment (98% for both boys and girls) and an increase in
lower secondary education GER from 39% in 2009/10 to 62% by 2015. The ambition of the GoE, the
progress it has been able to make in the past and its focus on results provide a strong foundation for
DFID’s efforts to support sector targets related to access, quality and equity.
Under ESDP IV the main goals of GoE for general education are to improve access to quality basic
education in order to make sure that all children, youngsters and adults, with particular emphasis on
females, acquire the competencies, skills, values and attitudes enabling them to participate fully in
the social, economic and political development of Ethiopia and to sustain equitable access to quality
secondary educationxxiv. GoE also recognises the challenges faced by girls and has laid out strategies in
ESDP IV that seek to promote girls participation.
The GoE’s emphasis on quality of education is fundamental to its drive to reach middle income status
by 2025. Relatively recent evidence shows that learning outcomes explain more of the difference in
productivity growth than simply years of schoolingxxv. Evidence from Ethiopia shows higher individual
returns to higher levels of education adding weight to the GoE’s efforts to keep students in school and
make sure they learnxxvi.
ESDP IV also provides an excellent platform for DFID’s efforts to support GoE to reach the last 20% of
out of school children and to tackle equity concerns. There are specific programmes tackling limited
access to education in the Developing Regional States and a separate strand on both gender and
special needs. The programme recognises the importance of both supply and demand side
interventions to tackle the problems of equity and access.
A4 Interventions to improve the quality of education
The Ethiopian General Education Quality Improvement Programme (GEQIP) was launched in 2009 to
address the problem of low quality of education at national scale and with harmonised donor
support. It seeks to increase the investment in key inputs to the system, such as textbooks, teacher
development and school improvementxxvii. GEQIP is now at the end of the second year of a four year
first phase.
Between 2009 – 2011 DFID disbursed all committed funds (totalling £45 million) to the MDTF. Other
contributing donors are the Education Fast Track Initiative ($168 million), the World Bank ($50
million), Italian Development Cooperation ($20 million), the Netherlands ($26 million) and Finland
($10 million). GEQIP has been showing good progress with respect to implementation and has
increased the supply of inputs to Ethiopian schools and in the last internal DFID annual review it was
scored as a “2” (purpose likely to be largely achieved).
1. GEQIP was designed to be complementary to the decentralised block grant (supported by the
Protection of Basic Services Grant – PBS)which provides direct financing to regional and Woreda
(district) governments to provide basic services (education, health, agriculture, water and sanitation,
and rural roads). The block grant is supported by donors through the Protection of Basic Services
programme (PBS). Over 40% of the decentralised block grant is spent on education. However, over
90% of education spending is for salaries; with little left over to fund quality related expenditure. PBS
remains GoE’s preferred modality for scaling up access to basic services, but GEQIP is regarded as
critical in the medium term for ensuring complementary resources are available for quality related
expenditures. GEQIP is designed to work in a complementary way with other instruments to tackle
education quality, access and equity issues (see table 2 below). The quality of education itself has
been found to be a major ‘push’ factor in driving parental decisions on whether or not to keep their
children in schoolxxviii.
Several donors are working outside of the pooled GEQIP fund in support of the GoE’s overall general
education quality improvement objectives. The most significant of these are:
o
USAID – is providing a big push on early grade readingxxix, including investing in assessments of
reading proficiency in the early grades and in development of materials and training to support
teachers. Many of USAID’s interventions are focused on selected regions and schools and all
programmes are delivered through contractors.
o
UNICEF – is working on their plans for the sub-sector. Historically, their focus has been on child
friendly schools and Alternative Basic Education (ABE). More recently, they have also been
prioritising early childhood education. They fund through GoE systems but with separate planning
and reporting.
o
Japan - their focus is on improving maths and science. All of their support is delivered through
projects.
There are also a number of NGOs working with GoE to improve the quality of education. These
include Save the Children (focusing on ABE), Link community Development (school improvement
planning), and Concern (reaching marginalised children).
DFID-E contracted a consortium of NGOs (Save the Children UK, Mercy Corps and Islamic Relief) to
pilot a programme of enhanced support to education in Ethiopia’s Somali Region. DFID-E Is planning
to scale this approach up, and expand to other basic services though a UK Peace and Development
Programme (PDP). This aims to strengthen the basic service provision of health, education and water
in Somali Region where there is a very low enrolment at both primary and secondary levels.
Table 2 below summarises DFID’s current and planned support to education and their focus and
interdependence.
Table 2: DFID Ethiopia – planned support for education
No
Programme/instrument
What it is supporting/contributing to
1
Protection of Basic
Services (PBS – 40%
spend on education)
Recurrent expenditure mainly salaries of teachers
(access)
2
General
Education
Quality Improvement
Programme
(GEQIP)
2009 – 2013
Quality inputs and non-salary recurrent expenditure
for general education (quality)
3
Basic services in Somali
Region (new – being
designed) 2011 – 2014
Improving access to quality education in Somali region
(equity in access)
4
Quality
Education
Strategic Sector Support
Programme (QESSPP)
2010 – 2012
Strategic support to MoE through a combination of
advisery secondment and Technical Assistance
5
End Early
(inception)
Marriage
provide school materials as an incentive to keep girls at
risk of early marriage in school in Amhara Region
(equity in access)
6
Result Based Aid pilot
(new – being designed)
Payment for every student who sits and passes the
grade 10 examination, with a premium paid for girls
and students in emerging regions. (focus on aid
effectiveness, results and transparency)
2011 – 2014
A5 Feasibility of intervening
In this context, there are at least four key reasons why DFID should scale up support for improving the
quality of education in Ethiopia:
o
Learning outcomes have been declining, despite increasing education investments
o
Inputs needed to improve quality are massively under-funded
o
There are still around 3 million children out of school, many of whom are girls, vulnerable children
and children with special needs (it is anticipated that supply side improvements will attract and
retain some of these students into school).
o
The social and economic consequences of low education quality include lower economic growth
and increased fertility rates
DFID is well placed to provide additional support to GoE’s efforts to improve the quality of general
education in Ethiopia for three reasons.
o
DFID-E is a trusted bilateral donor with the resources, relationships, expertise and instruments
available to help GoE to tackle the problem of improving quality at scale.
o
DFID-E is already taking a leadership role on the quality education agenda both in Ethiopia and
globally. It can use its trusted position to accelerate progress on this important agenda and to use
its influence to better understand what works through high quality evaluations.
o
DFID is a leader on aid effectiveness and has the commitment to align its funding behind a
government owned programme and encourage other donors to harmonise their efforts thereby
reducing transaction costs in the sub-sector and increasing impact.
A6 Consequences of not intervening
Without an additional contribution of £50 million to help close the funding gap for improving quality
of education:

26,000 fewer children will complete primary school, 10,000 fewer will complete secondary

100,000 fewer teachers will receive enhanced training

Schools will not receive grants to improve quality for 18 million students
Despite current efforts by the GoE and its partners to address the problem of quality, interventions to
address the issue are under-funded. GEQIP was appraised to cost $417 million. As a result of
increased costs of textbooks and agreement to expand the scope to include early grade reading
activities, total costs are now estimated at $455 million. Of this, only $337 million is currently
available from partners. The funding gap is due to a combination of price escalation and a shortfall in
funds planned at appraisal. Without additional funding this year major cuts would need to be made,
jeopardising the progress made to date.
The potential consequences would be, at best, maintenance at current levels, of learning outcomes for over
many students. Without follow-on support to existing investments, GoE’s efforts to accelerate economic
growth and gain the social benefits of education, may be jeopardised.
A7 Sustainability
Ethiopia spends a relatively high share of its Gross Domestic Product (GDP) on education by
international standards relative to it’s level of per-capita income of $344xxx it spends significantly more
than India, (whose per-capita income of $1192 is almost four times as much), and only a little less
than South Africa (whose per-capita income of $5786 is more than 16 times that of Ethiopia).
Despite this, the overall funding gap in ESDP IV is estimated at £1.2 billion as indicated above. Much
of this funding gap is expected to be filled by external partners. With the GoE already spending
around 4% of GDP on education and over 20% of its budget, there is little likelihood that the GoE will
be able to mobilise additional domestic resources to tackle the challenge of improving quality of
education in the next five years. In recognition of the time frame that would be needed to make
sustainable improvements, GEQIP was designed as an eight year, two phase programme to address
this challenge.
As discussed above, improving the quality of education and learning outcomes in Ethiopia will
contribute to its economic growth. Amongst countries that have participated in the Programme for
International Student Assessment (PISA - an internationally benchmarked measure of learning) shows
that test scores of one standard deviation above the average are associated with an average annual
growth rate in GDP per capita of two percentage points higher over 40-yearsxxxi
B. Impact and Outcome
The impact of our support will be improved completion rates and learning outcomes for boys and girls
in primary schools and increased transition to secondary schools in Ethiopia. Based on progress to
date, the targets for improvements in completion rates in grades 4 and 8 of primary and enrolment
rates in grades 10 and 12 of secondary could be achieved if effort and resources are stepped up,
especially for girls and students in the Developing Regional States (DRS).
A National Learning Assessment (NLA) is currently being conducted in grades 4 and 8 and this will
provide a snapshot of whether learning outcomes have improved since the last NLA that was
conducted in 2007. Any improvements are likely to be modest, however, as the key inputs needed to
make a significant difference to this measure of quality have only just started to flow.
The outcome will be improved quality of general education as measured by availability of textbooks
and trained teachers. Based on progress to date, significant progress is likely to be achieved over the
next two years if sufficient funds are available to support the GoE’s plans. , A second Early Grade
Reading Assessment will be conducted in 2013 and this will give an additional measure of learning
outcomes.
B2 Political and Institutional impact
There is strong political commitment to scaling up access to and quality of services from the GoE
including education services. This will build on the GoE record of rapid scale up and delivery of results
in recent years. The GoE’s Growth and Transformation Plan (GTP) reflects the ambitious targets of the
education sector development programme to 2015 which focuses, among other objectives, on the
achievement of the MDGs. Scaling up support for education will contribute to filling the financing gap
in education, may encourage others to also scale up their support and will also provide
encouragement to the GoE to continue its commitment to reaching the MDG targets in education.
It has been recognised that good governance requires state capability, responsiveness, and
accountability, and that all three elements are needed to make states more effective, to tackle
poverty and to improve people’s lives. There is no guarantee, for example, that a more capable MoE
will automatically focus on reaching marginalised communities unless it is responsive and
accountable. The MoE continues to explore alternative modes of education delivery considering the
challenges and living styles of populations. GEQIP plans include an increasing focus on community
involvement, scaling up efforts on local level accountability strengthening the role of Parent Teacher
Associations (PTAs) in formal schools and Centre Management Committees (CMCs) in ABE centres.
Supporting the GoE to expand access to and quality of services and make better development
progress will contribute to strengthening state legitimacy. State legitimacy is not just about
effectiveness of public institutions in their performance of various functions, such as service delivery,
but also their degree of representation and accountability. Increasing state legitimacy is also
associated with increased stability. In line with DFID’s approach to state building for security and
stability, DFID considers that providing support for an increasingly transformational programme in
Ethiopia is the best way to help Ethiopia develop into an even more prosperous, stable and secure
country. DFID has judged that a productive approach to working in Ethiopia is to combine work to
improve service delivery with support for transparency and accountability within the sector, thus
creating a healthier, more educated population with growing expectations of economic opportunity
and political space.
Ethiopia is a federal state consisting of nine regions and two city administrations. The sub-national
structure has four levels – regions, zones, woredas and kebeles. Fiscal decentralisation has deepened
over the last decade, but the sub-national institutions still rely for about three-quarters of their
expenditures on block grants. The block grant for services transfers funds from federal and regional to
woreda level for service delivery.
Decentralisation is the “centre piece of Ethiopia’s strategy for ending poverty, both to improve
responsiveness and flexibility in service delivery, but also to increase local participation and
democratisation of decision-making”xxxii. Although Woredas have formal discretion in the use of block
grants, in practice this is limited by a number of factorsError! Bookmark not defined.. First, national
policies, targets, quotas, planning guidelines and campaigns originating through top down directives
heavily influence Woreda planning. Second, regional monitoring and oversight of Woreda budgets
through performance agreements stress federal and regional development objectives. Third, Woreda
discretion is limited by the extent to which available funds are constrained by the recurrent financing
demands of existing services, particularly salaries.
The use of a combination of general purpose and specific grants to sectors is common in federated
systems and allows federal for large scale commodity and equipment purchase and a ‘big push’ on
activities and outputs that will accelerate progress towards the health related MDG targets.
Appraisal Case
A. Determining Critical Success Criteria (CSC)
Each CSC is weighted 1 to 5, where 1 is least important and 5 is most important based on the relative
importance of each criterion to the success of the intervention.
CSC
Technical
T1
Description
Weighting
(1-5)
Textbooks available in all subjects for all students in government
primary and secondary schools
5
T2
School grants received at correct levels in all schools and
improvement plans in place
T3
All secondary and primary teachers receiving relevant training
Institutional
I1
Increased harmonisation and alignment of financing behind
government-led plans and programmes
I2
Strengthened capacity of communities to hold schools to account
Political
P1
GoE commitment to education quality reforms matched by capacity
and resources
Social
S1
Girls and students in emerging regions benefiting from improved
quality inputs
5
5
3
4
4
4
B. Feasible options
This business case will appraise two feasible options
o
Channel additional financing through GEQIP
o
Do nothing (i.e. keep financing for GEQIP at current levels until end of phase one)
There may be other possible options for supporting quality improvements going forward, including
developing a separate bilateral programme or jointly financing other partners such as USAID, but these
are not appraised in this Business Case.
DFID is already a lead partner supporting the first phase of GEQIP which is midway through its first four
year implementation phase (see section A4 above). Both GoE and partners have agreed that GEQIP
progress is generally good and is beginning to deliver the inputs needed to improve the quality of
general education in Ethiopia.
When GEQIP was originally appraised in 2008/09xxxiii, a number of other options were considered and
rejected. These included development policy lending, channelling additional financing for quality
through PBS (rejected because the unearmarked block grants are not able to leverage sufficient non
salary recurrent inputs), and focusing on a limited number of regions (rejected because the GoE made
the case on equity grounds for a programme with national scale and reach). The rationale and evidence
for rejecting these options still remain relevant therefore they will not be appraised again at this time.
Before the end of the current phase, design will begin for GEQIP phase two. At that time a Business
Case will be developed that will consider the full range of possible options for achieving improved
quality of education.
Option 1: Additional finance through GEQIP
What it would consist of
GEQIP consists of five pillarsxxxiv:
o
Curriculum, textbooks and assessment
o
Teacher Development Programme
o
School improvement (including school grants)
o
Capacity building for planning and management
o
Programme coordination and evaluation
The main activities across these pillars are: i) provision of textbooks for all students in all subjects
through international procurement and increased availability of early grade reading materials ii)
enhanced pre-service training of primary and secondary teachers and upgrading of primary teachers to
diploma through an in-service programme iii) school grants of approximately £1 for every primary
school child and £1.50 for every secondary school child and better training in school improvement
planning); iii) training for school principals and supervisors); and iv) programme coordination, including
evaluations of the impact of the whole programme and the school improvement/school grant
programme). Table 3 shows the components, indicative costs (with additional financing), and some of
the key projected outputs. Under this option DFID would channel additional financing of £50 million
over the next two years in support of the first phase of GEQIP. Table 3 shows the components and
costs.
Table 3: GEQIP components, costs and outputs (with additional financing – million dollars)
Component
Cost
Key outputs
Curriculum, textbooks and
assessment
$179 ml
84 million primary and secondary textbooks +
Early grade reading materials
Teacher
Programme
$84 ml
Enhanced training for over 150,000 teachers
(in-service and pre-service) + Training in early
grade reading
School
improvement
(including school grants)
$166
Per capita grants for 68 million students
Capacity
building
for
planning and management
$12 ml
Training for 10,000 supervisors
Programme coordination
and evaluation
$14 ml
Comprehensive evaluation
Total
$455 ml
Development
School grant evaluation
The additional financing would be used to fill a financing gap in the programme as appraised (due to a
combination of price escalation and shortfall in funds pledged at appraisal) and to finance additional
elements that have been agreed at the GEQIP Mid Term Review. Finland has also indicated that they
will increase their allocation to GEQIP by 5 million euro over the next two years. The additional money
would take DFID’s total contribution to the pooled fund to £95 million over four years, approximately
34% of the total estimated cost for phase onexxxv. GEQIP contributing donors, other than Finland, are
not in a position to scale up support at the present time, but it is anticipated that DFID’s additional
support now will catalyse additional financing during phase I (the funding gap is not entirely filled) and
in advance of phase II design.
How it would work
GEQIP is delivered jointly with six partners (World Bank, DFID, Netherlands, Italy, Finland and the
Education Fast Track Initiative) currently contributing through a pooled fund arrangement (see
strategic case above). Bilateral funds are currently managed by the World Bank in a MDTF. Funds flow
through the GoE financial system to: a) the federal government (for management and oversight and for
participating universities); b) the eleven regions and city states for capacity building activities and for
the colleges of teacher education; and c) all districts for the 27,000 primary and secondary school
grants.
An annual work planning process, managed by the MoE, guides how these funds are spent at all levels
except schools (which receive money in the form of a grant where spending is guided by manual). MoE
produces a bi-annual report of progress at activity level and the Ministry of Finance and Economic
Development (MoFED) is responsible for financial reporting through quarterly interim financial reports.
The evidence
The design of GEQIP built on the experience of previous World bank projects in the education sector in
Ethiopia (The Education Sector Development Project and the Post-Secondary Education Project) and
the bilaterally supported Teacher Development Project. Key lessons reflected in the original project
design werexxxvi:
o
The importance of building on decentralised structures
o
Focus on schools through the provision of a coordinated set of instruments
o
The need for a realistic assessment of sector capacity
o
Use of jointly agreed results-based monitoring and evaluation system
o
Use of country systems
o
Provision of sustained technical assistance and training
o
Alignment behind government plans
For the GoE and its bilateral partners (DFID, Finland and the Netherlands), the experience of the
Teacher Development project (TDP) was particularly influential in the design of GEQIP. This project
became one component of GEQIP. It was effective from 2004 – 2008 and was implemented via a
pooled fund through MoFED. While evidence of the impact of the project on classroom interactions
was limited, the project completion report concluded that the following were key achievements of the
project:
o
It was comprehensive in its approach addressing all key areas of the teacher development process
o
Most of the reforms were institutionalised as core activities in teacher development
o
It was successful in mobilising external resources toward national policy goals
The key constraints identified in the implementation of TDP were in the lack of a comprehensive
monitoring and evaluation framework and weak financial reporting. Both of these constraints were
recognised and addressed in the design of GEQIP.
Option 2: Do nothing
DFID is already mid way through support to phase one of GEQIP, therefore the do nothing option is to
continue at the current level of approved support. This option would constitute no additional funding
for the current phase of GEQIP. As noted above, this would result in a financing gap in the programme
of approximately $99 million. The impact of this would be significant, particularly on the delivery of
support to the school grant programme and the teacher development programme in the final year of
the programme. Table 4 below shows the components, financing and outputs under this scenario.
Table 4: GEQIP components, costs and outputs (do nothing)
Component
Cost
Key outputs
Curriculum,
textbooks
and assessment
$175 million
84 million primary
secondary textbooks
Teacher
Development
Programme
$50 million
Enhanced training for 60,000
teachers
School
improvement
(including school grants)
$112 million
Per capita grants for 50
million students
Capacity building for
planning
and
management
$6 million
Training
supervisors
Programme coordination
and evaluation
$13 million
Comprehensive evaluation
Total
$356 million
for
and
10,000
School grant evaluation
Climate change and the environment
Both options have low risk of negatively impacting on the environment. Donor support is focused
mainly on soft inputs and the school grants programme as currently defined prohibits capital
expenditure beyond rehabilitation of existing infrastructure. UK support for capital construction is likely
to flow through a complementary Local Investment Grant which will be the subject of a separate
Business Case. Recent curriculum reforms also meant that the environment has taken a much more
prominent place in the Civics programme, which may have beneficial impacts in the future. The
environmental screening that was carried out by the World Bank as part of the original project
development rated the project as low risk. There is also some evidence that retaining girls in school
may be one of the most cost effective interventions for tackling climate change because of its impact
on fertility rates and population growthxxxvii
Climate change offers some opportunities for the education sector – in particular relating to low
carbon technologies for school lighting and water supply. However, these opportunities will be brought
out by the Education Climate Change Sector Action Plan which is being drafted as part of the GoE’s
Climate Resilient Green Economy strategic process. DFID is supporting these activities through the
Strategic Climate Institutions Programme (SCIP). For these reasons, we do not propose any
climate/environment specific interventions as part of this programme
In table 5 below:

the quality of evidence for each option is rated as either Strong, Medium or Limited,

the likely impact on climate change and environment is categorised as A, high potential risk /
opportunity; B, medium / manageable potential risk / opportunity; C, low / no risk /
opportunity; or D, core contribution to a multilateral organisation.
Table 5: Impacts on the environment
Option
Evidence rating
Climate change and
category (A, B, C, D)
1
Limited
C
2
Limited
C
environment
Theory of change
The need for a multi-faceted approach to improve quality is set out in the strategic case above.
The key assumptions underlying the theory of change for this support are as follows:
1. That harmonised and aligned support will lead to increased availability of key inputs at school
level
2. That these inputs will separately and in combination be sufficient to change teacher and
student behaviour in the classroom
3. That increased discretionary spending will be used by schools to improve quality
4. That increased accountability of schools to communities will impact positively on learning
outcomes
5. That these inputs will have a positive impact on learning outcomes and staying on rates for
both boys and girls at national scale
Figure 3: Theory of Change
INPUTS
OUTPUTS
OUTCOMES
IMPACT
Better quality inputs
are a platform
for improvements in
Teaching
and
All pr imary and secondar y students
learning
have new textbooks In all s ubjects
All schools a nd ABE Centres receiving
capitation gra nts at agree d le vels
Increased non salary
spending for quality
in schools
Availability o f inputs at
school level impacts
on national targets
Strengthe ne d in-ser vice and pre-ser vice
teacher tra ining
Impr oved school planning and
leadership
Funding for
General Educa tion
Quality
improvement
Impr oved comm unity involveme nt in
planning a nd m onitoring
Increased harm onisation a nd a lignment
of de velopment partner s upport
Teachers ha ve skills
and
resources to help
students to learn
Improved
learning outcomes
and staying on rates
For bo ys and girls
Increased momentum be hind the
gover nment ’s drive to impr ove quality
Strengthe ne d Education Mana gement
Information s ystem
Harmonised and aligned
support leads to
better a vailability
of inputs
Increased accountability Quality impro vements
attract and retain students
of schools to
and help to further close
communities impacts
the gender gap
on teaching and
learning
The evidence underpinning the key assumptions in the Theory of change is summarised below.
Does harmonisation and alignment lead to increased inputs? Limited evidence
Multiple and fragmented development assistance has the potential to increase transaction costs for
recipient Governments as well as for duplication of effort and reduced inefficiency of resources. The
empirical evidence that more harmonised and aligned approaches lead to improving the effectiveness
of aid and delivering better outcomes is however limited. The issues appear to have been studied
more in health than in education. A review of harmonisation and alignment in health commented that
“it is unclear how to separate out the impact of aid practices such as having a sector wide approach or
more aligned aid, from the impact of the health strategies and policies followed, and the adequacy of
financing and implementation capacityxxxviii
A recent synthesis of the evidence to determine whether aid effectiveness processes are improving
results in the health sector reached a similar conclusion – it is difficult it is to demonstrate the impact
of processes such as harmonisation, but that they do contribute to development through creating
conditions for sustainable impactxxxix
Evidence to date from Ethiopia indicates that harmonisation and alignment in the education sector is a
mechanism for attracting additional resources in support of the government’s quality improvement
plan. The GEQIP instrument attracted $168 million of Fast Track Initiative financing which would have
been difficult to mobilise with pre-existing instruments. The approach has also helped to encourage
other donors working on general education to harmonise their support. Most notably, USAID is
supporting government efforts to improve textbooks through complementary support.
Major achievements of GEQIP to date include:
o
The development and distribution of over 7 million secondary science and mathematics textbooks
o
Strengthened school planning and school grants to over 27,000 primary and secondary schools
o
Improved pre-service teacher training for over 40,000 primary and secondary teachers
o
Upgrading of over 30,000 primary teachers from certificate to diploma
GEQIP is not without its problems and these are summarised in the recent Mid term Review of the
Projectxl. There are concerns about the pace of procurement of textbooks and delays in financial
reporting. Despite these caveats, partners agreed during the review that the project was making good
progress and signalled that it could effectively absorb additional funding up until the end of the first
phase. As described in the previous section, fiscal space has been created in GEQIP through the
expanded scope of the programme.
How does the provision of textbooks impact on learning? Strong evidence
The GEQIP Project Appraisal Document summarises substantial evidence that has demonstrated that
textbooks have had a consistently positive effect on student achievement. Recently, a World Bank
studyxli found that in Ghana, “textbook provision is among the most cost effective means of improving
test scores." Several studies have had more nuanced findings. For example, Glewwe, Kremer and
Slviemoulinxlii found little evidence of the impact of textbooks on the average test scores of students in
Kenya, contrary to the results they found in Nicaragua and the Philippines. A possible explanation was
the lack of training for teachers in the use of textbooks in Kenya – extensive training in the Philippines
and minimal training in Nicaragua. Nannyonjoxliii found a small correlation between improved textbook
provision and higher test scores. The study suggests that the impact of textbooks may be limited by
teachers making poor use of textbooks, and emphasizes the need to link textbook provision with
appropriate teacher training
Evidence from Ethiopia very strongly suggests that textbook usage improves academic achievement.
For example, the findings of the 2007 National Learning Assessment (NLA) demonstrates that, for all
subjects, Grade 8 students with a textbook in a particular subject obtained higher test scores on
average. It also finds that having textbooks in English, mathematics and the sciences were all
significantly and positively correlated with improved overall learning outcomes of both Grade 4 and
Grade 8 students. These findings were confirmed in the 2010 NLA conducted in grades 10 and 12. The
same study also found that a student having his/her own textbook was positively associated with
performance. Similarly the 2010 Early Grade Reading Assessment found a strong positive relationship
between having a textbook and reading fluencyxliv . While GEQIP supports the provision of textbooks in
all grades, the EGRA findings have led to a renewed emphasis and impetus to tackle early grade reading
problems both through GEQIP and by other partners such as USAID..
How does enhanced teacher training impact on learning? Strong evidence
International evidence suggests that, after family characteristics, teacher quality is the most important
contributor to quality of educationxlv . From the evidence, it is clear that teacher quality can be
improved by both pre-service and in-service training. The World Bankxlvi found in Ghana that after
textbook provision, teacher training was the next most cost effective means of improving test scores.
However, the evidence also shows that not all teacher training interventions have been successful in
improving quality, and that the structure and quality of the teacher training is of critical importance.
In Ethiopia, there is some evidence of the impact of teacher training. The NLA data shows that higher
test scores were significantly correlated with the provision of teacher training (at Grade 4 and 8 in
2004, and at Grade 4 in 2007). Similarly, the preliminary findings of the school based component of
Young Lives research found a relationship between teacher qualifications and experience and student
math scores, although this may be confounded by student age. However the impact of teacher training
is not always clearcut. For example, qualitative studies of the TDP 1 teacher training interventions
found that the training was not always reflected in observed classroom practicesxlvii. The available
evidence suggests the need for training to be relevant to classroom reality in order to maximize the
chance of teachers adopting new techniques in the classroom and to be linked to better management
of teachers at school level to maximize time on taskxlviii.
GEQIP tackles both the relevance of teacher training and the management of teachers. The first
through a strengthened practicum component during in-service teacher training and through revised
and improved teacher training materials. The second through provision of school leadership training
and also structured continuous professional development for practicing teachers. Broader issues
around pay and incentives for teachers are not addressed directly by GEQIP but are part of our broader
dialogue with government on the effectiveness of the civil service through other instruments such as
PBS and PSCAP.
Do interventions to increase discretionary spending and enhance school accountability improve
learning outcomes? Limited evidence
International evidence shows that the provision of school grants is an effective mechanism to
strengthen school-based management, increase community participation, improve transparency and
accountability in the use of available resources, and improve learning outcomesxlix. Recent evidence
from Sri Lankal shows that a school improvement programme focusing on greater community
involvement and better planning in schools resulted in significantly improved English and maths scores
for grade IV students compared to control schools. Interestingly, results from a school report card
intervention did not have any significant impact on student results.
In Ethiopia, the limited evidence suggests that schools’ discretionary resources have positive impact on
student learning outcomes. The 2007 National Learning Assessment, for example, found positive
correlations between schools available funding and student performance. In a DFID supported pilot
project in Somali region of Ethiopia, PTAs are already increasing enrolment and attendance rates,
especially of girlsli. However, there has been no systematic study in Ethiopia to date of the impact of
school level planning processes and increased accountability of schools to communities on student
achievement.
How do interventions combine in the classroom to improve learning? Limited evidence
Rather less is known about how specific interventions interact to improve learning, and whether any
particular intervention is more cost effective than another. However, school effectiveness research
points to the need for a holistic approach. Figure 4 illustrates a model with eight domains of school
effectiveness that have been posited contribute to high quality teaching and learning
Figure 4: Domains of school effectiveness
Although GEQIP does not address all eight domains of the model, the figure above illustrates where the
project is seeking to add value. The key to the success of the intervention rests on the extent to which
the project components are implemented in coordination with other inputs. For instance, GEQIP does
not include infrastructure investment or finance for teacher salaries, but these are supported through
complementary financing through PBS. Nor does GEQIP support demand side constraints such as the
well-being of students, but these will be the subject of a separate DFID workstream.
A study of the determinants of primary schooling in Ethiopialii using household survey data found that
while the physical supply of schools continued to be an important barrier, the quality of schooling was
also an important variable in persuading parents to send their children to school. Other literature from
Ethiopia suggests that key issues beyond the availability of resources and improved school planning will
revolve around teacher time on task and promotion of approaches which maximise learning. For
example, on a small sample of schools, USAID-funded researchliii focusing on reading achievement
concluded that teacher absenteeism and effective use of teaching time were both key factors in
explaining reading scores. GEQIP as planned included a comprehensive evaluation of the programme
and its impact on teaching and learning. The evaluation of GEQIP, to be commissioned this year, will
generate evidence of what works with respect to improving education quality in Ethiopia.
Do quality interventions contribute to attracting and retaining students and closing the gender gap?
Medium evidence
There is relatively robust evidence with respect to what works with respect to girls accessing and
staying in school. These include a mixture of demand side and supply side interventions. Important
factors are making schools safe places (including separate latrines for boys and girls), locating schools
close to girls’ homes, and changing attitudes towards the importance of schooling for girlsliv. Factors
associated with drop out include high rates of repetition, inflexible schooling, language of instruction,
and access to post primary educationlv.
In Ethiopia, available literature points to the importance of the quality of services delivered, including
teacher training, and an increased supply of basic materials, as important factors in enrolling and
keeping children in schoollvi lvii. Other literature confirms the relationship between delayed entry and
drop outlviii, and between violence and school attendance for both girls and boyslix and also the
importance of demand side interventions to address opportunity costs to families of sending girls to
school.
C. Appraisal of options
C1 Appraisal against the Critical Success Criteria
All textbooks available by 2013
GEQIP has already delivered over 7 million internationally procured textbooks to secondary schools.
Feedback from stakeholders indicates that the books are regarded as a big improvement on what has
gone before. Average cost per book is under $3.00, delivered to the school. The plans for procuring the
remainder of the textbooks are mainly on track, and average costs per book have recently been
calculated at $1.71lx.
Under Option 2 the GoE would prioritise the procurement of textbooks over other outputs such as
school grants and teacher development. Consequently, books would also be procured under this
scenario, although other components of the programme would not then be funded in year four. Under
option 1, it is also planned to purchase additional instructional materials through the programme to
support early grade reading. Estimated costs are $8 million. This would not be possible under option 2.
The main risk under both options is that the GoE cannot procure the remaining books in a timely
fashion because of capacity constraints thereby jeopardising any quality improvements that might be
achieved in phase one. A dedicated textbook procurement unit has been established in the ministry,
under the direct authority of the state minister, in order to minimise this risk. Additional technical
assistance is also planned to support the ministry team.
School grants received in all schools
Option 1 would ensure the availability of financing for agreed enhanced school grants in all schools in
2011/12 and 2012/13. Under option 2, school grants for the financial year 2012/13 would be
substantially reduced, or potentially cut completely. Current available decentralised financing would
not be able to fill this gap and the gains made under the school improvement programme to date
would be jeopardised.
Under both options, a school grant evaluation is planned later in 2011 in order to asses the extent to
which schools and ABE Centres are receiving grants at the appropriate level and using them to fund
their plans. The evaluation will also assess the extent to which the financing is being used for quality
improvement. A rapid assessment conduced in 2009lxi, at the very start of the programme, indicated
that timeliness of the grants and community participation in planning both needed to be improved.
A major risk under the school grant sub component is that the grants get held up at regional level
because schools and woredas cannot report upwards on their spending in a timely fashion. This is
already happening in Somali Region where one tranche of school grants were sent back. The school
grant evaluation should provide more information on this issue and help government and donors to
address bottlenecks. It has also been agreed to send a ministry team to analyse why the reasons for
delays in reporting school grant expenditure.
Relevant training for teachers
Under Option 1, it is anticipated that around 30,000 primary and secondary teachers per year will be
exposed to enhanced training, including a school-based practicum and improved selection. In addition,
over 50,000 certificate holders will be upgrading to a diploma in a three year summer programme. A
programme for improving the English language skills of existing teachers is also being taken forward
this year.
Under option 2, the teacher development programme would not receive any funding in 2012/13.
Under this scenario, there would be no practicum and the upgrading of certificate holders would have
to be put on hold for many if not all teachers. Module development for teacher training would likely
proceed under this option, but the English language programme would be compromised. Additional
training for teachers to strengthen their skills in teaching early grade reading is planned under option 1,
but would not be possible under option 2.
The major risk to the teacher development programme is that revised teacher training materials (based
on the new curriculum) are not developed and implemented in the first phase of the programme. This
will have serious consequences for the quality of primary and secondary teacher training and the GoE is
working hard to fast track the modules. The recent arrival of a long term technical assistance package
should also help to ameliorate this problem.
Increased harmonisation and alignment of financing
As noted above, GEQIP has led the way with respect to harmonisation alignment in the general
education sub-sector. Under Option 1, DFID will send strong signals to both government and donor
partners of its commitment to the aid effectiveness agenda. It will also give DFID significant influence
as the project moves into the design of phase two.
Option 2 would possibly signal a weakening of DFID’s commitment to the sector, including the quality
agenda. Our influence on phase two design could be reduced which might have a negative impact on
efforts to increase alignment behind the government’s planning framework.
The major risk to the aid effectiveness agenda is that the GEQIP modality may not deliver for the GoE
because of overly complex donor procedures and high transaction costs. This may result in the pooled
partners switching to a more fragmented, projectised support. Ongoing dialogue with the World Bank
and other development partners is intended to minimise this risk.
Capacity of communities to hold schools to account
Under both Options 1 and 2 the school improvement planning process would continue to be rolled out
by the GoE. The assessment and planning frameworks have recently been revised and simplified and
are being distributed to all schools. GEQIP includes financing for training at regional and school levels in
the use of the new tools in order to strengthen school level planning and community participation.
A further roll out of very simplified tools to ABE Centres is also planned, but would be unlikely under
Option 2. The withdrawal of school grants in year four under Option 2 would also threaten the school
improvement programme as it is partly dependent on the discretionary spending provided through the
capitation grants to focus the planning process.
The main risks to the school improvement programme are that the planning process does not translate
into increased accountability of schools to communities and grants do not reach schools. This will be
monitored through the bi-annual school evaluation.
GoE commitment to quality improvement matched by capacity and resources
Under both options, DFID’s funding is complementary to financing for quality from GoE‘s own sources
through regular channels. The available evidence indicates that government non salary recurrent
expenditure has increased from around 5% in 2008 to 15% 2010, largely as a result of the GEQIP
intervention. Maintaining and increasing this share from GoE own resources would be a severe
challenge in the medium term, especially given the ongoing pressure to increase the number of
teachers because of high pupil teacher ratios and the need to further expand access. We therefore
judge that continued support through GEQIP, as per option 1, is necessary to catalyse the system to
effectively resource, plan for, and monitor quality improvements in the system.
There is a risk that external funding for the quality agenda will crowd out GoE’s own resources. This is
being tracked through the monitoring and evaluation processes. GoE commitment to the education
sector remains strong and this is reflected in the ESDP IV document and the level of resources going to
the sector.
Impact on girls and students in emerging regions
Since the project was launched in 2009, the girls’ completion rate in grade 5 has increased from 67% to
74%, and in grade 8 from 40% to 45%. The number of girls sitting the grade 10 examination has
increased by over 30,000 from 196,000 to 229,000. While this progress cannot be entirely attributed to
GEQIP, this represents significant progress. Data on learning outcomes will be available later this year.
GoE tracks data on gross enrolment in the two most under-served regions (Afar and Somali Region) and
this has increased from 26% to 39% in Afar and from 33% to 66% in Somali. There are now over
180,000 girls enrolled in primary school in these two regions compared to 140,000 in 2007/08. Option
1 will enable existing strategies within GEQIP to tackle equity to be vigorously pursued. These include
better selection of teachers to reflect gender and ethnic minorities, strengthened ABE facilitator
training, and a school improvement process which prioritises the enrolment and retention of
marginalised groups.
In addition, a recently conducted social assessment for GEQIP has suggested a number of ways to
further strengthen the equity dimension of the project. These include differential grant allocations
depending on the region, and additional school grants to incentivise the enrolment of girls and other
disadvantaged students. Option 1 will enable these discussions to be taken forward, while under
Option 2 this would not be possible. Under both options, the impact of GEQIP on equity will be closely
monitored and lessons learned fed into the design of GEQIP Phase two. It is anticipated that
complementary work planned by DFID-E on early marriage and support to basic services in Somali
Region will both enhance the impact of DFID programming on equity.
C2 The World Bank as a partner
Under both Options 1 and 2, DFID may channel its financing though a World Bank managed multi
donor trust fund. The World Bank was rated strong with respect to its contribution to DFID’s
development objectives in the Multilateral Aid Review (MAR)lxii. This is generally true in Ethiopia where
we work closely with them on a number of major programmes, including Protection of Basic Services
and the Productive Safety Nets Programme. The MAR rated the Bank as satisfactory with respect to its
organisational strengths.
In Ethiopia, and specifically in the GEQIP MDTF, while we recognise the benefits of using this modality
with respect to some aspects of harmonisation, we are having some problems due to the Bank’s
administrative procedures (which can lead to delays in disbursement), weak coordination, and the
transaction costs generated by the no objection process. We are continuing to review the situation and
will consider in advance of the additional financing whether to channel through the MDTF or directly
into the MoFED pooled fund.
D. Comparison of options
The same weighting is used as for CSC above. The score ranges from 1-5, where 1 is low contribution
and 5 is high contribution, based on the relative contribution to the success of the intervention.
Table 6: Comparison of options
Option 1
Option 2
CSC
1
2
3
4
5
6
7
Totals
Weight
(1-5)
5
5
5
3
4
4
4
Score
(1-5)
4
4
3
4
3
3
4
Weighted
Score
20
20
15
12
12
12
16
107
Score
Weighted
Score
20
5
5
6
6
12
4
58
4
1
1
2
2
3
1
Option 1 scores higher on all critical success criteria than Option 2, except provision of textbooks which
would be prioritised under both options. Option 1 will be particularly effective in increasing
discretionary spending in schools and helping the GoE to take forward teacher education reforms. The
preferred option is assessed as low risk with respect to climate change and the environment.
Comparison of option 1 and 2 with respect to outputs and outcomes
Table 7 below compares options 1 and 2 with respect to what will be achieved with and without the
additional funding. As can be seen, the main areas where cuts would be made in the programme are in
the area of school grants and enhanced teacher training as the government has prioritised the
procurement and distribution of textbooks within the available resource envelope. Unit costs are the
same under both options, but option 1 delivers 18 million more school grants (at a cost of
approximately £20 million), enhanced training for 90,000 teachers and support to teacher training
institutions (at a cost of £18 million) . The proposed early grade reading activities would also need to be
dropped under option 2 (estimated costs of £10 million).
Table 7: GEQIP outputs with and without additional funding
Outputs
Option 1
Option 2
No of school grants
No. of textbooks
No. of teachers with
training
68 million
84 million
150,000
50 million
84 million
60,000
enhanced
GEQIP funding is part of DFID’s overall contribution to the education sector in Ethiopia over the BAR
period. Doing nothing could reduce our overall spending from £365 million to £315 million over the
period of the BAR (to 2015). This would impact on our overall contribution to results as follows:
Table 8: DFID attributable results under the two options – up until 2015
Outcome
Additional financing
Do nothing
Number of children supported
in primary by 2015
1.94 million children in
primary school of which
930,000 are girls
130,000 of which 65,000
are girls
52,590 (of which 22,927
are girls)
1.66 million of which
799,000 are girls
No. of children completing
primary by 2015
No. of children completing
lower secondary by 2015
111,000 of which 56,000
are girls
45,227 of which 19,717
are girls
As table 8 above shows, under the do nothing option results at outcome level attributable to DFID
across our education portfolio would reduce by around 14%.
E. Measures to be used or developed to assess value for money (VfM)
We applied DFID’s 3Es (Economy, Efficiency and Effectiveness) VfM framework to analyse how we
maximise the impact of each pound to be spent on GEQIP.
E1 Economy
This relates to how our money buys key inputs of the appropriate quality at the right price. The main
costs of the programme relate to the provision of inputs, such as textbooks and school grants.
Generally, Ethiopia compares favourably with other countries in sub-Saharan Africa as far as unit costs
are concerned. The table below shows how the unit costs used in the ESDP IV planning process (base
year 2010) compares to the data presented in the DFID education portfolio review (2009) for Ethiopia
and other selected countries in sub-Saharan Africa. Teacher salaries, a major cost driver, have been
increased in line with inflation in ESDP IV – an above inflation salary increase would significantly affect
overall costs but would still compare favourably to other countries in Africa. Ethiopia’s low wage rates,
choice of low-cost service delivery models and low levels of leakage tend to ensure relatively strong
cost effectiveness.
The challenge ahead will be to maintain this value as salaries increase in response to growing
competition in the labour market. GEQIP addresses directly addresses the issue of teacher quality
through improvements in the management of schools and strengthened community oversight of
teacher behaviour. Government plans to introduce a system of teacher licensing should also help to
maintain teacher standards. A primary teacher tracking study is planned under PBS and will improve
the evidence base on the extent to which teachers are absent or not. Finally, the impact evaluation of
GEQIP will provide evidence of the extent to which training is actually impacting on teacher
performance in the classroom.
Table 9: Unit costs comparators
Inputs
ESDP IV
Textbook
Unit cost per child
(primary)
Teacher training (primary)
$1.50
$32
Primary teacher monthly
salary
Classroom construction
DFID Education
Portfolio Review
$1.25
$25
$576/per
yr
$87
$760
$1357
-
$82
Comparator
$5 (Nigeria)
$44
(Nigeria)
$1,000
(Kenya)
$198
(Kenya)
$6,745
(Kenya)
E2 Efficiency
The efficiency analysis relates to how well our partners (in this case the GoE) convert inputs into
outputs. The fact that GEQIP is using a pooled fund mechanism helps to avoid high transaction costs
and through competitive bulk purchase of essential inputs such as text books, it seeks to drive down
unit costs to the lowest possible value without compromising quality. The NAO identified GEQIP as a
good example of a programme which seeks to monitor impact on what matters – resultslxiii.
In the literature, educational efficiency is reported to have a high correlation to quality and the
commonly used measure of educational efficiency is student’s drop-out rates and repetition rates. As
highlighted in the recently published Ethiopian Economic Association (2011) publication on the
Ethiopian economy, high drop-outs and repetition rates imply inefficiency and wastage of resourceslxiv.
Existing evidence on Ethiopia summarised in the same report indicated the existence of high-student
drop-outs in the lower grades when the class size is very large. For instance, in 2008/09, the proportion
of children dropping out of school stood at 14.6% while the repetition rate stood at 6.7%. The GEQIP
programme, by contributing to better quality outcomes, is expected to increase the completion rates
of grades 5 and 8 from the respective 75.6% and 47.8% in 2009/10 to 84% and 51% in 2012/13. This
implies a significant reduction in drop out as well as repetition rates which will translate into efficiency
gains and resource saving.
E3 Effectiveness
The potential results benefits of a programme focusing on improving the quality of education include:
Increased earnings potential – In economics literature, education is viewed as an investment that turns
unskilled labour into skilled labour which increases returns in the labour market. As a result, education is
expected to be positively related to labour market outcomes (Malhotra et.al., 2003). For example, one
estimatelxv suggests that the rate of return to one additional year of schooling, averaged over 100 countries,
is 10%. A recent study by Hanushek and Woßmann (2007) also highlighted the positive effect that
educational quality has on individual earnings, to the distribution of income and thus economic growth. It
was reported that years of schooling combined with improved learning outcomes (as a measure of
educational quality improvements) would result in 1% increase in GDP. The same study indicated that the
effect of educational quality on economic growth is larger in low income countries than in high income
countries.
Figure 5 below shows rates of return analysis for education in Ethiopia conducted in 2005lxvi. This shows
significant and increasing returns to higher levels of education.
Figure 5: Monthly mean earnings per level of education: Ethiopia 2001 (from World Bank, 2005)
This analysis draws on other studies in Ethiopia that have found consistently found positive effects on
investments in education for earnings. These include:
o
Tilahun (2005)lxvii - an extra year of schooling for an Ethiopian manufacturing worker would
generate 10% rate of return for both men and women,
o
Verwimp (1996)lxviii - based on a small sample of 422 male wage earners employed in the public and
private sectors in 1994 revealed that an extra year of schooling yields an estimated return of 15
percent in urban Ethiopia.
o
Wolday’s (1997)lxix - Using data for 1996 for 843 workers in a stateowned enterprise (Edget Cotton
Factory) and 170 workers in a formal sector private enterprise (MOENCO), found a return of 5 percent in
the public sector and 8 percent in the private sector for an additional year of schooling.
o
Krishnan, Selassie, and Dercon (1998)lxx - using data from the 1997 Ethiopian Urban Household Survey,
revealed varied rates of return to education for public and private sector employment. According to the
result, an extra year of schooling would yield a return of 10.6 percent for primary education, and 15
percent for both secondary and higher education for men employed in the public sector. On the other
hand, for those working in the private sector, study came out with 0 rate of return for primary education,
8.2 percent return for secondary education and 21.5 percent return for higher education.
The demographic bonus If GEQIP succeeds in increasing the number of girls who successfully complete
primary and secondary education there will be positive externalities related to lower fertility rates and
reductions in early marriage. According to a 2005 study, raising education levels for women is a key
factor in accelerating demographic transition in Ethiopia. The same study stresses the importance of
girls’ education in reducing early marriage and fertility and increasing economic growthlxxi.
Health benefits Improved levels of education have been associated with better health of children
through parental education; increased life expectancy; improvement in spouse’s health and lowered
mortality; and improved contraceptive efficiencylxxii. Education leads to reduced fertility by enhancing
women’s knowledge, decision making power, confidence in interacting with the outside world,
closeness to their husband and economic and social self reliance.lxxiii Maternal education is a key factor
in improved child survival rates, and even low levels of education increase child survival.lxxiv Maternal
education is also positively related to knowledge of immunisation and may be expected to influence
accessing preventative health serviceslxxv. Child nutrition is positively and independently associated
with mothers’, fathers’ and grandmothers’ education.lxxvi
Improved equity – poor children, those living in rural areas, and pastoralists are amongst the groups
who are less likely to benefit from improved education opportunities. By increasing investments in ABE
Centres and making more non salary inputs available to rural schools, GEQIP is expected to have a
disproportionate benefit on the poor, rural children
E4 Cost effectiveness
In a cost benefit framework, the net benefits of the programme and the impact on poverty reduction of
GEQIP have been analysed relative to the additional inputs (£50 million). We have employed two
methodologies to monetize the benefits of the GEQIP programme. The first method proxies the estimate for
the impact on growth with a measure of the private returns to an additional year of education. The second
method tried to estimate the contribution of the GEQIP programme to productivity growth and growth
enhancement following the Pearman methodology. See the value for money (VfM) technical annex for the
detailed economic appraisal.
The estimated cost of GEQIP for the remaining 2 years of phase 1 amounts to £147 million, with DFID
contributing £50 million to the pooled fund. The investment is expected to produce benefits that will
potentially arise through private return to investment (method 1) or growth rate enhancement
(method 2) and gains from system strengthening.
Considering the global as well as Ethiopia specific evidence on returns to education, and in view of the
envisaged DFID attributable support of the GEQIP programme, we expect the achievement of better
educational outcome and through this enhanced productivity, output growth and private returns to
investment in education in Ethiopia. We have also taken in to account efficiency enhancement benefits of
this investment as GEQIP will be implemented through pooled fund arrangement that is expected to
generate efficiency gains from system strengthening.
Using a range of empirical estimates for rates of return to primary education as highlighted above, method 1
generates benefits amounting to £185.2 million that flow to the students that benefit from our support. This
added to the efficiency gain benefits of £26.8 million resulted in total discounted benefits of £212 million. So,
the estimated NPV using this method amounted to £73.3 million with a benefit cost ratio of 1.3. It is not
possible to calculate an IRR for this method because of difficulties in generating a multi-year benefit stream.
This estimate suggest that the proposed additional financing for GEQIP provided good value for money as the
NPV is positive and since £1 investment in GEQIP will generate £1.53 in benefits to Ethiopia. DFID-E is
contributing £50 million in two years to the proposed £147 million costs of the GEQIP-I programme, so the
pro-rata credit of DFID for producing the incremental benefit is estimated at 34%. Consequently, the total
NPV under method 1 attributable to DFID-Ethiopia is £24.3 million. This is our preferred cost benefit analysis
result in light of the good evidence that supports the rate of return approach.
The second methodology replaces the measure of the private returns to an additional year of
education by the estimate of growth enhancement effects. While acknowledging the weak evidence
linking budget support to growth effects, we have assumed such growth enhancement effects to
happen since the GEQIP programme, by enhancing the quality of education, is expected to enhance
labour productivity and through it over all economy wide growth.
The cost benefit analysis in this case focuses on two benefit streams: the impact on growth associated
with increasing the number of semi-skilled workers in the economy as a result of the investment in
education and public expenditure efficiency gains. In the absence of empirical evidence for Ethiopia,
the cost benefit calculation assumed a GDP growth enhancement effect of 0.05%2 and an efficiency
gain of 0.4% (based on assumptions from a direct budget support programme in Malawi). This delivers
a Net Present Value3 (NPV) of £453.9 million, an Internal Rate of Return4 (IRR) of 21%, and a Benefit
Cost Ratio (BCR) of 4.3 at 12% discount rate which is the current average lending rate of banks in
Ethiopia5 (. This implies that over £4 of benefits is delivered to Ethiopia for every £1 that is spent i.e.
2
As a result of our additional support through GEQIP-I we are expecting an additional 40,000 to complete grade 5. This roughly
accounts to 2% contribution to the increase in the number of educated/new workers joining the labour market in Ethiopia. Every
year around 2 million new workers are expected to join the Ethiopian labour market. Therefore the modest impact on growth would
appear to be valid.
3 NPV is the net present value. It is the difference between the present value of cash inflows and cash outflows. NPV
compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into
account. If the NPV of a prospective project is positive, it should be accepted. However, if NPV is negative, the project
should probably be rejected because cash flows will also be negative. The NPV calculation finds the net present value
using a predefined discount rate
4 IRR is the internal rate of return on an investment. IRR finds the discount rate that makes the NPV equal to zero. The
discount rate is the cost of borrowing or using money for investments. The decision to accept or reject the purchase
depends on the whether the internal rate of return is higher than the discount rate. The decision criteria is that, accept
the project if the IRR is higher than the discount rate or the cost of borrowing.
5
our preference in using the 12% average lending rate as discount rate is based on the consideration of the fact that Ethiopia is a
highly credit constrained economy. This is in line with the recent discount rate guideline which highlights the fact that the SOC is
the incremental benefits of the programme exceeds the incremental costs by five times. These benefit
streams are much higher than the rate of return methodology due to the strong assumption regarding
the growth enhancement contributions of the GEQIP programme. Given the weak evidence linking
budget support to growth effects vis-a-vis the estimated results highlighted above, we have ranked the
cost benefit estimates of this approach to be second best.
In summary, the above appraisal fully supports the case for providing additional financing to GEQIP.
However, GEQIP is to be seen as part of the existing package of DFID’s support to basic services in Ethiopia
including through the Protection of Basic Services (PBS) programme which is complementary to the sector
specific programmes in education, health and water. Work is also underway to explore complementary and
focussed programmes to improve equity across the regions and ensure maximum impact on women and girls
and increase demand and accountability for services. These proposed instruments are:
o
Results Based Aid pilot – this will reward results in the lower secondary leaving examination and will pay
a premium for improvements in the results of girls and students in emerging regions
o
PDP service delivery – this will focus on providing improved education, water and health services in order
to help to build a more stable Somali Region
o
End Early marriage - this will scale up a rage of strategies in Amhara Region, including through the
education sector, to reduce the prevalence of early marriage
o
Quality Education Strategic Support Programme – a package of technical support, including the partial
secondment of an adviser to the MoE, designed to build capacity to plan, implement and monitor quality
education services.
During the GEQIP phase II design and appraisal process, a full range of options for supporting GoE to deliver
on education quality improvement will be considered and appraised and a new business case will be
developed.
more appropriate for making shorter-term trade-offs in economies marked by a severe shortage of resources. Also, the World Bank
used 12% discount rate for Ethiopia in its economic appraisal of the Agricultural Growth Programme (AGP)
Commercial Case
Clearly state the procurement/commercial requirements for intervention (distinguishing between
direct and indirect procurement)
All procurement under GEQIP will all be indirect and will be undertaken by the Federal Ministry of
Education, universities, regional governments, colleges of Teacher Education, and schools. At the
federal level, the procurement Department in the MoE is responsible for the oversight of textbook,
vehicles and Information Technology equipment. A Textbook Unit has been established to
undertake international procurement of textbooks. No direct procurement will be undertaken by
DFID.
A. Why is the proposed funding mechanism/form of arrangement the right one for this
intervention, with this development partner?
It is our intention to use GoE’s Procurement and Financial systems to deliver this programme. This
decision is based on:

Undertaking the bulk of procurement through GoE systems will incur lower transaction and
overhead costs. It is also buildings capacity and strengthening GoE systems in the process.

Reassurance gained from the recent Country Procurement Assessment Review (CPAR) and
the 2010 Public Expenditure and Financial Accountability Review (PEFA) that systems are
‘good enough’ – see below.

This decision is consistent with DFID’s aid effectiveness commitments to use country
procurement systems whenever possible.
Assessment of national financial management and procurement systems
The overall fiduciary risk was assessed as moderatelxxvii, with a positive trajectory of change and a credible
programme of financial management reform currently in place. Fiduciary risk in general and corruption
risk in particular is considered lower in Ethiopia compared with other countries at a similar stage of
development. The Public Expenditure and Financial Accountability (PEFA) review in 2010 concluded that
overall the public financial management systems and processes were functioning well by international
standards. Several weaknesses were identified, but the conclusion was that these areas are being
addressed adequately by the Government’s Expenditure Management and Control Programme.
Similarly, the DFID 2010 Fiduciary Risk Assessment (FRA)lxxviii assessed the overall fiduciary risk as
moderate. This was based on substantial risks arising from weaknesses in timeliness of annual financial
statements and legislative scrutiny of external audit reports balanced with a strong internal control
framework. A recent study of corruption in Ethiopialxxix concludes that perceived corruption risks in
Ethiopia’s health and education sectors are lower than those typically encountered in many developing
countries as well as in other sectors within the Ethiopian public administration. A range of accountability
systems are in place in the sectors, which are particularly strong on the supply side (e.g. internal audit
systems and vertical accountability to the various levels of the administration).
Although substantial improvements to the legal framework for public procurement have been made
in Ethiopia in the last few years, procurement capacity remains a significant challenge at all levels of
government. The Federal Public Procurement Agency (FPPA) has currently embarked on a
multifaceted approach to improve the procurement capacity of the GoE including strengthening the
capacity of staff and oversight functions. The recent World Bank Country Procurement Assessment
Review (CPAR)lxxx at Federal level found procurement systems to be acceptable overall when
benchmarked against international good practice. The CPAR did however identify a gap in
procurement audit capacity as the Auditor General function is not equipped to focus specifically on
procurement. The MoE has commissioned independent consultancy services for the procurement
audit of GEQIP.
Assessment of education sector procurement systems
During appraisal of the project in 2008 a procurement capacity assessment of the Federal MoE and
implementing entities in the project was undertaken. Risks were assessed as substantial with
respect to the legal framework and high with respect to structures for procurement management.
The following were among the mitigation measures that were agreed during appraisal:
o
Conduct regular procurement supervision and an annual procurement audit
o
Recruit additional staff at federal and regional levels to assist with procurement
o
Ensure procurement training for key staff
A separate procurement guideline was developed as part of the Project Implementation Manual in
order to guide procurement under the project. The threshold for international procurement of
goods was set at $500,000 and for services at $200,000. International competitive bidding follows
World Bank guidelines and is subject to the World Bank procedures including the necessity to grant
‘no objection’ during the process. This helps to ensure the bidding and evaluation process is of good
quality. Other procurement in the project follows GoE procedures but is subject to post review by
the World Bank. The GoE is required to keep an up to date and detailed procurement plan.
The recent GEQIP Mid Term Review recognized a number of achievements with respect to
procurement, notably the successfully delivery of secondary textbooks to schools valued at over
$18 million and contracts signed for textbooks in excess of $48 million. Even though the MoE has
only brought in a fraction of the agreed consultancy support to deliver on the international
procurement of textbooks, capacity has been built to keep the process moving. GoE and its partners
are currently reviewing the capacity needs for textbook procurement and an international textbook
consultant is expected shortly to speed up the procurement process.
A number of weaknesses were also identified, including failure to institute agreed procurement
mitigation measures, and some issues with contract management. An action plan was agreed to
address these weaknesses and the World Bank is following up closely through weekly technical
meetings.
Procurement for GEQIP under the country’s financial management and procurement systems
GEQIP is a complex programme delivered at national scale at multiple levels of the system. Planning
is bottom up, based on an agreed planning process and the implementing entities are well placed to
handle local procurement of goods and services.
The international competitive procurement of textbooks is a new activity for the GoE so it was
agreed to centralise procurement at federal level in order to build capacity and learn lessons. The
available evidence from joint missions is that competition has generally reduced costs and increased
quality. The role of the World Bank has been important in providing technical support and due
diligence for large international procurement packages under GEQIP. However, problems persist
with respect to federal procurement capacity, involvement of regions in decision making, and
debate around creating opportunities for local publishers. These issues, as well as the Bank’s no
objection process, will be the subject of continued review during the rest of phase 1 of the
programme. An important focus going forward will be how to support local publishing and printing
capacity in order to maximize sustainability.
Given the high procurement content of GEQIP (compared to the amount of procurement as a share
of overall GoE spending) the pre-mitigation risk could be considered to be higher than that of the
core fiduciary risk assessment. However, the combined safeguards of procurement audit and
capacity building offset the additional risks and confirm a moderate level of risk for procurement in
this programme.
B. Value for money through procurement
As noted above, GEQIP includes significant procurement of goods and services, especially at federal
level for the international procurement of textbooks. Using GoE systems to procure reduces
management costs (we pay the World Bank 2% of our contribution to the MDTF for supervision).
Through competitive international bulk purchase of essential inputs such as text books,
procurement through GEQIP seeks to drive down unit costs to the lowest possible value without
compromising quality.
Financial Case
A. How much it will cost
The costs of the programme to DFID will be a total of £50 million over the next two years,
broken down as follows.
2011/12 - £25 million
2012/13 - £25 million
The allocation of DFID funds within the programme is as follows:
Table 10: Allocation of DFID funds to GEQIP components
Total
Share
of
expenditures
expenditures,
Components
(million $)
%
Curriculum, Textbooks
179.0
39.2
& Assessment
Teacher Development
83.6
18.4
Program
School
Improvement
165.8
36.4
Program
Management
and
12.4
3
Administration Program
Program Coordination
14.4
3
and Monitoring and
Evaluation
Total
455.2
100
DFID
contribution
(million £)
19.6 m
9.2
18.2
1.5
1.5
50
B. How it will be funded: capital/programme/admin
The programme will be funded from programme resources, and has been budgeted for in the
Operational Plan for DFID Ethiopia (2011 – 2015). The planned resources for the next two years
are within the current spending round period (to 2015). Based on performance and need,
consideration will be given in 2012/13 as to whether to continue funding to the education
sector and if so whether this continues to be the optimum mechanism to do so.
There are no contingent or actual liabilities.
C. How funds will be paid out
Figure 5 below illustrates the funds flow arrangement. DFID will disburse to the GoE pooled
account either through the MDTF (as currently) or directly to government. The decision on the
modality will be made in advance of the preparation of the grant agreement. If we do use the
MDTF, we will pay 2% of the value of the funds (£1 million) to the Bank for enhanced
supervision and head office costs. Disbursement to the pooled fund will be based on reported
spending in quarterly Interim Financial Reports (IFRs) that are received from all implementing
entities and collated by MoFED. Payments to the pooled fund will be made in advance of need
based on GEQIP plans.
GEQIP’s federal level implementing entities (MoE and Universities) and the Regional Bureaus of
Finance and Economic Development (BoFED) will receive GEQIP funds direct from the Ministry
of Finance and Economic Development (MoFED). Woreda Offices for Finance and Economic
Development (WoFEDs), Regional Education Bureaus (REB) and Colleges of Teacher Education
(CTEs) will receive GEQIP resources from their regional BoFEDs. WoFEDs in turn will be
responsible for channeling GEQIP resources (mainly school grants) to schools.
Figure 5: GEQIP funds flow arrangement
DPs
participating in
MDTF
IDA
FTI-CF
(IDA-administered)
Non
MDTF
partners
IDA-administered
MDTF
Pooled
Designated Account at MOFED
(Foreign Currency)
Government’s Regular Birr Account at MOFED
which includes Federal Government’s contribution
BOFEDs
MOE
Universities
Including Regions’ Contribution
WOFEDs
REBs
CTEs
Schools
The Financial Management arrangements for the program are anchored in the country’s regular
public financial management (PFM) system. Specifically, fund flow, banking arrangements,
chart of accounts and accounting system follow the regular GoE system, rules and procedures.
This is particularly relevant given the large number of implementing institutions and that the
programme operates throughout the country in all Regions and Woredas. During appraisal, the
Bank undertook a financial management assessment and the conclusion was that the FM
arrangements met their requirements.
The scale of the programme and complexity arising from the large number of implementing
institutions continues to pose some implementation challenges. Financial reporting for the
programme requires submission and consolidation of timely and accurate reports from a large
number of institutions. Country-wide rollout to all schools (about 22,900 schools) of the school
grants scheme needs careful monitoring and support. Additionally, weaknesses in the country’s
broader PFM system impact on GEQIP e.g. shortage of qualified accountants, delays in
reporting, limited focus of internal audit, and understaffing of the audit function.
Design features proposed to address these challenges during the original GEQIP appraisal
include: (a) aligning the GEQIP reporting arrangements with the country’s regular PFM system
and reporting arrangements, which enhances controls and minimises additional work; (b)
Financial Management support to be provided by MOFEDs and BOFEDs to other implementing
entities; (c) early appointment of auditors to facilitate early completion of the external audit;
and (d) development of school grant guidelines. An extensive dissemination and training plan is
also being designed to train trainers at the Regional and Woreda levels, and the schools and
communities, on the School Grants programme.
The GEQIP Mid Term Review included a review of the financial management arrangements for
the project. GoE were commended for assigning dedicated accountants to the project at federal
level, conducting capacity building training, and rolling out the financial management manual
for the project. The review also flagged slow disbursement of goods, but this is largely due to
the pace of textbook procurement which is expected to pick up significantly in the coming
twelve months.
D. How expenditure will be monitored, reported, and accounted for
D1 Accounting
The GoE’s accounting policies and procedures will be used for accounting for the project. The
GoE follows a double entry bookkeeping system and modified cash basis of accounting. This is
documented in the GoE’s accounting manual. This has been implemented at the federal level
and in many regions. The main elements of the ongoing accounting reform are the adoption of
(i) a comprehensive Chart of Accounts consistent with the budget classification; (ii) a system of
ledgers accommodating all types of accounts (including transfers, assets, liabilities and fund
balance in addition to revenues and expenditures); (iii) double entry book-keeping (thus, self
balancing set of accounts); (iv) a system of control of budgetary commitments (recording
commitments as well as actual payments); (v) modified cash basis transaction accounting; and
(vi) revised monthly report formats to accommodate double-entry book-keeping and
commitment control and permit better cash control. The GoE’s accounting manual provides
detailed information on the major accounting procedures, including controls.
For the school grants, a guideline has been developed and rolled out to all schools and ABE
Centres. A simple columnar cash book in a standardised format should be kept and supporting
documents should be maintained for receipts collected and payments made by schools for all
their funds (i.e. school grants provided by GoE and funds raised by the community). The
PTA/Community exercises oversight over school funds. Schools should submit a copy of their
cashbook and supporting documents quarterly to the woreda finance department (WoFED).
D2 Financial Reporting
Existing financial reporting according to GoE procedures on all expenditures including GEQIP will
continue along the following lines:

MoE and Universities report monthly to MoFED

Regional Bureaus and Colleges of Teacher Education report monthly to the regional
bureaus of finance; and

Woreda finance departments report monthly to zones who in turn report quarterly
to regional Bureaus of finance, on all their expenditures including GEQIP
expenditures.
These reports include information such as trial balance; expenditures by line items (based on
the GoE’s functional classification system), with a break-down by economic classification for
each line item; details of cash and bank balances, and break-down of receivables and payables.
MoFED is responsible for preparing the IFR drawing on information collected from the various
agencies on receipts, expenditures and balances. The MoE provides information to MoFED on
budgets for the quarter (drawing information from the annual work plan and budget).
Subsequently, MoFED will submit consolidated quarterly Interim (unaudited) Financial Reports
(IFRs) to Development Partners within 75 days of the end of each fiscal quarter. The IFRs
include comparisons with budgets, financial information for the quarter, and cumulatively for
the year and the project. The IFRs also include: (i) sources and uses of funds; (ii) break-down of
project expenditures by sub-components, aggregated to components; and (iii) forecast for the
next 2 quarters.
D3 Auditing
The external audit is carried out by the Office of Federal Auditor General (OFAG). Annual
audited financial statements and audit report (including Management Letter) of the project are
submitted to partners within 6 months of the end of the fiscal year. The annual financial
statements are prepared in accordance with the International Financing Reporting Standards
(IFRSs) and include the sources and uses of funds on the project (containing the same
information as the similar statement in the IFRs), with supporting schedules and other
information. The formats of the annual financial statements are included in the Financial
Management Manual. The draft annual financial statements are prepared within 3 months of
the end of fiscal year and provided to the auditors to enable them to carry out and complete
their audit on time. A requirement to audit up to 10% of schools annually was agreed during the
original appraisal of GEQIP. The audit is shared with all development partners. The first audit for
the programme was received on time and was unqualified.
Internal audit are carried out by the internal audit departments of the respective entities (MOE,
Universities, REBs, CTEs). In addition, MoFED, BoFEDs and WoFEDs perform internal audit
including an assessment of whether the budget utilisation is in line with the intended purposes.
Furthermore there are inspection departments at the MoFED and BoFEDs with a role of
ensuring quality of internal audits at the Ministries at Federal level and Sector bureaus at region
level, following up on the audit recommendations noted by audit reports and providing training
and improving manuals.
D4 Costs related to financial management
The costs of: (i) consultancy support; (ii) audit costs; and (iii) related logistics costs (e.g.,
transportation) are included in the GEQIP work plans and budget. Other costs are expected to
be met from the GoE’s regular budget
D5 Asset Management
Assets under this programme can not be attributed to DFID, nor can DFID track or monitor them
given that this is a joint programme and our funds will be pooled with other DPs and GoE.
Therefore, the assets will be owned, monitored and controlled by the various GoE
implementing entities involved in this programme.
Management Case
A Oversight
GEQIP is implemented at three levels of GoE – federal, regional and woreda levels – corresponding to
the roles and responsibilities for the management and financing of general education. Management
of GEQIP is fully integrated into GoE structures as figure 6 below shows.
Figure 6: GEQIP Implementation Arrangements
Minister
(MOE)
State Minister
MOFED
GEQIP
Coordination
Committee
GEQIP Coordination, M&E
(Planning and Resource Mobilisation
Process)
Universities
BOFEDs
WoFEDs
REGIONAL PLANNING DEPT
(REB)
Schools
CTEs
The Federal GEQIP Coordination Committee is intended to: (i) provide overall strategic guidance for
the GEQIP implementation; (ii) oversee the equitable distribution of the budget to regions,
institutions and components; (iii) ensure that agreed performance targets and timelines for activities
under the different components are met; and (iv) ensure effective programme implementation and
proactively address critical issues that could hinder implementation. However, in practice oversight
of the project is the responsibility of the Planning and Resource Mobilisation Process. Ultimate
responsibility for GEQIP implementation rests with the Minister of Education and he reports to
Parliament.
Regional Education Bureaus (REB) are responsible for overseeing the plans of the Colleges of Teacher
Education (CTE), including ensuring that numbers of primary teachers trained is in line with regional
requirements. They also oversee the implementation of the school improvement programme in the
woredas, and are responsible for textbook development and distribution, although the latter function
has been centralised.
Woreda Education Offices have oversight of the schools grant programme, including communicating
to the Woreda Office of Finance and Economic Development (WoFED) the lists of schools and their
enrolment. They are also responsible for supervision, although absence of transport often hampers
them in fulfilling this role. Woredas are accountable to the regional governments for their
performance.
Pooled funding partners do not have a direct role in managing the project. However, they are in
principle invited to observe meetings of the Federal GEQIP Co-ordination Committee. They are also
involved in reviewing and approving the annual plans, including the resource allocation, and
monitoring the progress of the project through review of the IFRs and the semi-annual project
reports. A MoU governs how the partners co-ordinate themselves in order to interface with GoE with
the lowest possible transaction costs.
The donor Education donor Technical Working Group (TWG), a sub group of the Development
Assistance Group (DAG), is the overall structure for harmonising and aligning donor relations with the
GoE in the sector. The TWG has an oversight role with respect to the extent to which GEQIP
complements other bilateral and multilateral projects in the sector.
B. Management
B1 DFID Management
This programme will be managed by a senior DFID Education Adviser based in DFID Ethiopia. DFID-E is
planning to extend its support through Quality Education Strategic Support Progamme (QESSP) for the
partial secondment of this adviser to the Ministry of Education until 2013. He/she will continue to be
part of the joint governance structures of the GEQIP (illustrated above) and the Education TWG.
He/she will be supported where necessary by the Head of DFID Ethiopia. The DFID Ethiopia Senior
Education Adviser will call on other Advisers from the team as required e.g. for issues relating to
public financial management, impacting on women and girls, results monitoring etc.
Financial reports, compliance and administrative functions will be managed by the DFID programme
officer in DFID Ethiopia’s Human Development Team.
B2 GoE Management
At the federal level, in addition to overall coordination of GEQIP implementation, the MoE is also
responsible for certain assigned activities, including large procurement packages (such as textbook,
vehicles, and IT equipment) on behalf of Regions. In addition, universities at the federal level and
Colleges of Teacher Education (CTEs) at the regional level are responsible for teacher development
activities in close coordination with the MoE and REBs, respectively.
Regions and woredas are responsible for the implementation of activities based on their GEQIP plans
that are consistent, on the one hand, with national standards and on the other, with regional
priorities. According to a defined formula, each region will receive a grant to implement the agreed
regional GEQIP plan. Woredas receive no additional financing from the project, but funding for
schools and ABE Centres is channeled through them.
C. Conditionality
The conditions associated with this project are set out in the GEQIP Project Appraisal Document,
which describes the conditions for effectiveness, and specific date covenants that will be monitored
through the annual and semi-annual review process. All theses conditions are linked to the specific
components of the project. They flow in part from the risk analysis and were agreed through the
formal negotiations held between the GoE and the Development Partners.
The UK’s overall conditionality policy will apply to this financial aid. If any of the following conditions
are breached, then the payments could be suspended:
(i)
Commitment to poverty reduction and the millennium development goals
(ii)
respecting human rights and other international obligations and
(iii)
improving public financial management, promoting good governance and transparency
and fighting corruption; and
(iv)
strengthening domestic accountability
D. Monitoring and Evaluation
D1 Monitoring strategy
The majority of GEQIP indicators at outcome and impact level are aligned with the GoE’s sector
development plan. Progress on these indicators is reported annually through the Education
Management Information System (EMIS). A comprehensive abstract is produced annually based on
routine administrative data. This includes data on key indicators of interest to GEQIP. The MoE has
been working hard to improve the timeliness and availability of EMIS data and the report was
available within three months of the end of the academic year last year. Data quality is considered
good enough for reporting purposes by most partners. GEQIP includes a sub-component under the
management and administration component aimed at strengthening the existing EMIS capacity to
collect, analyse and report data accurately and in a timely manner.
Learning outcomes are not part of the government’s regular monitoring system as examination data is
currently not robust enough to compare progress over time. A sample based National Learning
Assessment (NLA) that was first conducted in 2000 and repeated in 2003 and 2007 is being used for
this purpose. The NLA tests children in grades 4 and 8 in core subjects. The next assessment is
planned for 2011. The NLA has also been extended to grades 10 and 12, so baseline data are now
available to track progress at this level too. Support is being provided through GEQIP to maximise the
comparability of results over time.
In addition, the MoE produces six monthly GEQIP progress reports based on information received
from all implementing entities. These reports are the basis for monitoring of progress on key outputs
and are aligned with the quarterly financial reports in order to get a picture of both activities and
financing. The annual GEQIP report (due in September each year) is discussed in the GEQIP annual
review to which all key stakeholders (The World Bank, DPs, MoE, MoFED and all other federal,
regional and local implementing entities) are involved. Efforts to align GEQIP’s review process with
the annual education sector review meeting are ongoing.
While EMIS captures data for the key indicators of GEQIP, specific monitoring through the annual joint
review missions focuses on reviewing the implementation progress of the programme. In consultation
wit partners, the World Bank commissions independent consultants to undertake critical reviews of
progress and to give recommendations for consideration at the joint review missions.
The annual MoE GEQIP progress report and the Education Management Information System (EMIS)
abstract provide data to monitor millstones. However these reports cover the Ethiopian budget year
(July to June) as opposed to DFID’s reporting year (April to March). This can create a time lag in the
data used for DFID reporting. The quality and timeliness of the monitoring data can generally be rated
as medium.
D2 Evaluation strategy
Impact evaluation
Regular monitoring systems are not capable of helping stakeholders to understand the relationship
between the outputs (in terms of textbooks, better trained teachers, increased discretionary spending
etc.), and the outcomes in terms of improved instructional practices in classrooms, and impact in
terms of learning. Consequently the project design includes an independent evaluation. The
objectives of the evaluation are to:

Evaluate the extent to which the key inputs (GEQIP-related) influence processes (teaching and learning
in the classroom) and lead to improved student outcomes (as measured by standardized test results
and completion rates) and

Assess how key stakeholders view the relevance, effectiveness and impact of the sequencing and mix
of key inputs, and to use this information to adjust the programme over time.
The procurement of the independent evaluation team is led on by the Planning Department in
Ministry of Education. The original design of the evaluation was intended to collect baseline, mid term
and end of project data in order to track change over time. Unfortunately, the mobilisation of the
evaluation team has been delayed. An international company (Hifab) has now been recruited to lead
the evaluation with a team of local consultants and work is due to begin on collecting a first round of
baseline data in October 2011. This will be followed up with a second round of data collection in early
2013. These two data sets will be sufficient to provide robust information on the impact of the project
over time and inform the design of phase II.
The evaluation will seek to understand the relationship between inputs, outputs, processes and
outcomes at national, regional and school level. It will use a range of methods including:
o
A perception study of key stakeholders as to the reach and effectiveness of key inputs (school
grants, textbooks, teacher training, leadership training);
o
Classroom observations to assess the extent to which teachers encourage participation in the
classroom and whether this can be linked to GEQIP supported teacher training;
o
Tracking of key outcome indicators (drop out and secondary examination data) in order to make
the link to GEQIP inputs and classroom processes
Specific attention will be paid to the impact of the project on the participation and progress of girls,
and of students in the Developing Regional States. The results of the evaluation will be
communicated to key stakeholders at a workshop in 2013. The findings will be fed into the design of
GEQIP phase 2. The total costs of the evaluation will be $400,000.
School grants evaluation
A bi-annual evaluation of the impact of the school grants was also agreed as part of the project design
in order to generate feedback on the impact of the grants on school level planning and accountability.
The first evaluation should be carried out later in 2011 and will build on a rapid evaluation that was
conducted late in 2009.
Young Lives
DFID-E has also bilaterally funded Young Lives (a research programme funded by DFID centrally) to
complement its longitudinal cohort data with school level data. A baseline has now been collected
and results are currently being analysed. If a second round of data collection is funded, then this
should provide another source of data on the impact of GEQIP on school and classroom processes and
on student learning. This process is independent of the GEQIP evaluation, but has strong ownership
from the MoE and partners who will ensure that the data is triangulated.
E. Risk Assessment
The risk matrix in table 11 below is derived from the 2009 GEQIP Programme Memorandumlxxxi.
Overall project risks (where 1 is low and 5 is high) were rated as high at appraisal, mainly because of
the complexity of the programme and generally weak capacity of multiple implementing partners.
Risks are reviewed as part of regular project monitoring, and have not changed substantially since
appraisal. The procurement and fiduciary risks are in line with the World Bank’s categorisation.
Table 11: Risk Matrix (where 1 is low risk and 5 is high risk)
Risk
Probability
Impact
Mitigation
1–5
1-5
Implementation/operational risks
5
1.
Reduction
in 3
Monitor closely GoE efforts to stabilise
projected growth of
macro-economy.
public education budget
DFID is scaling up its dialogue on and
due to macroeconomic
support for wealth creation and economic
instability,
and/or
reform.
slowing
down
of
economic growth
2. Weak monitoring
reporting
and
implementation
capacity, especially at
lower
levels
of
government.
4
3
3. Textbooks delayed
5
5
4. School grants may not
have
the
expected
effects on the quality of
schooling
3
5
5. Weak procurement
capacity at all levels of
GoE
and
limited
understanding of World
Bank
procurement
procedures slows down
implementation
progress.
Political risks
6. GoE does not to
allocate sufficient funds
to non salary, quality
related recurrent
expenditure in regions
5
5
5
3
Residual
Probability
Medium
Monitoring and reporting mechanisms
have been integrated into existing GoE
systems as much as possible. Capacity of
relevant GoE staff and consultants to carry
out M&E and implementation is being
strengthened through training and
mentoring.
Adequate procurement capacity has been
established through: (a) MOE hiring a
consultant to assist in procuring textbooks
in a timely fashion using World Bank
procurement procedures and guidelines;
and (b) a more flexible approach being
sought by MOE to develop and distribute
mother tongue textbooks
Per pupil school grant amount has been
revised upwards to 30 birr for primary and
45 birr for secondary. A Rapid Assessment
conducted in 2009 indicated that grants
were generally being received by schools
and plans were in place. A larger scale
evaluation, planned for later this year, will
confirm.
Weak MoE procurement capacity will be
mitigated
through
(a)
additional
procurement staff; (b) training, and (c) the
use of consultants, where capacity gaps
exist. Procurement capacity, especially
with respect to textbooks, continues to be
a concern.
Medium
Despite
increasing
GoE
resources,
decentralized quality expenditure is likely
to remain constrained over the coming two
years. We will continue to monitor through
the review process.
High
Medium
Medium
High
7. Use of GEQIP funds
for political purposes
e.g. promotion for party
members, use of schools
for political rallies
8. Extent to which
results
are
being
achieved may be overstated by GoE in its
drive to show progress
9.
Development
partners,
including
those funding through
the MDTF, fail to align
and
harmonise
in
supporting
GEQIP
resulting in disrupted
funding
flows
and
changes in the rules of
the game
Fiduciary risks
10. Weaknesses in the
country’s PFM system
notably capacity gaps at
the
local
levels
undermine
implementation
and
reporting
11.
Evidence
of
significant instances of
corruption found
3
3
3
2
3
3
5
3
2
5
GEQIP has a number of checks and
balances built in, such as prior review of
objectives of training activities clear
guidelines for use of funds at the different
levels, and semi annual reviews. These
should reduce but not eliminate this risk UK
will continue ongoing constructive and high
level dialogue.
GEQIP includes an element of capacity
building to strengthen the GoE’s regular
education
management
information
system.
Complementary
evaluations
(school grants and comprehensive) and
joint reviews will be able to triangulate
results
Strong coordination of Development
Partners through GoE co-chairmanship of
the education TWG, coupled with an MoU
for GEQIP partners which sets out the rules
of the game.
Efforts under way to strengthen sector and
national PFM. UK will continue ongoing
constructive and high level dialogue.
Action plans to address GEQIP-specific and
broader FM weaknesses in sector
institutions have been agreed. Timeliness
of IFRs continues to be a problem and
reported spending is low, especially in
universities.
Annual procurement audits, plus annual
financial audit will provide disincentive to
corrupt behaviour and early identification
of corrupt activities. The World Bank
conducted a corruption diagnostic in the
sector early in 2009 which assessed risks as
low
Low
Medium
Low
High
Low
F. Results and Benefits Management
The impact and outcome indicators in the logical framework are taken from targets in ESDP IV. They
are considered ambitious, although achievable with sufficient continuing commitment from GoE and
its partners. There is no reason to believe that this commitment will not be maintained under the
current political conditions.
At the output level, targets are based on agreed forecasts and plans. As noted above, there are risks
particularly with respect to the timely procurement of textbooks which could affect the targets and
ultimately the programme’s impact. This will be closely monitored through the reporting and review
process and additional support provided as necessary.
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Quest no. 2056041
lxxix
Technical Annex 1: Economic Appraisal on the Additional Contribution to
GEQIP-I
In a cost benefit framework, the net benefits of the programme and the impact on poverty reduction
of GEQIP have been analysed relative to the additional inputs of£147 (DFID contributing £50 million).
We have employed two methodologies to monetize the benefits of the GEQIP programme. The first
method proxies the estimate for the impact on growth with a measure of the private returns to an
additional year of education. The second method tried to estimate the contribution of the GEQIP
programme to productivity growth and growth enhancement following the Pearman methodology.
The global evidence on the link between educational quality and economic growth suggests the
positive contribution of educational quality on individual earnings, to the distribution of income and
thus economic growth. This coupled with the efficiency enhancement benefits of the planned GEQIP
programme revealed greater benefits of the intervention compared to the investment cost we are
putting in.
A. Overall Economic Appraisal
Growth Benefits: In economics literature, education is viewed as an investment that turns unskilled
labour into skilled labour which increases returns in the labour market. As a result, education is
expected to be positively related to labour market outcomes (Malhotra et.al., 2003)lxxxi. A recent
study by Hanushek and Woßmann (2007) also highlighted the positive effect that educational quality
has on individual earnings, to the distribution of income and thus economic growth. It was reported
that years of schooling combined with improved learning outcome of educational quality
improvements would result in 1% increase in GDP. The same study indicated that the effect of
educational quality on economic growth is larger in low income countries than in high income
countrieslxxxi.
There is also indirect link through the spill over effect of increased educational attainment to better
health outcome and subsequently to economic gains. Improved levels of education have been
associated with better health of children through parental education; increased life expectancy;
improvement in spouse’s health and lowered mortality; and improved contraceptive efficiencylxxxi.
Education leads to reduced fertility by enhancing women’s knowledge, decision making power,
confidence in interacting with the outside world, closeness to their husband and economic and social
self reliance.lxxxi
Maternal education is a key factor in improved child survival rates, and even low levels of education
increase child survival.lxxxi Maternal education is also positively related to knowledge of immunisation
and may be expected to influence accessing preventative health serviceslxxxi. Child nutrition is
positively and independently associated with mothers’, fathers’ and grandmothers’ education.lxxxi
This health outcomes will then be translated in to better productivity gain and thus growth.
Malhotra et.al. (2003)lxxxi review of eight studies conducted in India, Indonesia, Egypt, Jordan, Peru
and Nicaragua showed that women’s education improves their use of maternal health services and
women are more likely to be able to translate the human capital of education into employment and
wages if the labor market conditions are favourable to them. Gakidou (2010)lxxxi also argued that in
addition to the inherent economic growth contribution, education is positively and strongly related
to health outcomes.
As highlighted in the strategic case, evidence from Ethiopia shows higher individual returns to higher
levels of education adding weight to the government’s efforts to keep students in school and makes
sure they learn.
One estimatelxxxi suggests that the rates of return to one additional year of schooling, averaged over
100 countries, is 10%. Rates of return analysis for education in Ethiopia conducted in 2005lxxxi shows
significant and increasing returns to higher levels of education. The study by Verwimp (1996)lxxxi
based on a small sample of 422 male wage earners employed in the public and private sectors in
1994 revealed that an extra year of schooling yields an estimated return of 15 percent in urban
Ethiopia.
Using data for 1996 for 843 workers in a stateowned enterprise (Edget Cotton Factory) and 170
workers in a formal sector private enterprise (MOENCO), Wolday’s (1997)lxxxi found a return of 5
percent in the public sector and 8 percent in the private sector for an additional year of schooling.
Rate of return study by by Krishnan, Selassie, and Dercon (1998)lxxxi using data from the 1997
Ethiopian Urban Household Survey, revealed varied rates of return to education for public and
private sector employment. According to the result, an extra year of schooling would yield a return of
10.6 percent for primary education, and 15 percent for both secondary and higher education for men
employed in the public sector. On the other hand, for those working in
the private sector, study came out with 0 rate of return for primary education, 8.2 percent return for
secondary education and 21.5 percent return for higher education.
Another model based analysis by Tilahun (2005)lxxxi revealed that extra year of Schooling for an
Ethiopian manufacturing worker would generate 10% rate of return for both men and women.
Considering such global as well as Ethiopia specific evidence on returns to education and in view of
the envisaged support of the GEQIP programme in terms of better delivery of new primary and
secondary text books for 25 million children; school grant for 10 million primary and 1.2 secondary
school students; enhanced pre-service training for 20000 primary and secondary teachers; and
upgrading of 30000 teachers, we expect the achievement of better educational outcome and
through this enhanced productivity, output growth and private returns to investment in education in
Ethiopia.
Using a range of empirical estimates for rates of return to primary education as highlighted above,
this rate of return method (method 1) generates discounted benefits amounting to £185.2 million
that flow to the students that benefit from our support.
For method 2, considering the growth enhancement assumptions in Malawi’s General budget
support programmelxxxi and acknowledging the weak evidence linking general budget support to
growth effects, we assumed a 0.05% growth enhancement a result of our proposed intervention.
This resulted in monetized benefits estimated at £1,776 million (undiscounted) and £565.7 million
discounted.
As a result of our additional support through GEQIP-I we are expecting an additional 40,000 to
complete grade 5. This roughly accounts to 2% contribution to the increase in the number of
educated/new workers joining the labour market in Ethiopia. Every year around 2 million new
workers are expected to join the Ethiopian labour market.
Efficiency Gain in Public Expenditure: In the literature educational efficiency is reported to have high
correlation to quality and the commonly used measure of educational efficiency is student’s drop-out
rates and repetition rates. As highlighted in the recently published Ethiopian Economic Association
(2011)lxxxi publication on the Ethiopian economy, high drop-outs and repetition rates imply
inefficiency and wastage of resources.
Existing evidence on Ethiopia summarized in the same report indicated the existence of high-student
drop-outs in the lower grades when the class size is very large. For instance, in 2008/09, the
proportion of drop-out stood at 14.6% and that of repetition rate at 6.7%.
The Education Public Expenditure Review on Ethiopia published in December 2010 with financial
support from DFID and through over sight by the Ministry of Education indicated that the coefficient
of efficiency in primary education stood at 48.5% in 2007/08.
So, the GEQIP programme by contributing to better quality outcomes is expected to increase the
completion rates of grades 5 and 8 from the respective 75.6% and 47.8% in 2009/10 to is 84% and
51% in 2012/13. This implies a significant reduction in the drop-out as well as the repetition rate
which translates in to efficiency gain and resource saving.
General or sector budget support will generate efficiency gains in public expenditure. However, as
indicated in Joint Evaluation of Budget Supportlxxxi the magnitude of these effects depend on whether
an increase in discretionary funds is actually made available to the government budget. It was
reported that in some cases general budget support clearly improved allocative efficiency by
enabling the governments to complement earmarked resources (e.g. in Burkina Faso GBS was
reported as complementing the HIPC funds which are targeted for social services).
The same evaluation also highlighted the positive contribution of GBS to enhance the operational
efficiency of public expenditures by facilitating a better balance between capital investment and
recurrent spending in government budgets (e.g. Uganda, Rwanda, Mozambique). This makes it easier
to provide counterpart funding for project aid (e.g. Mozambique); and reducing transaction costs for
governments.
Based on these arguments and considering the efficiency enhancement assumptions in Malawi’s
General budget support programme, we assumed 0.004% efficiency gain from the intervention which
is translated in to a monetized benefit to the tune of £69.7 million (undiscounted) and £26.8 million
discounted. We assumed this benefit to be the same for both methods 1 & 2.
Overall cost benefits analysis: Aggregating the monetized private return (method 1) or growth
enhancement (method 2) benefits and efficiency gain for public expenditure resulted in greater
incremental benefit from the intervention compared to £147 million incremental investment cost.
Normally longer timeframe (10 years or more) is used for economic appraisal. In this case, using 14
years time horizon, our economic appraisal of the additional GEQIP spend using method 1 resulted in
NPVlxxxi of £73.3 million and benefit cost ratio of 1.53. This estimate suggest that the proposed
additional financing for GEQIP provided good value for money as the NPV is positive and since £1
investment in GEQIP will generate £1.53 in benefits to Ethiopia. This is our preferred cost benefit
analysis result in light of the good evidence that supports the rate of return approach. It should be
noted that the estimated results under method 1 is lower and this result would be expected because
the estimate for the private returns to education represents a narrower measure of the impact of
education than using the impact on growth.
Method 2, on the other hand, generates NPV of £453.9 million, IRRlxxxi of 21% and benefit cost ratio
(BCR) of 4.3 at 12% discount rate which is the current average lending rate of banks in Ethiopia. This
implies that that the planned investment is best from VfM perspective as it would generate over £4
of benefits for every £1 that we spend in the education sector. These benefit streams are much
higher than the rate of return methodology due to the strong assumption regarding the growth
enhancement contributions of the GEQIP programme. Since the estimated result for method 2 is
based on some strong assumptions regarding the possible labour productivity and growth
enhancement contributions of a two year GEQIP programme far in to the future, there is a need to
look at the productivity enhancement and growth contribution of both GEQIP I and II programmes
over the whole 8 years period to gather better evidence in the area thus helping to effectively
address such shortcomings. Given the weak evidence linking budget support to growth effects vis-avis the estimated results highlighted above, we have ranked the cost benefit estimates of this
approach to be second best (i.e. we did not prefer it over that of private return to investment
methodology).
DFID-E is contributing £50 million in two years to the proposed £147 million additions to the GEQIP-I
programme. So, the pro-rata credit of DFID for producing the incremental benefit is estimated at
34%. So, of the total NPV under method 1, £24.9 million is attributed to DFID Ethiopia (Annex 2).
B. Sensitivity of Results to Variations in Baseline Parameters
Sensitivity analysis was made on the estimated cost-benefit results based on method 1 by varying the
private return to investment and public expenditure efficiency-improvement parameters in three
different scenarios.
First, if private return parameter was reduced to 15% while keeping the same public expenditure
efficiency-improvement, the NPV becomes £65.6 million and benefit cost ratio 1.47. Second, if we
reduce the private return coefficient to 10% while keeping the same public expenditure efficiencyimprovement, the NPV becomes £57.9 million and BCR of 1.42. Finally, if the private return
coefficient was kept at the same level while reducing the public expenditure efficiency-improvement
to 0.002, the NPV becomes £59.7 million and BCR of 1.43. This again supports the proposal to accept
the envisaged additional contributions to GEQIP-I.
C. Appraisal Summary
The additional contribution to GEQIP-I programme is good value for money as revealed by this
economic appraisal: positive and high NPV and greater benefit cost ratio. So, even after accounting
for sensitivities related to the assumed private return and public expenditure efficiencyimprovement parameter, the cost-benefit analysis yields NPV of £57.9 million (£20 million attributed
to DFID)and benefit-cost ratio of 1.42 suggesting the additional financing to GEQIP is viable from VfM
point of view.