Document of The World Bank Report No: 17739-ET PROGRAM APPRAISAL DOCUMENT ONA PROPOSED INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT IN THE AMOUNT OF US$100 MILLION EQUIVALENT TO THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA FOR THE EDUCATION SECTOR DEVELOPMENT PROGRAM May 4, 1998 Human Development IV and Country Department 6 Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective March 31, 1998) Currency Unit Ethiopian Birr US$ 1.00 = 6.8 Birr - SDR 1.00 = US$1.34731 FISCAL YEAR July 8-July 7 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank BESO Basic Education System Overhaul (USAID) CAS Country Assistance Strategy CFU Counterpart Fund Unit CJSC Central Joint Steering Committee CS Central Secretariat DCA Development Credit Agreement DERU Distance Education Resource Unit DFID Department for International Development (UK) DO Development Objectives EICMA Educational Institutes Construction and Maintenance Agency EMA Educational Media Agency EMU Educational Media Unit EMPDA Educational Materials Production and Distribution Agency ESDP Education Sector Development Program ESRDF Ethiopian Social Rehabilitation and Development Fund EU European Union GER Gross Enrollment Ratio FDRE Federal Democratic Republic of Ethiopia GTZ German Technical Cooperation ICB International Competitive Bidding ICDR Institute of Curriculum Development and Research IDA International Development Association IEC Information Education and Communication IFC International Finance Corporation IP Implementation Progress IRI Interactive Radio Instruction MEDAC Ministry of Economic Development and Cooperation MOE Ministry of Education MOF Ministry of Finance NCB National Competitive Bidding NOE National Organization for Examinations OPEC Organization of Petroleum Exporting Countries PHRD Policy Human Resource Development PMO Prime Minister's Office REB Regional Education Bureau RS Regional Secretariat RJSC Regional Joint Steering Committee Sida Swedish International Development Agency TTC Teacher Training College TTI Teacher Training Institute Vice President: Callisto Madavo Country Director: Oey Astra Meesook . Sector Director: Birger Fredriksen Task Team Leader: Arvil Van Adams Assistant Task Team Leader: Young Kimaro FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA EDUCATION SECTOR DEVELOPMENT PROGRAM TABLE OF CONTENTS A. Program Development Objective 2 1. Sector background 2 2. Program objectives 3 B. Strategic Context 4 1. Sector-related CAS goal supported by the program 4 2. Main sector issues and Government strategy 4 3. Sector issues to be addressed by the program and strategic choices 6 C. Program Description Summary 7 1. Program components 7 2. Key policy and institutional reforms supported by the program 10 3. Benefits and target population 13 4. Institutional and implementation arrangements 14 D. Program Rationale 23 1. Program alternatives considered and reasons for rejection 23 2. Major related programs financed by the Bank and/or other development agencies 25 3. Lessons learned and reflected in proposed program design 28 4. Indications of Borrower commitment and ownership 30 5. Value added of Bank support in this program 30 E. Summary Program Analyses 31 1. Economic 31 2. Financial 32 3. Technical assessment 33 4. Social assessment 34 5. Environmental assessment 34 6. Participatory approach 35 F. Sustainability and Risks 36 1. Sustainability 36 2. Critical risks 37 3. Possible controversial aspects 40 G. Main Loan Conditions 40 1. Conditions of Negotiations 40 2. Conditions of Board Presentation 40 3. Conditions of Effectiveness 40 H. Readiness for Implementation 41 I. Compliance with Bank Policies 41 Annexes Annex 1: Program Design Summary Annex 2: Detailed Program Description Annex 3: Program Costs Annex 4: Economic Assessment Annex 5: Financing Plan and Donor Activities Annex 6: Procurement and Disbursement Arrangements Annex 7: Key Indicators Annex 8: Program Processing Budget and Schedule Annex 9: Documents in Program File Annex 10: Status of Bank Group Operation in Ethiopia Annex 11: Ethiopia at a Glance Map: IBRD Reference Number 29484 This PAD is a joint effort by a World Bank team consisting of: Arvil Van Adams (Task Team Leader, AFTH4), Young Kimaro (Asst. Task Team Leader, AFTH1), Christine Pena (Human Resources Economist, AFTH4), Harry Anthony Patrinos (Economist, HDDED), Iraj Talai (Financial Analyst, AFTSI) and Francesco Sarno (Procurement Specialist, AFTSI), Richard James (Financial Analyst, ECSIN), Gebreselassie Okubagzhi (Social Sector Specialist, Resident Mission, Ethiopia), Bengt Jacobson (Architect Consultant) and Dick Coppinger (Architect Consultant). The report benefited from advice and comments from the Quality Assurance Team consisting of: Marlaine Lockheed (MNSHD), Surendra Agarwal (AFTSI), Juan Prawda (SASED), and Gerhard Tschannerl (AFTSA), and also from Matthew Verghis (AFC06). INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Africa Regional Office AFC06 Program Appraisal Document Ethiopia Education Sector Development Program (ESDP) Date: April 29, 1998 Task Team Leader: Arvil Van Adams Country Director: Oey Astra Meesook Sector Director: Birger Fredriksen Program ID: 732 Sector: Education Program Objective Category: Poverty Reduction Lending Instrument: Sector Investment Program Program of Targeted Intervention: [X] Yes [ ] No Program Financing Data [ ] Loans [X] Credit [] Guarantee [ ] Other [Specify] For Loans/Credits/Others: Amount (US$m): lOOM Proposed terms: [X] Multicurrency [ ] Singlecurrency,specify Grace period (years): 10 [ Standard Variable [ ] Fixed [] LIBOR-based Years to maturity 40 Commitment fee: 0.5% Service charge: 0.75% Financing plan (Annex 5) Source Amount (US$m.) Government 1,315.1 Total existing donor commitment (as of 4/1/98) 278.6 IDA ESDP 100.0 Total available financing 1,593.7 Financing gap 221.2 (gap as % of total cost) (12.2%) Borrower: Government of Ethiopia Guarantor: Responsible agency(ies): Ministry of Education and the Regional Education Bureaus Estimated disbursements (Bank FY/USSm): FY98/99 FY99/00 FYO0/Ol FY01/02 FY02/03 Annual: 15 25 25 25 10 Cumulative: 15 40 65 90 100 Proposed coverage: Program sponsor: Nature of underlying financing: Terms of financing: Principal amount (US$): Final maturity: Amortization profile: Financing available without guarantee?: [X} Yes [ ] No If yes, estimated cost or maturity: Program implementation period: 5 years IDA credit financing period: 4.5 years Expected effectiveness date: 9/98 Expected closing date: 1/7/03 Project Appraisal Document Page 2 Ethiopia Education Sector Development Program A. Program Development Objetie 1. Sector Background Ethiopia's education sector is characterized by low enrollment at all levels. Only about one out of three primary school age children attend primary school. The gross enrollment ratio (GER) in 1995/96 was 30% for Grades 1 to 8. Only one in ten school age youth attend secondary school and tertiary education is open to a smaller fraction of those completing secondary education. Regional disparities are also prevalent with urban areas having higher gross enrollment ratios (GER) than less developed regions such as Afar and Somali. Except for Addis Ababa, gender disparities also exist with girls having significantly lower GERs than boys. Low and declining quality is a problem contributing to high dropouts and repetition rates, especially for girls. About a third of the students enrolled in Grade One drop out and close to one-fifth of the remaining students repeat. Poor performance is linked with inadequate facilities (due to long standing neglect and civil strife, a number of schools in the country are in need of major repair), lack of teaching materials (textbook to student ratio is 1:5), inadequate teacher training (only about 85% in primary, 30% in junior secondary and 40% in senior secondary are qualified for their post), and a curriculum that fails to take into account regional, cultural and linguistic differences. Science, language and culture components seem too theoretical, lacking enough practical material to prepare students to lead productive lives in their communities. In spite of some recent gains in enrollment and numbers of schools and teachers, the educational system, particularly at the primary level, is still suffering from acute problems of accessibility, quality, equity and relevance at all levels. In order to address the above issues, the Government embarked on a set of political, economic, and social reforms, and formulated a new Education and Training Policy and Strategy (1994). The policy's main goal is to restructure and expand the education system in ways that are directly relevant to the present and future requirements of the economy. The policy's scope encompasses formal education from kindergarten to tertiary education, special needs education, and non-formal education. Its objectives are the following: => To make education more relevant and to link schools closer to the community by use of local languages as a medium of instruction at the primary level. = To increase students' access to textbooks by reducing the textbook/pupil ratio from 1:5 to 1:1 in core subjects (language, math and science). > To enable increasing numbers of students to complete 8 years of basic education by changing the existing structure of 6-2-4 to 8-2-2. => To provide a good quality primary education with an ultimate aim of achieving universal primary enrollment over a period of 20 years. > To make education relevant by providing problem solving skills and well rounded education catering to the needs of the individual and the society. =' To provide vocational education and training at different levels attuned to the manpower requirements of the economy. > To provide a secondary education of appropriate quality in an equitable way. > To promote a higher education of good quality, relevance, and focusing on research and development => To make available special and non-formal education in line with the needs and capability of the country. = To improve the quality of training, professional competence and career structure of teachers and other professionals. Project Appraisal Document Page 3 Ethiopia Education Sector Development Program => To streamline the management and organization of the education system so as to make it decentralized, coordinated, participatory, professional and efficient. = To increase education financing by encouraging community participation, introducing cost sharing mechanisms, and involving the private sector in the provision of education. => to improve the collaboration and coordination of the education sector with other relevant sectors. The Education and Training Strategy focuses on four major areas: First, the restructuring of the education system: a kindergarten system for children aged 4-6 years; primary education from Grades 1-8 divided into the first cycle (Grades 1-4) for basic education and the second cycle (Grades 5-8) for general education; general secondary education from Grades 9-10; senior secondary education of 2 years (Grades 11-12) to prepare for higher education; a vocational and technical education system that runs parallel with formal education; higher education of 1-2 years for diploma and 3-5 years for undergraduate degree and an additional 1-3 years of post-graduate degree; non-fornal, adult and distance education, as well as special needs education that are coordinated with the rest of the educational system. Second, a curriculum change in line with the new education objectives and to increase the relevance of education in order to meet the needs of communities. Third, an improvement in the quality of education throughout the system. Fourth, the expansion of primary and vocational education to meet the demands of the country and economy and to attain some equity and sustainability. 2. Program Objectives The Education Sector Development Program (ESDP) is an expenditure program that translates the Government's far-reaching policy and strategy into action. The program covers the first five years of a 20-year sector development program and was launched by the Government in 1997/98. Activities of the first year of the program are supported by Government and donors through on-going projects. The framework for the ESDP, developed by the Government, was presented to the Consultative Group meeting of donors in December 1996. This resulted in a partnership between the Government and the donors to jointly prepare the program for external financing. ESDP Objectives. The objective of the first five-year phase of ESDP is to improve the overall educational attainment of the population, while achieving greater social equity. Its longer-term objective is to achieve universal basic education by 2015. For the first five-year phase of ESDP the Government has set the following targets: => expand access to education with special emphasis on primary education in rural areas, raising enrollment from 3.1 million to 7 million, and increasing the primary enrollment ratio from 30% to 50%; > improve equity by improving enrollment ratios for disadvantaged groups: increase girls' enrollment from 38% to 45%, and increase rural relative to urban enrollment; => improve efficiency of the education system by reducing dropout and repetition rates; => improve quality and relevance by providing books, reducing the student to book ratio from 5:1 to 1:1 in core subjects, and by curriculum improvements and teacher training; and => improve financing for education by increasing public spending on education from 3.8% to 4.6% of GDP and facilitating private sector and community financing of education within the target of 5% of ESDP spending. Project Appraisal Document Page 4 Ethiopia Education Sector Development Program B. Strategic Context; i 1. Sector-related Country Assistance Strategy (CAS) goal supported by the program (see Annex 1) CAS document number: 17009-ET - Date of latest CAS discussion: August 19, 1997 The latest Country Assistance Strategy (August 1997) for Ethiopia sets as a goal the improvement in human capital and the provision of direct and immediate benefits to the poor as a foundation for sustained long- term development. This is justified on the basis of extremely low educational attainment in the country. The existing gender and urban bias, which are manifested in school enrollments, are identified for immediate attention. The CAS calls for an increase in the overall gross primary enrollment rate to 50% by 2002 and at least 25% in disadvantaged areas. 2. Main sector issues and Government strategy Key sectoral issues are: (a) high direct and indirect cost of schooling; (b) regional, urban/rural and gender disparity in schooling; (c) poor quality of education; (d) inadequate resources; (e) inefficient use of resources; and (f) weak management capacity throughout the system. In identifying the issues and developing strategies to address them, the Government has benefited greatly from a dozen diagnostic studies of the education sector that were undertaken over two years (1996-98) with funding from a Japanese Policy and Human Resource Development (PHRD) grant. Issue (a) - high direct and indirect cost of schooling. High opportunity cost of children's schooling, particularly during agricultural peak seasons (PHRD grant studies: Household Demand for Education, 1996), and cash cost of schooling (PHRD grant studies: Cost and Financing of Education, 1996). Government strategy is to reduce opportunity cost to parents with flexible school calendar that avoids overlap with agricultural peak periods, shortened school days that allow children time for chores at home, and reduced financial burden on families by abolishing school fees up to Grade 10. Issue (b) - regional, urban/rural and gender disparity. Primary GER achieved in two nomadic Regions of Somali and Afar are 11% and 7%, respectively. Girls' participation rates are lower. Primary GER for nomadic girls is below 1%. The gender disparity is also conspicuous at the tertiary level, in the teaching profession and in school management. According to the Strategic Resource Planning for Girls Education Country Case Study for Ethiopia (1997), concern for security, early marriage, family's dependence on their labor, and lack of privacy in school toilets keep girls from school. Government strategy is to increase access to schools in rural areas by locating the majority of new schools and additional resources in disadvantaged areas. Some nomadic areas will pilot nomadic schools that move with the population so that children can attend school without interruption. An inter-sectoral approach is taken to promote girls' education. Communities are sensitized to the inter-generational benefits to be gained from girls' education, and are discouraged from early marriage of girls. Much emphasis is given to infrastructure within school, such as separate toilet facilities for girls. And in the community, emphasis is placed on water supply and grain mills which would diminish household chores for children, especially girls. Project Appraisal Document Page 5 Ethiopia Education Sector Development Program Issue (c) -poor quality of education. Physical facilities in disrepair, lack of educational materials, equipment, and furniture create a poor learning environment for children (PHRD grant studies: Institution Surveys, 1996). Teachers are inadequately trained, particularly for secondary grades (only 40% are trained). Schools operate without professional guidance. A third of the students drop out of school before completing the first grade. Repetition rates are high, and only half of the age group completes primary education. Examinations serve to select students for advancement rather than to provide feedback to improve classroom teaching. Government strategy is to totally overhaul the learning environment to achieve better results. Schools are to be fully rehabilitated and refurbished and teachers professionally trained and motivated. Professional support is to be given to schools for increased effectiveness, both through feedback on examination performance as well as pedagogic support to teachers on a continuing basis. More books will be made available to facilitate learning. Issue (d) - inadequate resources. Ethiopia's per capita income of US$110 places it among the lowest in the world. The share of education has been substantially increased from about 2.6% of Gross Domestic Product (GDP) in 1990/91-1992/93 to 3.8% in 1995/96. Despite the increased share of resource allocation, financing falls short of the level required to expand and improve education because of the country's low income base and near total dependence of the sector on public finance (PHRD grant study: Cost and Financing of Education, 1996 and World Bank Public Expenditure Review, 1997). Government strategy is to diversify sources of financing for education including cost sharing (for Grades X 11 and above), student loans, income generating activities such as consultancies for tertiary institutions, and active participation by the private sector in financing education. Issue (e) - inefficient utilization of resources. Primary and secondary schools are run inefficiently. Wastage arising from dropouts and repetition is high. It takes, on average, 8.8 years for a child to complete a 6- year primary cycle. Repetition rates are high at upper grades of the primary and secondary schools (average 21%). The state monopoly of textbook supply and distribution has perpetuated inefficiencies that Ethiopia can ill-afford. (PHRD I studies: Cost Effectiveness of Key Educational Inputs, 1996). While lack of access to schools is a deterrent to education in rural areas, it is equally true that many schools are underutilized. Government strategy is to combine improved quality of education (see issue c, above) with automatic promotion up to Grade 3, and extend the primary education system to Grade 8 so that pupils will have increased years of schooling before leaving the system. A local language policy was adopted to facilitate children's adjustment to school, increase their cognitive growth, increase relevance of learning to their home environment, and thereby increase children's motivation in school. Teachers will be more intensively employed by raising the average student teacher ratio from 33:1 to 50:1. Facilities will be better utilized through double-shift practices. For tertiary institutions, Government would make further expansion of facilities conditional on the institutions' developing and implementing their strategies for improving efficiency. State subsidy to textbook provision will shift from producer to consumer subsidies. The Education Materials Production and Distribution Agency (EMPDA), a public enterprise, will be commercialized and competition from the private sector encouraged to improve efficiency in the textbook sector. Issue (f) - weak education planning and implementation/management capacity. At all four levels of Government (center, regional, zonal and woreda), there is a shortage of qualified staff. Procedures and guidelines for implementation and reporting under the decentralized Government structure have not been developed. Decision-makers at all levels of Government are hampered by lack of easy access to urgently needed data. At the school level, there has been little or no training of managers. Government strategy is to provide training in education management to officials at all levels and to head teachers, develop guidelines and establish a reporting and monitoring system to assure accountability. Project Appraisal Document Page 6 Ethiopia Education Sector Development Program 3. Sector issues to be addressed by the program and strategic choices ESDP is a sector-wide operation. It will address all the above issues. Strategic choices which the program has made in addressing these social issues were: (a) School site location in rural and under-served areas. ESDP will locate the majority of new schools in under- serviced rural areas. The alternative would have been demand-driven site selection. This would have located most new schools in urban areas where the demand for education is high, schools are congested, and there is a clear need for expanded facilities. However, this would further widen the urban-rural gap in education opportunities. It was therefore decided that social equity should be considered in deciding where to locate schools and that schools should be placed where demand for schooling is depressed by distance to schools. In addition, numerous interventions will be introduced to increase that demand. This is also consistent with the Government's overall development strategy that emphasizes raising productivity in rural areas. (b) Construction of more schools. With primary GER of about 30% for Grades 1 to 8, Ethiopia has one of the lowest school enrollment rates in the world. Household surveys carried out under PHRD grants reveal that lack of access to schools and, even where they are available, long distances to schools have been major constraints to school attendance. Under these circumstances, it was thought justified to construct more schools to increase access and shorten distance to schools. (c) Shorter school days. Due to the poor quality of learning, longer school days with increased instructional hours would have been desirable. However, shorter schools days have two advantages: (i) it reduces the opportunity cost of schooling, thereby encourages more parents to send their children to school; and (ii) where demand for education is constrained by inadequate facilities, enables double-shifting for schools to accommodate more children. Given the extremely low primary enrollment rate, this trade-off appears justified, particularly as additional interventions are in place to enhance the quality of education with teacher upgrading and availability of books. (d) Higher student-teacher ratio. More than 90 percent of the primary recurrent budget has been spent on teacher salaries. Leaving little for other inputs that are necessary for quality education, especially books and desks. Under the program, the average student-teacher ratio will be allowed to increase from 33:1 to 50:1. More funds will be allocated to books, desks and other complementary inputs that are severely under-funded. (e) Elimination of schoolfees for Grades 1-10. It was mentioned in Section A that the education sector suffers from serious under-funding. Yet under this program school fees for these grades have been eliminated to reduce the financial burden of children's schooling on parents. For subsistence farmers, cash required to pay school fees carries an additional burden. Project Appraisal Document Page 7 Ethiopia Education Sector Development Program C. Program Description Summary 1. Program components (seeAnnex 2for a detailed description and Annex 3for a detailed cost breakdown) The program covers all education activities of the Central and Regional Governments, from basic education to tertiary education, both formal and non-formal education, as well as adult education, special needs education, distance education and teacher training. A brief description of the program activities by component and the expected outcome of these activities is described below. This is a "generic" presentation; there will be considerable variation among Regions and different emphasis and prioritization depending on the Regions' particular needs. Basic Education. Activities - Over the five-year ESDP period, 2,423 new primary schools will be built, 1,814 upgraded, and 1,220 renovated, in order to accommodate 3.9 million additional students. Curriculum reform will be completed, teachers upgraded, and book provision will be substantially increased. Expected outputs - access to schools will be substantially increased, specially in rural areas where all new school construction is to be located. Increased enrollment (from an average GER of 30% to 50%) over the next five-years will be realized both from increased in-take and improved student retention. Quality of teaching/learning will be improved and proximity of schools to homesteads should enable more children to remain in school and complete the primary cycle. Non-formal education will provide a second chance to school dropouts and those youths and adults who have never had the opportunity to attend schools. Educational radio programs will also supplement classroom teaching. Secondary Education. Activities - ESDP will selectively expand secondary school facilities to reduce congestion. Curriculum will be revised to improve quality and relevance. Teachers will be upgraded and the availability of instructional materials and equipment will be greatly increased. Expected outputs - reduced class size will improve the learning environment. Improved quality of teachers and greater availability of books will help improve teaching/learning. Technical and Vocational Education and TrainingActivities (TVET) - employer and market surveys will be carried out to assure relevance of TVET programs before facilities expansion is considered. Close partnership will be sought with the private sector in the design of TVET programs and in the provision of training. Until the private sector becomes more active throughout the economy, the Government would continue, in the short-run, to play an active role. Expected outputs - training provided will have greater relevance to the demands of the job market, hence higher rates of employment may be expected for TVET graduates than in the past. The economy will stand to benefit from increased productivity from trained and skilled labor. Teacher Training Institutes and Colleges. Activities - facilities will be upgraded and expanded to handle in-service upgrading for primary teachers to qualify to teach in the upper two grades of the second primary cycle. Teacher training curricula will be revised to reflect curriculum reforms at primary and secondary levels. Greater emphasis will be placed on teaching skills. For cost effective teacher upgrading and to give teachers in remote schools opportunities for professional growth, teacher training through distance education will be introduced. Head teachers will be trained on school management and national standards for teacher training will be established. Expected outputs - schools will be better managed and have greater community involvement. The quality of teachers and their effectiveness in the classroom should improve. Opportunities for professional growth and a new career structure should boost teacher morale. Project Appraisal Document Page 8 Ethiopia Education Sector Development Program Tertiary Education. Activities - expansion of the tertiary sector will be limited to meeting the immediate needs of the country for educators, engineers, health workers, and public administrators. The Government encourages investments in higher education by the private sector from home and abroad. Each facility's expansion will be contingent on the tertiary institution having carried out a satisfactory diagnosis of the cost effectiveness of its operation and proposals for improvement. Cost sharing schemes will be designed and implemented for Grades 11-12 and tertiary institutions. Expected outputs - more trained personnel will be available for the four critical areas mentioned above, greater private resources will flow to tertiary education, thereby reducing the burden on the public sector, and tertiary institutions will become more efficient. Institutional Development. Activities - planning, finance management, implementation and monitoring and evaluation capacities of the MOE and the Regions will be improved. The National Organization for Examination (NOE) will be staffed and equipped to carry out its mandate as the chief body responsible for designing and administering national examinations and national surveys of learning assessment. The Education Media Agency's (EMA) capacity to develop secondary school programs, distance learning programs for teacher upgrading and non-formal and adult education, and to assist the Regional Education Media Units (EMU) will be improved. Regional EMUs will, with the assistance of EMA, develop capacity to design educational programs and transmit them. This is particularly important to local language programs for primary school. Expected outputs - analysis of student performance and feedback to schools will make examinations an integral part of the teaching/learning process. National surveys for student achievement will enable ESDP to assess whether it is attaining quality goals for education. Non-formal education will become a cost-effective tool for reaching the greater majority who cannot be reached through the formal education system. Project Appraisal Document Page 9 Ethiopia Education Sector Development Program Summary Table of Program Costs Category Indicative Costs (Birr mill) US$ mill.) Share ESDP Cost by Component Primary Education Physical, Other 6,652 978 59.8% Secondary Education Physical, Other 1,258 185 11.3% TVET Physical, Other 202 30 1.8% Teacher Training Physical, Institution Building 428 63 3.8% Adult, Non-formal and Special Education Other 171 25 1.5% Distance Education Physical, Institution Building 138 20 1.2% Tertiary Education Physical, Institution Building 1,306 192 11.7% Capacity Building Physical, Institution Building 122 18 1.1% Ministry of Education Physical, Institution Building 210 31 1.9% Administration Program Management 635 93 5.7% Total Base Cost 11,122 1,636 100.0% Contingency 1,112 164 Grant Total ESDP 12,235 1,799 Project Appraisal Document Page 10 Ethiopia Education Sector Development Program 2. Key policy and institutional reforms supported by the program Policy reforms outlined in the Government's new Education and Training Sector Policy of 1994 lays out the following key policies which ESDP is supporting (not included in B.3) (a) Change of education structure, increasing primary education from 6 years to 8 years in all schools, in order to increase the number of years of schooling received by the majority who do not go beyond the primary level. (b) Automatic promotion in primary grades through Grade 3 to reduce repetition and dropouts and to enable the late bloomers to catch up without having to drop out. (c) Local languages used as medium of instruction in primary grades to facilitate children's adjustment to school, increase the relevance of what is taught in the classroom to their home environment, and to facilitate cognitive growth. (d) A new teaching career structure that is based on professional growth, performance, and experience so that teachers are motivated. (e) Elimination offees for Grades 1-10 to reduce the "cash" burden on parents. School fees have been identified as one of the major reasons for children being kept out of school. (f) Cost sharing_for Grades 11-12 and tertiary education has been adopted as a Government policy. ESDP supports the policy and is assisting the Government with modalities for implementing the policy. Additional policy changes recommended and to be confirmed under ESDP are: (a) A separate budget line for facilities maintenance so that costly and wasteful rehabilitation of facilities will not be necessary in the future. A separate budget line reduces the fungibility, earmarking the funds for maintenance purposes rather than have it lumped together with other operating costs. (b) Contracting out civil works supervision to private firms and consultants whenever and wherever there are bottlenecks in government's capacity to supervise. (c) Primary school teaching experience as a requirement for teacher training tutors. Currently tutors are frequently recruited from academia or from secondary schools. Therefore tutors are not able to prepare the teachers well for primary school classroom instructions. The Government will consider: (a) requiring new primary teacher trainers to obtain practical experience in primary school teaching for a minimum acceptable period; and (b) apply primary teaching experience as a requirement for tutor recruitment. (d) Reduce the emphasis on academic requirements for admission to TVET. Current admission practice limits access to only those students who rank among the top ten in their class and have outstanding grades in English, mathematics, and the natural sciences. (e) Practical experience in trade should be made a requirement for the new TVET trainers. In upgrading the quality of trainers, emphasis needs to be placed on practical experience of the trainers. Project Appraisal Document Page II Ethiopia Education Sector Development Program (f) A partnership between the private and public sectors in the provision of TVET. Some Regional Governments are reassessing the situation and contemplating partnerships between NGOs and the private sector for provision of training. Each partner's respective roles and responsibilities, financial contributions and accountability need to be developed. (g) Establishing Grade 4 national survey of student achievement. The new education policy, which introduced 8-year primary schooling, has eliminated Grade 6 examinations. It is feared that Grade 8 will be too late to capture deficiencies existing in the system, take corrective measures, and have a beneficial impact on the students as the majority leave the education system before Grade 8. Therefore, the Government will undertake a national baseline survey of student achievements at Grade 4. This is consistent with NOE's wish to reduce the emphasis on examinations as a selection tool, and to use the survey's results for assessing learning achievement. (h) Education data collation, processing, analysis to be carried out as close to the source as possible. While woreda and zonal offices are involved in gathering data, the processing and analysis have, in the past, been carried out at the center. More recently, Regions have taken on greater responsibility and have developed some capacity for analyzing the data. For a thorough understanding of the local situation and ownership of the education process, this is an important development. The Government will encourage decentralization further down the local government chain to the woreda level with support from ESDP. Institutional reforms adopted prior to ESDP which will be supported by the program are: (a) Establishment of a National Organization for Examination. The ESDP work program focuses on assisting NOE staff with assistance necessary for the newly established organization to carry out its mandate to administer national examinations, and to provide pedagogic feedback to the education system on student performance. The organization will phase in improvements to the examination system and additional activities as its capacity expands. (b) Decentralization of government administration. ESDP implementation is designed to work through the existing decentralized system. Some activities, particularly those that have not yet been taken up by the Regions such as procurement through International Competitive Bidding (ICB), may initially start at the center and then gradually decentralize as the Regions develop their own capacity under ESDP. (c) Commercialization of EMPDA and textbook sector liberalization. This has been planned for more than a year. ESDP will assist the Government to establish a time-bound action plan for EMPDA for transition from being an arm of MOE into an independent commercial entity. At the same time, ESDP will include training for Regional education staff so that they have the basic know-how for procuring books. (d) Donor coordination. In anticipation of ESDP, the Government has set up a Steering Committee at the center and in each of the Regions to coordinate and monitor program implementation. The committees are to be supported by secretariats located at respective education bureaus and the Ministry of Education. ESDP supports establishing such a network of coordinating bodies and will assist in developing reporting, monitoring and evaluation procedures within this framework. Project Appraisal Document Page 12 Ethiopia Education Sector Development Program Additional institional reforms neededfor ESDP implementation (a) Harmonization of donor procedures. To lighten the administrative burden on the limited capacity of the Government at all levels, it was agreed that donor procedures for supervision, monitoring and evaluation, reporting, financial accounts and auditing, procurement procedures should be harmonized. As part of preparatory work and subsequently under ESDP program implementation, harmonization will be pursued which will require flexibility on the part of all donors and could require some institutional reforms governing those activities in Ethiopia. (b) Internal audit for donor-funded activities. Accounting and audits have been weak in Ethiopia. Donor confidence for accountability of funds provided under ESDP will be critical for continued support to the program in the longer term. Currently, only Government-funded activities are subjected to internal audit. Experience with the on-going Education VII project suggests that problems encountered in external audit could have been prevented had the project been subject to such internal audit. An important step for credibility building will be for the Government to bring under internal audit all ESDP activities, whether Government or donor funded, so that problems may be dealt with as they arise. (c) Increased role of Women's Affairs Offices. Gender sensitivity will be mainstreamed in all ESDP activities and the Women's Affairs Offices will be activated to achieve this. Project Appraisal Document Page 13 Ethiopia Education Sector Development Program 3. Benefis and target population Anticipated benefits from achieving the development objectives of the program are: (a) Greater number of better educated youth with relevant knowledge and skills joining the labor force is expected to raise the productivity of the economy. In addition, the system will have the capacity to turn out large numbers of engineers, health workers, educators, and administrators to meet the demands of rapid expansion in roads, health and education sectors. (b) Social equity will be enhanced. Children from rural, poor, families will have a better chance of attending school because schools will be made accessible. Financial burden to the poor families should be reduced by the yet to be fully implemented policy to eliminate school fees for Grades 1-10, and children can attend school without having to forgo their responsibilities at home. More girls will be encouraged to go to school and to continue for a longer period. Disadvantaged Regions and disadvantaged pockets within better-off Regions will be given additional resources and assistance to improve their education attainment. (c) Resource base for education will be broadened and efficiency in resource use improved. Sources of financing education will be expanded to include the private sector, NGOs, cost sharing by parents (from Grades 11 and up), private sponsors and student loans for tertiary education. Better quality education will be provided for the same amount of money, as ESDP continuously explores cost-effective alternatives. Target populations include: (a) Rural poor, who will benefit from having the opportunity to send their children to school. (b) Girls, who will benefit from gender-sensitive curricula and books, school facilities that are more gender- friendly, mills and water sources located close to schools to reduce time spent on chores, increased number of female teachers to serve as role models, and community support for their education. (c) Children in school, who will benefit from increased proximity of schools, improved school environment and improved quality of learning. (d) Children out-of-school, who will benefit from an opportunity to become literate through non-formal education. (e) School dropouts, who will have a second opportunity to continue their learning through non-formal education. (f) Teachers, who will benefit from improved teaching environments, improved professional support, and a career structure that rewards performance and experience. (g) Civil servants, who will be better able to carry out their responsibilities in planning, budgeting, implementing, reporting, supervising and monitoring. Project Appraisal Document Page 14 Ethiopia Education Sector Development Program 4. Institutional and implementation arrangements Implementation period: Five years (1997/98-2001/02); four and a half years with IDA funding Executing agency: Ministry of Education Implementing bodies: Central Educational Agencies, MOE, Regional Education Bureaus Program oversight and coordination: Implementation arrangements for the ESDP are designed to accommodate all donors jointly, not just IDA. ESDP implementation will be carried out through existing institutions, largely following existing Government procedures. Monitoring, coordination and oversight of ESDP will be carried out through bodies created for ESDP (see Annex 6, Chart 6.1 and 6.2: Organizational Charts). The ESDP bodies are the Central Joint Steering Committee, the Central Secretariat and their corresponding bodies in the Regions: the Regional Joint Steering Committees and the Regional Secretariats. About 87% of the program will be implemented by the Regions; the remaining 13% will be implemented at the Center. Organizational set-up at the Center. Implementation at the Center will be carried out by various departments of the Ministry of Education, Central Educational Agencies affiliated with the Ministry, and tertiary institutions that report to the Ministry. The Central Joint Steering Committee (CJSC) will be responsible for coordination, oversight, resource mobilization, approval of work plans and for monitoring the overall progress of the program. Its membership will consist of Ministers of Finance, Economic Development and Cooperation, and Education, and will be chaired by the Minister of Social Affairs in the Prime Minister's Office (PMO). The Minister of Education will serve as the Secretary to the Committee and the Ministry's Planning and Projects Department (PPD) will function as the Central Secretariat (CS). The Committee will meet at least once each quarter, but additional meetings may be called at the initiative of the Chairman. Two to three donor representatives (from bilateral and multi-lateral agencies) will be non-voting participants of the Committee in an advisory capacity. The Central Secretariat will liaise with the Regional Secretariats on an on-going basis. The Secretariats at the Central and Regional levels are responsible for managing ESDP information flows and will be the main channels through which system reporting is achieved. Organizational set-up in the Regions. The Regional Education Bureaus (REB) will have implementation responsibility. The degree to which this responsibility is devolved to the zones and woredas will vary from Region to Region, depending on the respective strengths of these offices. A Regional Joint Steering Committee (RJSC) will be responsible for coordination, oversight, resource mobilization, approval of work plans and for monitoring progress. The Committee will meet at least quarterly and at any other time as determined by the Chairman. Membership of the Committee will consist of heads of Regional Bureaus of Finance, Planning, Works and Urban Development and Education and will be chaired by the Head of the Regional Social Affairs Committee. The Regional Education Bureau Head will also serve as Secretary of the RJSC and the Management Committee (consisting of Heads of Departments). The Regional Education Bureau will serve as the Regional Secretariat (RS). The Regional Secretariat will be primarily responsible for reporting to the Regional Joint Steering Committee. Program supervision, annual review and reporting requirements. ESDP is a sector-wide program that encompasses all education-related undertakings of the Government. Therefore the nature of donor support and supervision will be different from project support which requires that details of the operation be spelled out and costed. For program support, the key is agreement on program objectives and targets, and the process by which these objectives and targets will be reached. Project Appraisal Document Page 15 Ethiopia Education Sector Development Program The Central Secretariat (PPD/MOE) and the Regional Secretariats (RS) have the primary responsibility for on-going supervision of program implementation. Supervision of the program will occur at many different levels with different stakeholders. Supervision, at a more formal level, will be carried out jointly by the Government and the donors. The focus will be on program strategies, interventions and expenditures. Each joint Government- donor supervision mission will conclude with an agreement on a time-bound action plans that will move ESDP implementation forward. > Implementation tracking will be carried out by implementing bodies and records maintained on an on-going basis. => Special studies and validation. At the school level, teachers may be engaged to carry out small studies to investigate their own school/community specific problems so that they can become part of the solution. At the Regional and national level, short-term consultants will be engaged as needed to research implementation and pedagogic issues. Annual independent, objective validation of ESDP performance will be a task for the joint supervision missions. => Internal reporting and consultations will carried out on a regular basis between the executing agencies (MOE at the Center and REBs in the Regions) and implementing bodies that report to them. MOE will take a proactive role to assist the weaker Regions in all aspects of ESDP - implementation, supervision, monitoring, planning and budget preparation. => Formalized periodic reporting. Formal implementation progress reports will be required of executing agencies. These will be submitted to the CJSC (see the Reporting Requirements and Chart 3.5, below) and the donors twice a year, in July and January. Much of the data required for the report will involve education officers at the woreda and zonal level, particularly for monitorable indicators. => Formalized supervision. Donor-Government joint supervision missions will take place twice a year, in September and in February, to conduct an independent review of ESDP implementation progress. All donors will have an opportunity to influence the terms of reference for these missions, but need not necessarily participate in this expert assessment. The report of the joint supervision missions would be an important item on the agenda of the Annual Review Meeting. (a) Annual Review. The purpose of the Annual Review is to take stock of how far the strategies and interventions have taken the country toward the ESDP goals and to re-examine the objectives, priorities and target in light of greater information on education generated by the system, especially on its capacity for implementation. Against this background, the proposed annual work programs and budgets for the following year will be reviewed. The Annual Review is a joint donor-Government exercise. All donors active in the education sector in Ethiopia are expected to participate in the Annual Review along with the Government implementation bodies: the Ministry, central education agencies, REBs and, to the extent possible, zonal and woreda education offices. Important inputs required for this process are the Regional and national monitorable indicators, annual work programs and budgets presented in the revised Plans, implementation performance as reported in Progress Reports and validated by independent reviewers, and the findings of special studies at all levels. The outcome of the review mission will be: (a) an agreed work program and budget for the following fiscal year; and (b) reconfirmation or agreed adjustments to ESDP priorities, strategies and nature of interventions. Project Appraisal Document Page 16 Ethiopia Education Sector Development Program (b) Reporting Requirements. Implementation Progress Reports will be prepared by implementing agencies (the Regions and MOE with input from their constituencies) semi-annually. The Reports will contain: =. Expenditure data for the previous 6 months. The expenditure data will be based on figures from the tracking of Regional and Central education budgets, and will, as far as possible, be provided in the same format and level of aggregation as used in the Regions' and the Center's ESDP Plans. This will facilitate comparison between projected and actual expenditures. > Data on physical targets achieved in comparison to the targets set for the period, and plausible reasons for over- or under-achieving the targets. > Procurement status report and revised procurement plans for the next 24 months. => Performance coefficients (actual targets achieved divided by projected physical targets for the period) will be calculated. => Issues and problems encountered in the course of program implementation will be discussed. => Time-bound action plan to redress these problems will be proposed by implementing agencies. => Issues and problems that cannot be resolved by the implementors, such as policy or donor coordination related issues that require higher level of intervention will be brought to the attention of the respective Steering Committees. The Central Secretariat will provide guidance and technical assistance to the Regions and Central Education Agencies in preparing their Progress Reports. Based on the submissions of these reports, the Central Secretariat will prepare semi-annually a Consolidated Progress Report for the Central Joint Steering Committee. The content of the Consolidated Progress Report will summarize all the elements listed above. In addition, it will: > Identify issues that are generic and can be redressed more effectively through concerted efforts by all; > Identify goodpractices for dissemination; > Monitor relative strengths and weaknesses of the Regions and identify how the weaker areas might be strengthened; = Identify key policy and coordination related issues that require higher levels of intervention; and = Propose appropriate interventions by the Central Joint Steering Committee. The Consolidated Progress Report submitted to the CJSC in December will cover implementation progress from previous January to June, and the Progress Report submitted in June will cover the previous July to December period. Annual Review Reports submitted to CJSC in December of each year will cover the activities of the preceding fiscal year (July to June). Project Appraisal Document Page 17 Ethiopia Education Sector Development Program ESDP Reporting Cycle Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Regional Progress Report Data/information gathering_ Report preparation = = 11 Preparation of Action Plan._ _ Final reponrt :" __ _ l _ Central Progress Report Datarinformation gathering Report preparation _ Submission to CS = =*_ _ _ 1 E - |Consolidated Progress R;eport =_==== Submission of report to CJSC= 1 = = = = = i Fiancial Reports |Quarterly reports l |Closing of accounts_ |Audit report preparation l l | l Audit report submission _ Project Appraisal Document Page 18 Ethiopia Education Sector Development Program (c) Annual Review Package. The Annual Review Package should contain, in addition to the Progress Reports, Revised Regional and Central Plans. These revised plans will provide the following additional data/information: > Monitorable indicators for the past year and a discussion of their implications for the following year's work program. =' Review of priorities and strategies in light of past year's performance, as revealed by performance coefficients for physical targets and expenditures, and monitorable indicators. => Reports on special studies, including those at the school and community level, that provide insight to problems encountered in implementation. => Updated work programs consisting of revised physical targets and procurement plans, detailed expenditure projections for the following year and an indicative budget for the following two years. A Consolidated Plan will be prepared by the Central Secretariat, based on the submissions by the Regions, MOE and the Central Education Agencies. The Consolidated Plan should incorporate all the elements listed above. In addition, it should also provide: => Aggregate monitorable indicators for the country as a whole. => Independent validation of ESDP outcomes in the Regions and at the Center. > Findings of special studies at the national level, undertaken to assess ESDP impact on education and to investigate problem areas. => Results of a national survey on student achievement at the earliest reporting opportunity after the completion of the survey, following about 6 months of the processing period. The ESDP planning and budgeting exercise needs to precede the budget call in January to allow sufficient time for deliberations, review, consolidation at the center, and consultation with the donors. Budget preparation, review, and consolidation will span over two months from October and December, whereas the budget call is made in January, setting the regional subsidy and Ministry ceilings. Therefore, the Regions and the Center will be prepared with contingency plans for physical targets, work programs and budgets. The ESDP annual review is timed to allow Govemment-donor consultations before the Govemment's budget preparation is completed. All REB offices will be encouraged to equip and train their staff and computerize their planning and budgeting processes in the second year of ESDP, so that last minute changes can be incorporated with minimal time loss. The ESDP provides a framework for multi-year planning and programming. Work programs and donor commitments should extend beyond the imminent budget years, and the most important adjustments during each annual planning/programming exercise should be the work plans and financing plans for the later years of the planning period. Procurement Arrangements (Annex 6): Procurement and implementation will be largely decentralized to the Regions, where about 87% of the expenditures will occur. The PPD of the MOE will facilitate and coordinate intemational procurement for the Regions. At the regional level, REBs will implement and manage procurement and supervision. Regions may opt to pass on to zones and woredas some procurement responsibilities, based on implementation capabilities at these lower levels of Govemment. A minimum of two senior officers with procurement responsibilities will need to be based at the Center. Similar staffing is recommended for each of the REBs. The Regions will have the option to: (i) carry out procurement through their own RS; (ii) strengthen their capability through technical assistance; or (iii) contract out management and supervision responsibilities to procurement consultants. Procurement arrangements will evolve as capacity increases. Regional proposals for building up their procurement capability and for changes in procurement arrangements will be regularly reviewed and assessed by CS, and semi-annually by IDA and donors. Project Appraisal Document Page 19 Ethiopia Education Sector Development Program (a) International Competitive Bidding (ICB) procurement will be used for equipment and goods not available in Ethiopia and for works in metropolitan areas where a "package and slice" approach will be used to attract international competition. National Competitive Bidding (NCB) will be used for furniture, locally available goods, most printing jobs and construction works of less than US$1 million. Other procurement methods to be used under ESDP and thresholds of authority and local regulations are described in Annex 6. Prior review will be used for all ICB procurement. For NCB, if prior review of the first three contracts of an implementing agency is satisfactory and procurement management is found to be adequate, NCB will thereafter be subjected to post review only. Post-review of procurement and supervision under ESDP will be agreed with other donors and carried out on a yearly basis. Fund flow management, accounting, financial reporting and auditing arrangements: The Government's new Financial Administration Proclamation (57/1996 dated December 19, 1996) establishes the principle of consolidated funds. The long-term goal of ESDP is for all donors to use Government's channels for the flow of program funds and reporting. This will entail substantial strengthening of institutions at the Center and Regional levels. The donor community plans to move gradually toward the pooling of funds with the Government and in the interim to gain experience with the system and test its feasibility. Donors will work together to harmonize the monitoring and reporting systems, while the feasibility and reliability of the Government funding channel is being tested by a few donors. To accommodate ongoing donor projects and some restrictive donor regulations, parallel channels for the flow of ESDP funds and information will remain open (see Annex 6, Charts 6.4 and 6.5). However, a common reporting system and set of formats will be used. The Central Secretariat will prepare and compile expenditure and progress reports, while the Ministry of Finance will assume responsibility for periodic consolidation and reporting on the flow of funds and fund balances. The program as a whole will be subject to an annual independent audit, with a single audit report issued for the Government and donors. No new implementation unit will be created for the program. All efforts will be focused on strengthening existing implementation bodies of the Ministry of Education and Regional Education Bureaus. (a) Oversight. The Central Joint Steering Committee, assisted by its Secretariat, will be responsible for the monitoring and evaluation of the program nationwide. It will also coordinate with other stakeholders and donors. Each Regional Joint Steering Committee will be assisted by a Regional Secretariat and will have the oversight responsibility for the regionally implemented parts of the program and, through the Central Joint Steering Committee, will be accountable to the central Government. The responsibility for day-to-day operations and implementation of centrally executed components will rest with different departments of the Ministry of Education. The Regional Education Bureaus will have similar responsibilities with regard to the regional programs. Relationships and levels of responsibility of each agency will be clearly spelled out in the Program Implementation Manual. (b) Flow of Funds. Approximately 73% of ESDP's funding is provided by the Government and the balance, 27%, by participating donors. The Government channel for its own funds are the Ministry of Finance at the center and the Regional Finance Bureaus in each Region. Several donors, including IDA, will use this channel to flow funds for the program's new activities. This is not the same as pooling, however, since IDA's funds will be separately tracked through the use of a special account. Project Appraisal Document Page 20 Ethiopia Education Sector Development Program Other funding channels currently used by donors fall under the following classification: (i) sector ministry channel, through Special Accounts under the control of the latter; (ii) regional institution channel, through accounts opened under regional responsibility; and (iii) donors' own channel for procurement and delivery of goods and services. These ongoing channels for the flow of funds will be kept open subject to donors willingness to use the Government's channel. The Ministry of Finance (MOF) will have full responsibility for donor funds that flow through its channel. This is consistent with the new finance proclamation that establishes the principle of consolidated funds. Donors who are required to track their funds to specific expenditures can do so through this channel using special accounts. (c) Disbursement of IDA Funds. Disbursements from IDA will be made on the basis of incurred eligible expenditures. IDA will make advance disbursement from the proceeds of the Credit by depositing into a Borrower-operated Special Account to expedite program implementation. The advance to a Special Account is to be used by the Borrower to finance IDA's share of program expenditures under the Credit. Another acceptable method of withdrawing funds from the Credit is the direct payment method, involving direct payments from the Credit to a third party for works, goods, and services upon the Borrower's request. Payments may also be made to a commercial bank for expenditures against IDA special commitments covering a commercial bank's Letter of Credit. IDA's Disbursement Letter stipulates a minimum application value for direct payment and special commitment procedures. ESDP will use a simplified Special Account disbursement procedure which allows decentralized program implementation. The Government will open a Special Account in its National Bank. The Special Account will be operated by the designated officials of the Counterpart Funds Unit (CFU) of the MOF. Upon Credit effectiveness, the CFU will submit a withdrawal application for an initial deposit to the Special Account, drawn from the IDA Credit, in the amount agreed to in the DCA. Replenishment of funds from IDA to the Special Account will be made upon evidence of satisfactory utilization of the advance, reflected in the SOEs and/or on full documentation for payments above the SOE thresholds. Replenishment applications should be submitted regularly - ideally every month but not exceeding three month intervals. If ineligible expenditures are found to have been made from the Special Account, the Borrower will be obligated to refund the same. If the Special Account remains inactive for more than six months, the Borrower may be requested to refund to IDA amounts advanced to the SA. In each of the Regions and in the MOE a Project Account will be opened. The CFU will make an initial advance into each account to cover four months of expected expenditures, based on the approved annual work program and budget. These Project Accounts will be replenished by the CFU by drawing funds from the SA at the request of the respective Bureaus and the MOE. Replenishment requests from the Regions and MOE will be on SOE or full documentation basis. The Project Accounts must be used only for advances and replenishments of funds coming from the Credit and for effecting payments against IDA's share of the financing. The Regional Bureaus and the MOE are responsible for following all procedures specified in the DCA related to prior and post review of bidding and contract documents. The CFU is responsible for making appropriate arrangements for the opening of the Project Accounts in the Regions and at MOE, and for monitoring the proper use of the advances. The Unit will also assist the regional Bureaus to establish proper systems for accounting the usage of the advances and for submitting regular replenishment applications for the Project Accounts. Project Appraisal Document Page 21 Ethiopia Education Sector Development Program (d) Accounting and Reporting. Regional Education Bureaus will assume responsibility for financial management, accounting and reporting for regionally executed parts of the program. They will collect the necessary information and report to the Central Joint Steering Committee through the Regional Joint Steering Committee on a quarterly basis. Their reports will contain information and analysis of both expenditure data and physical progress for the reporting period and cumulative data. Similarly, the Ministry of Education will report to the Central Joint Steering Committee for centrally implemented parts of the program. Reporting on the treasury transactions will be the responsibility of the Regional Finance Bureaus through the Ministry of Finance. The Regional Finance Bureaus will have front line responsibility for ensuring that funds are spent in line with budgets. The Central Secretariat will compile the program reports (both reports from the Ministry of Finance and implementing agencies) and produce final reports in an agreed format. Each Regional Joint Steering Committee will have responsibility through its Secretariat to provide the annual Regional budget, broken down into quarterly budgets. These quarterly budgets, together with periodic (at least quarterly) financial and physical implementation progress reports (budget execution report formats will be included in the Program Implementation Manual). It will form the basis for replenishment of Special Accounts. The Central Joint Steering Committee will have the consolidated reports available for the periodic review meetings and for donor consultation. ESDP-wide auditing arrangements will require the agreement of the Regions to delegate some of their audit responsibilities. (e) Audit of Accounts. As a sector program, all funds related to the ESDP will be annually audited by an independent auditor. Following current Government practice, the Office of the Auditor General (OAG) will be the independent auditor. Although the designated auditor may sub-contract part or parts of the audits to other qualified auditors, it will retain the overall responsibility in order to prevent fragmentation of the program audits. A single annual audit report for the ESDP will be issued by the designated auditor and submitted to IDA no later than six months after the end of each financial year. Monitoring and evaluation arrangements: The Central and Regional Secretariats will monitor the progress of program implementation against (a) physical targets established, (b) a set of educational indicators (Annex 7), (c) national survey of Grade 4 student achievement (to be initiated under ESDP), and (d) evaluation studies commissioned by the Central Secretariat. This will be an iterative and continuous process. Physical targets are to be adjusted based on implementation results. Each Region will prepare bi-annual progress reports and action plans with issues for review by the Regional Joint Steering Committee. The Central Secretariat will review and advise on the progress reports and action plans prepared by the Regions and submit consolidated reports for the Central Joint Steering Committee's consideration. The progress report by implementors will be supplemented by special studies to capture the qualitative changes in education and with periodic independent validations of the monitoring results. Additional staff training and equipment, as well as short-term consultancies, will be provided to strengthen Regions' and Ministry's capacity in monitoring and evaluation. Emphasis will be placed on the dissemination of information through effective management of information flow through the system. Project Appraisal Document Page 22 Ethiopia Education Sector Development Program Woredas and zones are already actively involved in gathering data for the Education Management Information System (EMIS). Currently, the data are aggregated at the zonal and Regional levels and forwarded to the Ministry for processing. The entire process from data collection to the publication of the EMIS report takes about two years, too long for the data to be useful for the purpose of monitoring ESDP's progress. Collection, processing and analysis of educational data should be carried out as close to the source as possible. Therefore, Regions will be encouraged and assisted to create capacity at the lower levels of Government so that data processing and analysis can be handled at zonal and woreda levels, whereby the findings would become immediately useful. ESDP proposes that the data required to derive monitorable indicators (see section 4 below) be extracted from the data already being collected annually for EMIS and processed at the Regional level to provide timely input to decision-makers at the Regional level. As the capacity is developed further down the local Government chain, processing and analysis of the data can be devolved to the zonal and woreda levels. A study is being undertaken to harmonize reporting requirements and procedures on monitoring, reporting and evaluation of donors. Key Indicators. Indicators to gauge resource allocation to education, the program's impact on access, quality of education, rural/urban and gender equity, and efficiency are proposed (Annex 7). Wherever possible, base year (1996/97) data are provided and ESDP targets for year 2001/02. From these data, annual milestones for the Region and for the country as a whole will be derived. Project Appraisal Document Page 23 Ethiopia Education Sector Development Program D. Program Rationale Program alternatives considered and reasons for rejection The main scope and design options considered were: Methods and materials of school construction. Schools built with chikka, traditional mud and wattle, are cheaper to construct, as materials are more readily available and building requires no skills beyond what the communities already have. However, chikka requires frequent, costly maintenance which communities find difficult to do. Due to lack of maintenance, these buildings typically last only 3-5 years rather than 10. Chikka was compared to four other building materials: concrete element, stone, brick and hollow concrete block and was found to be less cost-effective in the long run. Although the cost of construction and transportation of other materials to site was 50% higher than chikka, the longer service life (30 compared to 3-5 years), and lower maintenance cost (about one-fifth of that of chikka) made them a better choice. However, the rate of return to hollow concrete block was shown to be much higher. This was true of other building materials, although their advantage over chikka was somewhat lower. Other building materials considered also require lower wood usage, an important environmental consideration for Ethiopia which has scarce forest cover. Therefore, the Bank supports the Government's decision to discontinue chikka school building, excepting in cases where other options are not feasible. Size of schools. Studies have shown that, in addition to distance, lack of access to higher grades is another deterrent to school attendance in rural areas. The rural/urban gaps in school enrollment rate and education achievement are wide. For equity reasons, this widening gap needs to be checked. The Government has decided that all existing schools to be upgraded should offer a full 8 years of primary education. The likely risk that many of the upgraded schools in rural areas may go under-utilized, at least for the time being, was weighed against the positive effect access to higher grades would have on meeting the needs of the rural students. The Government has considered smaller schools with multi-grade teaching, but feels that they compromise on quality. Ethiopia will be exposed to the more positive experiences of Escuela Nueva in Colombia and Guatemala and will continue the dialogue. Language of instruction. For the Government of Ethiopia, using local languages as mediums of instruction in primary schools was primarily an academic decision, but it was also a political decision. Of some 80 local languages spoken in the country, 19 are now used in classrooms. The overriding political nature of the decision blocked the ability to objectively weigh enormous cost implications of the policy for textbook provision, teacher training and deployment, and labor mobility. By focusing on technical, financial and implementation aspects, the Bank was able to establish a dialogue on the issue. The Regions' new awareness of the financial and managerial implications of the policy are leading some to seek alternatives such as research to identify a few linguistically linked languages that could serve many. Modalitiesfor expansion of educational materials and textbooks. The Government has recognized that for cost effective and sustainable provision of textbooks the sector needs to be liberalized. It has decided that EMPDA will be commercialized, but progress has been slow. The Ministry has been dependent on EMPDA for its textbook related decisions; now it needs to acquire an in-house capacity to develop and implement a new textbook policy. The Bank's dialogue with the Government will focus on development of the new textbook policy, EMPDA's commercialization and appropriate staffing needed to implement the new policy. Project Appraisal Document Page 24 Ethiopia Education Sector Development Program Balancing improved access and quality of education. Ethiopia's primary GER at 30% for Grades I to 8 is less than half the average for Sub-Saharan Africa. There is no denying that an urgent need exists for Ethiopia to raise the GER substantially to catch up with the rest of the continent and to reach universal primary enrollment. However, Ethiopia opted not to open the floodgates, as have few African countries, but to take a graduated approach in reaching UPE. It has chosen to balance improved access with quality of education by investing heavily in increasing textbook provision, improving school facilities, and teacher upgrading. Delivery system for vocational skills training. Following a year-long dialogue with the ESDP technical assistance missions, Government is recognizing the potential that private sector holds in TVET provision. We are supporting the decision of some Regions to defer expansion of public TVETs until market studies and employer surveys have been carried out. Balance of education sub-sector investment. Despite Government's stated intentions, primary education's share of the total Government expenditure on education has been declining from 59.0% in 1993/94 to 53.7% in 1996/97. This results from uncoordinated investment decisions by numerous actors. ESDP, on the other hand, brings all education activities under one umbrella. The impact of decisions on one or another sub-sector is thereby made transparent. Prioritization across sub-sectors is made easier. Consequently, under ESDP the share of primary education is increased from 53.7% to 59.8%. At the same time, primary education's important linkages to upper levels of education as a source for supplying qualified teachers and trained personnel for development is recognized and a modest degree of investments are proposed for those levels. Modalities for reaching nomadic populations. Two Regions that are predominantly nomadic, Afar and Somali, have the lowest Regional enrollment rates. The Government has proposed 17 new boarding schools for nomadic children. Oromia Region has had positive experience with 11 pilot nomadic schools and intends to expand the nomadic school system widely in the Region. However, its success story has not been disseminated widely. Afar Region intends to pilot nomadic schools in a similar fashion. Overall, the Government plans to build 17 new boarding schools for nomadic children. Further dialogue on the costs and benefits of these options shall be carried out with the Government. Use of media technology for education. Ethiopia has an extensive transmission network and one of the most experienced educational broadcast systems in Africa. The Government intends to mobilize this capacity and reach those children who are deprived of the formal education system by educating them through the radio. The Government will also broadcast training courses for teachers on the radio, targeting specifically female teachers and those teachers who are assigned to remote areas and are unable to benefit from training for upgrading. Project Appraisal Document Page 25 Ethiopia Education Sector Development Program 2. Major relatedprogramsfinanced by the Bank and/or other development agencies (completed, ongoing and planned and also see Annex 5for donor mapping) Financing Program Sector Issue Latest Form 590 ratings WORLD Education Expansion of (US$70 million, of + Increased access, BANK VII (1988) facilities at primary, which US$8 million * Improved quality lower-secondary, was canceled - The Project is likely to only partially teacher training, and 1988/89. achieve the Development Objectives tertiary levels; Implementation due to delays in start up of the software ]provision of books, delayed due to civil components that affect the education furnishings and unrest; project content, largely because of equipment. restructured Government's wish to hold off until the following the break new sector policy and strategy had been away of Eritrea. developed (1994). IP = satisfactory. DO = satisfactory ESRDF Primary school (US$26.8 million; * Increased access (1996) expansion through 1996-2001) * Community participation community All implementation * Gender action plan mobilization offices have been DO = satisfactory established and functioning fairly satisfactorily; disbursement has picked up. IP satisfactory Existing Commitment Agencies Sector Issues (as of 4/98) Development Objectives AfDB Primary, lower secondary school US$33.8 million * Access (primary and secondary construction and furbishing. education) EU Furniture for primary schools US$10.7 million * Quality (school environment) Finland Primary and secondary teacher US$2.1 million * Quality (teachers and school education, education management environment) training, primary curriculum * Access (non-formal and special development, non-formal needs education) education and special education, * Capacity building (construction construction management management, school training, strengthening libraries, management and monitoring monitoring and evaluation. and evaluation) Project Appraisal Document Page 26 Ethiopia Education Sector Development Program UllindUibursed Agencies Sector Issues (as of 4/98) K: Developmen Objctve Germany Teacher education, basic US$23.7 million * Access (primary, adults, out- education for adults, skills of-school children) training, non-formal education, * Quality (teachers and skills primary school rehabilitation, trainers, provision of curriculum, educational educational materials) materials, education management * Capacity building (education management) Ireland/ Educational materials for non- US$4.5 million * Quality (educational materials, Irish Aid formal primary education and teachers) functional adult literacy, * Access (primary, adults, out- including radio programs; of-school children, primary school construction, handicapped persons) rehabilitation and upgrading; * Capacity building (school new NFE centers, community administration) skills training centers, primary teacher training and school administration training; special needs education expansion. Italy Tertiary education US$2.0 million * Efficiency (capacity and resource utilization) * Relevance (selective expansion) Japan/ Training of EMA staff on US$0.4 million * Capacity building (EMA) JICA education program production, * Access (TVET) technical and vocational training. Netherlands Curriculum development and US$3.9 million * Quality improvement teacher training for tertiary institutions Norway/ Tertiary education (agricultural US$2.6 million * Capacity building NORAD college) Project Appraisal Document Page 27 Ethiopia Education Sector Development Program Undisbursed Balance Agencies Sector issues; (as of 4198) Development Objectives, Sida Primary school construction and US$13.2 million * Quality (book, curriculum, furbishing; educational materials teachers) production training; EMPDA * Access (primary) management training, and provision of * Capacity building (textbook paper and consumables for printing; sector) training regional staff on textbook provision; monitoring and evaluation; in-service teacher training. UNDP Primary and secondary level skills US$11.4 million * Capacity building (planning training, women's education, non-formal and management) education, education planning and * Equity (skills training for management. women) UNESCO Teacher training in environmental US$0.1 million * Quality (teachers) science; establishment of a UNESCO * Capacity building International Institute for Capacity Building (for education management, curriculum development, teacher education and distance education). UNFPA Development of curriculum, US$0.2 million * Quality (POP/FLE) instructional materials and teacher training for POP/FLE. UNICEF Primary education and non-formal US$4.7 million * Quality (non-formal education education) USAID Basic Education System Overhaul US$42.7 million * Quality (curriculum and (BESO) - Primary education; training of teachers) education manager, planners, curriculum * Capacity building developers, finance managers, head (education management, teachers, communities on school finance management and management. planning) WFP School feeding in chronically food US$6.1 million * Equity (food insecure insecure woredas. woredas) Source: Donors to ESDP (figures not confirmed by the Government). Project Appraisal Document Page 28 Ethiopia Education Sector Development Program 3. Lessons learnt and reflected in the program design Main lessons culled from past IDA supported education projects in Ethiopia are: (a) Balancing expansion with quality improvements. In the past, all IDA projects have attempted to balance quantity with quality: Education I in technical and teacher education; Education II in secondary, teacher, and agricultural education; Education III in rural education, teaching of science, and provision of textbooks and instructional materials; Education IV in non-formal education; Education V in basic and secondary education; Education VI in primary and secondary levels and teacher training; and Education VII on basic and tertiary education. Experience has been that quantity targets tend to be met or exceeded. Shortfalls occurred with quality targets. (b) ESDP puts emphasis on quality. Enrollment expansion is being complemented with quality improvements -- from improved quality of teachers, more relevant curriculum, increased availability of books, improved school environment, improved internal efficiency, examinations which will provide feedback to schools to help improve classroom teaching. Moreover, monitoring indicators also cover the targets for quality enhancing activities. (c) Flexibility in the details of implementation. Education VI was being implemented during a period of civil unrest in the country, this posed serious communication and security problems in implementing the project. The Bank did not act in a timely manner in tackling problems during project implementation. As a result, several project locations had to be re-sited. ESDP is flexible across Regions and across time. While an overall framework for the Program has been set by the Center, interventions at the Regional level are custom-tailored to the Regions' own priorities. While each Region has an overall framework and targets for ESDP, a detailed work program is to be reviewed on an annual basis, therefore providing an avenue to adjust the contents and the speed of implementation to accommodate unforeseen circumstances. (d) Careful survey and selection of school sites to assure accessibility and equity. Both Education VI and VII school rehabilitation and construction experienced delays in implementation due to inadequate preliminary survey and failure to take into consideration the type of terrain, road accessibility for building materials and supervision crew, and the Government's inability to supervise works under implementation in hundreds of scattered sites. Long delays between surveys of facilities to be rehabilitated and the start-up of works contributed to cost overruns, in the meantime facilities deteriorated further. In preparation for ESDP, school mapping is being carried out to locate schools. Site selection will be finalized only after the chosen sites have been assessedfor appropriateness through site visits. ESDP addresses equity by locating most new schools in rural areas and in urban areas expanding classrooms only where congestion poses a serious problem. (e) Attention to macro-economic environment and the Government's financial capacity. There was a lack of attention to the weakening financial capacity of the Government in a declining economy in the design of Education VI and Education VII. An unrealistically high share of project costs was expected to be borne by Government. Lack of counterpart funds frequently slowed implementation. This problem was addressed by a revision of the DCA to reduce the local funding share for Education VII from 35% to 15%. The Government of Ethiopia puts a high priority on education and plans to finance as much as 73% of ESDP costs. Although this is considered within Government's capacity, given its rapid economic growth in recent years, sound macroeconomics management and projected growth in the medium term, the Central Ministry and the Regions are nevertheless drawing up contingency plans in case of a possible shortfall in financing. Project Appraisal Document Page 29 Ethiopia Education Sector Development Program (f) Coordination of responsibilities. Education VI faced difficulties in implementation and supervision of multi- faceted projects requiring the cooperation of several implementing agencies (e.g., PMO, EICMA, EMPDA, ICDR). Better coordination might have been achieved had there been a clarification of and agreement on each agency's responsibility and continuous monitoring of their compliance. As ESDP is a sector-wide operation, its implementation will be even more complex and its coordination needs greater. In addition, ESDP is designed for implementation under a decentralized system. At the center, a Steering Committee, with representations from PMO, MOE, MOF, Ministry of Economic Development and Cooperation (MEDAC) and donors and chaired by the PMO, will be responsible for overall coordination and monitoring and evaluation. Each Region will establish Regional Joint Steering Committees with similar representations to coordinate, monitor and evaluate implementation at the regional level. (g) Continuous management oversight of education. Education VI implementation was delayed due to under- staffing of the Project Management Office, particularly accountants. ESDP's problems in management are potentially more grave. Regions that have very weak capacity will be the major players in implementation. ESDP stresses the need for capacity building to be as up-front as possible, especially in procurement, finance management, and monitoring and evaluation. Procedures and guidelines need to be laid down and staff trained. As a safeguard, those Regions considered especially ill-prepared will focus on capacity building in the initial period of ESDP, and swing into implementation of the program once they have acquired the minimum capacity. (h) Realistic disbursement schedule. Disbursement schedule for Education VI was overly optimistic compared to the Ethiopia's past performance in this sector. The originally proposed ESDP implementation schedule also appears to be overly optimistic. The schedule is heavily front-loaded, making no allowances for capacity building, procedures that need to be established and disseminated, and learning that will need to take place. The donors have strongly advised the Govermment to make their implementation projections more realistic so that targets set are within reach, rather than setting up for disappointment from the start. (i) Involvement of stakeholders. ESDP has been developed by MOE in collaboration with central educational agencies and the Regions. Therefore, there is strong ownership of the program and its objectives and targets by all key implementing agencies. However, involvement of other stakeholders, e.g., zones and woredas, teachers and the communities, has been spotty. The success of ESDP and the sustainability of its development objectives hinges on the extent to which these stakeholders identify with and support the objectives of the program. Therefore, the Government is encouraged to take ESDP to the grassroots and to solicit their participation in numerous decisions on the details that are yet to be made. (j) Role of the private sector. In Education VI, GOE insisted on civil works construction by force account. The performance was poor. In Education VII, basic education facilities construction was stalled for a while because of a controversy over GOE's wish to continue with force-account, and also because of inappropriate packaging when open bidding was attempted. Once the packaging was made to vary according to the construction industry's capacity in each Region, the school construction component has moved rapidly and neared completion within 2 years. The Government is no longer reluctant to use private contractors. ESDP school construction and rehabilitation will be mostly through private contractors. (k) Need for adequate monitoring and supervision. Security problems, shortage of staff, lack of local funds and transportation hampered close monitoring of implementation. Problems arose due to MOE's limited knowledge of the sites and the status of implementation. The Bank's supervision missions were also insufficient, only one annual supervision was fielded from 1985-88. ESDP's supervision of implementation will be made easier by involving the Regional government. Implementation progress reports, based on periodic monitoring of implementation, will be required for the work program and budget for the following Project Appraisal Document Page 30 Ethiopia Education Sector Development Program year to be approved. In addition, it is suggested that evaluation be carried out by independent bodies, reporting directly to CJSC Secretariat. This will provide a safeguard on the validity of the reports. These measures, notwithstanding adequate staffing and funding, remain an issue. 4. Indications of Borrower commitment and ownership As part of its long-term development strategy, the Government has declared education, health and roads to be priority sectors for investment. ESDP is an expenditure program which will implement the Government's new sector policy and strategy of 1994. The sector policy, strategy and the framework of ESDP have all been developed by the Government and it has its full ownership. The Government plans to finance 73 percent of the cost of ESDP and has already embarked on the program as of July 1997. It has demonstrated its commitment and ownership by adopting time-bound performance indicators for measuring ESDP success. 5. Value added of Bank support in this program The ESDP was first presented to donors at the Consultative Group Meeting in December 1996. Following the presentation, the Bank was invited by the Government and donors to facilitate a dialogue on the program. As presented, it provided an excellent framework for a sector program, but lacked the refinements needed to make it immediately financeable. There were opportunities for considering international experience and alternative, more cost-effective ways to achieve the Government's objectives in the ESDP to reach universal primary enrollment. The Bank helped form a partnership of donors to begin this dialogue. The dialogue began in an exchange of views on the program by donors and the Government at Debre Zeit in March 1997. The Bank subsequently led three joint donor technical assistance missions to continue the technical dialogue. Initially, 11 development agencies participated with the number growing to 14 by the third mission which appraised the program in February 1998. The Bank helped structure the missions and develop the terms of reference for consultants selected by donors. The outcome, by the estimation of all parties, was a much stronger ESDP. The missions proved to be an excellent capacity building opportunity for the Ministry of Education and the Regional Education Bureaus. The Bank agreed to take on the role of residual financier for the program, allowing other donors first opportunity to select components to finance. This approach helped create a more collegial, less-competitive environment for working in a partnership. The Bank's role will allow it to bridge gaps where donors may be delayed in meeting their financing commitments. The international experience of the Bank helped enrich the dialogue and its economic analysis was important in assuring other donors of the program's economic justification and fiscal sustainability. The Bank often played a go-between role in communicating donor and Government views on the process and policy issues, keeping the process moving. The value added is seen in a comparison of the quality of initial Regional plans with those at the conclusion, but also in the policy content. The role of the private sector in technical and vocational education and training was strengthened. Non-formal education was introduced to the program to reach out-of-school children. Greater awareness of the cost and benefits of implementing a local language policy was achieved. A text book policy promoting the development of private publishing grew out of the experience. By facilitating the process and adding its own technical experience, the Bank helped Government move ESDP quickly to a financeable stage and improve the quality of the program. The Bank expects to be helpful in mobilizing support for the ESDP. Project Appraisal Document Page 31 Ethiopia Education Sector Development Program E. Summary Program Analysis (Detailed assessments are in the program file, see Annex 4) 1. Economic (supported by Annex 4) []Cost-Benefit Analysis: NPV=NA; ERR= NA [ ] Cost Effectiveness Analysis: NA [ Other (Specify) The Education Sector Development Program is consistent with Country Assistance Strategy priorities and follows on the recommendations of recent sector work. The sector development program concept is justified for Ethiopia, as shown in the recent Public Expenditure Review, which deemed the sector expenditure program to be sound and financially sustainable. Based on the results of the sector work and public expenditure review, as well as analysis of alternative data sources, a thorough economic analysis was conducted. The complete results are presented in Annex 4. The Government has carried out an alternative financing scenario simulation exercise. It contains a risk assessment and contingency plan for each component. The analysis takes ESDP goals and objectives and compares them to the base case, which is the situation projected to take place without ESDP. The financing situation and enrollments without ESDP (base case) were projected. The analysis shows the effect of the increase in expenditures and enrollment targets with ESDP (goal). The results of the exercise demonstrate that ESDP makes primary education the priority sub-sector. Fully implemented and fully financed, ESDP results in long term savings, higher enrollments and higher quality of schooling. ESDP contributes to a reallocation of resources from higher levels to primary education. Thus, there is more than adequate justification for public intervention. Choice of technology was analyzed in terms of building materials for the massive civil works component that is required to raise enrollments to 50 percent. Cost-benefit analysis was used and cross-over discount rates were estimated. It is demonstrated that when fully maintained, hollow concrete block is a much better alternative than the traditional mud and thatch schools. However, since maintenance is a problem in Ethiopia, sensitivity analysis shows that all alternative technologies are preferable to chikka construction. Further analysis demonstrates that when costs escalate because remote areas cannot afford hollow concrete block, then traditional chikka construction is feasible. Overall, another year of schooling would increase earnings by about 23 percent. For males earnings increase by 23 percent for every year of schooling, slightly more than the estimate for females, at 21.5 percent. In rural areas schooling increases earnings by 21 percent, while in urban areas where the average level of schooling is highest, schooling increases earnings by 15 percent. Estimating the earnings function with dummy variables representing the three levels of schooling shows that similar increases in earnings result. Earnings increase by 25, 24 and 27 percent with the completion of primary, secondary and university education. Overall, these estimates conform to the pattern usually found in low-income countries. They show that education is a profitable investment in Ethiopia. Project Appraisal Document Page 32 Ethiopia Education Sector Development Program 2. Financial (see Annex S) NPV=NA; FRR=NA Fiscal impact. An assessment of the fiscal sustainability of the education, health, and roads sector programs was undertaken in the World Bank's Public Expenditure Review. The assessment used a medium-term macroeconomic framework with alternative assumptions about GDP growth rates, government revenue efforts (tax and non-tax), and balance of payments. Detailed analysis can be found in Annex 4. The main findings are: => The incremental annual impact of the three sector programs is relatively small during the first two years of implementation at approximately Birr 900 million. However, from 1998 onwards, the sector program- related incremental costs are projected to increase annually to more than Birr 4 billion. The substantial increase in expenditures may result in a decline in funding for other sectors, if additional revenues and/or grants are insufficient and funds have to be reallocated from other sectors to cover this expenditure. In this situation, as much as Birr 14 billion may have to be reallocated. > While the incremental annual expenditure implications for the recurrent budget are small, they are significant for intersectoral capital expenditures. Combined capital spending for the three sector programs will rise from 35 percent to 86 percent. This implies a reduction in the proportion of other sector capital expenditures to just 14 percent of total capital spending for 1997-2002. => At 8.5 percent, the projected rate of increase in recurrent expenditures in the education sector poses the least problem. Because this is below growth rates for recurrent spending in education for the past five years. While recurrent expenditures envisaged under ESDP are below historic levels, there is a need to monitor actual expenditures over time and ensure that the level of spending is adequate to obtain the necessary level of quality. ESDP sets ambitious targets for annual increases in capital spending. Capital spending in education under ESDP will increase by 38% per year. Relative to the observed under-spending in the sector, this target is high. Up to one-third of budgeted capital expenditures in education are unspent. Implementation of the education sector program in five years will require vigorous efforts on the part of all stakeholders to improve implementation capacity, especially at the regional and woreda levels. Program supervision will also have to be improved. To ensure timely implementation of ESDP, efforts to increase private sector involvement in education are needed immediately. Also efforts to implement cost-recovery at the upper secondary and tertiary levels need to be stepped up. Community participation will also be needed. Government's Alternative Financing Scenarios Simulation exercise underscores the importance of contingency plans and risk-mitigating efforts. Project Appraisal Document Page 33 Ethiopia Education Sector Development Program 3. Technical assessment Local languages development. Of the nineteen local languages that are currently used in schools, only a handful have written scripts; the majority do not and need to develop scripts. The process of transcribing, refining, and achieving broad consensus on transcription is a long-term undertaking. In the meantime, there will be difficulties in assuring quality of textbook manuscripts and teaching how to write in these languages in classrooms. School construction. Building materials to be used for school construction are readily available locally or in the market; designs proposed for schools are variations on what has been traditionally practiced and proven. Therefore technical problems are not expected to arise. Problems are more likely to occur in areas of community mobilization, supervision of construction, and timely payment of contractors. The Government has not developed the modalities for community involvement in-depth, but useful lessons could be drawn from the ESRDF experience. Two possibilities are being considered for improved supervision: to contract out school construction to large contractors who then sub-contract and supervise the work of their sub-contractors, or to engage independent consultants to provide site-supervision services. For timely payment, details of efficient management of flow of funds are being worked out. Distance education. Expansion of radio coverage and strengthening of existing transmission network will require modernized equipment. However, the Government is advised to be cautious in selecting technology, keeping in mind the existing skills of technicians who will operate and service the equipment with only minimum updating of skills. The greater challenge comes from expanding the use of distance education to more "formalized" courses for basic education, functional literacy, continuing education and teacher in-service training. The courses that lead to "certification" require supplementary printed course materials and face-to-face tutoring. The success of these new ventures will depend on EMA and EMU's ability to collaborate closely with other actors in teacher training and course materials development. - Project Appraisal Document Page 34 Ethiopia Education Sector Development Program 4. Social assessment Major social issues faced by ESDP are: =:> wide rural-urban gaps, especially more severe in disadvantaged Regions where rural primary GER is 2%; => wide gender gaps in school enrollment and education achievement, particularly in rural areas and in upper grades; and => children the formal system cannot reach -- twice as many children are out of school as those attending school. MOE's guidance to the Regions to build new schools in under-served rural areas has been well taken. This is supplemented with efforts to increase demand for schooling in rural areas by reducing the opportunity cost of children's schooling (see Section F.2). Targeting of the rural population could be strengthened with monitoring indicators which specifically measure reduction in the urban-rural gap. The ESDP aims to raise the primary GER for the Afar and Somali Regions to 25%, but the capacity of both Regions is weak. They face an additional problem as the majority of their population is nomadic. In the case of the Somali Region, political will and commitment seems weak. The MOE is providing additional technical assistance to these Regions. Pilot boarding and nomadic schools are to be set up. On gender, the MOE and the Regions are committed to improving girls education. Many imaginative interventions have been proposed (see Section B.2b), however, MOE and the Regions lack the capacity or mechanism to effectively follow through with the proposals. Women's Affairs Offices need to be closely integrated into the mainstream of the Ministry and the Regional governments, and should be adequately funded in order for them to carry out their responsibilities. The staff may not be fully conversant with gender issues. The MOE and the Regions will need to make concrete proposals on how and by whom the gender issues will be addressed. Out-of-school children will be especially targeted by non-formal components, using both media and non- media methods to spread literacy and to provide a second chance for school dropouts to maintain their literacy and acquire new skills. The Regions have limited capacity, and therefore will need to collaborate closely with NGOs who are active in this area. 5. Environmental assessment: Environmental Category [] A [ ]B [X] C * Construction of a large number of schools (2,423 new primary schools) consisting primarily of hollow concrete blocks. Chikka (mud and wattle) is not advisable for long-run cost effectiveness, and also because its use of wood raises environmental issues. * Construction of pit latrines in all new schools. Siting of the latrines will need to be done keeping in mind that sources of drinking water supply for the school and community are not contaminated in the process. * To prevent the spread of diseases due to unclean latrines and unwashed hands, water will be supplied to schools, wherever possible. Project Appraisal Document Page 35 Ethiopia Education Sector Development Program 6. Participatory approach [key stakeholders, how involved, and what they have influenced; if participatory approach not used, describe why not applicable Preparation Implementation I Operation (a) Primary beneficiaries and other affected groups Students in school Primary, secondary and tertiary education (through increased access, improved quality of learning and improved school environment). School drop-outs IS CON Non-formal and distance education, TVET (being given and neo-literates a second chance to acquire basic education outside the school system and skills training). Illiterate youth and IS CON Non-formal and distance education, TVET (having adults opportunity to acquire basic education without having to forgo work). Teachers CON COL Teacher upgrading through distance education, improved teaching environment, improved professional support, and career incentives (facilities upgrading, provision of instructional materials, student performance feedback, and implementation of new career structure). Parents and CON COL Reduced opportunity cost of children's schooling, Community elimination of school fees for primary and the first two years of secondary education. (b) Other key stakeholders: Private sector CON COL Textbook sector liberalization, TVET design and provision, school management, civil works contracts, furniture production, other services. NGOs CON COL Non-formal education, TVET. Academic COL COL Expansion of facilities, provision of equipment and institutions books, increased efficiency. Local government COL COL Improved planning, budgeting, implementation, supervision, and management capacity. Other donors COL COL Increased probability of obtaining lasting results in the field from donor support to the sector. [IS: information sharing; CON: consultation; and COL: collaboration] Project Appraisal Document Page 36 Ethiopia Education Sector Development Program F. SU abit and Risks 1. Sustainabgity ESDP is the first 5-year segment of a 20-year plan for Ethiopia to achieve universal primary enrollment. Sustainability of the development objectives is extremely important so that each phase builds on the other for an expanding and improving system. Viewing the sustainability in that light, ESDP will require the following factors: * Continued Government budget support over the longer term. Education also needs to feature highly in the Regional governments' priority. The work program presented by the REB staff to their respective Regional Councils must be of quality worthy of their support. The capacity building component will emphasize building of Regional planning and budgeting capacity. * Cost effective measures must be sought continuously to reduce unit cost of education provision. Use of distance education rather than residential training for teacher upgrading, double-shifting to increase the rate of utilization of facilities, nomadic schools as an alternative to more costly boarding schools, increasing student to teacher ratio at all levels, including tertiary institutions, are such measures. ESDP will need to be constantly mindful of further cost cutting measures such as multi-grade teaching for remote and scarcely populated areas. With reduced unit costs and constant vigilance for cost saving measures, ESDP could become resilient even with shortfalls in budget support. * Preventive maintenance must be carried out for all school facilities so that subsequent investments will increase the assets by adding to the existing stock rather than merely replacing (rehabilitating) them at enormous costs. Under the ESDP, preventive maintenance will be made a separate budget item and devolved to the school level. * Teacher motivation must be sustained through effective implementation of a new career structure for teachers that rewards experience and performance. Stakeholder participation at all levels. ESDP is owned by the Regions and individual educational agencies. Participation by other stakeholders such as teachers, parents and the community as well as non- government providers of education services and materials has been spotty, non-systematic, and varied across Regions. For sustainability, their participation and ownership of ESDP is critical. Project Appraisal Document Page 37 Ethiopia Education Sector Development Program 2. Critical Risks (reflecting assumptions in the fourth column of Annex 1) - Risk.- - ; E -Risk - XRating - Risk Minimizing Measures Program Outputs to Development Objectipes :_E_-_- Parents are not as Moderate Mitigating measures to prevent premature termination of schooling of responsive to school children, ESDP proposes to: quality => introduce automatic promotion up-to Grade 3; improvements. => sensitize communities to the benefits of schooling, particularly for girls => get the community involved in school affairs. Program Components to Outputs . -_-_._- _-_:_- _-_- Construction industry High => contingency plans are in the works to adjust the pace of civil works is reluctant to take up implementation; school construction > where supervision load is beyond the Region's capacity, construction because of lack of supervision will be contracted out to speed implementation; spare capacity (in =:> Govemment will streamline payment procedures. light of heavy competing demands from roads and health sectors) and/or because of cumbersome bureaucratic procedures which delay implementation and payment. Demand for High Household surveys have shown that distance to schools, concems for girls' schooling fails to security, cash cost and opportunity cost of schooling are the major reasons grow even with why parents do not send their children, particularly girls, to school. increased access to Interventions introduced by ESDP to increase demand for schooling schools. include (the Regions already implementing the measures are indicated in parenthesis): > school construction in rural areas, where distance has been a key deterrent, and their siting close to homesteads; > adjustable school calendar to avoid peak agricultural periods (Benishangul-Gumuz); => shortened school days; > provision of water and flour mills close to reduce girls' opportunity cost (Gambella); > elimination of school fees up-to Grade 10 (policy announcement already made by Govemment); => piloting of nomadic schools that move with the population and herds (Oromia, Afar); > targeted subsidy for the needy (free note books for needy girls in Amhara and Benishangul-Gumuz Regions, clothing for minority tribe girls in Benishangul-Gumuz); => improved fencing around school premises to provide security to girls; => separate latrines with privacy for girls; = sensitization of the community to benefits of education, particularly girls' education (Benishangul-Gumuz, Amhara, Oromia, SNNPR, Harari, Gambella Regions). Project Appraisal Document Page 38 Etiopia Education Sector Development Program Risk = R - = Rsk Ratin Risk MinimnizingMesures t0;5;; 0 Out-of-school Low => Ethiopia has an active radio network which covers large part of the children, school country. Active IEC campaign to inform the public of the opportunity dropouts, youth and for basic education will be recommended; adults interested in > Certification for those successfully completing courses is basic education recommended as incentive to participate. through distance learning are not informed of available programs. Radios are not readily Moderate > Adequate budgeting for schools will be required of Regional available and are not Governments; kept in working => Government is pilot testing wind-up radios that do not need electricity order. or battery to operate as an alternative. Skills training offered Moderate => market and employer surveys will be the starting point is not relevant to the => Several Regions have questioned the tradition of public sector needs of the market. providing TVET. > Regions to develop their TVET strategy. > market relevance of skills training is to be further bolstered with _ private sector involvement in shaping and providing TVET. EMPDA High > Paper subsidy to EMPDA (provided by IDA under Education VII and commercialization is earlier projects and by Sida) will be discontinued under ESDP; delayed; private = A time bound plan for EMPDA's transition to a commercial entity has sector does not invest been requested of Government; to build-up capacity; . financing of textbooks will be shifted from production subsidy to books are not demand subsidy (the Government is already channeling funding to the provided to schools Regions); on time. = Regions will receive training to develop capacity to handle textbook contracts; > Impediments to private sector entry into the market are being explored. Script and textbook High > Regions have shown pragmatism and flexibility by opting to use title developments in Amharic until their local languages are adequately developed. local languages are delayed. Teachers with local High > Government will survey teacher requirements and availability by language mastery are language and use the information for teacher deployment and training. not available. The private sector Low > A PHRD study is being undertaken to identify constraints to private and NGOs are not sector involvement. interested in TVET provision. Project Appraisal Document Page 39 Ethiopia Education Sector Development Program Risk -___ - Risk Rating Risk Minimizing Measures Qualified candidates Moderate => Teacher salaries have been raised substantially recently; for teacher training MOE's new career structure for teachers, once implemented, should cannot be found in provide opportunities for professional growth. remote areas. =' The Government is willing to lower the entry qualification requirements on an exceptional basis for applicants from remote areas. These candidates will be given additional training and support to enable them to graduate at the same level of competence as other candidates. Female teachers do Moderate =. Further incentives are provided by providing those upgrading through not take advantage of distance education who pass qualifying exams with same certification and upgrading through remuneration as those trained at TTI/TTC, and salary increases under the distance learning. new teacher career structure. Demand for higher Low = Private rate of return expected from higher education is high; education is adversely = There is high unmet demand for higher education as only 10% of those affected by cost passing the ESLCE find placement in a tertiary institution; sharing. => Student loan and scholarship schemes to reduce the financial burden on the family are being designed under ESDP. Govermnent at all Moderate => Continued support through ESDP is conditional upon the Central and levels continue to give Regional governments doing their share in financing and in priority in funding to implementation as per performance indicators hitherto agreed. education. Wide variation across High => more advanced Regions and the Center provide technical assistance to Regions and among less prepared Regions; central educational => further preparation and building up capacity in the less prepared Regions agencies in their be included as part of the ESDP program; preparedness and capacity for implementation poses a challenge. Harmonization of High > Government strongly demands it; donor procedures may => donors are willing in theory, but the details have to be worked out and be less than fully agreed on; realized or delayed. => Sida is financing a study to explore how harmonization could be achieved This could put in monitoring, evaluation and reporting. enormous strain on the Government's weak implementation capacity. Project Appraisal Document Page 40 Ethiopia Education Sector Development Program 3. Possible ControversialAspects * The Government has eliminated fees for Grades I through 10. There appears to be conflicting interpretation of the Governments policy: some believe that all cash contributions from parents to schools are no longer permitted for fear of misuse of funds by school managers, However, these contributions play an important role in community involvement and ownership of the school. It makes the teachers feel accountable to the community and is one effective way of stimulating improved school performance. * Implementation of cost sharing for Grades 11 and above could meet resistance from university students who can be more visible and vocal. ESDP will explore alternative means for cushioning the financial burden, such as student loans, private sector sponsorship, scholarship schemes, gradual increasing of privately sponsored students, etc. * Implementation of local languages policy. Household Surveys found that some parents do not favor the use of local languages for fear that the policy would put their children at a disadvantage in the job market. This initial reservation by the parents about the use of local languages appears to be changing in favor of the policy. * Harmonization of donor procedures on procurement, finance management, and reporting may not be as comprehensive, therefore placing considerable burden on the GOE's limited capacity at all levels. G. in anConditions 1. Conditions of Effectiveness * Program Implementation Manual (PIM) acceptable to IDA * Action plan for financial management capacity building Project Appraisal Document Page 41 Ethiopia Education Sector Development Program H.- Readiness for Implementation [X] The engineering design documents for the first year's activities are complete and ready for the start of program implementation. [ ] Not applicable. [X] First two years of the program have been fully prepared. [ ] The procurement documents for the first year's activities are complete and ready for the start of program implementation. [ ] The Program Implementation Manual has been appraised and found to be realistic and of satisfactory quality. [ ] The following items are lacking and are discussed under loan conditions (Section G): L Compliance with Bank PolicieI [X] This program complies with all applicable Bank policies. [ I [The following exceptions to Bank policies are recommended for approval: The program complies with all other applicable Bank policies.] Arvil Van A al4is, Task Team Leader: Birger Friksen, Sector Director: Oey 4esook, Country Director: Annex I Page l of 5 Education Sector Development Program Program Design Summary Monitoring and Narrative Summary Key Performance Indicators Supervision Critical Assumptions CAS Goals Economic growth is sustained over 1. Real growth rate of 6% maintained 1. MOF Annual the long term. in the medium term. Budget Report; IMF and IDA macro-economic indicators Development Objectives ' Objectives to Goals Broaden the human capital with 1. Grade 8 pass rated improved from 1. EMIS data * Favorable macroeconomic increased access to education, 61.7% to 80.0%. 2. NOE data conditions are maintained. improved quality and equity. 2. National learning assessment 3. EMIS data * Internal security prevails. survey results show improved student performance over time. 3. Grade I dropout rate reduced from 28.5% to 14.2%. 4. Enrollment rate in under-served areas increase from 16% to 25%. 5. Girls' share of enrollment is increased from 38% to 45%. 6. Rural/urban share of enrollment is improved from the current 22%. MEMO RPR: Regions' Progress Reports SPN: Supervision mission report Annex 1 Page 2 of 5 Monitoring and Narrative Summary Key Performance Indicators Supervision Critical Assumptions Outputs of Program Outputs to Objectives 1. More students attend school. 1. Primary school enrollment is I. EMIS data * Parents respond positively to 2. Overcrowding in urban increased from 3.1 million to 7.0 2. EMIS data quality improvement schools and secondary schools is reduced. million (enrollment rate from 30% 3. EMIS data keep their children in school. 3. Teachers are better qualified. to 50%). 4. EMIS data 4. More students have access to 2. Average number of students 5. Regions' books. per classroom in urban secondary Progress 5. Examination is integrated schools is reduced from 64 to 50. Report (RPR) into classroom teaching/learning 3. Share of qualified teachers 6. NOE and through student performance increased from 87% to 100% for supervision feedback. the first cycle primary, 21% to mission reports 6. TVET is responsive to 54% in the second cycle, and 40% market needs. to 67% for secondary. 4. Average student to textbook ratio for core subjects for primary schools is reduced from 5:1 to 1:1. 5. Report analyzing student performance in grade 8 is widely disseminated each year. 6. Market studies and employer surveys for TVET have been completed. MEMO RPR: Regions' I'rogress Reports SPN: Supervision mission report CPR: Consolidated Progress Report Annex I Page 3 of 5 Key Performance Monitoring and Critical Assumptions Narrative Summary Indicators Supervision Progranm Conponents Component to Outputs Basic education US$978.2 million. 1. RPR, * The construction industry has the 1. 2,423 new schools are constructed, 2. EMIS data capacity, is interested in building schools. 1,814 schools upgraded, 1,220 schools 3. CPR * Demand for schooling is increased. rehabilitated. 4. ICDR and Interested out-of-school children, school 2. Separate toilet facilities for girls and 5. EMA reports dropouts and adults are informed of the boys are built in newly constructed and non-formal program. upgraded schools. + Radios are available, accessible and 3. Curriculum is made more relevant to kept in working order. local conditions and more gender sensitive. * Commercialization of EMPDA is 4. 57,850 new teachers are trained and carried out without delay so that the 23,230 teachers upgraded. private sector has the incentive to 5. 51 million books in 19 languages and actively participate. covering 3 core subjects are distributed. * Local language script development is completed and textbook titles developed in local languages. * Adequate number of teachers with _mastery of local languages are available. Secondary education 1. 83 new schools are constructed, US$184.0 million 1. EMIS data 357 additional classrooms built, and 50 2. ICDR report schools rehabilitated. 2. Curriculum is made gender sensitive. 3. 6,630 teachers are trained, and 5,320 teachers upgraded. 4. 5.1 million books in 10 subjects are distributed. MEMO RPR: Regions' Progress Reports SPN: Supervision mission report CPR: Consolidated Progress Report Annex I Page 4 of 5 Key Monitoring and Narrative Summary Performance Supervision Critical Assumptions Indicators Technical and vocational education and training 1. Market studies and employer surveys are completed. US$36.2 million. 1. RPR + The Government is willing 2. TVET curriculum is redesigned 2. CPR and the private sector and NGOs 3. 6 new training centers and additional facilities in are interested in participating in 4 training centers are built in the Region. TVET provision. Teacher training institutions 1. 6 new TTls are established, 7 TTIls expanded, and US$61.0 million. 1. EMIS + Qualified candidates are 2 TTIs rehabilitated. 2. RPR found for teacher training, 2. 14 TTis are equipped and 13 TTIs furnished. 3. CPR particularly female candidates 3. Teacher training curriculum is revised. 4. ICDR progress and candidates from remote 4. In-service training through distance learning is initiated. report areas. 5. EMA progress + Female teachers find spare reports time to undertake upgrading courses through distance learning. MEMO RPR: Regions' Progress Reports SPN: Supervision mission report CPR: Consolidated Progress Report Annex 1 Page 5 of 5 Key Performance Monitoring and Narrative Summary Indicators Supervision Critical Assumptions Tertiary education 1. Efficiency in use of resources (human, financial US$192.2 million 1. MOE progress * Demand for higher education and physical facility) is improved. report remains unaffected by cost sharing. 2. Revenue at the institution level through non- 2. SPN traditional means, including cost recovery, is increased. 4 engineering colleges, 3 medical schools and 2 education faculties are upgraded. 2 health faculties and 2 education faculties are newly established. Management and administration training for the public sector (Civil Service College) is strengthened. Institution building 1. MOE staff are trained in planning and budgeting, US$93.6 million 1. MOE progress * MOE and Regions employ staff procurement, finance management, construction report q|ualified for the position and retain management, and in monitoring and evaluation. 2. EMA progress them in office 2. EMA and EMU's capacity to develop and transmit report educational programs is improved. 3. NOE progress 3. All key positions of NOE are filled and its facility reports is furbished and equipped to enable the new 4. SPN organization to administer national examinations. MEMO RPR: Regions' I'rogress Reports SPN: Supervision mission report CPR: Consolidated Progress Report Annex 2 Page 1 of 8 Education Sector Development Program Objectives and Proposed Interventions Objectives The overall objective of the first five-year phase of ESDP is to improve the overall educational attainment of the population while achieving greater social equity. Its longer-term objective is to achieve universal basic education by 2015. During the first five-year phase of ESDP, its particular objectives are: * achieve expanded access to education with special emphasis on primary education in rural areas raising enrollment from 3.1 million to 7 million; * improve equity by improving enrollment ratios for disadvantaged groups: girls relative to boys, rural relative to urban populations; * improve efficiency of the education system by institutional development and capacity building; * improve quality and relevance by providing books, materials, curriculum improvements and teacher training; and * improve financing for education by increasing public spending on education and facilitating private sector financing of education. The Government proposes to undertake reforms and actions below to achieve the above objectives. Basic Education Access. In order to raise enrollments, a massive expansion of the primary education system will take place. Distance to schools will be reduced through the construction of 2,423 schools in rural and disadvantaged areas. Shortened distance to schools will reduce the opportunity costs of schooling, as will shortened school days through double-shifting, and flexible school calendars that take into account agricultural peak periods when children's labor is in high demand. The elimination of school fees for grades I to 10 will also help reduce the financial burden for households who send their children to school. Equitv. School construction will target rural areas where more than 85 percent of the population reside. School calendars will also try to accommodate the agricultural peak periods when the demand for children's labor is likely to be high. In order to increase the enrollment of girls, grain mills and sources of potable water will be sited close to schools so that girls will be able to attend school and at the same time have grain milled and water fetched for home. Separate toilet facilities for girls and boys will also be built in newly constructed schools. Other kinds of special assistance, such as free notebooks and school uniforms, and special tutorial sessions will be given to girls on a pilot basis to test ways to expand girls' participation in school. Community sensitization on the value of education and on the benefits of girls' education will be undertaken. The training and employment of female teachers will also be an Annex 2 Page 2 of 8 education will be undertaken. The training and employment of female teachers will also be an important factor in attracting girls to attend school. The Government intends to increase the proportion of teachers who are women from 25% in the base year to 35% by the fifth year of ESDP. Quality. Quality of schooling will be improved by: (1) raising the qualifications and motivation of teachers, together with on-going support to teachers to enhance the quality of teacher-learning; (2) improving the management of schools by training head teachers on school management and administration; (3) providing feedback on student performance in national examinations; (4) increasing the availability and use of textbooks from a student-textbook ratio of 5:1 to 1:1 for core subjects; and (5) upgrading and refurbishing schools to improve learning environment. Further quality improvements will be brought into the classrooms through educational radio programs. Relevance of education will be enhanced through the use of local languages, adaptation of curriculum and books to the socio-cultural environment of students. Community involvement in enriching the curriculum will be encouraged. Automatic promotion for grades 1 to 3 will help reduce dropouts in these early grades and allow late bloomers to catch up with class as they mature. Out of school children and adults will be reached through non-formal education. Courses could be developed for: (1) basic education to reach those who have never been to school; (2) functional literacy and numeracy for youth and adults; and (3) post-literacy for new literates and school dropouts, utilizing distance education as the main medium for reaching this segment of the population. Secondary Education Access. Major expansion of secondary education is deferred to beyond the first five- years ESDP until the outflow from primary education begins generating demand for secondary education. Interventions will focus on reducing overcrowding by building 357 classrooms and constructing 83 new secondary schools. A greater proportion of the new construction will be done in urban areas. Quality. Just over 40% of teachers have the prerequisite teacher training, while 39% are degree holders. Upgrading through in-service training, particularly through distance education will be supported and the share of degree holder teachers will be introduced. Recently teacher salaries have increased, and a new career structure that provides a path for professional growth and advancement has been introduced. As in primary education, more funds will be provided to increase the provision of school books. Continuinz education for out-of school youth and adults. EMA and EMU will develop distance education programs to reach the greater majority of youths who do not continue in the formal education system. Technical and Vocational Education and Training (TVET) The capital investment earmarked for TVET is meant to strengthen existing institutions, while options are examined during the first and second years of the ESDP in order to develop a more substantial plan that will improve TVET's relevance and quality. Major expansion will be deferred pending preparation of these plans in some of the larger Regions. Annex 2 Page 3 of 8 Interventions to improve relevance consist of market demand surveys, employer surveys and curriculum reform based on the findings and with participation of the business sector. The Government proposes to invite greater private sector involvement not only through survey participation but also in provision of training. Modalities of private sector involvement will be developed and presented. Ouality Interventions consist of raising the quality of teachers and improving the facilities and equipment at training centers. Practical experience in trades will be a requirement for new TVET trainers. Similarly, less emphasis would be given to academic qualifications of students provided they meet the minimum education standards. These interventions are likely to increase the practical content of skills training. Teacher Training Interventions aimed at increasing the share of gualified teachers focus on the system's capacity to produce or upgrade teachers. This will be achieved through expanded throughput capacities of teacher training institutes, colleges, and faculties of education. At the same time, distance education will be used for teacher upgrading that is cost effective and more accessible to female teachers than residential training for upgrading. Interventions to retain gualified teachers. As the economy continues to grow rapidly, the school system is likely to face increased competition for its capable teachers, particularly science, math and English teachers. Teacher salaries have been raised recently; periodic review of teacher salaries will become necessary to retain competitiveness of the teaching profession. For assignment to remote schools, an incentive package that consists of a hardship allowance, accelerated professional advancement, preferential access to in-service training is being considered. The ESDP will improve school environment by rehabilitating/renovating existing schools and by providing more instructional materials and books. Interventions to improve gualitv of teacher training. Quality of trainers is an important factor determining quality of teacher training. Greater classroom orientation will be given in teacher training; classroom teaching experience will be made a requisite qualification for newly hired tutors for TTIs and TTCs, and a strategy will have to be developed for having currently employed tutors without primary or secondary school experience acquire classroom experience. National standards for certification will be set by a central body (to be determined) to assure that minimum standards are met for all teachers certified. Books, teacher-guides, and other instructional materials will be provided to the teacher training institutions. Teacher training curriculum is being revised by the Institute for Curriculum Development and Research (ICDR) and plans developed for the implementation of the new curriculum. Tertiary Education Im2roved efficiency. The average student teacher ratio of 7:1 ranges from 2:1 (School of Pharmacy, Addis Ababa University) to 13:1 (Business College, Mekele in Tigray). This ratio is low by international standards and indicates inefficiencies in the system. Gains in efficiency could be achieved in use of staff resources, use of physical facilities, and resulting unit cost of providing tertiary education. An internal review has been carried out by all tertiary institutions. Annex 2 Page 4 of 8 Increased number of engineers. educators. health workers and public administrators. The Government puts high priority on roads, education and the health sector. An extensive roads construction program is already underway; similarly ambitious expansion programs are planned for the near future in health and education, substantially increasing demand for health workers and educators beyond what the system has to offer. There is also unmet demand for engineers. Therefore, the Government has proposed selective expansion of tertiary education. Four engineering colleges, three medical schools and two education faculties will be upgraded and two new health faculties and three education faculties will be established during the five year ESDP. Additional staffing required for the expansion will be met initially by expatriate teachers while local teaching staff receive training overseas. A strategv for diversifving the resource base for tertiary education will be prepared and implemented by the Ministry of Education by the third budget year of the ESDP. The strategy will consider varied cost sharing mechanisms such as fees, privately sponsored students, student loan schemes, and private provision of tertiary education. Education Materials The share of recurrent expenditures for non-salary items, such as textbooks, will be increased to raise the quality of education while also encouraging community and household financing for this purpose. Options will be explored for assuring a dependable supply of affordable textbooks and instructional materials. By the third budget year of the ESDP, it is planned to place the Education Materials Production and Distribution Agency (EMPDA) fully on a commercial footing. During the second year of ESDP, a textbook policy will be developed to support development of private publishing capacity and build capacity within the Ministry of Education to implement and administer the textbook policy. Institutional Development (a) Ministry of Education The shift to a federal structure of administration, following the change of Govemment in 1993, has resulted in a devolution of administration of public education at the primary and secondary levels, as well as teacher training to the newly-established 11 Regional Education Bureaus. Only the responsibility for the specialized agencies and universities and colleges were retained within the Ministry. Consequently, the Ministry has been restructured and downsized to carry out its responsibilities which are redefined to include: (a) setting national educational policies and strategies and monitoring their implementation; (b) setting standards country-wide and issuing criteria for teacher recruitment; (c) providing training opportunities and support for training programs; (d) promoting private investment for education; (e) providing technical support for regional offices; and (f) mobilizing external assistance. Interventions proposed to strengthen the Ministry's capacity are: Strengthening the capacity of the MOE to carry out research and Rolicv development which will lead to improvements in the effectiveness of the education system and the efficiency of its operation. ESDP will strengthen staffing for research, provide equipment, staff training and short-term technical assistance as necessary to help build up the research capacity within the Ministry. Standards and criteria to be reviewed or set by MOE for ESDP are: Annex 2 Page 5 of 8 (i) Teacher Training Institutes (TTIs) and Teacher Training Colleges (TTCs) tutor qualifications (to emphasize classroom experience); (ii) teacher qualifications for TVET (emphasizing experience in the trade); (iii) student admissions requirements for TVET (to reduce emphasis on academics); and (iv) teacher certification for in-service upgrading through distance education. Planning and budgeting capacity. A financial management system with a computerized accounts management system, capable of handling all donor-funded expenditures will be set up, staff trained, and equipment provided. All ESDP expenditures, inclusive of donor funded expenditures, will be subject to internal audits. Monitoring and evaluation capacity. As the Secretariat to the Central Steering Committee (CSC), the Planning and Projects Department of MOE will review and advise on the progress reports and action plans submitted by the Regions, engage an independent body to evaluate ESDP implementation progress, and submit consolidated reports for CSC consideration. The Secretariat will prepare consolidated annual budget from Regional submissions, coordinate preparations for an annual assessment of ESDP performance, and facilitate twice-yearly joint-donor supervision mission. Additional staff, training and equipment, as well as short-term consultancies will be provided to strengthen the capacity of the MOE. Particularly important for monitoring and evaluation is the management of information flows through the education system. Collation, processing and analysis of education data should be carried out as close to the source as possible. (b) Regional Education Bureaus The decentralization of administration and management for primary and secondary education is based on the rationale that educational services are best managed by agencies located closer to communities. The major tasks of the Regional Education Bureaus (REBs) include: (i) adapting national educational policies and programs to meet regional needs; (ii) expanding basic education with the goal of achieving universal primary education; (iii) organizing and administering the regional education system; (iv) promoting private investment in education; (v) ensuring an adequate supply of educational facilities; and (vi) maintaining national education standards and criteria. Capacity to Adapt National Policies and Programs. The Regions' capacity to adapt national policies and programs to meet their regional needs has grown impressively in the short period they have interacted with intemational experts in preparing ESDP plans. However, the capacity of the Regions varies; cross-Regional support as well as assistance from the MOE are helping to improve the capacity of disadvantaged Regions. This experience has shown that capacity building is most effective when tied to work at hand. Further training for Regional staff in the future might be made to coincide with the development of the annual work program. Funding for periodic training will be provided under the ESDP. Annex 2 Page 6 of 8 Improved Implementation capacity. Financial management and procurement on the scale of the ESDP with donor involvement will be new to most Regions. Additional staffing may be needed by the Regions, and their staff will need to be trained in the procedures and guidelines to be followed. Initial intensive training needs to be followed by periodic reinforcement to consolidate and deepen the knowledge staff have acquired and also as a means of obtaining feedback to improve the procedures and guidelines. The Govemment will also consider contracting out some tasks such as supervision of civil works, textbook supply, etc., to achieve speedy implementation. Monitoring and Evaluation Capacity. The quality of information obtained from woreda and zones will need to be improved. Information management capacity at the Regional level will also need to be improved. The Regions are encouraged to create capacity in the lower levels of Government so that data processing and analysis can be handled at the zonal and woreda levels where the findings become immediately useful. Staffing, training, equipment and logistical support required for efficient monitoring and evaluation are being developed. (c) Central Education Agencies There is a significant role for the Educational Media Agency (EMA), Institute of Curriculum Development (ICDR), and the National Organization for Examinations (NOE) to play for quality assurance, technical assistance in highly specialized expertise, and for assuring consistency across Regions. Education Media Agency (EMA). Ethiopia has a strong broadcasting infrastructure for education and decades of experience and commitment to using distance education to strengthen education. Distance education has been mostly a centralized operation with EMA at the helm. Following decentralization, Educational Media Units (EMU) have been set up in each of the Regions. EMA and EMU jointly have the capacity to produce and broadcast educational radio programs in 13 languages. The full educational potential for distance education has not been realized because of limited capacity for program development, lack of transmission facilities in some Regions, weak transmission signals in remote areas, inadequate provision of receivers. EMA's five year development plan, prepared two years earlier, is being updated to make it consistent with ESDP goals and the progress in regionalization, especially how the center (EMA) and EMUs in the Regions will collaborate in the design, production and implementation of the programs. Distance education under ESDP will strengthen EMA's multimedia approach, utilizing print materials, face-to-face meetings when appropriate in addition to broadcast media. It will supplement classroom instructions in primary and secondary schools, support non-formal and continuing education for out-of-sch6ol children and adults, and provide alternative means to teacher in-service training. EMA and EMU will (a) build capacity in program development, (b) build capacity for research and evaluation (c) update facilities and equipment, and (d) explore further technological advancements in distance education such as interactive ratio instruction (IRI). Institute of Curriculum Development and Research (ICDR). Curriculum development has been the responsibility of the Institute of Curriculum Development and Research (ICDR) at the center. With recent initiatives for decentralization, each Region has the Annex 2 Page 7 of 8 freedom to adapt the curriculum developed by the ICDR to suit regional conditions. Regions are exercising that right mostly for primary education, for the time being, to adapt to local languages. Following the new education policy's introduction of a change in the education structure, extending the primary level from the 6th to the 8th grade, ICDR has, over a period of four years, revised the primary curriculum. The objectives of further curriculum reforms are to: (a) improve quality; (b) enhance the relevance of education; (c) increase gender sensitivity; and (d) improve curriculum implementation in the classroom. * To improve quality - ICDR provides curriculum guidelines to the Regions from which the Regions evolve locally relevant curricula, using appropriate national languages. The prototype curriculum developed by ICDR puts emphasis on the development of basic skills in literacy, numeracy, communications and problem solving, and reduced emphasis on rote learning. An integrated curriculum is promoted (for environmental science, language, arts, and aesthetic subjects), particularly for early years of schooling, to provide an integrated educational experience. * To increase the relevance of education, the use of mother tongue is promoted as a medium of instruction in the lower primary grades (and in some Regions even in upper grades). Considerable work has been done in the use of national languages. For most, materials have been created from scratch, translated or adapted to cover all subject areas. Nineteen local languages are now in use in classrooms throughout the country; glossaries and dictionaries are being developed for these languages. In addition to classroom instruction, successful development of local languages depends on a favorable literacy environment beyond the confines of the school. Production and distribution of creative literature, newspapers and booklets in local languages will be encouraged. ESDP will support tapping community resources for developing materials in the mother tongue, non-text materials such as artifacts, songs, oral poetry or other forms of oration. Traditional ceremonies and festivals can be brought into the school and classrooms through a variety of means. This will involve the community members directly in curriculum development work and help break down the artificial barriers between school and society and strengthen community involvement. * To increase gender sensitivity, the new curriculum guidelines have taken up the challenge and have attempted to remove all manifestations of gender bias from curriculum materials. However, unconscious gender biases still remain in books (girls and women depicted in subsidiary social roles) and poor representation of women on curriculum panels. More guidance will be provided by ICDR to school heads and teachers on what to watch out for, what to prevent, what to work towards in promoting gender equity as envisaged in the new curriculum. * To improve curriculum implementation in the classroom, intensive training in curriculum development is proposed for the Regional staff to create a critical mass of qualified curriculum specialists; short-term training and study visits are proposed for ICDR staff. It has also been suggested that pedagogical centers, which are an important feature of the educational landscape in Ethiopia and found in nearly every school, could be used for training teachers in the spirit of the new curriculum but also for involving teachers in curriculum development work. A study is being undertaken by ICDR to Annex 2 Page 8 of 8 identify training needs. National Organization for Examinations. Design, production and administration of national examinations for grades 6, 8, and 12 have in the past been spread between MOE and Addis Ababa University. The new education policy mandated these functions be brought under one roof. The National Organization for Examinations (NOE) was created in 1996. With the change in the education structure from the 6- to 8-year primary cycle and automatic promotion in grades 1 through 3, children will now sit for only one national examination in grade 8, in lieu of a grade 6 exam. The Government will carry out a baseline study of grade 4 student achievement. Major constraints to the system, as identified by the NOE, are inadequate administrative and technical capacity, particularly lack of expertise in educational measurement, poor quality examination items and lack of research, perception of public examinations solely as a selection tool, regional variation in grading capacities, problems that may arise in the future from exam administration in different local languages. The NOE's objectives are to: (a) establish an organization that is capable of effectively managing public examinations; (b) integrate examinations with the teaching-learning process through feedback; and (c) develop research capacity. * Establishing an efficient organization - the main responsibility of the NOE is to provide efficient service in managing public examination. Skill composition of the staff required has been identified and recruitment is underway. The NOE premises will be fitted with security features to protect the confidentiality of examination papers. Equipment and furnishing necessary for NOE operation will also be provided. Respective roles of the Regions, NOE, and tertiary institutions will be clarified. Short-term technical assistance will be provided on supplementary areas of expertise that are needed to build-up NOE's capacity such as item banking. NOE staff will be trained through short-term specialized training and study tours. Regional staff will receive training and guidelines on grading procedures to redress anomalies in examination results reported. * Integrating examinations with the teaching-learning process - public examinations have been largely viewed as a selection mechanism for the next level of the education ladder. With ESDP support, NOE will make assessment an integral part of the teaching-learning process. Examination results will be analyzed and detailed feedback provided to schools on student performance. Training and guidance will be provided to teachers on own classroom assessment. * Developing research capacity - there is a need for quality information about student achievement levels that would be of value to policy makers, education planners, management, curriculum experts, and teachers. A national learning achievement sample baseline survey for grade 4 will be carried out in the third year of ESDP to establish the baseline. Annex 3 Annex 3 Program Costs Page I of 17 Table A3.1: Total ESDP Cost by Program Component by Year ('000 Birr) Projected Expenditure ESDP Share Component 1997/98 1998/99 1999/2000 2000/01 2001/02 Total (%) CAPITAL COST BY COMPONENT Regional Capital Cost Primary Education 208,439 489,042 483,523 517,060 470,487 2,168,550 19.5% Secondary Education 39,484 89,928 85,634 85.587 76,436 377,069 3.4% TVET 2,017 24,962 18,664 21,852 9,051 76,547 0.7% Teacher Training 42,551 82,944 44,971 18,863 2,398 191,727 1.7% Adult & Non-formal Education 1,785 6,839 5,795 5,962 5.497 25,878 0.2% Special Education 396 683 542 542 601 2,764 0.0% Distance Education 9,703 34,658 21,446 7,540 6.847 80,193 0.7% Capacity Building 7,036 22,324 37,989 31,408 16,157 114,914 1.0% Administration 3,000 7,310 16,042 6,167 1,380 33,899 0.3% Total Regional capital cost 314,410 758,691 714,606 694,980 588,854 3,071,541 27.6% Central Capital Cost Tertiary education 116,276 321,751 28,571 7,776 - 474,374 4.3% Ministry of Education 44,297 21,133 1,495 2,889 1,773 71,586 0.6% Total Central capital cost 160,573 342,884 30,065 10,665 1,773 545,960 4.9% TOTAL CAPITAL COST 474,984 1,101,574 744,671 705,645 590,627 3,617,501 32.5% RECURRENT COST BY COMPONENT Regional Recurrent Cost Primary 746,097 848,155 896,172 909,594 1,083,511 4,483,528 40.3% Secondary 142,641 155,446 184,674 195,033 202,888 880,683 7.9% TVET 19,576 22,328 23,840 29,296 30,285 125,323 1.1% Teacher Training 27,290 45.193 48,595 54.793 60,275 236,146 2.1% Adult&Non-formal Education 15,373 19,408 27,354 27,597 28,988 118,720 1.1% Special Education 2,347 4,829 5,207 5,717 5,795 23,895 0.2% Distance Education 4,492 13,226 13,153 13,174 13,622 57,669 0.5% Capacity Building 268 1,970 2,064 1,572 1,176 7,049 0.1% Administration 104,601 116,748 119,971 128,234 132,021 601,573 5.4% Total Regional recurrent cost 1,062,685 1,227,301 1,321,030 1,365,009 1,558,561 6,534,586 58.8% Central Recurrent Cost Tertiary Education 146,008 157,214 166,683 176,389 185,827 832,122 7.5% Ministry of Education 20,518 24,404 29,770 30,232 33,338 138,262 1.2% Total Central recurrent cost 166,526 181,619 196,453 206,620 219,165 970,383 8.7% TOTAL RECURRENT COST 1,229,211 1,408,920 1,517,483 1,571,630 1,777,726 7,504,970 67.5% TOTAL (CAP + RECU) BASE COS 1,704,194 2,510,494 2,262,155 2,277,275 2,368,352 11,122,471 100.0% CONTINGENCY 170,419 251,049 226,215 227,727 236,835 1,112,247 GRAND TOTAL ESDP 1,874,614 2,761,544 2,488,370 2,505,002 2,605,188 12,234,718 File: COST-SUM2 - Sum-Comp Annex 3 Page 2 of 17 Table A3.2: Total ESDP Cost by Expenditure Category by Year ('000 Birr) Projected Expenditure ESDP Share Expenditure Category 1997/98 1998/99 1999/2000 2000/01 2001/02 Total (%) CAPITAL costs BY EXPENDITURE CATEGORY Regional Capital Cost Civil Work 216,720 508,431 505,804 512,221 445,431 2,188,607 19.7% Equipment 34,647 121,312 108,430 80,825 55,856 401,070 3.6% Furniture 57,225 110,234 82,306 82,688 76,711 409,166 3.7% Monitoring & Evaluation 785 3,419 2,219 2.405 2,122 10,950 0.1% Others ( curriculum, Training Fund, Training) 5,033 15,295 15,846 16,841 8,734 61,749 0.6% Total Regional capital costs 314,410 758,691 714,606 694,980 588,854 3,071,541 27.6% Central Capital Cost Civil Works 49,225 92,069 23,079 2,575 - 166,946 1.5% Equipment 93,965 240,940 5.040 6,021 275 346,240 3.1% Furniture 16,939 7,927 600 - - 25.465 0.2% Vehicle 445 842 - - - 1,287 0.0% Training - 1,107 1,347 2.070 1.498 6,022 0.1% Total Central capital cost 160,573 342,884 30,065 10,665 1,773 545,960 4.9% TOTAL CAPITAL COST 474,984 1,101,574 744,671 705,645 590,627 3,617,501 32.5% RECURRENT COST BY EXPENDITURE CATEGORY Regional Recurrent Costs Salaries 831,180 912,827 995,113 989,179 1,083,831 4,812,130 43.3% Operating Cost 94,839 121,935 140,067 165,375 185,498 707,715 6.4% Educational Materials 107,562 137.439 126,508 149,865 234,215 755,589 6.8% Curriculum/Program Development 9,878 19,843 16.371 14.013 11,035 71,140 0.6% Building Preventive Maintenance 10,680 16,881 19,207 20,389 19,432 86,589 0.8% Monitoring & Evaluation 3,933 7,410 8,871 10,921 12,124 43,259 0.4% Training 4,612 10,966 14.893 15,267 12,426 58,164 0.5% Total Regional recurrent cost 1,062,685 1,227,301 1,321,030 1,365,009 1,558,561 6,534,586 58.8% Central Recurrent Cost Salary & Allowance 88,156 93,318 98,778 104,567 110,700 495,518 4.5% Non-salary 76,407 83,865 92.435 97,297 105.348 455,352 4.1% Technical Assistance 452 1,130 1,290 870 20 3,762 0.0% Teacher Training ( for Higher Education) - 2,290 3,000 3,000 2,131 10,421 0.1% In-service Teacher Trainig for Secondary Schools 1,511 1,015 951 887 967 5,330 0.0% Total Central recurrent cost 166,526 181,619 196,453 206,620 219,165 970,383 8.7% TOTAL RECURRENT COST BY CATEGORY 1,229,211 1,408,920 1,517,483 1,571,630 1,777,726 7,504,970 67.5% TOTAL (CAPITAL + RECURRENT) BASE CO 1,704,194 2,510,494 2,262,155 2,277,275 2,368,352 11,122,471 100.0% CONTINGENCY 170,419 251,049 226,215 227,727 236,835 1,112,247 10.0% GRAND TOTAL ESDP COST 1,874,614 2,761,544 2,488,370 2,505,002 2,605,188 12,234,718 110.0% File: COST-SUM2 - Sum-Cat Annex 3 Page 3 of 17 Table A3.3: Physical Targets as of April 1998 (1997/98 - 2001/02) COMPONENTS Tigray Afar Ambara Oromiya Somali BlGumuz SNNPR Gambela Harari A/Ababa Dire Dawa Total 1. Primary Education 1.1 Civil Works New construction school 251 90 592 224 340 100 755 31 6 20 14 2423 Upgrading school 221 80 600 143 134 73 420 35 23 73 12 1814 Rehabilitation school 100 58 130 143 116 75 489 36 22 37 14 1220 Boarding school school 0 6 0 0 9 2 0 0 0 0 0 17 Hostels school 0 0 0 0 0 0 1 0 0 0 0 1 1.2Equipment school 221 194 1192 489 474 200 1175 96 45 20 42 4148 13Furniture school 251 252 1192 481 474 175 1175 96 45 93 42 4276 IA Teacher Training Pre-service number 4640 601 24286 13600 1105 871 9145 358 250 2831 162 57849 In-service number 1298 1126 6534 2600 4582 1408 2882 390 336 1974 136 23266 1.5 Textbooks '000 5330 851.3 20726 11358.8 694 261.1 6547.7 249.4 71.1 4893A 35.4 51018.2 2. Secondary Education 2.1 Civil Works New schools school 26 4 12 5 9 2 5 1 1 16 2 83 Additional classrooms classroom 36 0 50 48 4 42 20 17 12 120 8 357 Rehabilitation/renovation school 0 3 0 12 0 5 10 1 2 16 1 50 2.2Equipment school 26 4 12 7 9 10 5 4 2 16 4 99 2.3Furniture school 31 7 18 23 9 10 5 4 2 16 4 129 2.4 Textbooks '000 619.6 64 1311.4 621.6 62 90.4 195.3 6 20.5 2079.5 19.3 5089.6 3. Technical and Vocational Education 3.1 Civil Works New schools school 1 0 0 0 3 1 0 0 1 0 0 6 Additional ficlities school 0 0 0 0 0 0 0 0 0 3 1 4 Rehabilitation/renovation school 0 0 0 0 0 0 2 1 0 1 0 4 3.2 Equipment school 0 0 3 0 9 1 2 1 0 3 1 20 33 Furniture number 0 0 3 0 9 1 2 1 0 3 1 20 3A4Textbooks number 0 66 0 4.8 0 9.4 0 1.93 0 0 0 82.13 institute 4. Teacher Training 4.1 Civil Works New institutes institute I 0 0 1 1 1 2 0 0 0 0 6 Additional fcilities center 0 0 3 0 1 1 I 1 0 0 0 7 Rehabilitation/renovation center 0 0 0 0 1 0 0 0 0 1 0 2 4.2 Equipment center 2 0 3 1 1 1 3 1 1 1 0 14 4.3 Furniture center 2 0 3 1 1 1 3 1 0 1 0 13 5. Adult and Non-formal Education 5.1 Civil Works New skill training centers classroom 0 1 8 5 0 7 6 0 4 0 7 0 47 Rehabilitation/renovation classroom 0 0 0 8 2 8 0 17 0 7 0 42 4.2 Equipment classroom 0 18 5 0 9 14 0 21 0 14 0 81 4.3FerFture classroom 0 18 5 0 9 14 0 21 0 0 0 67 6. Special Education 6.1 CivM Works Addtional classrooms classroom 0 0 24 0 12 0 0 0 0 0 0 36 4.2 Equipment classrcom 0 0 24 0 12 0 0 0 10 0 0 46 43Furmiture classroom 0 0 24 0 12 0 0 0 0 0 0 36 Page 1 Annex 3 Page 4 of 17 Table A3.4: ESDP Cost by Region by Component (Birr '000) Tigray Afar Amhara Oromiya Somali B/Gumuz SNNPR Gambella Harari Addis Ababa Dire Dawa Total ESDP COST BY COMPONENT Capital Cost Primary 244,198 198,357 357,620 233,576 285,137 109,487 481,272 70,499 33,765 140,094 14,547 2,168,550 Secondary 55,383 24,701 39,600 42,997 56,585 16,450 12,648 14,600 9,110 87,631 17,364 377,069 TVET 1,707 2,800 7,500 1,700 26,300 9,600 809 4,900 3,590 15,944 1,697 76,547 Teacher Training 28,674 - 24,394 13,676 12,481 29,900 59,538 19,854 310 2,900 - 191,727 Adult & Non-formal Education - 4,672 5,000 960 5,700 3,925 - 1,561 - 4,060 - 25,878 Special Education - - 1,716 - 748 - - - 300 - - 2,764 Distance Education - 17,157 7,938 2,838 8,394 12,510 4,889 4,011 8,175 14,281 80,193 Capacity Building 1,832 8,703 21,358 16,679 7,056 6,238 18,205 8,679 8,564 17,601 - 114,914 Administration - 13,572 5,000 - 4,690 - - 3,437 4,200 3,000 - 33,899 Region Capital Cost 331,794 269,963 470,126 312,425 407,091 188,110 577,360 127,540 68,014 285,510 33,608 3,071,541 Recurrent Cost Primary Education Education 303,497 156,018 906,070 1,597,615 193,364 116,234 689,313 68,926 58,963 353,587 39,941 4,483,528 Secondary 34,189 15,198 179,641 226,213 33,961 23,580 114,726 8,430 16,859 213,780 14,106 880,683 TVET 5,770 2,826 8,081 23,163 6,485 3,062 39,252 2,006 4,164 25,116 5,399 125,323 Teacher Training 14,714 7,277 53,009 56,391 23,162 3,097 36,501 10,293 7,668 22,812 1,222 236,146 Adult & Non-formal Education 14,543 11,504 37,598 20,134 12,520 3,511 5,768 1,841 2,986 3,999 4,315 118,720 Special Education 3,898 150 2,704 7,256 5,020 460 4,060 - 116 - 232 23,895 Distance Education 744 3,532 9,925 12,094 18,854 1,032 7,628 1,248 954 - 1,658 57,669 Capacity Building 703 - - - 2,613 - 714 1,076 75 - 1,868 7,049 Administration 13,092 18,432 179,399 177,809 25,231 10,115 54,378 48,040 11,444 62,096 1,538 601,573 Region Recurrent Cost 391,150 214,937 1,376,427 2,120,675 321,209 161,091 952,340 141,860 103,229 681,390 70,277 6,534,586 Total Cost Primary Education Education 547,696 354,375 1,263,690 1,831,191 478,501 225,721 1,170,585 139,425 92,727 493,681 54,488 6,652,078 Secondary 89,572 39,899 219,241 269,210 90,546 40,030 127,374 23,029 25,969 301,411 31,470 1,257,752 TVET 7,477 5,626 15,581 24,863 32,785 12,662 40,061 6,906 7,754 41,059 7,095 201,870 Teacher Training 43,388 7,277 77,403 70,067 35,642 32,997 96,039 30,147 7,978 25,712 1,222 427,873 Adult & Non-formal Education 14,543 16,176 42,598 21,094 18,220 7,436 5,768 3.402 2,986 8,059 4,315 144,598 Special Education 3,898 150 4,420 7,256 5,768 460 4,060 - 416 - 232 26,659 Distance Education 744 20,689 17,863 14,931 27,248 13,542 12,517 5,259 9,129 14,281 1,658 137,862 Capacity Building 2,535 8,703 21,358 16,679 9,669 6,238 18,919 9,755 8,639 17,601 1,868 '21,964 Administration 13,092 32,005 184,399 177,809 29,921 10,115 54,378 51,477 15,644 65,096 1,538 635,473 Region Recurrent Cost 722,945 484,900 1,846,553 2,433,101 728,300 349,201 1,529,700 269,400 171,243 966,900 103,885 9,606,127 File: Annex3-1 - Sheetl Annex 3 Page 5 of 17 Table A3.5: ESOP Cost by Region by Expenditure Category (Birr '000) Tigray Afar Amhara Oromiya Somali B/Gumuz SNNPR Gambelia Harari Addis Ababa Dire Dawa Total Capital Costs CivilWorks 260,162 162,698 331,338 242,334 269,320 132,573 446,408 81,287 38,588 200,917 22,983 2,188,607 Equipment 17,947 55,119 65,862 26,079 49,592 25,588 47,294 26,620 21,636 59,016 6,317 401,070 Fumiture 53,676 46,147 63,626 33,707 86,053 27,069 57,795 15,766 3,680 17,340 4,308 409,166 Monitoring and Evaluaton 10 4,426 - 1,106 - 225 4,851 - - 332 - 10,950 Other (training) - 1,572 9,300 9,200 2,126 2,655 21,012 3,868 4,110 7,906 - 61,749 Region Capital Cost 331,794 269,963 470,126 312,425 407,091 188,110 577,360 127,540 68,014 285,510 33,608 3,071,541 Recurrent Cost Salaries 306,056 116,651 1,090,171 1,784,215 147,261 110,947 601,781 87,265 63,659 467,282 36,843 4,812,130 Operating Costs 31,085 61,663 130,945 173,099 57,948 7,784 94,887 25,660 19,736 92,035 12,873 707,715 Educational Materials 36,610 17,812 123,816 119,121 68,771 24,889 234,332 16,546 14,717 87,300 11,676 755,589 Curriculum/Program Development 13,609 3,064 8,962 12,844 7,013 5,531 7,041 2,223 3,956 6,897 71,140 Building Preventive Maintennce 2,161 3,221 10,200 28,896 13,265 8,040 4,262 199 1,245 15,100 - 86,589 Monitoring and Evaluation 301 3,530 6,399 - 11,500 755 10,273 1,001 378 9,122 - 43,259 Training 1,328 8,996 5,934 2,500 15,452 3,145 6,805 4,149 1,272 6,595 1,988 58,164 Region Recurrent Cost 391,150 214,937 1,376,427 2,120,675 321,209 161,091 952,340 141,860 103,229 681,390 70,277 6,534,586 As % of Total Base Cost Capital Costs Civil Works 36.0% 33.6% 17.9% 10.0% 370% 38.0% 29.2% 30.2% 225% 20.8% 22,1% 22.8% Equipment 2.5% 11.4% 3.6% 1.1% 6.8% 7.3% 3.1% 9.9% 12.6% 6.1% 6.1% 4.2% Fumiture 7.4% 9.5% 3.4% 1.4% 11.8% 7.8% 38% 5.9% 2.1% 1.8% 41% 4.3% Monitoring and Evaluation 0.0% 0.9% 0.0% 0.0% 0.0% 0.1% 0.3% 0.0% 0.0% 0.0% 0.0% 0.1% Other (training) 0.0% 0.3% 0.5% 0.4% 0 3% 0.8% 1.4% 1.4% 2.4% 0.8% 0.0% 0.6% Region Capital Cost 45.9% 55.7% 25.5% 12.8% 55.9% 53.9% 37.7% 47.3% 39.7% 29.5% 32.4% 32.0% Recurrent Cost Salaries 42.3% 24.1% 59.0% 73.3% 202% 31 8% 39.3% 32.4% 37.2% 48.3% 35 5% 50.1% Operating Costs 4.3% 12.7% 7.1% 7.1% 8.0% 2.2% 62% 9.5% 11.5% 9.5% 124% 7.4% Educational Materials 5.1% 3.7% 6.7% 4.9% 9 4% 71% 15.3% 6.1% 8.6% 9.0% 11 2% 7.9% Curriculum/Program Development 1.9% 0.6% 0.5% 0.5% 1.0% 1.6% 00% 2.6% 1.3% 0.4% 6.6% 0.7% Building Preventive Maintennce 0.3% 0.7% 0 6% 1.2% 1.8% 2.3% 0 3% 0.1% 0.7% 1.6% 0.0% 0 9% Monitoring and Evaluation 0.0% 0.7% 0.3% 0.0% 1.6% 0.2% 0.7% 0.4% 0.2% 0.9% 0 0% 0.5% Training 0.2% 1.9% 0.3% 0.1% 2.1% 0.9% 0.4% 1.5% 0.7% 0.7% 1.9% 0.6% Region Recurrent Cost 54.1% 44.3% 74.5% 87.2% 44.1% 46.1% 62.3% 52.7% 60.3% 70.5% 67.6% 68.0% Total Base Cost 722,945 484,900 1,846,553 2,433,101 728,300 349,201 1,529,700 269,400 171,243 966,900 103,885 9,606,127 File 1 - I Annex 3 Page 6 of 17 Tigray Region Table A3.6: Tigray Region ESDP Cost Summary (Birr '000) Projected Costs 1997198 1998J99 1999/00 2000/01 2001/02 Total Share ESDP COST BY COMPONENT Capital Cost Primary 9,851 92,230 63,389 50,074 28,655 244,198 33.8% Secondary 5,804 16,493 11,029 11,029 11,029 55,383 7.7% TVET 1,707 - - - - 1,707 0.2% Teacher Training 8,279 9,992 10,403 - - 28,674 4.0% Adult & Non-formal Education - - - - - - 0.0% Special Education 0.0% Distance Education - -- 0.0% Capacity Building 1,832 - - - - 1,832 0.3% Administration - - - - - - 0.0% Region Capital Cost 27,473 118,715 84,820 61,103 39,683 331.794 45.9% Recurrent Cost Primary Education Education 50,965 66,141 60,224 65,575 60,593 303,497 42.0% Secondary 5,491 8,310 6,647 6,447 7,295 34,189 4.7% TVET 1,146 1,328 1,201 1,226 869 5,770 0.8% Teacher Training 2,865 3,015 2,936 2,953 2,944 14,714 2.0% Adult & Non-formal Education 3,415 3,435 2,580 2,585 2,529 14,543 2.0% Special Education 631 765 775 829 898 3,898 0.5% Distance Education 176 176 178 118 96 744 0.1% Capacity Building 196 231 120 86 70 703 0.1% Administration 5,084 5,167 912 953 976 13,092 1.8% Region Recurrent Cost 69,969 88,568 75,574 80,771 76,268 391,150 54.1% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs Civil Works 11,226 97,851 67,468 49.518 34,099 260,162 36.0% Equipment 4,274 3,570 6,714 2,453 938 17,947 2.5% Furniture 11,963 17,295 10,639 9,132 4,647 53,676 7.4% Monitoring and Evaluation 10 - - - - 10 0.0% Other (training) - - - - - - 0.0% Region Capital Cost 27,473 118,715 84,820 61,103 39,683 331,794 45.9% Recurrent Cost Salaries 58,838 65,246 60,228 60,593 61,150 306,056 42.3% Operating Costs 4,598 6,200 6,449 6,771 7,067 31,085 4.3% Educational Materials 4,151 13,162 5,181 9,759 4,357 36,610 5.1% Curriculum/Program Development 1,902 3,241 2,885 2,792 2,790 13,609 1.9% Building Preventive Maintennce 60 427 490 560 624 2,161 0.3% Monitoring and Evaluation 60 60 60 60 60 301 0.0% Training 361 231 280 236 220 1,328 0.2% Region Recurrent Cost 69,969 88,568 75,574 80,771 76,268 391,150 54.1% REGIONAL TOTAL (CAP.+ RECU.) COST 97,443 207,283 160,394 141,874 115,952 722,945 100.0% Contingency (10%) 9,744 20,728 16,039 14,187 11,595 72,294 10.0% GRAND TOTAL 107,187 228,012 176,433 156,061 127,547 795,239 110.0% File: COST-SUM2 - Annex 3 Page 7 of 17 Afar Region Table A3.7: Afar Region ESDP Cost Summary (Birr '000) Projected Costs 1997/98 1998/99 1999100 2000i01 2001102 Total Share ESDP COST BY COMPONENT Capital Cost Primary 22,318 93,136 33,791 26,095 23,017 198,357 40.9% Secondary 1,553 5,831 5,877 5,877 5,563 24,701 5.1% TVET - 2,800 - - - 2.800 0.6% Teacher Training - - - - - - 0.0% Adult & Non-formal Education - 1,356 1,320 1,325 671 4,672 1.0% Special Education - - - - - - 0.0% Distance Education - 16,067 626 227 237 17,157 3.5% Capacity Building - 1,157 2,948 2,738 1,861 8,703 1.8% Administration - - 9,832 3,740 - 13,572 2.8% Region Capital Cost 23,871 120,348 54,394 40,002 31,348 269,963 55.7% Recurrent Cost Primary Education Education 12,169 18,710 32,415 42,431 50,293 156.018 32.2% Secondary 2,494 2,388 2,888 3,648 3,780 15,198 3.1% TVET - 275 769 647 1,135 2,826 0.6% Teacher Training 84 826 1,854 2,129 2,385 7,277 1.5% Adult& Non-formal Education 119 674 4,444 3,009 3,259 11,504 2.4% Special Education - - - 150 - 150 0.0% Distance Education - 240 1,255 1,086 952 3.532 0.7% Capacity Building - 0.0% Administration 3,057 3,844 3,844 3,844 3.844 18,432 3.8% Region Recurrent Cost 17,922 26,956 47,469 56,943 65,647 214,937 44.3% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs Civil Works 17,523 68,421 32,901 24,711 19,142 162,698 33.6% Equipment 1,202 29,460 10,002 8,099 6,356 55,119 11.4% Furniture 4,988 19,773 9,964 6,193 5,229 46,147 9.5% Monitoring and Evaluation - 2,181 816 809 621 4.426 0.9% Other (training) 158 514 711 190 - 1,572 0.3% Region Capital Cost 23,871 120,348 54,394 40,002 31,348 269,963 55.7% Recurrent Cost Salaries 14,117 16,463 22,923 28,977 34,171 116,651 24.1% Operating Costs 1,959 5,512 13,065 18,524 22,604 61,663 12.7% Educational Materials 900 1,991 6,669 4,245 4,006 17,812 3.7% Curriculum/Program Development 863 1,292 442 292 175 3,064 0.6% Building Preventive Maintennce - 410 705 964 1,142 3,221 0.7% Monitoring and Evaluation - 437 799 1,132 1,164 3,530 0.7% Training 84 851 2,867 2,810 2,385 8,996 1.9% Region Recurrent Cost 17,922 26,956 47,469 56,943 65,647 214,937 44.3% REGIONAL TOTAL (CAP.+ RECU.) COST 41,794 147,304 101,863 96,945 96,995 484,900 100.0% Contingency (10%) 4,179 14,730 10,186 9,694 9,699 48,490 10.0% GRAND TOTAL 45,973 162,034 112,050 106,639 106,694 533,390 110.0% File" COST-SUM2 -Afar Annex 3 Page 8 of 17 Amhara Region Table A3.8: Amhara Region ESDP Coat Summary (Blrr '000) Projected Costs 1997198 1998/99 1999100 2000101 2001/02 Total Share ESDP COST BY COMPONENT Capital Cost Primary 39,140 57,700 66,480 92,300 102,000 357,620 19.4% Secondary - 6,900 9,450 10,350 12,900 39,600 2.1% TVET - - - 7,500 - 7,500 0.4% Teacher Training - 8,443 9,464 6,487 - 24,394 1.3% Adult & Non-formal Education - 2,000 1,000 1,000 1,000 5,000 0.3% Special Education 336 436 295 295 354 1,716 0.1% Distance Education - 1,443 1,570 3,725 1,200 7,938 0.4% Capacity Building - 700 7,908 9,750 3,000 21,358 1.2% Administration 2,000 3,000 - - - 5,000 0.3% Region Capital Cost 41,476 80,622 96,167 131,407 120,454 470,126 25.5% Recurrent Coat Primary Education Education 132,236 158,065 158,952 184,002 272,815 906,070 49.1% Secondary 26,705 31,582 38,378 41,291 41,685 179,641 9.7% TVET 864 864 2,000 2,000 2,353 8,081 0.4% Teacher Training 6,239 8,917 11,095 12,979 13,779 53,009 2.9% Adult & Non-formal Education 6,293 6,911 7,527 8,133 8,734 37,598 2.0% Special Education 238 429 505 683 849 2,704 0.1% Distance EducatIon 1,675 1,725 2,175 2,175 2,175 9,925 0.5% Capacity Building - 0.0% Administration 30,399 33,000 36,000 40,000 40,000 179,399 9.7% Region Recurrent Cost 204,649 241,493 256,632 291,263 382,390 1,376,427 74.5% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs Civil Works 33,900 58,420 64,501 87,217 87,300 331,338 17.9% Equipment 2,680 10,819 16,333 23,250 12,780 65,862 3.6% Furniture 4,896 10,683 13,233 17,440 17,374 63,626 3.4% Monitoring and Evaluation - - - - - - 0.0% Other (training) - 700 2,100 3,500 3,000 9,300 0.5% Region Capital Cost 41,476 80,622 96,167 131,407 120,454 470,126 25.5% Recurrent Cost Salaries 164,091 187,304 218,002 246,008 274,765 1,090,171 59.0% Operating Costs 18,337 23,498 26,444 30,500 32,167 130,945 7.1% Educational Materials 17,228 24,763 6,157 7,541 68,127 123,816 6.7% Curriculum/Program Development 1,454 1,914 2,007 1,830 1,755 8,962 0.5% Building Preventive Maintennce 1,711 1,834 2,027 2,204 2,426 10,200 0.6% Monioring and Evaluation 399 1,000 1,000 2,000 2,000 6,399 0.3% Training 1,429 1,180 995 1,180 1,150 5,934 0.3% Region Recurrent Cost 204,649 241,493 256,632 291,263 382,390 1,376,427 74.5% REGIONAL TOTAL (CAP.+ RECU.) COST 246,125 322,115 352,799 422,670 502,844 1,846,553 100.0% Contingency (10%) 24,613 32,212 35,280 42,267 50,284 184,655 10.0% GRAND TOTAL 270,738 354,327 388,079 464,937 553,129 2,031,209 110.0% File: COST-SUM2 - Amhara Annex 3 Page 9 of 17 Oromiya Region Table A3.9: Oromiya Region ESDP Cost Summary (Birr '000) Projected Costs 1997198 1998/99 1999/00 2000/01 2001/02 Total Share ESDP COST BY COMPONENT Capital Cost Primary 43,993 43,272 52,876 52,137 41,298 233,576 9.6% Secondary 14,085 10,088 6,267 6,291 6,267 42,997 1.8% TVET - 200 500 500 500 1,700 0.1% Teacher Training 3,392 4,515 5,769 - - 13,676 0.6% Adult & Non-formal Education - 240 240 240 240 960 0.0% Special Education - - - - - - 0.0% Distance Education 2,838 - - - - 2,838 0.1% Capacity Building 253 4,389 4,567 3,984 3,486 16,679 0.7% Administration - - - - - - 0.0% Region Capital Cost 64,559 62,704 70,219 63,152 51,791 312,425 12.8% Recurrent Cost Primary Education Education 271,951 290,022 310,599 333,394 391,649 1,597,615 65.7% Secondary 39,093 41,598 49,272 47,192 49,058 226,213 9.3% TVET 4,404 4,706 4,650 4,723 4,680 23,163 1.0% TeacherTraining 9,856 11,125 11,191 11,388 12,832 56,391 2.3% Adult & Non-formal Education 2,724 3,510 4,120 4,352 5,428 20,134 0.8% Special Education 1,235 1,532 1,554 1,456 1,479 7,256 0.3% Distance Education 1,891 2,351 2,436 2,608 2,807 12,094 0.5% Capacity Building - 0.0% Administration 31,174 35,197 36,152 37,136 38,150 177,809 7.3% Region Recurrent Cost 362,329 390,040 419,973 442,249 506,084 2,120,675 87.2% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs Civil Works 44,990 50,577 54,709 50,706 41,352 242,334 10.0% Equipment 7,318 4,685 6,297 4,420 3,358 26,079 1.1% Furniture 11,999 5,162 6,632 5,435 4,479 33,707 1.4% Monitoring and Evaluation 253 206 206 216 226 1,106 0.0% Other (training) - 2,075 2,375 2,375 2,375 9,200 0.4% Region Capital Cost 64,559 62,704 70,219 63,152 51,791 312,425 12.8% Recurrent Cost Salaries 313,002 336,671 356,574 377,571 400,398 1,784,215 73.3% Operating Costs 28,121 31,665 34,519 37,477 41,317 173,099 7.1% Educational Materials 14,155 12,088 19,803 17,994 , 55,081 119,121 4.9% Curriculum/Program Development 1,147 3,393 2,763 2,776 2,766 12,844 0.5% Building Preventive Maintennce 5,405 5,723 5,814 5,932 6,023 28,896 1.2% Monitoring and Evaluation - - - - - - 0.0% Training 500 500 500 500 500 2,500 0.1% Region Recurrent Cost 362,329 390,040 419,973 442,249 506,084 2,120,675 87.2% REGIONAL TOTAL (CAP.+ RECU.) COST 426,889 452,745 490,192 505,401 557,875 2,433,101 100.0% Contingency (10%) 42,689 45,274 49,019 50,540 55,787 243,310 10.0% GRAND TOTAL 469,577 498,019 539,211 555,941 613,662 2,676,411 110.0% File: COST-SUM2 - Oromiya Annex 3 Page 10 of 17 Somali Region Table A3.10: Somali Region ESDP Cost Summary (Birr '000) Projected Costs 1997/98 1998/99 1999/00 2000/01 2001/02 Total Share ESDP COST BY COMPONENT Capital Cost Primary 30,478 47,861 59.264 70,888 76,647 285,137 39.2% Secondary 5,929 15,086 11,857 11,857 11,857 56,585 7.8% TVET - 8,200 7,800 9,100 1,200 26,300 3.6% Teacher Training 6,401 1,080 - 5,000 - 12,481 1.7% Adult & Non-formal Education - 1,000 1,700 1,500 1,500 5,700 0.8% Special Education - 187 187 187 187 748 0.1% Distance Education 2,500 1,010 2,324 1,560 1,000 8,394 1.2% Capacity Building 10 2,077 2,230 1,581 1,158 7,056 1.0% Administration - 1,610 1,610 590 880 4,690 0.6% Region Capital Cost 45,317 78,110 86,972 102,262 94,429 407,091 55.9% Recurrent Cost Primary Education Education 15,749 31,389 39,748 47,706 58,773 193,364 26.6% Secondary 761 3,980 8,376 8,913 11,930 33,961 4.7% TVET - 34 51 3,671 2,729 6.485 0.9% Teacher Training 241 5,002 5,640 5,890 6,389 23,162 3.2% Adult & Non-formal Education - - 3,325 4,187 5,009 12,520 1.7% Special Education - 905 1,305 1,455 1,355 5,020 0.7% Distance Education - 4,133 4,285 5,009 5,427 18,854 2.6% Capacity Building 47 725 792 770 280 2,613 0.4% Administration 1,752 4,295 5,490 6,400 7,294 25,231 3.5% Region Recurrent Cost 18,550 50,463 69,011 84,000 99,185 321,209 44.1% ESOP COSTS BY TYPE OF EXPENDITURE Capital Costs Civil Works 26,950 48,200 57,900 71,820 64,450 269,320 37.0% Equipment 5,590 12,539 11,246 10,827 9,390 49,592 6.8% Fumiture 12,777 16,871 17,226 18,890 20,289 86,053 11.8% Monitoring and Evaluation - - - - - 0.0% Other (training) - 500 600 726 300 2,126 0.3% Region Capital Cost 45,317 78,110 86,972 102,262 94,429 407,091 55.9% Recurrent Cost Salaries 12,159 20,178 28,272 37.087 . 49,564 147,261 20.2% Operating Costs 278 8,636 11,990 16,482 20,562 57,948 8.0% Educational Materials 5,378 12,339 17,093 17,553 16,408 68,771 9.4% Curriculum/Program Development 264 2,236 2,232 1,480 801 7,013 1.0% Building Preventive Maintennce 184 2,345 2,910 3,612 4,213 13,265 1.8% Monitoring and Evaluation - 1,500 2,300 3,400 4,300 11,500 1.6% Training 287 3,230 4,213 4,386 3,336 15,452 2.1% Region Recurrent Cost 18,550 50,463 69,011 84,000 99,185 321,209 44.1% REGIONAL TOTAL (CAP.+ RECU.) COST 63,868 128,573 155,983 186,262 193,613 728,300 100.0% Contingency (10%) 6,387 12,857 15,598 18,626 19,361 72,830 10.0% GRAND TOTAL 70,254 141,430 171,582 204,889 212,975 801,130 110.0% File: COST-SUM2 - Somali Annex 3 Page 11 of 17 Benshangul Region Table A3.11: Benishangul/Gumuz Region ESDP Cost Summary (Birr '000) Projected Costs 1997198 1998199 1999100 2000101 2001102 Total Share ESDP COST BY COMPONENT Capital Cost Primary 15,425 21,830 29,506 24,098 18,629 109,487 31.4% Secondary 4,600 4,400 3,250 1,200 3,000 16,450 4.7% TVET 310 1,375 7,260 655 - 9,600 2.7% Teacher Training 1,000 12,000 15,850 1,050 - 29,900 8.6% Adult & Non-formal Education 1,780 670 355 375 745 3,925 1.1% Special Education - - - - - - 0.0% Distance Education 3,831 8,649 10 10 10 12,510 3.6% Capacity Building 3,690 708 700 555 585 6,238 1.8% Administration - - - - - - 0.0% Region Capital Cost 30,636 49,632 56,931 27,943 22,969 188,110 53.9% Recurrent Cost Primary Education Education 20,460 18,866 20,483 31,506 24,919 116,234 33.3% Secondary 10,173 1,895 2,109 4,571 4,832 23,580 6.8% TVET 428 628 858 728 420 3,062 0.9% Teacher Training - - - 1,430 1,667 3,097 0.9% Adult & Non-formal Education 977 639 627 610 658 3,511 1.0% Special Education 90 90 90 95 95 460 0.1% Distance Education - - 470 278 284 1,032 0.3% Capacity Building - 0.0% Administration 1,699 1,821 1,997 2,192 2,406 10,115 2.9% Region Recurrent Cost 33,827 23,939 26,634 41,410 35,281 161,091 46.1% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs Civil Works 22,116 32,990 40,491 21,203 15,774 132,573 38.0% Equipment 4,710 11,883 8,375 260 360 25,588 7.3% Furniture 3,450 4,189 7,330 5,890 6,210 27,069 7.8% Monitoring and Evaluation 35 35 50 50 55 225 0.1% Other (training) 325 535 685 540 570 2,655 0.8% Region Capital Cost 30,636 49,632 56,931 27,943 22,969 188,110 53.9% Recurrent Cost Salaries 16,398 18,239 21,005 25,936 29,369 110,947 31.8% Operating Costs 993 1,111 1,342 2,082 2,256 7,784 2.2% Educational Materials 12,847 260 660 10,180 942 24,889 7.1% Curriculum/Program Development 1,549 1,830 1,184 580 388 5,531 1.6% Building Preventive Maintennce 1,500 1,700 1,520 1,800 1,520 8,040 2.3% Monitoring and Evaluation 155 125 125 175 175 755 0.2% Training 385 674 798 657 631 3,145 0.9% Region Recurrent Cost 33,827 23,939 26,634 41,410 35,281 161,091 46.1% REGIONAL TOTAL (CAP.+ RECU.) COST 64,463 73,571 83,565 69,353 58,250 349,201 100.0% Contingency (10%) 6,446 7,357 8,356 6,935 5,825 34,920 10.0% GRAND TOTAL 70,909 80,928 91,921 76,288 64,074 384,121 110.0% Annex 3 Page 12 of 17 SNNPR Region Table A3.12: SNNPR Region ESDP Cost Summary (Birr '000) Projected Costs 1997/98 1998/99 1999100 2000/01 2001/02 Total Share ESDP COST BY COMPONENT Capital Cost Primary 23,074 74,148 116,127 140,804 127,119 481,272 31.5% Secondary 1,366 795 4,082 4,363 2,041 12,648 0.8% TVET - 809 - - - 809 0.1% Teacher Training 14,799 44,739 - - - 59,538 3.9% Adult & Non-formal Education - - - - - - 0.0% Special Education - - - - - - 0.0% Distance Education - 4,889 - - - 4,889 0.3% Capacity Building 255 4,734 6,929 6,037 250 18,205 1.2% Administration - - - - - - 0.0% Region Capital Cost 39,494 130,114 127,138 151,205 129,410 577,360 37.7% Recurrent Cost Primary Education Education 149,977 160,031 169,039 95,591 114,675 689,313 45.1% Secondary 19,477 20,860 22,084 26,794 25,511 114,726 7.5% TVET 7,850 7,850 7,850 7,850 7,850 39,252 2.6% Teacher Training 4,847 6,893 6,393 8,184 10,184 36,501 2.4% Adult & Non-formal Education 943 1,084 1,247 1,247 1,247 5,768 0.4% Special Education 149 995 877 963 1,076 4,060 0.3% Distance Education 394 4,071 900 1,132 1,132 7,628 0.5% Capacity Building 333 382 714 0.0% Administration 9,810 10,371 10,971 11,613 11,613 54,378 3.6% Region Recurrent Cost 193,446 212,489 219,742 153,375 173,288 952,340 62.3% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs Civil Works 33,047 76,740 103,059 121,490 112,072 446,408 29.2% Equipment 806 16,739 11,307 12,265 6,178 47,294 3.1% Furniture 1,014 29,027 8,140 9,842 9,772 57,795 3.8% Monitoring and Evaluation 487 914 1,065 1,247 1,138 4,851 0.3% Other (training) 4,140 6,694 3,567 6,361 250 21,012 1.4% Region Capital Cost 39,494 130,114 127,138 151,205 129,410 577,360 37.7% Recurrent Cost Salaries 146,065 149,679 157,460 69,932, 78,645 601,781 39.3% Operating Costs 14,730 16,748 16,161 21,910 25,339 94,887 6.2% Educational Materials 29,779 41,142 40,480 56,797 66,134 234,332 15.3% Cuniculum/Program Development - - - - - - 0.0% Building Preventive Maintennce 336 1,297 1,431 1,018 180 4,262 0.3% Monitoring and Evaluation 2,037 2,291 2,329 1,717 1,899 10,273 0.7% Training 500 1,333 1,882 2,000 1,091 6,805 0.4% Region Recurrent Cost 193,446 212,489 219,742 153,375 173,288 952,340 62.3% REGIONAL TOTAL (CAP.+ RECU.) COST 232,940 342,603 346,880 304,579 302,698 1,529,700 100.0% Contingency (10%) 23,294 34,260 34,688 30,458 30,270 152,970 10.0% GRAND TOTAL 256,234 376,863 381,567 335,037 332,968 1,682,670 110.0% File: COST-SUM2 - SNNPR Annex 3 Page 13 of 17 Table A3.13: Gambella Region ESDP Cost Summary Gambella Region (Birr '000) Projected Costs 1997/98 1998199 1999100 2000101 2001102 Total Share ESDP COST BY COMPONENT Capital Cost Primary 6,470 15,548 17,545 19,688 11,248 70,499 13.1% Secondary 400 1,700 5,622 6,164 714 14,600 2.7% TVET - - - 2,000 2,900 4,900 0.9% Teacher Training 8,539 1,123 2,640 5,303 2,250 19,854 3.7% Adult & Non-formal Education 5 413 470 362 312 1,561 0.3% Special Education - - - - - - 0.0% Distance Education 84 1,650 2,184 67 25 4.011 0.7% Capacity Building - 1,876 3,705 1,753 1,346 8,679 1.6% Administration - 1,100 1,100 1,237 - 3,437 0.6% Region Capital Cost 15,497 23,410 33,265 36,574 18,795 127,540 23.7% Recurrent Cost Primary Education Education 10,277 13,091 14,301 15,306 15,952 68,926 12.8% Secondary 992 1,100 1,375 1,709 3,253 8,430 1.6% TVET 102 254 273 314 1,063 2,006 0.4% Teacher Training 932 2,206 2,239 2,421 2,496 10,293 1.9% Adult & Non-formal Education 112 473 408 407 441 1,841 0.3% Special Education - - - - - - 0.0% Distance Education - 98 346 393 411 1,248 0.2% Capacity Building 10 364 249 224 229 1,076 0.2% Administrafion 8,025 8,778 9,621 10,373 11,244 48,040 8.9% Region Recurrent Cost 20,450 26,364 28,812 31,146 35,088 141,860 26.3% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs 7,333 15,944 20,246 25,308 12,457 81,287 15.1% Civil Works 3,959 4,317 8,316 6,036 3,992 26,620 4.9% Equipment 4,206 1,995 3,041 4,381 2,143 15,766 2.9% Furniture - - - - - - 0.0% Monitoring and Evaluation - 1,154 1,663 849 203 3,868 0.7% Other (training) 15,497 23,410 33,265 36,574 18,795 127,540 23.7% Region Capital Cost 30,994 46,819 66,531 73,147 37,589 255,080 47.3% Recurrent Cost 14,136 15,872 17,413 18,863 20,981 87,265 16.2% Salaries 3,802 4.413 5,124 5,426 6,896 25,660 4.8% Operating Costs 1,410 2,430 3,288 4,106 5,312 16,546 3.1% Educational Materials 692 2,086 1,599 1,437 1,226 7,041 1.3% Curriculum/Program Development - 55 65 40 40 199 0.0% Building Preventive Maintennce 10 173 201 285 332 1,001 0.2% Monitoring and Evaluation 401 1,334 1,123 989 302 4,149 0.8% Training 20,450 26,364 28,812 31,146 35,088 141,860 26.3% Region Recurrent Cost 40,899 52,727 57,624 62,293 70,176 283,720 52.7% REGIONALTOTAL (CAP.+ RECU.) COST 71,894 99,547 124,155 135,440 107,765 538,800 100.0% Contingency (10%) 7,189 9,955 12,415 13,544 10,777 53,880 10.0% GRAND TOTAL 61,349 79,091 86,436 93,439 105,264 425,579 79.0% Annex3 Page 14 of 17 Harari Region Table A3.14: Harari Region ESDP Cost Summary (Birr '000) Projected Costs 1997198 1998199 1999100 2000101 2001102 Total Share ESDP COST BY COMPONENT Capital Cost Primary 8,415 8,040 8,325 4,115 4,871 33,765 19.7% Secondary 430 1,710 885 4,120 1,965 9,110 5.3% TVET - 90 - - 3,500 3,590 2.1% Teacher Training 135 75 75 25 - 310 0.2% Adult & Non-formal Education - - - - - - 0.0% Special Education 60 60 60 60 60 300 0.2% Distance Education 450 950 450 1,950 4,375 8,175 4.8% Capacity Building 996 2,049 2,614 1,675 1,230 8,564 5.0% Administration 1,000 1,600 500 600 500 4,200 2.5% Region Capital Cost 11,486 14,574 12,909 12,545 16,501 68,014 39.7% Recurrent Cost Primary Education Education 12,063 10,379 10,790 14,039 11,692 58,963 34.4% Secondary 3,591 2,631 2,756 4,535 3,347 16,859 9.8% TVET - 141 70 1,740 2,213 4,164 2.4% Teacher Training 1,649 1,813 1,596 1,300 1,310 7,668 4.5% Adult & Non-formal Education 253 650 684 739 660 2,986 1.7% Special Education - 29 29 29 29 116 0.1% Distance Education 326 290 134 102 102 954 0.6% Capacity Building 15 15 15 15 15 75 0.0% Administration 2,088 2,186 2,287 2,390 2,493 11,444 6.7% Region Recurrent Cost 19,984 18,133 18,362 24,889 21,861 103,229 60.3% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs 0.0% Civil Works 7,534 8,666 6,334 8.534 7,520 38,588 22.5% Equipment 3,192 4,248 3,790 2,941 7,466 21,636 12.6% Fumiture 350 950 965 450 965 3,680 2.1% Monitoring and Evaluation - - - - - - 0.0% Other (training) 410 710 1,820 620 550 4,110 2.4% Region Capital Cost 11,486 14,574 12,909 12,545 16,501 68,014 39.7% Recurrent Cost 0.0% Salaries 11,126 11,983 12,517 13,707 14,326 63,659 37.2% Operating Costs 3,198 3,632 3,311 4,538 5,057 19,736 11.5% Educational Materials 4,582 1,466 1,459 5,665 1,546 14,717 8.6% Curriculum/Program Development 603 550 448 337 286 2,223 1.3% Building Preventive Maintennce 235 240 245 260 265 1,245 0.7% Monitoring and Evaluation 76 76 76 76 76 378 0.2% Training 164 187 307 307 307 1,272 0.7% Region Recurrent Cost 19,984 18,133 18,362 24,889 21,861 103,229 60.3% REGIONAL TOTAL (CAP.+ RECU.) COST 31,470 32,707 31,270 37,433 38,362 171,243 100.0% Confingency (10%) 3,147 3,271 3,127 3,743 3,836 17,124 10.0% GRANDTOTAL 34,617 35,978 34,397 41,177 42,198 188,367 110.0% Annex 3 Page 15 of 17 Table A3.15: Addis Ababa (Region 14) ESDP Cost Summary Addis Ababa (Region 14) (Birr '000) Projected Costs 1997198 1998/99 1999/00 2000101 2001102 Total Share ESDP COST BY COMPONENT Capital Cost Primary 6,098 32,292 33,997 33,997 33,710 140,094 14.5% Secondary 4,954 22,425 22,066 21,336 16,850 87,631 9.1% TVET - 11,120 2,982 1,501 341 15,944 1.6% Teacher Training 6 978 770 998 148 2,900 0.3% Adult & Non-formal Education - 1,160 710 1,160 1,030 4,060 0.4% Special Education - - - - - - 0.0% Distance Education - - 14,281 - - 14,281 1.5% Capacity Building - 4,633 6,389 3,337 3,242 17,601 1.8% Administration - - 3,000 - - 3,000 0.3% Region Capital Cost 11,058 72,608 84,195 62,329 55,321 285,510 29.5% Recurrent Cost Primary Education Education 62,983 72,882 72,047 71,941 73,734 353,587 36.6% Secondary 32,419 36,840 48,366 46,390 49,766 213,780 22.1% TVET 3,942 5,009 4,962 5,301 5,902 25,116 2.6% Teacher Training 508 5,059 5,385 5,807 6,054 22,812 2.4% Adult & Non-formal Education 499 687 1,032 989 792 3,999 0.4% Special Education - - - - - - 0.0% Distance Education - - - - - - 0.0% Capacity Building - - - - - - 0.0% Administration 11,238 11,800 12,390 13,009 13,660 62,096 6.4% Region Recurrent Cost 111,588 132,277 144,181 143,437 149,907 681,390 70.5% ESDP COSTS BY TYPE OF EXPENDITURE Capital Costs 0.0% Civil Works 10,087 45,117 52,611 46,891 46,211 200,917 20.8% Equipment - 21,626 24,745 9,370 3,274 59,016 6.1% Fumiture 971 3,368 4,430 4,304 4,267 17,340 1.8% Monitoring and Evaluation - 83 83 83 83 332 0.0% Other (training) - 2,413 2,326 1,681 1,486 7,906 0.8% Region Capital Cost 11,058 72,608 84,195 62,329 55,321 285,510 29.5% Recurrent Cost 0.0% Salaries 74,911 84,351 93,271 102,601 112,148 467,282 48.3% Operating Costs 15,837 18,315 18,753 19,323 19,809 92,035 9.5% Educational Materials 17,042 22,600 24,024 13,068 10,566 87,300 9.0% Curriculum/Program Development 850 1,298 761 675 373 3,956 0.4% Building Preventive Maintennce 1,250 2,850 4,000 4,000 3,000 15,100 1.6% Monitoring and Evaluation 1,196 1,749 1,982 2,076 2,119 9,122 0.9% Training 502 1,115 1,391 1,695 1,893 6,595 0.7% Region Recurrent Cost 111,588 132,277 144,181 143,437 149,907 681,390 70.5% REGIONAL TOTAL (CAP.+ RECU.) COST 122,646 204,885 228,376 205,765 205,228 966,900 100.0% Contingency (10%) 12,265 20,488 22,838 20,577 20,523 96,690 10.0% GRANDTOTAL 134,910 225,373 251,213 226,342 225,751 1,063,590 110.0% Annex 3 Page 16 of 17 Dire Dawa Region Table A3.16: Dire Dawa ESDP Cost Summary (Birr 'Oo) Projected Costs 1997198 1998/99 1999100 2000101 2001102 Total Share ESDP COST BY COMPONENT Capital Cost Primary 3,178 2,985 2,225 2,865 3,295 14,547 14.0% Secondary 364 4,500 5,250 3,000 4,250 17,364 16.7% TVET - 368 122 597 610 1,697 1.6% Teacher Training - - - - - - 0.0% Adult & Non-formal Education - - - - - - 0.0% Special Education - - - - - - 0.0% Distance Education - - - 0.0% Capacity Building - - - - - - 0.0% Administration - - - - - - 0.0% Region Capital Cost 3,542 7,853 7,597 6,461 8,155 33,608 32.4% Recurrent Cost Primary Education Education 7,268 8,579 7,572 8,104 8,417 39,941 38.4% Secondary 1,445 4,261 2,424 3,545 2,431 14,106 13.6% TVET 840 1,239 1,156 1,095 1,069 5,399 5.2% Teacher Training 70 338 266 313 236 1,222 1.2% Adult & Non-formal Education 38 1,345 1,361 1,340 232 4,315 4.2% Special Education 4 84 73 57 15 232 0.2% Distance Education 31 143 975 273 236 1,658 1.6% Capacity Building - 302 507 477 582 1,868 1.8% Administration 274 290 307 324 343 1,538 1.5% Region Recurrent Cost 9,970 16,580 14,640 15,526 13,561 70,277 67.6% ESDP COSTS BY TYPE-OF EXPENDITURE Capital Costs 0.0% Civil Works 2,014 5,505 5,585 4,825 5,055 22,983 22.1% Equipment 917 1,427 1,306 905 1.763 6,317 6.1% Furniture 611 922 706 732 1,337 4,308 4.1% Monitoring and Evaluation - - - - - - 0.0% Other (training) - - - - - - 0.0% Region Capital Cost 3,542 7,853 7,597 6,461 8,155 33,608 32.4% Recurrent Cost 0.0% Salaries 6,337 6,842 7,448 7,904 8,313 36,843 35.5% Operating Costs 2,989 2,206 2,911 2,343 2,424 12,873 12.4% Educational Materials 90 5,198 1,693 2,958 1,737 11,676 11.2% Curriculum/Program Development 554 2,002 2,051 1,815 475 6,897 6.6% Building Preventive Maintennce - - - - - - 0.0% Monitoring and Evaluation - - - - - - 0.0% Training - 332 537 507 612 1,988 1.9% Region Recurrent Cost 9,970 16,580 14,640 15,526 13,561 70,277 67.6% REGIONAL TOTAL (CAP.+ RECU.) COST 13,512 24,433 22,237 21,988 21,716 103,885 100.0% Contingency (10%) 1,351 2,443 2,224 2,199 2,172 10,389 10.0% GRAND TOTAL 14,863 26,876 24,461 24,186 23,887 114,274 110.0% Annex3 Page 17 of 17 MOE Table A3.17: Ministry of Education ESDP Costs (Birr'000) Projected Cost 1997/98 1998/99 1999/00 2000/01 2001/02 Total Capital Costs General Education 44,297 14,054 - - - 58,351 Educational Assessment & Examination - 5,910 - - - 5,910 Cpacity Building - 1,169 1,495 2,889 1,773 7,325 Tertiary Education 116,276 321,751 28,571 7,776 - 474,374 Total Capital Exp. 160,573 342,884 30,065 10,665 1,773 545,960 Recurrent Cost Salary and Allowance Curriculum Development 1,273 1,336 1,403 1,473 1,547 7,032 Distance Education 1.375 1.448 1.516 1,591 1,671 7,600 Program Supervision 284 299 314 329 346 1,571 Technical & Vocational Education & Training 95 99 104 110 115 523 Adult and Non-Formal Education 67 70 73 77 81 368 Teacher Education 92 96 101 106 111 507 Tertiary Education 81,132 85,999 91,159 96.629 102,427 457,346 Educational Assessment & Examination 1,231 1,231 1,231 1,231 1,231 6,153 Capacity Building 178 187 197 207 217 986 Policy Analysis 53 55 58 61 64 290 Information Management 105 110 116 122 128 581 Monitoring & Evaluation 80 84 88 92 97 441 Administrative & Others 2,194 2,303 2.418 2,539 2,666 12,120 Total Salary and Allowance 88,156 93,318 98,778 104,567 110,700 495,518 Non-Salary Costs Curriculum Development 829 2,178 5,455 2,695 6,025 17,182 Distance Education 1,773 3,409 3,161 1,484 902 10,728 Program Supervision 81 89 105 105 99 480 Technical & Vocational Education & Training 20 100 80 100 100 400 Adult and Non-Formal Education 4 161 112 27 72 376 Teacher Education 40 240 375 280 145 1,080 Tertiary Education 64,877 71,005 75,104 79.760 83,401 374,145 Educational Assessment & Examination 6,405 5,357 7,611 12,106 12.725 44,204 Capacity Building 7 7 8 8 8 38 Policy Analysis 7 360 54 195 27 642 Information Management 115 230 155 50 50 600 Monitoring & Evaluation 17 103 39 40 341 539 Administrative & Others 3.744 3.931 4,128 4,334 4,551 20,688 Total Non-Salary Costs 77,918 87,170 96,386 101,184 108,446 471,103 Technical Assistance Technical & Vocational Education & Training 20 870 870 870 20 2,650 Tertiary Education - 210 420 - - 630 Educational Assessment & Examination 432 - - - - 432 Policy Analysis - 50 - - - 50 Total Technical Assistance 452 1,130 1,290 870 20 3,762 Total Recurrent Cost 166,526 181,619 196,453 206,620 219,165 970,383 Total Base (Capital and Recurrent) Cost 327,099 524,502 226,519 217,285 220,938 1,516,343 Contingency 32,710 52,450 22,652 21,729 22,094 151,634 Grand Total 359,809 576,953 249,171 239,014 243,032 1,667,978 Annex 4 Page I of 26 EDUCATION SECTOR DEVELOPMENT PROGRAM Economic Assessment Links to CAS The latest Country Assistance Strategy for Ethiopia sets as a goal the improvement in human capital and the provision of direct and immediate benefits to the poor as foundation for sustained long- term development. This is justified on the basis of extremely low educational attainment. The existing gender bias, which manifests itself in very low girls' school enrollment, is singled out for immediate attention. 'rhus, there is a need for increased emphasis on education and improvement in women's status. The CAS calls for an increase in the primary enrollment ratio to 50 percent by 2002 (25 percent in backward areas). Links to Sector Work The Ethiopia: Social Sector Strategy Note (February 1997, white cover) recommends that efforts be made to increase coverage so that at least half of all primary school aged children receive basic education in the next five years (from 30 percent). The strategy recommended includes a school rebuilding program and a reduction in the high opportunity cost of schooling in rural areas. With school enrollment rates among the lowest in the world, low quality schooling, high opportunity costs, prevalence of overaged children in classrooms, and high repetition and dropout rates, make education a priority public sector investment. In addition to a rebuilding program, the Social Sector Strategy Note recommends that more schools be built closer to communities in order to ensure the demand for schools so that enrollment targets can be met. Local strategies to reduce the opportunity cost of schooling are suggested, for example, making changes to the school calendar so that classes are not scheduled during the important harvest season. This would free children for school attendance. Rationale for Public Intervention Along with extremely low enrollments and the need to improve the human capital base of the country, Ethiopia's Education Sector Development Program (ESDP) is a sector investment program that: * Support the sector policy framework * Is sector-wide in approach * Places local stakeholders in the driver's seat * Assures that all the main donors sign on * Proposes to put in place common implementation arrangements * Minimizes long-term technical assistance The ESDP translates the sector policy framework into a program of expenditures over time for the sector. By bringing together all expenditures within the sector-recurrent and capital, local and donor-the problem of fungibility is reduced, given that a high quality expenditure program is in place. Without the program, progress towards universal primary education will be slow and expensive. Annex 4 Page 2 of 26 The need to use local building materials will prove costly, as replacement costs will rise. The government program will be jeopardized without donor assistance and coordination. The value-added of donor assistance and concentrated effort is documented by the simulation exercise carried out by Government. Alternative Financing Scenario Simulation. A thorough risk assessment and contingency plans for each component were developed for use in the planning and implementation stages of ESDP. Specific actions include modeling the effects of not achieving key targets and drawing up contingency plans. The Planning and Project Department of the Ministry of Education carried out the 41ternative Financing Scenarios of the Education Sector Development Program (November 1997). The analysis takes ESDP goals and objectives and compares these to the base case, which is the situation projected to take place without the ESDP. The financing situation and enrollments without ESDP (base case) were projected. The analysis shows the effect of the increase in expenditures and enrollment targets with ESDP (goal). Key project components and critical assumptions are analyzed in terms of risk assessment (likelihood that assumption is correct) and effect on financing if assumption does not work out. For example, in civil works it is assumed that an adequate number of contractors are available, that no delay in the completion of works will take place, and that the financing is available on time. Alternative scenarios are spelt out and contingency plans are drawn up: * In the first scenario, it is assumed that sources of finances are inadequate. The shortfall in funds is assumed not to affect quantitative targets (for example, enrollment targets are kept constant). Also, the same number of schools will be built, the same number of teachers will be trained and the same number of books will be printed. However, the unit cost of building a school, training a teacher and printing a book and procuring materials and equipment is reduced. A reduction in the cost of construction is assumed to be realized by the use of somewhat inferior building material. The duration of teacher training will be reduced and class size in teacher training institutes will be increased. As the analysis points out, the problems with this approach are that the demand for education may be reduced, the quality of education will not increase, and further community participation is required. In the long term, costs will increase because of the lack of maintenance of school buildings (see below) and replacement of books. * In the second scenario, implementation risks are the problem. It is assumed that civil works are delayed, resulting in fewer schools being built. In addition, fewer desks, materials and books are supplied, and fewer teachers are trained. In the analysis, unit costs are kept constant. In order to maintain the enrollment targets, class size is increased significantly. Therefore, the implication is that the quality of education is reduced since there are fewer trained teachers, overcrowded classrooms and fewer teaching bours. * In the third scenario, both financial and implementation risks take their toll. Both unit costs and quantities are reduced, and as a result the total cost is reduced. In this case both access to education and quality will be affected negatively. The reduction in the number of schools and classrooms to be built and the quantity of equipment and furniture supplied will result in low access to education. Similarly, the reduction in the supply of books and teachers will result in high pupil:book and pupil:teacher ratios. Annex 4 Page 3 of 26 * In the fourth scenario, unit costs are increased because of an assumed increase in the price of educational inputs. Quantities and quality remain the same, but it is assumed that teachers' salaries and administrative costs are increased by 10 percent, that operating costs are increased by 25 percent, and that other costs rise by 6 percent. Outcomes will be the same, but unit and total costs will rise significantly. Scenarios 1, 2 and 3 will involve a smaller outlay of cash than would ESDP in the short term, but costs will rise over time. In addition, access to education and the quality of schooling will be lower in the long run. Scenario 4 increases the financial burden in the short term without increasing access or quality. Nevertheless, the cost escalation implied in scenario 4 would increase total costs by less than 6 percent. Therefore, ESDP is the best alternative to increase access and improve the quality of education. This exercise contributes to a useful risk assessment and consideration of alternatives. Contingency plans are described and fully costed. It forces a useful prioritization for ESDP. It is indeed rewarding to see that primary education remains a priority. With ESDP, primary education gets 60 percent of the capital expenditures, thus more than doubling its share in the base case. The exercise also helps highlight once again key risks. The implications of not adequately dealing with these risks upfront are made clear. Thus, efforts to minimize known risks early on, for example, through review of contractor capacity at the regional level, are given high priority. The exercise also highlights the long-term benefits of a fully implemented and fully financed ESDP. Not only in terms of enrollments (equity, access, rural, poor, girls), but also quality (books, teachers, curriculum, better schools). There are long term savings involved. For example, better schools and less maintenance results in more schools, higher enrollments and greater community interest in the long run. The exercise also contributes to the justification of ESDP. Fully implemented and fully financed, and supported by donors, ESDP will result in higher enrollments and higher quality of schooling. Without the program, primary education would not receive the priority it is accorded under ESDP, and the efficiency of the system will be lower. Thus, there is more than adequate justification for public intervention. Fungibilitv. Development assistance is fungible, not only within the sector, but also among sectors. ESDP avoids the problem of fungibility. There is, therefore, a higher probability of success in terms of development impact. First, however, the overall expenditure program needs to be examined. This has been done in the case of Ethiopia in the recently completed Public Expenditure Review, which focused on all three sector investment programs (education, health and roads). The public expenditure review exercise certified the ESDP as satisfactory, implying therefore that the Bank's financing will have a positive development impact even if it ends up financing expenditures other than those actually appraised by the Bank. The alternative financing scenario simulations demonstrate the value-added of the Bank's finance (as well as that of other donors). Bank financing expands the public expenditure envelope. This provides an assessment of the marginal project that is being financed because of the availability of Bank finance. Annex 4 Page 4 of 26 Market Failure. Years of neglect, civil strife, low quality schooling, and a lack of tradition make it extremely difficult to increase the pace of school enrollments. As the economy is in transition and adjustments take place, households and individuals will increase investment in human capital. In the meantime, primary school (grades 1-6) enrollments in Sub-saharan Africa average 70 percent. Primary school enrollments are only 35 percent in Ethiopia. But in order to increase enrollments in the interim, public investment is needed, especially at lower levels, to increase attainment and retention, to produce a literate population, and to increase household and labor market productivity. Identifvin2 the Appropriate Form of Public Intervention It is established that public intervention is required. However, the form of intervention could vary. The main objective is to increase enrollments from a very low base. The program provides a good plan for solving the problem of insufficient public classrooms, which is a constraint. But it would be wrong to ignore issues of parental choice, which is another constraint to achieving objectives. Even in a very poor country, it is true that poor, rural parents exercise choice. In terms of the demand for education, they may choose not to send their children to school. Issues of importance include distance, opportunity cost, language of instruction, direct monetary cost associated with schooling, gender issues, cultural issues and lack of tradition. Most regions in Ethiopia have implemented the national policy of abolishing school fees at the primary level. This has resulted in a considerable increase in the demand for schooling in just a few years. The gross enrollment ratio (grades 1-6) increased from 19.7 percent in 1992/93 to 34.6 percent in 1995/96. To the extent that language of instruction is an issue, all Regions have plans to introduce local language learning into the curriculum. Some regions have already implemented this plan. Given the perceived low returns to schooling, and low parental interest in education, simply increasing the supply of schooling will not be enough to raise enrollments from such a low base. Thus, demand-side interventions are necessary. To solve the problem of distance, the plan is to build new schools as close as possible to students, especially in remote, rural areas. Specific demand-side measures have been implemented. To attract girls, communities in some regions are being equipped with grinding mills, sensitization,campaigns are under way, counseling is employed, separate toilets are being built, drinking water is provided, and female teachers are being recruited. Analysis of Alternatives Geographic Targeting. The program will use geographic targeting as the first stage screening device to reach the poor. Underserved areas will be chosen as sites for new construction of primary schools. In fact, under ESDP there will be 2,423 new first cycle primary schools built within walking distance of communities. Targeting of Schools. Schools that are incomplete, in that they do not offer the complete set of grades I to 8, will be targeted to ensure that they are made complete in that the schools offer the complete primary school cycle. This strategy is designed to improve access to a complete school for the households in these Regions. In fact, under ESDP, there will be 1,814 existing primary schools that will be upgraded to provide room for two full cycles of primary education. Choice of Technology. When there are technological alternatives by which one can realize the same result when designing a project, then one has an instance of mutually exclusive alternatives because Annex 4 Page 5 of 26 the choice of one technology precludes the use of another for the same purpose. The alternative one chooses will be the one with the lower present value-but, if the total undiscounted cost of using the different alternatives is different and they have differing time profiles, the alternative one chooses may depend on the opportunity cost of capital. The massive civil works campaign requires the coordinated effort of planners, educators, communities and contractors. New primary school construction alone is a costly exercise (912 million Birr), representing 25 percent of the capital expenditure of ESDP. These schools will need to accommodate the students required to enroll in order for the project to attain the enrollment targets set in the ESDP. To make it a good investment, the schools will have to last beyond the period of the ESDP, so that Ethiopia can attain the goal of universal primary education by the year 2015, as set in the Government plan. In order for schools to last, maintenance becomes an issue. Historically, schools in Ethiopia have been built with a variety of materials, depending on local conditions, donor involvement and community participation. During the previous regime, enrollment drives necessitated the construction of chika-mud and thatch-schools, which are quick and cheap to construct, but require heavy maintenance and in any case do not last many years. In more recent years a variety of cheap techniques have been used in order to increase enrollments, including open-air schools. Parents and communities do not appreciate the chika schools, which do not resist termites and wash away in the rain. The building of chika schools also contributes to the depletion of forests. Routine maintenance of school buildings is not a tradition in Ethiopia. Very little maintenance and repair activities have been performed over the years. But it is demonstrated that the community is more interested in maintaining the element schools because they value them more than the chika schools. Still, school committees are not interested in maintaining schools, regardless of government proclamation. It is necessary therefore that the government makes routine maintenance a priority and take appropriate policy decisions. According to the SIDA report on the construction of schools in Ethiopia (Participatory Evaluation of EICMA (Educational Institutes Construction and Maintenance Agency), A Report to Ministry of Education and SIDA, 1992) there are different kinds of chika schools. It is also true that any kind of chika structure requires more maintenance than schools built by element (hollow concrete block, stone, concrete element). It is also very true that Ethiopians do very little maintenance of school buildings. For these and other reasons (see Table 1), under ESDP, schools will be built by something other than chika, unless there are no local alternatives. From the SIDA report: "...chika schools are uneconomical and should be abandoned...in the future all school buildings be constructed in solid building materials (stone, concrete hollow blocks or concrete elements)..." Annex 4 Page 6 of 26 Table 1: Advantages and Disadvantages of Different Building Materials Material Advantages Disadvantages Maintenance Required Chika (mud and Cool in dry and hot Short life span High thatch) weather Does not resist termites Cheap initial Washes away in rain investment Depletes forest Not popular with community, students Concrete element Resist termites and rain Costly initial investment Low Construction requires skilled supervision Stone Resist fire, termites, rain Costly initial investment Low Hollow Concrete Resists fire termites, rain Need stable foundation, supervision Low Block (HCB) Better insulation Brick Comfortable and cool Many trees cut to burn brick High Weak in rainy season, unless bricks properly made Corrugated iron Cheap initial investment Susceptible to corrosion High sheets Not heat resistant Not popular with community, teachers Chika schools certainly are a cheap initial investment (see Table 2). However, the maintenance requirements are heavy and even a fully maintained chika school will not last much longer than ten years. Hollow concrete block, stone and concrete element buildings appear to be more cost-effective. Table 2: Cost Comparison of School Buildings, 1992 Birr* Capital Recurrent Life time* Costlyear Material (Investment) (Maintenance) (years) lifetime Concrete element 213,000 2,130 40 7,455 Stone 189,284 1,893 40 6,625 Brick 170,400 5,000 30 10,680 Hollow Concrete Block 127,800 1,278 30 5,538 Chika 85,200 6,000 10 14,520 Corrugated Iron Sheet 31,950 5,000 10 8,195 Source: Participatory Evaluation of EICMA (Educational Institutes Construction and Maintenance Agency), A Report to Ministry of Education and SIDA. j992. * With full maintenance The question of which technology to adopt for school buildings depends on crossover discount rates. The lower the discount rate the more attractive are materials other than chika. Using the information provided in the SIDA report, a cost-benefit analysis was carried out to determine which building material would be the best choice for ESDP. The results of the analysis are summarized in Table 3. Annex 4 Page 7 of 26 Table 3: Summary Cost-Benefit Analysis of School Buildings: Internal Rates of Return Transportation Difficulties: Cost Escalation Material Full Maintenance Half Maintenance 10% 20% 30% Concrete element 6% 9% 7% 5% 2% Stone -8% 11% 10% 8% 6% Brick 5% 12% 10% 6% 3% Hollow Concrete Block 17% 23% 19% 14% 8% Chika (base case) (base case) (base) (base) (base) Source: Team calculations, based on data from SIDA report on construction. Note: Since the estimates of the life span of school buildings is arbitrary, then it is assumed that concrete, stone, brick and concrete block buildings last for 40 years. Since stone is not transported, but only the concrete necessary, the transportation cost increases are reduced to 5, 10 and 15 percent. * Intemnal rate of return calculations based on savings due to selection of material versus chika Fully maintained, hollow concrete block is a much better alternative. Assuming a discount rate of 12 percent, then the preferred investment option is hollow concrete block. However, maintenance is an issue in Ethiopia. Experience shows that school buildings are not well maintained in Ethiopia. Chika requires heavy maintenance. There is no indication that this will take place. Therefore, the assumption of full maintenance is not realistic. For this reason, the sensitivity analysis considers the more realistic case that maintenance will be less than adequate. For simplicity sake, half of the required maintenance is assumed to take place. Effectively, this makes all alternative technologies preferable to chika construction. Given the fact that parents and communities are more likely to get involved in the maintenance of element schools, then the returns to switching to an alternative technology are likely underestimated here. With the more realistic assumption of half maintenance, brick and stone, and possibly concrete element, are good investments. The choice of technology of course depends also on the availability of local materials. It may simply not be possible to transport certain materials to remote areas. The lack of roads in some cases is real. The Roads SIP may help in some cases, but for many rural areas there will be impossible transportation problems. In such cases there is no alternative other than building with chika. In less severe cases there may be roads, but the cost of transporting materials may be prohibitive. To examine this problem, sensitivity analysis was carried assuming scenarios of cost escalation due to transportation difficulties of the order of magnitude of 10 to 30 percent. The results show that even in the case of hollow concrete block there are instances when it is not a good investment. All of the alternatives to chika have a lower present value. However, the total undiscounted cost of using the different alternatives is different and they have differing time profiles. Therefore, the altemative one chooses may depend on the opportunity cost of capital. In the cases examined here, the higher the opportunity cost of capital assumed the greater the likelihood of choosing chika over the altemative. This is because with the chika model one is postponing investment. In other words, there is a discount rate at which chika becomes the preferred option, despite higher undiscounted total cost or lower present value of the alternatives. To illustrate this example, the case of chika versus hollow Annex 4 Page 8 of 26 concrete block (HCB) is used. The present value of the two methods is plotted along with the associated discount rate. As is shown in the graph, there is a discount rate at which building chika schools is preferred to HCB. This is known as the crossover discount rate, which is 23 percent in the case highlighted. This is the same as the internal rate of return calculated for the benefits (cost-savings) stream presented above for the case of half-maintenance, which is (hopefully) the realistic scenario. Graphic Derivation of Crossover Discount Rate, Choice Between Chika and Hollow Concrete Block Alternatives in Ethiopia 250,000 200,000 I, 150,000 HCR Crossover discount rate * 100,000 * 10 15 20 25 Discount rate (percent) Benefits and Costs The 1995/96 Household Income, Consumption and Expenditure Survey and Welfare Monitoring Surveys contain detailed information at the household level. These surveys were conducted by Ethiopia's Central Statistical Authority. The surveys are national, covering all households, except in non-sedentary populations in Afar and Somali. Earnings from wages were collected. However, the earnings information cannot be matched with an individual, which is necessary for estimating returns to investments in schooling. The survey does contain information on household head's personal characteristics. As a second best solution, the monetary benefits of schooling are estimated using a sample of household heads with a wage income. Annex 4 Page 9 of 26 Very little information on the wage benefits of schooling exists for Ethiopia. Previous estimates produced mixed results. For example, in P. Krishnan, "Returns to Schooling in Urban Ethiopia" (PHRD Study), very low returns to primary schooling are estimated, but the sample dates back to 1990, the last year of the Marxist regime and covers only urban youth between the ages of 15 to 29 years. D. Hoerr ("Educational Returns and Educational Reform in Ethiopia," Eastern Africa Economic Review, December 1977) reports private returns to primary schooling of 20 percent, but the data are from 1972. The present analysis uses the 1996 household survey, taking a sub-sample of household heads with positive labor market earnings, in single wage earner households, aged between 15 and 65. Table 4 presents summary statistics of the main variables used in the analysis. Half the wage sample resides in urban areas, and most are male. The average age is 38 years, and average schooling is less than four years. Most wage earners have no education. Table 4: Mean Sample Characteristics Variable Mean Rural 0.49 (0.50) Male 0.67 (0.47) Age 38.25 (11.33) Years of 3.80 Schooling (4.69) No education 0.53 (0.50) Primary 0.18 education (0.38) Secondary 0.26 education (0.44) University 0.03 (0.18) Experience 28.45 (13.39) Earnings 171.27 (birrlmonth) (224.34) Sample size 1,474 Source: Team calculations based on HICE-WMS 1995/96 survey. Note: Standard deviation in parentheses * Household heads with labor income Annex 4 Page 10 of 26 Mean earnings by educational level and sex and area of residence are presented in Table 5. Earn- ings rise with schooling level, more or less doubling with each level. A considerable increase in earnings is apparent from no education to primary. For females, earnings more than double from primary to to secondary. In rural areas, there is not much of an increase in earnings from no education to primary, but earnings triple for primary to secondary. In urban areas, the increase in earnings from primary to secondary is not as large as the jump from no education to primary, or the increase from secondary to university. Table 5: Mean Earnings by Educational Level (in birrlmonth) Educational level Overall Male Female Rural Urban Mean S N No education 82 89 72 59 126 0.0 777 Primary 151 154 136 73 221 4.2 261 Secondary 309 300 336 218 333 10.0 388 University 616 681 632 13.0 49 Overall 171 187 139 80 259 3.8 1,474 Mincerian earnings functions fitted to the sample as a whole, by sex and by area of residence, are presented in Table 6. Despite the fact that the sample consists of household heads from single-wage earner households, the earnings functions are well behaved. The signs of the coefficients are correct. The coefficient on the years of schooling variable (S) represents the increment in earnings associated with completing another year of schooling. The increases in earnings estimates are summarized in Table 7. Overall, another year of schooling would increase earnings by about 23 percent. For males, earnings increase by 23 percent for every year of schooling, slightly more than the estimate for females, at 21.5 percent. In rural areas, schooling increases earnings by 21 percent, while in urban areas, where the average level of schooling is highest, schooling increases earnings by only 15 percent. Estimating the earnings function with dummy variables representing the three levels of schooling shows that similar increases in earnings result. Earnings increase by 25, 24 and 27 percent with the completion of primary, secondary and university education. Table 6: Mincerian Earnings Functions (Dependent variable=log annual earnings) Variable Overall Males Females Rural Urban Males Constant 4.740 4.316 5.560 4.330 6.261 4.697 Years of Schooling (S) 0.231 0.234 0.215 0.209 0.148 Experience (EX) 0.063 0.082 0.026 0.072 0.023 0.064 EX-squared -0.0008 -0.0009 -0.0005 -0.0010 -0.0003 -0.0007 Primary' 0.742 Secondary' 2.196 University' . 3.261 R-squared 0.308 0.302 0.333 0.127 0.316 0.283 1 N 1,474 989 485 721 753 989 Mean S 3.8 4.3 2.8 1.8 5.7 4.3 Note: All coefficients statistically significant at the 1% level or better unless indicated by * # Dummy variables omitting "no education" as the base. Overall, these estimates conform to the pattern usually found in low-income countries. They Annex 4 Page 11 of 26 show that education is a profitable investment in Ethiopia. Table 7: Contribution of Education to Earnings Gain for Household Heads (percent) Overall 23.1 Males 23.4 Females 21.5 Rural 20.9 Urban 14.8 Males Primary 24.7 Secondary 24.2 University 26.6 This analysis shows that the returns to schooling in Ethiopia may be high. Of course, so far only private benefits and costs have been considered. Brining in public resource costs of education allows one to estimate social, or total, rates of return to educational investment. Unit costs in Ethiopia are high, given extremely low enrollments at all levels. Adding recurrent unit costs and the resulting estimates of social returns to education are much lower (Table 8). The largest differential between private and social returns occurs at the tertiary level. Still, social returns to schooling are high enough to justify public intervention. The highest returns occur at the level, where the bulk of investment is planned. Table 8: Rate of Return to Education by Level of Education, 1995/96 (percent) Rate of Return Primary Secondary Tertiary Private 24.7 24.2 26.6 Social 14.9 14.4 11.9 Source: Household Income, Consumption and Expenditure Survey and Welfare Monitoring Surveys Notes: | I 1. Years of foregone earnings: primary, 3; secondary, 6; tertiary, 4 2. Annual social costs in birr: 167 (primary); 305 (secondary); and 5,357 (tertiary) 3. Social rate of return calculated by full discounting method to age-earnings profiles for male household heads Non-monetarv benefits. The social rates of return estimated above consider only social costs, but not the difficult to measure social benefits. However, it is believed that in addition to high observed market benefits associated with schooling, significant non-market benefits have also been estimated. Primary education in particular has large effects on desired family size, on the perceived ideal age for having a first child, and on the use of contraception. Primary education increases the probability of using contraception by 32 percent, raises the perceived ideal age of having a first child by 10 months, and reduces the desired number of children by 6 percent. The effect of education on fertility operates on the Annex 4 Page 12 of 26 behavior and attitudes of the children. For example, a mother who has completed primary education reduces the desired number of children, for her offspring, by 10 percent, and a father with the same education lowers his offspring's desired number by 6 percent. Education also has an effect on health outcomes. In rural areas, a mother with completed primary education is 60 percent more likely to make sure that her child will get treatment if ill. Female education lowers stunting, wasting and child mortality. Fiscal ImRact Overall fiscal trends. Ethiopia's economic indicators have improved significantly over the past decade. In particular, as shown in Table 9, the average fiscal deficit has declined from 10.1 percent of GDP in the late 1980s/early 1990s to about 7.7 percent of GDP in 1996/97. This decline is mainly due to two factors: increasing revenues (from 11 percent in 1991/92 to about 17 percent in 1996/97) and a tight expenditure policy. Tax revenues as a share of GDP have increased from an average of 10.2 percent in 1991/92- 1994/95 to 12.8 percent in 1995/96. Tax revenues are mainly comprised of taxes on business profits, indirect taxes and import duties. Non-tax revenues share of GDP increased slightly from 4 percent in 1991/92-1994/95 to 4.6 percent in 1995/96. Fiscal trends during the past two years have been positive, reflecting increasing fiscal consolidation and increasing allocations to social sectors and infrastructure (see Tables 10 and 11 for recurrent and capital expenditures by sector). The latter is expected to significantly increase with the Sector Investment Programs in education, health and roads. A detailed assessment of the fiscal impact of the education ESDP, as well as its combined impact with health and road SIPs, was undertaken by the World Bank through its Public Expenditure Review. A summary of the analysis and conclusions is given below. Annex 4 Page 13 of 26 Table 9: Fiscal Trends AVERAGE AVERAGE Fiscal Year 1986187-90/91 1991192-1994195 1995196 1996197 Actual ActlPr Act Est Budget In Million Birr GDP (current market prices) 17,212 26,875 36,478 39,780 Recurrent Expenditure 3,468 4,542 5,997 6,638 Capital Expenditures 1,495 2,411 3,240 3,520 Total Expenditures 4,963 6,953 9,236 10,158 Total Revenue 3,228 3,810 6,340 7,084 Extemal Grants 524 1,340 2,310 2,418 Fiscal Deficit (excl. Grants) -1,734 -3,142 -2,896 -3,074 Fiscal Deficit (incl. Grants) -1,210 -1,802 -586 -656 Share of GDP Recurrent Expenditure 20.1% 16.9% 16.4% 16.7% Capital Expenditures 8.7% 9.0% 8.9% 8.8% Total Expenditures 28.8% 25.9% 25.3% 25.5% Total Revenue 18.8% 14.2% 17.4% 17.8% External Grants 3.0% 5.0% 6.3% 6.1% Fiscal Deficit (excl. Grants) -10.1% -11.7% -7.9% -7.7% Fiscal Deficit (incl. Grants) -7.0% -6.7% -1.6% -1.6% SOURCE: Government of Ethiopia Statistics: World Bank Data Base Notes: Actuals for 1986/87 through 1992/93; Pre-actuals for 1993/94 through 1995/96 projections for 1996/97. Annex 4 Page 14 of 26 Table 10: Recurrent Expenditures by Sectors AVERAGE AVERAGE FISCAL YEAR 1986/87-90/9 1991J92-1994l95 19/96 1996/97 Actual ACT/Pr Act Est PFP in Million Birr Total Current Expenditure 3,468 4,542 5,997 6,638 General Services 1,874 1,350 1,746 1,91 Defense 1,51 721 786 782 Economic Services 204 402 642 682 ofwhich Agriculture& Natural Resourcs 11 232 366 417 Roads 47 46 120 134 Social Services 623 1,067 1,396 1,496 of which Education and Training 423 670 924 1,01 Public Health 123 230 323 363 Pension Payments 140 241 289 31 Interest and Charges 244 661 905 1,075 Miscellaneous 82 179 404 580 External assistance 300 626 589 569 Safety net measures 17 25 10 as Shares Total Current Expenditure 100.0% 100.0% 100.0% 100.0% General Services 54.1% 29.7% 29.1% 28.8% Defense 43.8%/o 15.9% 13.1 11.8 Economic Services 5.9%/0 8.9% 10.7% 10.3% of which Agriculture & Natural Resources 3.2% 5.1 6.1 6.3% Roads 1.3 1.0 2.0% 2.0% Social Services 18.0% 23.5% 23.3% 22.5% of which Education and Training 12.2% 14.7% 15.4% 15.3% Public Health 3.6% 5.1 5.4% 5.5% Pension Payments 4.0% 5.3% 4.8% 4.7% Interest and Charges 7.0% 14.6% 15.1 16.2% Miscellaneous 2.4% 3.9% 6.7% 8.7% External assistance 8.7% 13.8% 9.8% 8.6% Safety net measures 0.4% 0.4% 0.2% SOURCES Govemment of Ethiopia Statistcs; World Bank Data Base; IMF Data Base; Policy Framework Paper NOTES Actuals fbr 1986/87 through 1992/93; Pre-Actuals5br 1993/94 through 1995/96; PFP Projections for Annex 4 Page 15 of 26 Table 11: Capital Expenditures by Sectors AVERAGE AVERAGE FISCAL YEAR 1986187-90191 1991192-1994195 1995/96 1996197 Actual ACT/Pr Act Est. PFP in Million Birr Total Capital Expenditure 1,495 2,445 3,240 3,520 Economic Development 1,289 1,657 2,206 2,133 of which Agriculture & Natural Resources 501 607 693 633 Roads 206 557 858 975 Social Development 162 406 718 666 of which Education and Training 45 155 434 321 Public Health 38 87 14 187 General Services 34 75 95 124 Compensation Payments 10 10 13 1 Extemal Assistance Grants 297 207 587 as Shares Total Capital Expenditure 100.0%/0 100.0% 100.0% 100.0% Economic Development 86.3% 67.8% 68.1% 60.6% of which Agriculture & Natural Resources 33.5% 24.8% 21.4% 18.0% Roads 13.8% 22.8/o 26.5% 27.7% Social Development 10.8% 16.6% 22.2% 18.9% of which Education and Training 3.0% 6.3% 13.4% 9.1 Public Health 2.6% 3.5% 4.3% 5.3% General Services 2.2% 3.1 2.9% 3.5% Compensation Payments 0.7% 0.4% 0.4% 0.3% Extemal Assistance Grants 12.2% 6.4% 16.7% Sources: Government of Ethiopia Statistics; World Bank Data Base; IMF Data Base; Policy Framework Paper. Notes: Actuals for 1986/87 through 1992/93; Pre-actuals for 1993/94 through 1995/96; PFP Projections for 1996/97 Expenditure Trends and Fiscal Implications of the ESDP. As shown in Table 12, although education's share of GDP increased from 2.7 percent in 1992-93 to 4.1 percent in 1993-94, its budgeted share for 1996/97 has declined to 3.8 percent. In spite of an increase in education's share of the total government budget from 11.5 percent in 1992/93 to 14.5 percent in 199,6/97, declines have been observed since 1993/94 in expenditures on primary education (from 59.7 percent to current 53.7 percent), as well as recurrent expenditures (from 9 percent to current 8 percent), especially in terms of operations and maintenance. The non-wage component of recurrent costs has declined in 1993/94, contributing to a continuous shortage of textbooks and teaching materials. All these underscore the need to address the issue of whether recurrent expenditures are adequately accounted for in the ESDP's budget, especially given that one of its main objectives is to increase the quality of schooling. Annex 4 Page 16 of 26 Table 12: Public Expenditures in Education 1992-93 1993-94* 1994-95* 1995-96* 1996-97* 1. Level l at current prices (million Birr) 692 1,142 1,297 1,339 1,497 Share of GDP (percent) 2.7 4.1 3.9 3.7 3.8 Share of total spending (percent) 11.5 13.6 13.3 14.5 14.3 2. Composition Capital as a percent in total 12.8 27.7 31.7 29.4 32.1 Recurrent as a percent in total 87.2 72.3 68.3 70.6 67.9 a. Composition by Program (% ) Primary 59.7 57.9 58.7 59.7 53.7 Secondary 24.4 30.9 28.8 25.3 30.5 Tertiary 15.9 11.2 12.5 15.0 15.8 b. Composition by Function (%) _ Wages and salaries 88.9 83.7 83.6 84.9 83.7 Operation and Maintenance 2.7 6.4 6.5 6.1 4.5 Materials and Supplies 1.8 7.0 6.2 5.9 8.4 Source: Ministry of Finance; World Bank 1997 Public Expenditure Review *=budgetary figures Combined Effect of the Three Sector Investment Programs in Education. Health and Roads. The medium-term framework presented in the 1996-99 Policy Framework Paper (PFP) projects an average annual real growth rate of 6 percent. Fiscal revenues are expected to increase to 19 percent of GDP while expenditures are expected to decrease to 24 percent of GDP. These projections, however, do not take into account the combined impact of the three SIPs. Intersectoral Cost Comparisons. As can be seen from Table 13, recurrent spending in education is expected to increase by approximately 8.5 percent annually. This is the lowest among the recurrent growth estimates for the three sectors but this rate is still below the observed growth rates for recurrent spending on education in the past five years. On the other hand, the projected 15 percent annual increase in recurrent spending on health seems feasible and in line with observed increases in sectoral expenditures. The roads SIP has the largest estimated impact on total govemment recurrent expenditures. Sectoral spending on roads is expected to grow at a nominal annual rate of 40 percent for the next five years. Annex 4 Page 17 of 26 Table 13: Annual Sectoral Expenditures under SIP Implementation Required Increase in Spending Relative to Current Levels Recurrent Within Five Years l__ __ __ __ ___ __ __ __ _ l__ Ca ital Recurrent Capital Education Sector 18% 90% 50% 400% Health Sector 33% 67% 105% 259% Roads Sector 92% 113% 413% 559% Source: World Bank 1997 Public Expenditure Review Capital expenditures for both education and health SIPs would have to increase annually by 38 percent and 30 percent. These targets are significantly higher than the observed spending in the social sectors shown in Table 14. Table 14: Percentage of Actual relative to Budgeted Capital Expenditures ___________ _ 71992-93 1993-94 1994-95 1995-96 Average, 1992-96 Total Capital Expenditure 69 89 67 82 76 of which: - Agriculture and Natural Resources 50 65 64 77 63 Roads 65 75 58 71 66 Health 68 72 42 59 59 Education 46 74 62 110 77 Source: World Bank 1997 Public Expenditure Review As can be seen from Table 15 and Figures l.a and l.b, the incremental annual impact of the three SIPs is relatively small during the first two years of implementation at approximately Birr 900 million. However, from 1998 onwards, SIP-related incremental costs are projected to increase annually to more than Birr 4 billion. Annex 4 Page 18 of 26 Table 15: Fiscal Impact of SIPs Fiscal Year Total 1997/98 1998199 1999tO0 2000101 2001/02 1997-02 TOTAL RECURRENT (asia; withouA SIPs) 6967.6 7301.2 7801.5 8327.1 8743.5 39140.9 TOTAL CAPITAL (as-is: witmout SlPs) 3841.1 4156. 4530.2 4937.9 5333.0 22798.3 TOTALEXP (ASIS-NOSIPS) 10808.7 11457. 12331.7 13265.0 14076.4 61939.2 SIP INCREMENT (WEDGE)RECURRENT EDUCATION 36.7 79.6 105. 135.3 191. 548.4 SIP INCREMENT (WEDGE)RECURRENT HEALTH 35.7 81.8 128.6 185. 261.6 693.3 SIP INCREMENT (WEDGE)RECURRENT ROADS 46.1 111. 200.7 328.3 511. 1197. SIP INCREMENT (WEDGE)CAPITAL EDUCATION 93.7 233.5 431.9 715. 1122.3 2596.9 SIP INCREMENT (WEDGE)CAPITAL HEALTH 38.1 127.0 162.7 258.3 388.7 974.8 SIP INCREMENT (WEDGE)CAPITAL ROADS 265.1 682.6 1308.7 2249.9 3663.0 8169.3 TOTAL SIP INCREMENT 515. 1315. 2337.7 3872.8 6138.6 14180.4 OF WHICH RECURRENT 118. 272.6 434.4 649.1 964.7 2439.4 CAPITAL 396.9 1043.1 1903.3 3223.8 5174.0 11741. TOTALEXPWITHSIPS 11324.2 12773. 14669.5 17137. 20215.0 76119. TOTAL REC EXP WITH SIPS 7086.2 7573.9 8235.9 8976.1 9708.1 41580.3 TOTAL CAP EXP WITH SIPS 4238.0 5199.3 6433.5 8161. 10506.9 34539.4 Soures PFP Projectons and PER Mission Estimates Figure l.a. SIP RELATED INCREMENTAL RECURRENT EXPENDITURES 1 0000.0 -__.-_----..-.-..-... _._ ._ 95000.0. 9000.0- 8500.0- 8=so.O . 7SIP INCREMENT (WEDGE)RECURRENT ROAD 8000.0- .ESIP INCREMENT (WEDGE)RECURRENT HEALTH 7500.0 * SIP INCREMENT (WEDGE)RECURRENT 7 - . - - ~~~~~EDUCATION 7000.0 /TOTAL RECURRENT (as-is; without SIPs) 6500.0 6000.0 5500.0 . 5000.0, 1994V9 1995/96 199697 1997198 1998/99 1999/00 2000101 2001/02 FY Annex 4 Page 19of26 Figure 1.b. SIP RELATED INCREMENTAL CAPITAL 11nn.o 10000.0 9000.0 8000.0__________________ 80SIP INCREMENT (UEDGE)CAPITAL ROADS 7000.0 10 SIP INCREMENT (VNEDGE)CAPITAL HEALTH M BIRR .ISIP INCREMENT WEDGE)CAPITAL 6000.0 EDUCATION 5TOTAL CAPITAL (as-is: wfout SIPs) 4000.0-= 3000 0- 1994/96 1995/96 1996/97 1997198 1998/99 1999100 2000/01 2001/02 FiY The substantial increase in SIP-related expenditures could result in a decline in funding for non- SIP sectors, if additional revenues and/or grants generated are insufficient. The Public Expenditure Review estimates a Birr 14 billion reallocation from other sectors to finance incremental SIP-related expenditures assuming that Ethiopia's government expenditure path conforms with the overall 1996/97 expenditure envelope agreed to in the PFP. In terms of intersectoral recurrent expenditure effects (Figure 2.a), the combined recurrent spending increase from 22 percent to 29 percent for the three SIPs will only lead to a minimal reallocation from non-SIP sectors (about 1.5 percent annually). However, the intersectoral capital expenditure effects (Figure 2.b) are substantial because the increase in combined capital spending for the three SIPs will rise from 35 percent to 86 percent. This implies a drop in the proportion of non-SIP capital expenditures to only 14 percent of total capital spending for 1997-2002. Annex 4 Page 20 of 26 Figure 2.a. REALLOCATION OF RECURRENT EXPENDITURES BETWEEN SECTORS ASSUMPTION: STAY WITHIN AGREED ESAF CEILING 100 90% 80% 70% 60%4 IORECURRENT ROADS I0% JORECURRENT HEALTH 5RECURRENT EDUCATION I EALL OTHER RECURRENT, 40% 30% 20% 10 0% AVE 1992-97 AVE 1997-02 WITH SIP AVE1997-02 Figure 2.b. REALLOCATION OF EXPENDITURES BETWEEN SECTORS ASSUMPTION: STAY WITHIN AGREED ESAF CEILINGS 100 90% 80% 70% 60% \OCAPITAL ROADS I I 1OCAPITAL HEALTH 50 I\CAPITAL EDUCATION WI ALL OTHER CAPITALl 40% 30% 20% 10 0% AVE 1992-97 AVE 1997-02 WITH SIP AVE1997-02 Over-all Fiscal Impact. Assessment of the fiscal sustainability of the SIPs was undertaken in the Public Expenditure Review within the context of a medium-term macroeconomic framework with alternative assumptions about GDP growth rates, government revenue efforts (tax and non-tax) and balance of payments. One way of assessing fiscal sustainability is to assess the consistency of higher SIP-related expenditure levels with the fiscal and debt parameters defined in the Government's medium term PFP Annex 4 Page 21 of 26 1996/97-1998/99 under alternative macroeconomic conditions. The situation is considered sustainable if there is a continued reduction in the total debt to GDP ratio over time. Fiscal sustainability was evaluated given three medium term growth paths with government revenues modified in line with the underlying revenue elasticity of the PFP for each scenario. Alternative financing scenarios were also evaluated for each of the GDP growth assumptions. Moreover due to the observed underspending on the capital budget that was observed during the past years and the perceived existing implementation capacity constraints, especially at the regional and woreda levels, the possibility of extending the implementation period for each of the three SIPs beyond the 5 year period was examined. Under the Public Expenditure Review baseline scenario which reflects the projected growth path of the economy under the assumptions outlined in the PFP without the fiscal impact of the SIPs, the overall fiscal deficit (excluding grants) must be maintained within the range of 5 to 7 percent of GDP to help boost the very low domestic savings rate. The overall fiscal balance after grants is estimated to be - 0.3 percent of GDP on average for 1997-2002. As can be seen from Table 16, under unfavorable macroeconomic conditions (low GDP growth and no additional grant financing beyond what is assumed in the PFP), the full implementation of all three SIPs as planned would result in an overall average fiscal deficit after grants of 7 percent of GDP. Under favorable macroeconomic conditions (high growth and with additional grant financing of 50 percent of SIP-related incremental capital expenditures) the average fiscal deficit after grants will be 2.2 percent of GDP for 1997-2002. Table 16: Fiscal Scenarios-Overall Balance (including grants) as percent of GDP Scenario Average 1997/98-2001/2 as-is without SIPs with SIPs, no additional with SIPs and I ~ grants F additional grants Overall Balance including Grants Baseline -0.3 -5.6 -3.4 High Growth 0.7 -4.2 -2.2 Low Growth -1.4 -7.0 -4.7 Extended SIP -0.3 -2.7 implementation period Overall Balance Excluding Grants Baseline -5.4 -10.6 -10.6 High Growth -4.1 -9.0 -9.0 Low Growth -6.7 -12.4 -12.4 Extended SIP -5.4 -7.8 -7.8 implementation period Source: World Bank 1997 Public Expenditure Review Recommendations. A comparison of the various scenarios suggests that Ethiopia will only achieve a continued reduction in debt-to-GDP ratio if additional grant financing is mobilized from abroad to finance the SIPs and the real GDP growth rate is at least that which is assumed in the PFP. It might be possible to reexamine the macroeconomic framework in consultation with the World Bank and the IME to see if there is more fiscal space under the current high growth rates. The implementation period of the SIPs could also be extended. The government could also try to reduce the public sector part Annex 4 Page 22 of 26 of the SIP- related expenditures through increasing private sector involvement and via the cost recovery mechanism. Ethiopia faces high risks through external shocks such as a drought or a slower than anticipated private sector supply response. Either or both these factors could be detrimental to GDP growth over the medium term and lead to a shortfall in Government's revenues. In such a case, even with additional grant financing of 50 percent of capital costs of the three SIPs, the debt-to-GDP ratio would increase towards a fiscally unsustainable level by the late 1990s. If faced with such a contingency, the government may have to slow down the implementation of some components of the SIPs, actively engage the private sector and NGOs, mobilize community participation, and escalate efforts to improve fiscal revenues Thus, in order to mitigate the tremendous fiscal impact of SIPs and maintain financial sustainability of increased public expenditures, the government is encouraged to re-assess its plans and ensure that the planning and implementation rate of the SIPs take into account: * Realistic macroeconomic growth projections taking into account possible macroeconomic shocks * Existing implementation capacity, especially in the zones and woredas * Adequate funding for recurrent, non-wage expenditures to make sure those quality objectives will be achieved * A medium term public expenditure framework All the SIPs do not have to be implemented in five years. The SIP-implementation extension scenario confirms that extending the implementation period is a promising option that would allow the Government to further approach macroeconomic stabilization and a declining debt-to-GDP ratio. The impact of SIPs on sectoral expenditures in education and health are much less dramatic than in the roads sector. Fewer problems should be expected with regard to recurrent expenditures in the education sector. With the SIPs recurrent spending on education would need to grow at a rate of about 8.5 percent per year. This rate is below the growth rates for recurrent spending on education in the past five years. However, the ESDP implies ambitious targets with regard to annual increases in capital spending. Capital spending under the ESDP will increase by 38 percent per year. This target is high relative to the observed underspending in the sector. Up to one-third of budgeted capital expenditures in education are not spent. For the envisaged ESDP to be implemented by the Government within the proposed five-year period, vigorous efforts on the part of all stakeholders will be necessary in order to substantially improve implementation capacity, especially at the regional and woreda levels. Specifically for education, although recurrent expenditures envisaged under ESDP are below historic levels, there is a need to monitor actual expenditures over time and ensure that the level of spending is adequate to obtain the necessary level of quality. In terms of capital expenditures, given the tendency to underspend, it is necessary that steps be taken early on to improve implementation capacity, especially at the lower levels. In addition, supervision of projects should be improved, with increased resources budgeted by donors. To ensure that the ESDP can be implemented on time, efforts to increase private sector involvement should be taken immediately. Efforts to implement cost-recovery mechanism at the upper Annex 4 Page 23 of 26 secondary and tertiary levels could be stepped up. Community participation should also be maintained. The Alternative Financing Scenarios Simulation exercise undertaken by the Government underscores the importance of contingency plans and risk-mitigating efforts. Implementation of the ESDP will require close monitoring. Implementation capacity-from budgets, to decentralized decision-making, civil works, project supervision, teacher training-will need to be monitored closely and steps taken to improve the situation early on. External finance and donor supervision will need to be stepped up. Policy changes that may need to occur in order to make ESDP possible include implementing cost-recovery plans at the tertiary and upper secondary levels. Once the results of the PHRD II study on the role of the private sector in education is completed, it may be necessary for the government to take positive steps to increase private sector participation in education. Private education may be necessary in order to make ESDP affordable. Increased private sector activity, especially at the secondary and tertiary levels, will free up government resources to target at the lower levels of schooling, especially in the disadvantaged regions of the country. Povert Analysis In urban areas most primary school-aged children are enrolled (Table 17). Junior secondary school enrollment rates are higher in urban areas. Enrollment rates are particularly low in rural areas, and for higher levels of schooling. One of the reasons for low enrollment rates in rural areas is the high opportunity cost of schooling. An indicator of the high opportunity cost of primary schooling is distance. In rural areas, the distance to primary school is often great. For example, in Dire Dawa, the distance between two rural schools is 12 kilometers on average, while in urban areas it is only 0.7 kilometers. ESDP addresses this barrier to schooling in rural areas by allocating funds for the construction of 1,951 primary schools within walking distance of rural communities. Table 17: Gross Enrollment Ratios by Schooling Level, by Urban and Rural and by Gender (percent) Schooling Level Primary Junior Senior Tertiary Total Location and Gender Secondary Secondary Urban Male 88 84 44 3 58 Female 94 64 34 1 51 Total 91 73 38 2 54 Rural Male 24 9 2 13 Female 11 4 1 6 Total 18 6 2 9 Overall Male 33 22 9 1 20 Female 24 17 9 15 Total 29 19 9 17 Source: PHRD Study on the "Household Demandfor Schooling" (1996) Schooling participation is higher for children from higher income families (Table 18). Enrollment rates for the wealthiest families are two times greater than enrollment rates for the lowest income groups. At higher levels of schooling the poor are not represented at all. Annex 4 Page 24 of 26 Table 18: Gross Enrollment Rate by Per Capita Expenditure Group Total Monthly Household Expenditure (Birr) Schooling Level Gender 0 - 50 51 - 100 101 - 200 201+ Primary Male 26 33 42 49 Female 15 23 31 55 Total 21 28 37 52 Junior Secondary Male 20 15 34 46 Female 10 16 23 37 Total 15 16 28 40 Senior Secondary Male 5 8 13 23 Female 5 7 11 22 Total 5 7 12 22 Higher Education Male -- -- 1 3 Female 1 1 Total -- -- 1 2 National Total Male 17 19 24 30 | ______________ _ |Female 10 14 18 26 | _______________ _ tTotal 13 16 21 28 Source: PHRD Study on the "Household Demandfor Schooling" (1996) Consistent with having one of the lowest enrollment rates in the world, very few Ethiopian families send their children to school (Table 19). Overall, only 7 percent of all families send their children to school. Less than 6 percent of the poorest families send their children to school. Reducing the direct cost of schooling would contribute to an increase in enrollment by the poor. The Government has implemented a policy of no fees at the primary level. Table 19: Proportion of Different Income Groups Benefiting from Education Expenditure Group Schooling Level Total Monthly Household Percentage of Households Sending Average Education Expenditure (Birr) their Children to School Expenditure/Month (Birr) 0 - 50 5.8 4.58 51 - 100 7.4 5.46 11 -200 7.9 11.12 201+ 8.1 31.65 Total . 7.2 9.53 Source: PHRD Study on "Cost and Financing of Education " (1996) Overall, females are under-represented at school (Table 20). Furthermore, there has been very little if any progress over the last few years. This is despite the fact that enrollments in general have been increasing. Only in Addis Ababa do girls have a higher share of the enrollments. Specific interventions aimed at increasing female enrollments will be implemented under ESDP. Some regions are implementing schemes to reduce the opportunity cost of schooling for girls, including the location of grinding mills close to schools. One of the objectives of ESDP is to increase the share of qualified Annex 4 Page 25 of 26 teachers. The presence of female teachers in the classroom increases the likelihood that girls will enroll. Table 21 shows that there is much to be done at the primary level grades 7-8 and at secondary level. Table 20: Share of Girls in School Enrollment (percent) Primary Primary Secondary (Grades 1-6) (Grades 7-8) (Grades 9-12) 1992/ 1993/ 1994/ 1995/ 1992/ 1993/ 1994/ 1995/ 1992/ 1993/ 1994/ 1995 93 94 95 96 93 94 95 96 93 94 95 /96 Tigray 40 40 42 43 44 42 40 40 44 44 40 38 Afar 45 37 38 38 41 43 43 43 41 42 37 37 Amhara 48 47 46 45 50 49 48 48 46 47 47 46 Oromiya 38 35 33 31 45 45 43 4 1 43 42 41 40 Somali 30 -.- 28 28 37 -- 30 30 32 -- 20 20 B-Gumuz 32 33 27 28 38 38 32 29 - 46 39 36 35 SNNP 32 29 29 30 38 35 32 30 38 38 35 32 Gambella 37 35 34 35 31 23 18 26 25 22 22 20 Harari 49 45 45 43 50 52 52 48 44 45 45 47 Addis Ababa 51 51 52 52 54 54 53 54 50 51 51 51 Dire Dawa 47 47 46 47 49 49 49 47 43 43 46 47 Total 41 38 37 36 48 46 44 43 45 45 44 43 Source: (to be provided) Table 21: Share of Qualified Teachers, 1995/96 _____________________ f Qualified as percent of Total Male Female Total Rural Primary (Gr. 1-6) 88 89 89 Primary (Gr. 7-8) 30 32 3 1 Primary total 86 88 86 Secondary (Gr. 9-12) 32 9 30 Urban Primary (Gr. 1-6)' 83 87 85 Primary (Gr. 7-8)' 43 39 42 Primary total 71 82 74 Secondary (Gr. 9-12)' 39 28 38 Total Primary (Gr. 1-6)/I 87 88 87 Primary (Gr. 7-8) /2 40 38 40 Primary total 80 85 81 Secondary (Gr. 9-12) /3 39 27 38 Source: MOE. Education Statistics Annual Abstracts 1995/96 1/ TTI and above; 2/ Diploma and above; 3/ BA and above Females suffer in all key education indicators. They are less likely to enroll, complete, pass and they are more likely to repeat grades (Table 22). Annex 4 Page 26 of 26 Table 22: Gender Gaps in Education Indicators (percent) Gap Male Female (percentage points) Primary Education Primary completion rate (Gr. 6) 52 43 -9 Primary enrollment share (Gr. 1-6) 64 36 -28 Primary enrollment share (Gr. 7-8) 57 43 -14 Primary repetition rate (Gr. 1-6) 9 12 3 _Primary repetition rate (Gr. 7-8) 15 23 8 Grade 8 exam pass rate 67 55 -12 Primary teachers share (Gr. 1-6) 72 28 -45 Primary teachers share (Gr. 7-8) 88 13 -75 Secondary Education Secondary enrollment share 56 44 -13 Secondary repetition rate 13 24 11 Secondary teachers share 91 9 -82 Source: (to be provided) Recurrent expenditure trends by region are highlighted in Table 23. Overall, expenditures on education have increased over the years. However, given the increase in enrollments, per student expenditures have remained fairly constant. Table 23: Recurrent Education Expenditure per Student in School(Grades 1 to 12) by Region (Birr) Expenditure per Student Region 1993/94 1994/95 1995/96 Tigray 115 144 151 Afar 579 301 673 Amhara 266 265 247 Oromiya 249 253 228 Somali -- 41 102 B-Gumuz 261 257 209 SNNP 182 183 146 Gambella 298 217 357 Harari 349 351 418 Addis Ababa 126 144 151 Dire Dawa 168 208 217 Total 244 244 238 Source: (to be provided) Annex 5 Page I of 6 Annex 5 Financing Plan and Donor Activities Table A5.1: Donor Funding for the Education Sector in Ethiopia (as of April 1998) 1997/98 1998/99 1999/00 Total 1997198 1998/99 1999100 Total Donors (in Birr '000) ) (in USS '000) /1 AfDB/ADF 0 100,000 130,000 230,000 0 14,706 19,118 33,824 Austria 3,500 3,500 3,500 10,500 515 515 515 1,544 European Commission 4,950 11,020 57,035 73,005 728 1,621 8,388 10,736 Finland 6,270 8,007 0 14,277 922 1,178 0 2,100 Germany 12,300 59,100 82,800 161,200 1,809 8,691 12,176 23,706 Irish Aid 15,934 14,808 0 30,742 2,343 2,178 0 4,521 Italy 3,955 8,691 1,084 13,730 582 1,278 159 2,019 Japan 885 885 885 2,655 130 130 130 390 Netherlands 5,163 12,993 8,625 26,781 759 1,911 1,268 3,938 Norway 0 9,000 9,000 18,000 0 1,324 1,324 2,647 Sweden 20,500 69,319 0 89,819 3,015 10,194 0 13,209 UNDP 16,256 38,071 23.408 77,735 2,391 5,599 3,442 11,432 UNESCO 400 0 0 400 59 0 0 59 UNFPA 1,092 0 0 1,092 161 0 0 161 UNICEF 684 18,308 12,960 31,952 101 2.692 1,906 4,699 USAID 98,090 102,960 89,280 290,330 14,425 15,141 13,129 42,696 World Banlk 325,500 685,000 0 1,010,500 47,868 100,735 0 148,603 World Food Program 4,100 16,220 21,482 41,802 603 2.385 3,159 6,147 Total 519,579 1,057,882 310,059 1,894,519 76,409 155,571 45,597 278,606 Source: Sida/Ethiopia Donor I/ At exchange rate of 6.8 Birr per US dollar Figures not confirmed by Govemment. Annex 5 Page 2 of 6 Table A5.2: Indicative Financing Plan (as of April 1998) Amount Share (USS mill.) (%) Total Financing Required 1,814.9 100.0% Available Financing Domestic Funding 1,315.1 72.5% External Funding 278.6 15.4% Total available funding 1,593.7 87.8% Funding gap 221.2 12.2% File: NEWANXS.XLS - Sheet2 Annex 5 Page 3 of 6 Table A53: Mapping of Donor Activities by Region Regions Donors Activities Tigray Germany NFE basic education for adults and skills training, training of NFE trainers, primary school rehabilitation, primary teacher training and curriculum development, training of education managers. Ireland Functional adult literacy, NFE basic education centers, special needs schools, school libraries, primary school construction/rehabilitation and furnishing, primary teacher training and head teacher training. UNESCO Training of NFE teachers on environmental education and development of teacher's guide. USAIUSAID Budget support, educational materials, school supervision, REB capacity building (planners, curriculum developers, teacher educators, education managers, finance managers), head teacher training, community involvement, training of school committees. WFP Primary school feeding in chronically food deficit woredas. Afar WFP Primary school feeding in chronically food deficit woredas. Amhara EU School fumishing Finland NFE curriculum and assessment, training of head teachers and education managers at all levels, REB capacity building, primary education curriculum development and dissemination, teacher in-service training, pedagogic center development, capacity building in rehabilitation management, monitoring/evaluation and research capacity building. Germany TVET teacher training Sweden/Sida Primary school construction and furnishing. UNESCO Training of NFE teachers on environmental education and development of teacher's guide. UNFPA Teacher education reference books and materials. WFP Primary school feeding in chronically food deficit woredas. Oromia EU School furmishing Germany NFE basic education for adults and skills training, training of NFE trainers, primary school rehabilitation, primary teacher training and curriculum development, training of education managers. UK/DfID General support to primary education. UNESCO Training and development of teacher guides for NFE teachers on environmental File: Annex5ce.doc Annex 5 Page 4 of 6 education. Regions Donors Activities UNFPA Teacher education reference books and materials. WFP Primary school feeding in chronically food deficit woredas. Somali B/Gumuz Finland NFE curriculum and assessment, training of head teachers and education managers at all levels, REB capacity building, primary education curriculum development and dissemination, teacher in-service training, pedagogic center development, TVET curriculum development, capacity building in rehabilitation management, monitoring/evaluation and research capacity building. Germany NFE basic education for adults and skills training, training of NFE trainers. Sweden/Sida Primary school construction/rehabilitation and fumishing. UKlDfID General support to primary education. SNNPR Germany TVET teacher training, NFE basic education for adults and skills training, training of NFE trainers, primary school rehabilitation, primary teacher training and curriculum development, training of education managers, teacher education capacity building, Ireland Adult literacy and post-literacy materials development, NFE basic education centers, radio scripts for NFE, community skills training centers, primary education capacity building and training of school administrators, primary school construction/upgrading and rehabilitation, school furnishing, primary teacher training, school afforestation, textbooks. Basic and non-formal education. UNICEF Teacher education reference books and materials. UNFPA Budget support, educational materials, school supervision, REB capacity building USA/USAID (planners, curriculum developers, teacher educators, education managers, finance managers), head teacher training, community involvement, training of school committees. Gambella Germany Teacher education, NFE basic education for adults and skills training, training of NFE trainers, primary school rehabilitation, primary teacher training and curriculum development, training of education managers. Harari Addis Germany TVET teacher training, NFE basic education for adults and skills training, training File: Annex5ce.doc Annex 5 Page 5 of 6 Ababa of NFE trainers, primary school rehabilitation. UNESCO Deaf school construction and instructional materials, special needs education. UNFPA Assessment of POP/FLE integration. Regions Donors Activities Dire Dawa MOE Germany NFE basic education for adults and skills training, training of NFE trainers. EMA capacity building, TVET. Japan Tertiary education (Awassa agricultural college). Norway/NORAD Primary curriculum development capacity building, EMPDA management training, Sweden/Sida in-service primary teacher training, forestry education. National AfDB Primary school construction. Finland Special needs teacher training and materials development. Germany TVET teacher training. IDA Primary school construction, tertiary education facilities expansion, educational materials, furnishing, community involvement. UNFPA Assessment of POP/FLE integration in TTls/TTCs and TVET, development and production of POP/FLE handbook and training for secondary school teachers. USA/USAID Budget support, support to education policy reforms to improve basic education system. File: Annex5ce.doc Annex 5 Page 6 of 6 Table A5.4: On-Going Donor Activities and Interests in Funding Basic Education Special Needs Secondary Teacher Training Tertiary Institution/Capacity Building Primary on-Form Education Education TVET In-Service Pre-Servic Education EMA ICDR NOE EMPDA MOE Regions Capacity Sida Sida Italy Irish Aid Sida Germany Germany Building USAID NORAD Japan UNDP UNDP UNESCO UNESCO UNESCO UNESCO USAID Sida Civil Works AfDB Finland Finland Japan Finland Finland Equipment & EU Germany Ireland Furniture Finland Ireland Ireland Ireland Japan Germany Sida Curriculum Sida UNICEF Gernany Sida Sida USAID Development USAID USAID USAID USAID Distance USAID USAID USAID USAID USAID Education Japan Japan Japan Japan Japan MED Sida Finland Finland NFE UNICEF UNICEF UNDP UNESCO UNDP UNICEF UNDP UNFPA UNDP Teacher Germany Df1D Sida Sida Training Germany Sida Educational EU Sida EU DflD EU EU Materials Sida Ireland Sida Sida UNFPA File: PAD-AS.XLS - Sheet3 Annex 6 Page 1 of 11 EDUCATION SECTOR DEVELOPMENT PROGRAM Procurement and Disbursement Arrangements 1. Implementing Agencies Central Level. MOE's Planning and Project Department (PPD) will be responsible for the ESDP components handled by the Center. PPD is staffed by experienced technical staff, including a procurement specialist, with previous experience in IDA financed projects. The PPD will coordinate program implementation at the national level, will provide the Regions with standardized specifications and designs for civil works, and will carry out international procurement on its own or through agents such as its Central Procurement Cell (CPC) on behalf of the Regions requesting its assistance. A new position of procurement specialist has been created at the MOE in order to build up capacity for the Program. Regional LeveL The 11 Regions and administrations of Ethiopia will be fully responsible for the implementation and supervision of about 90% of the procurement activities under ESDP. The Management Committee in each REB represents the regional Executing Agency (EA) with implementation and supervision responsibilities passed on to zonal and woreda educational offices. Since the Regions are still inexperienced in handling international procurement, the Center will handle large procurement packages under international competitive bidding (ICB). The capacity of each Region to execute and supervise procurement will be assessed and agreed with the Bank before implementation. Regions will also have the option to contract out procurement and supervision tasks to the private sector. The organization and staffing proposed by the Regions will be reviewed and agreed by the Bank. Training of at least two senior staff through regional courses conducted by the Eastern & Southern African Management Institute/International Labor Organization (ESAMI/ILO) will be required. 2. Procurement of Works Civil works under ESDP include construction of new schools, upgrading of facilities, and rehabilitation. The majority of the new construction will be in rural areas, not serviced by roads, and ICB may be viable only for urban areas, such as Addis Ababa where suitable contract packaging may attract foreign contractors. A "package and slice" approach will be used to encourage competition among qualified contractors. For contracts to be awarded on the basis of ICB, domestic contractors may be awarded a margin of preference of 7.5%. ICB procurement will be subject to prior review. National Competitive Bidding (NCB) will be used for most of the small constructions and rehabilitation works, less than US$1 million per individual contract. National standard bidding documents, previously reviewed by the Bank, and specifications drafted by the MOPW (Ministry of Public Works) will be used throughout the program. Procurement actions under NCB will be subject to post-review with the exception of the first three contracts for each Region (see Table A6. 1). The Bank's Country Procurement Assessment Review (CPAR) expected to be carried out in March, 1998 will likely contribute to the establishment of a new procurement code for Ethiopia based on the UNCITRAL model code. Annex 6 Page 2 of II Small Works (SW) method of procurement, may be used in the most remote areas of Ethiopia when the NCB method is not practical. Contracts under SW should be equal to or less than US$75,000 per contract and not exceed $4,500,000 in the aggregate. Simplified construction methods and procedures such as lump sum fixed budget contracts will be used, as described in a manual of procedures to be reviewed by IDA. Direct Contracting will be used subject to prior approval of IDA when specified in the DCA and in exceptional cases such as an extension of an existing contract previously awarded through competitive bidding. 3. Procurement of Goods Procurement of vehicles, motorcycles and locally unavailable equipment will be procured to the extent possible in large packages through ICB. Packaging will be based on geographical considerations, calendar of completion of construction works, school calendar, and seasonal changes. ICB will be staged to assure maximum competition by international contractors and to avoid stock of undelivered equipment. Under ICB, domestically manufactured goods (as defined in donors agreements) may be granted a margin of preference of 15% of the CIF (cost in freight) or CIP (cost, insurance, and place of destination ). Equipment will be preferably delivered to destination sites by the suppliers and their local agents. Regions may also contract-out inland transportation of goods to the private sector. Furniture and other goods that are available locally and difficult to package, with individual contracts of less than $200,000, will be procured under NCB from local suppliers under national regulations acceptable to IDA. Contracts of goods for different Regions will be packaged whenever possible. Local Shopping, with bids from three or more qualified suppliers may be used for contracts less than US$30,000. Direct Contracting will be used for purchasing small quantities of spare parts for existing equipment. Procurement of textbooks and educational materials, presently solely furnished by Educational Materials Production and Distribution Agency (EMPDA) will be subject to competitive bidding. ICB will be used for items such as library books and printing jobs sufficiently large to attract international competition. For special printing and publishing packages of individual contract value of less than US$200,000, Limited International Bidding or International may have to be used as an alternative to ICB. Most of the contracts, however, will be very small due to the number of languages in which textbooks will be published and will be procured through NCB. Contracts will be generally below US$100,000. Foreign bidders will be allowed to make offers. Procurement from EMPDA (which will be commercialized during ESDP) or other suppliers on a sole source basis may still be necessary for Regions and zones where demand cannot be satisfied by any competitive means. A number of printing and duplicating work will also be carried out "in- house" in Regions such as Amhara that have their own printing or copying facilities. Annex 6 Page 3 of 11 4. Consulting Services Consulting services by either local or international consultants will be required particularly during Program preparation and early stages of ESDP. Various selection methods will be used depending on the type and size of contracts, and whether individual consultants or consulting firms will be used. For both individual consultants and consulting firms, clear Terms of Reference (TORs), well defined transfer of skills or capacity building components, and performance indicators will be drafted and subject to IDA prior review. Use of individual consultants by MOE and Regions is expected in market research, editing, distribution and procurement of textbooks. Most individual consultants will be recruited based on their qualifications, as per Bank consultant guidelines. Recruitment of consultingfirms may be required for supervision of works, auditing, and other tasks. Assignments will be advertised in Development Business and, if necessary, in specialized magazines. Requests for Proposals (RFPs) will also be sent to shortlisted firms. Evaluation of firms will be based mostly on technical factors with adequate weight given to the price offer. Other methods of selection may be chosen and stated in the Development Credit Agreement (DCA). The selection process for assignments beyond the threshold of US$ 100,000 equivalent for individual consultants and US$100,000 equivalent for consulting firms will be subject to prior review (see table A6. 1). In areas where competition for special expertise does not exist, small assignments linked with individual consultants may be assigned on the basis of the "Consultants Qualifications" method of selection. The value of these contracts will not be higher than US$50,000. Training contracts will follow the same selection procedures used for consulting assignments, though in special cases such as specialized courses, a particular institution may be designated. Contracting out of activities for which MOE does not possess the technical expertise such as supervision of works, maintenance and transport, may also represent a viable alternative to expensive, long term, capacity building of technical staff. 5. Implementation Manuals Implementation manuals for Regional use, including acceptable procedures for procurement and disbursement will be prepared and agreed with the Bank prior to effectiveness. 6. Prior and Post-Review of Procurement Works contracts above a threshold of US$400,000 and the first three contracts of any value of each Region under NCB will be subject to IDA prior review procedures. The review process would cover advertising of the General Procurement Notice (GPN) in Development Business, Standard Bidding Documents (SBDs), and specifications, tendering procedures and evaluation, and contract signature. Prior review will also be required for ICB procurement of goods and packages of textbooks and equipment above a US$200,000 tjhreshold. The first NCB standard bid documents for goods and works and the Manuals of procedures will be subject to Bank review before their initial use in the Program. All other procurement will be subject to post-review of a representative sample of contracts on a yearly basis. Aside from the documentation concerning procurement and awards, information to be recorded for post-review will include: quarterly reports with revised cost estimates and allowances for physical and price contingencies; revised timing of procurement actions and schedule of implementation and compliance with limits on specified procurement methods. Annex 6 Page 4 of II 7. Procurement Schedules The physical targets to be achieved entail preparatory procurement activities. The indicative procurement cycle in charts A6.3 and A6.4 have been provided to the implementing agencies as an indication of when the preparatory activities need to be initiated to realize the physical targets. This should assist each implementing Bureau/agency to plan ahead in a coordinated fashion to assure that when new schools are completed they will be furnished and equipped, and books and teachers will be available with a minimum time lag. Detailed procurement schedules by Region and the Center based on this guideline are provided in the ESDP plan of each Region and the Center. 8. Harmonization of Donors Procurement Procedures ESDP has attracted the interest of a large number of donors, a number of which are actively supporting the education sector in Ethiopia. Other donors may join the ESDP as they approach a new bilateral assistance cycle. It is expected that some of the donors would agree to having common thresholds for procurement and limits for prior or post review of the process. Donors may also agree to the use of common standard documents and procedures for advertising, evaluating, and awarding contracts. A study on harmonization of donors procedures for monitoring and evaluation is under way. 9. Priority Actions for ESDP Procurement The following actions will be taken by the EA at center and regional levels prior to Program implementation: a. Each Region should have a complete set of standard NCB bid documents, specifications and draft contracts. For ICB, use of Bank SBDs for the procurement of works, goods and consultants will be mandatory (See table A6.2, below). Annex 6 Page 5 of 11 Table A6.1: Thresholds for Procurement Methods and Prior Review Contract Intbn tioe n l PreLi,ited P Nrtional Sutall rs P Vaue Cojtiiv Cmettiecopeitv ItentionalSopg National Qaiiain eiwPs (USS) Bidding Bidding/i ~Bidding UNIIAS ter Sopn Soti Lstr ReivIew WORKS >10,000,000 x x x >1,000,000 x _ x 400,000-1,000,000 X _ X <400,000 X x <75,000 X X ($4,500,000) GOODS >200,000 X__ _ _ _ __ _ _ _ _ _ _ _ _ _ __ _ _ _ _ x _ _ _ _ _ <200,000 X X x ____________________ ($1,000,000) __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ __ _ _ _ _ _ <100,000 X X <50,000 X X ($1,000,000) <30,000 X X ($2,000,000) SERVICES Individuals >100,000 X X X 50,000-100,000 X X X <50,000 X X X ____ ____ ____ ____ ___ ____ __ ____ ____ ____ ____ ___ _ _ _ __ __ ___ ($100,000) Firms >200,000 X X = _ _ X X _ 100,000-200,000 X < 1I00,000 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ x Note: Aggregate ceilings indicated in italic, in parenthesis. I/ Textbooks and reference materials. 2/ First three contracts of works and goods, regardless of their estimated cost. File: ANNEX6-.xls - She=tl Annex 6 Page 6 of 11 Table A6.2: Allocation of Credit Proceeds Expenditure Category Financing Percentages Foreign Local 1. Works, Goods and Textbooks 100% 90% (a) School construction (b) School rehabilitation and upgrading (c) Other structure construction (d) School furniture (local) (e) School furniture (imported) (f) Equipment (g) Vehicles (h) Library/reference books (i) Textbooks (imported) (j) Textbooks (local) (k) Other educational materials 2. Training/Technical Assistance 100% 100% 3. Other/Operating costs 100% File: ANNEX6-1.xis - Sheet2 Annex 6 Page 7 of 11 Chart A6.1: Organizational Chart for ESDP Implementation and Reporting Central Steering Committee Chair: Senior Minister, Social Affairs, PMO Secretary: Minister, Education - . Members: Minister, Finance Minister, MEDAC - _ Donor Representatives Central Secretariat * -.-.-.-.-.-.. Planning and Project Dept. Central Implementing Bodies Ministry of Education *______________ I ICDR IL *NOE l__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ EM A Regional Steering Committee * . MOE Departments . * Tertiary Institutions Chair: Chairman, Social Affairs Committee, Regional Council Secretary: Head, Regional Education Bureau Members: Head, Finance Bureau Head, Urban Dev. Bureau (some Regions) Head, Planning Bureau Regional Secretariat ..... ... Donor Representatives _ Regional Education Bureau Regional Implementing Bodies ________________________________ Regional Education Bureau Zonal Education Bureau Woreda Educational Office Legend: * Directives and guidance - ----- * Reporting channel File: NEWANX6.XLS - Sheet2 Annex 6 Chart A6.2: Minstry of Education Organizational chart Page 8 of II |Minister of Education| - L ~(Secretary to CJSC) National Council for Technical & NainlUECOOgnzto | Vocational EducationlI Audit Service Public Relations Service [ Legal Service Women Affairs Department J Planning & Project Department (CS) | ~~Vice-Minister l Administration & l l Finance Service l Educational Programmes Teaching & Ed. Management Higher Ed. Academic Scholarship Teachers & Supervision Department Staff Development Dept. & Research Department Student Affairs Dept. ...... ..... ..... ..... .. . . . . .. . . . . .. .. Educational Educational Materials [ I Inst. for Curriculum Educational NI. Examination Production & Universities o l Dev.& research Organization Distribution Agency Universities Annex 6 Page 9 of 11 Chart A6.3: Indicative Procurement Cycle - ICB Phasin of Procurement Activities (in Months) __ 3 _ 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 CIVIL WORKS Site sclection Site acquisition Site preparation Sketch plans Final plans Preparation of tender documents Advertisaementlnvitation to bid Bid evaluation Contract negotiations and award Contractor mobilization I Construction Conunissioning Final payments EQUIPMENT AND FURNITURE Specifications/lists Tender document preparation : Advertisementllnvitation to bid Tendering Bid evaluation Contract award/signing and deliverv TEXTBOOKS & EDUCATIONAL MATI RI LS Titli development Edit/camera readv _ ___ L= T=========== Specifications Tender document preparation Advertisement/invitation to bid Bid evaluation Contract award/signing Production/deliverv DistributionIIIIII VEHIICLES_ T = 11_T =__===_===l TenderdocuRrentpreparation Advertisimeng invitation to bid Bid evaluation_ 3 _ I==__===___ Contract award/signing_ _-- ------ Delivery= TI=I ===_=_==__ CONSULTINCG -|;|------- Individuals_ i i _ i i _ i _ _ _ _ _ _ _ _ _ _ Terms of Reference preparation Submission of proposals _ Start of assignment Firs ANNEI _.XL _ I Advertising in the GPN 10 Preparation and subtnission of prnposals_ _ = T= T========== Shortlisting= = T=T=========_L Tenderingj_ r _ ________ Evaluation (technical then financl) _ __ _ _ _ _ _ _ _ _ _ _ Negotiations _ Start of assigntnent_ = = -= = = _ = = = = Fie: ANNEX6P.XLS - Slicetl Anrnex 6 Page 10 of 11 Chart A6.4: Indicative Procurement Cycle, NCB Phasing or Procuremet Activities (in Monihs) Il 2 3 5 6 7 8 9 10 1 12 13 14 15 16 17 18 19 20 21 22 2324 CIViL WORKS_______________________= Site selection _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ Site acquisition i Site preParation Sketch plans Final plans Preparation of tender documents Advertisement/Invitation to bid Bid evaluation Contract negotiations and award Contractor mobilization Construclion Commissioning Final payments EQUIPMENT AND FURNITURE Specifications/lists Tender document preparation Advertisement/livitation to bid Tendering Bid evaluation Contract award/signing and delivery TEXTBOOI:S & EDUCATIONAL MATE IAI S Title development Edit/camera ready Specifications Tender document preparation Advertisement/invitation to bid Bid evaluation Contract award/signing Productivn/deliveer |Distribution _||+___+_+__ Tender docufeent preparation Advertisementiinvitation to bid |Bid evaluation = ___t-__tII SContract awad/signing Ters ofReferene preparation | Submission of proposalsi _ _ _ _ _ _ _ |Start of assignment 111l§il___l_t__III_ |Firms III____t__II 1 Advertisingyin the GPN = II I=== T =__ |TcmLs of refcrence preparation __=T=I==3 Preparation and submission of proposals|| _r__ . Evaluation (technical then financial) | | = | i | | | | __ l _ _ l l l _ Negotiations r I I I ___ _ T1 |Start ofassignment iI_llll1g= Fgc: ANNEX6P LS - Shect2 Annex 6 Page 11 of 11 Chart A6.5: Alternative Disbursement Channels ROUTE 1 ROUTE 2 ROUTE 3 (via finance bodies) (via Sector bodies) (direct) I .U I I . I Ministry of Finance - Sector Ministry I II Reigonal Finance _ Regional Education Bureau _ Bureau I I Zonal Finance I Zonal Education Departmnent jDeparment I I Woreda Finance L I Woreda Education Office - Office File: ANNEX6-P.XLS - Sheet4 Annex 7 EDUCATION SECTOR DEVELOPMENT PROGRAM Key Performance Indicators Base-Year 2001/02 Suggested Indicators 1995/96 /i Target Data Source BUDGETARY AND EXPENDITURE INDICATORS Education's share of the total budget (current FY) 13.7% 19.0% RFB/MOF Primary education's share of the total education budget 46.2% 65% RFB/MOF ACCESS INDICATORS Total number of primary schools ('000) 9,670 12,595 EMIS/REB Total primary (grade 1-8) enrollments ('000) 3,788 7,000 EMIS/REB QUALITY INDICATORS Share of lower primary (grades 1-4) teachers who are qualified 85% 95% EMIS/REB Total number of upper primary (grades 5-8) teachers 27,381 36,777 EMIS/REB Number of qualified upper primary teachers 5,729 20,000 EMIS/REB Total number of secondary teachers 12,143 17,463 EMIS/REB Number of qualified secondary teachers 4,910 10,760 EMIS/REB Number of core /2 primary textbooks in school 2,273 51,000 EMISiREB Grade 8 examination pass rate 61.7% 80.0% NOE Grade 4 sample assessment of learning achievement /3 n.y.a. n.y.a. NOE EFFICIENCY INDICATORS Primary school student:section ratio 52 50 EMIS/REB Secondary school student:section ratio 63 50 EMIS/REB Grade 1 dropout rate 28.5% 14.2% EMIS/REB Total primary school dropout rate 8.4% 4.2% EMIS/REB Average grade 4 to 8 repetition rate 12.8% 6.4% EMIS/REB Average grade 4 to 8 repetition rate for girls 16.2% 8.1% EMIS/REB Coefficient of primary school efficiency 60% 80.0% EMIS/REB EQUITY INDICATORS Gross primary enrollment rate in the two most under-served areas 16.2% 25.0% EMIS/REB Share of girls in primary school enrollment (grades 1-6) 38.0% 45.0% EMIS/REB n.y.a.: not yet available. 1/ Base data will be updated to 1996197, the year immediately preceding the start-up of ESDP. 2/ Language, math, and science. 3/ Survey for the baseline data will be undertaken in the second year of ESDP (1998/99). file: NEWANX7.XLS Annex 8 Page 1 of 2 ETHIOPIA EDUCATION SECTOR DEVELOPMENT PROGRAM Program Processing Budget and Schedule Planned Actual (At final PCD stage) A. Program Budget (US$000) US$571.5 570.0 Planned Actual .___ ___ ____ ___ ___ ____ ___ ____ ___ _ _ (At final PCD stage) B. Program Schedule ___ l Time taken to prepare the program (months) 12 months 10.3 months First Bank mission (identification) 5/97 5/97 Appraisal mission departure 2/2/98 2/2/98 Post-appraisal mission departure 4/3/98 4/9/98 Negotiations 4/13/98 4/13/98 Planned Date of Effectiveness 9/30/98 Prepared by: The Ministry of Education and Regional Education Bureaus Preparation assistance: Population and Human Resource Development Grant (Japan) Composition of Task Team: Bank Team Arvil Van Adams Task Team Leader AFTH4 Young Kimaro Economist AFTH1 Christine Pena Economist AFTH4 Harry Anthony Patrinos Economist HDDED Gebreselassie Okubagzhi Social Sector Specialist AFMET Iraj Talai Implementation specialist AFTSI Francesco Sarno Procurement specialist AFTS1 Richard James Financial Analyst ECFIN Paul Vandenheede Sr. Disbursement Officer LOAAF Sidi Boubacar Legal Counsel LEGAF Bengt Jacobson Architect Bank Consultant Richard Coppinger Civil Engineer Bank Consultant Extended Team, _ _ Emmanuel Lomo Architect AfDB Anders Grum Architect AfDB Pai Obanya Curriculum Development UNESCO Melesse Delegne Teacher Training Irish Aid Annex 8 Page 2 of 2 John Martin Teacher Training DflD/Irish Aid Arja Puurula Teacher Training Finland Gunnar Berlin Teacher Training Sida Agnetta Flinck Teacher Training and Distance Education Sida Jergen Danker Technical & Vocational GTZ Irene Gross-Herzog Technical & Vocational GTZ Peter Stoye Educational Materials Sida Robert Schoellhammer Educational Materials AfDB Colin Bangay Educational Materials EU John Hare Educational Materials DfID Riitta Oksanen Monitoring & Evaluation Finland Paul Silfverberg Monitoring & Evaluation Finland Egil Froyland Monitoring & Evaluation Norway Furio Rosati Tertiary Education Italy Pauline Rose Gender Issues FAWE Tom Tilson Distance Education USAID Tom Kellaghan Educational Assessment Examinations Irish Aid K. Ramachandran Non-Formal Education UNICEF Stephen Lister Implementation DflD Hannu Vikman Implementation Finland Mahieddine Saidi Capacity Building UNESCO/UNDP Quality Assurance Team Lead Adviser Marlaine Lockheed MNSHD Peer Reviewers Juan Prawda SA2PH Surendra Agarwal AFTS 1 Gerhard Tschannerl AFTSA Quality Assurance Group Jerome Chevallier AFTS2 Peter Moock EA1HR Eluned Roberts-Schweitzer HDDED Annex 9 Page 1 of 2 ETHIOPIA Education Sector Development Program Documents in the Program File A. Program Implementation Plan (Program Action Plan) B. Bank Staff Assessments B.1. Identification (May. 1997) B.l.l First Joint Donor TA Mission Technical Report on Civil Works, 1997. B.1.2 First Joint Donor TA Mission Technical Report on Curriculum Development, 1997. B.1.3 First Joint Donor TA Mission Technical Report on Teacher Training, 1997. B.1.4 First Joint Donor TA Mission Technical Report on Capacity Building, 1997. B. 1.5 First Joint Donor TA Mission Technical Report on Monitoring and Evaluation. 1997. B.1.6 First Joint Donor TA Mission Technical Report on Textbooks, 1997. B. 1.7 First Joint Donor TA Mission Technical Report on Gender, 1997. B.1.8 First Joint Donor TA Mission Technical Report on Distance Education, 1997. B.1.9 First Joint Donor TA Mission Technical Report on Education Finance, 1997. B.2 Pre-Appraisal (September, 1997) B.2.1 Second Joint Donor TA Mission Attachment I on MOE and Central Agencies, 1997. B.2.2 Second Joint Donor TA Mission Attachment 2 on Tigray Region, 1997. B.2.3 Second Joint Donor TA Mission Attachment 2 on Afar Region, 1997. B.2.4 Second Joint Donor TA Mission Attachment 2 on Amhara Region, 1997. B.2.5 Second Joint Donor TA Mission Attachment 2 on Oromia Region, 1997. B.2.6 Second Joint Donor TA Mission Attachment 2 on Somali Region, 1997. B.2.7 Second Joint Donor TA Mission Attachment 2 on Benishangul-Gumuz Region, 1997. B.2.8 Second Joint Donor TA Mission Attachment 2 on Southern People's Region, 1997. B.2.9 Second Joint Donor TA Mission Attachment 2 on Gambella Region, 1997. B.2.10 Second Joint Donor TA Mission Attachment 2 on Harari Region, 1997. B.2.1 I Second Joint Donor TA Mission Attachment 2 on Region 14, 1997. B.2.12 Second Joint Donor TA Mission Attachment 2 on Dire Dawa, 1997. B.3. Appraisal (February. 1998) B.3.1 Third Joint Donor Mission Attachment I on the FDRE's Project Action Plan, 1998. B.3.2 Third Joint Donor Mission Attachment 2.a on MOE and Central Agencies, 1998 B.3.3 Third Joint Donor Mission Attachment 2.b on all Regional Plans, 1998. B.3.4 Third Joint Donor Mission Attachment 3 on Implementation Issues, 1998. B.3 Social Sector Note (green cover), July, 1997. B.4 Country Assistance Strategy, May, 1997. B.5 Public Expenditure Review, June, 1997. Annex 9 Page 2 of 2 C. Other C.1 Government Education Sector Development Program (ESDP) Plans (April. August. and November, 1997) C.l.1 Center's Five-Year ESDP (1990-1994 E.C.), 1997. C.1.2 Revised Five-Year ESDP (1990-1994 E.C.): Tigray Region, 1997. C.1.3 Revised Five-Year ESDP (1990-1994 E.C.): Afar Region, 1997. C.1.4 Revised Five-Year ESDP (1990-1994 E.C.): Amhara Region, 1997. C.1.5 Revised Five-Year ESDP (1990-1994 E.C.): Oromia Region, 1997. C.1.6 Revised Five-Year ESDP (1990-1994 E.C.): Somali Region, 1997. C.1.7 Revised Five-Year ESDP (1990-1994 E.C.): Benishangul-Gumuz Region, 1997. C.1.8 Revised Five-Year ESDP (1990-1994 E.C.): Southern People's Region, 1997. C.1.9 Revised Five-Year ESDP (1990-1994 E.C.): Gambella Region, 1997. C.1.10 Revised Five-Year ESDP (1990-1994 E.C.): Harari Region, 1997. C.1. I Revised Five-Year ESDP (1990-1994 E.C.): Region 14, 1997. C.1.12 Revised Five-Year ESDP (1990-1994 E.C.): Dire Dawa, 1997. C.2 Policy and Human Resource Development (PHRD) Reports, Part I (Auaust. 1996) C.2.1 Household Demand for Schooling (Rural Survey). PHRD Study No. l .a, 1996. C.2.2 Household Demand for Schooling (HICE-WMS). PHRD Study No. 1.b, 1996. C.2.3 Cost and Financing of Education. PHRD Study No. 5, 1996. C.2.4 Cost-effectiveness and Program Evaluation of Major Interventions in Education. PHRD Study No. 8, 1996. C.2.5 Private and Social Returns to Schooling. PHRD Study No. 9.a, 1996. C.2.6. Private and Social Returns to Schooling. PHRD Study No. 9.b, 1996. C.2.7. Access to and Supply of Education Facilities and Services. PHRD Study No. 10, 1996.. C.2.8 Demand and Supply of Education Manpower: Alternative Scenarios. PHRD Study No. 15, 1996. C.2.9 Community Consultation and Participatory Development. PHRD Study No. 12, 1996. C.2. 10 The Role of NGOs and Private Sector in Social Service Delivery, Ethiopia. PHRD Study No. 13, 1996.. C.2.11 Survey of Educational Institutions. PHRD Study No. 16, 1996. C.2.12 Social Sector Review: Education Sector Synthesis, 1996. C.3 Policy and Human Resource Development (PHRD) Reports. Part 11 (Drafts) C.3.1 Strategy to Encourage Private Investment in Education. PHRD Study No. 1, 1998. C.3.2 Options for a Sustainable Provision of Textbooks and Instructional Materials. PHRD Study No.2. January, 1998 C.3.3 School Mapping. PHRD Study No. 3. January, 1998. C.3.4. Provision of non-formal Alternatives for the Expansion of Education Services. Study No.4. January, 1998. C.4 Program Action Plan. Draft. January, 1998. C.5 Implementating Sector Development Programmes in Ethiopia. Draft. January 1998, by Stephen Lister Annex 10 Statuis of Bank Group Operations in Ethtiopia IBRD Loans and IDA Credits in the Operations Portfolio Difference Between expected Original Amounit in USS Millions and actual Loan or Fiscal disbursements a/ Project ID Credit Year Borrower Purpose No. IBRD IDA Cancellations Undisbursed Orig Frm Rev'd Number of Closed Loans/credits: 61 Active Loans ET-PE-736 IDA30190 1998 GOVT. OF ETHIOPIA ENERGY 1I 0.00 200.00 0.00 197.38 0.00 0.00 ET-PE-755 IDA30320 1998 GOVERNMENT ROAD SEC. DEV. PROG. 0.00 309.20 0.00 303.22 0.00 0.00 ET-PE-764 IDA28420 1996 GOVT. OF ETHIOPIA WATER SUPPLY DEV&REIH 0.00 35.73 0.00 29.98 13.68 0.00 ET-PE-771 IDA28410 1996 ESRF I 0.(0 120.00 0.00 98.39 22.64 0.00 ET-PE-752 IDA27410 1995 GOVT. OF ETllfOPIA NATIONAI. SEEDS l'ROJE 0.00 22.00 0.00 17.51 11.34 0.00 ET-PE-753 IDA27400 1995 GOVERNMENT HAT. FERTILIZER PROJ 0.00 120.00 0.00 84.22 -2.89 0.00 ET-PE-758 IDA25880 1994 ,GOVERNMENT CALUB ENERGY DEV. PR 0.00 74.31 0.00 65.91 49.47 0.00 ET-PE-734 IDA24380 1993 ETlilOPIA ROAD REIIABILITATION 0.00 96.00 0.00 54.00 57.82 0.00 ET-PE-712 IDA21610 1990 GOVERNMENT SECOND ADDIS URBAN D 0.00 35.00 0.00 18.42 16.02 4.06 ET-PE-722 IDA21030 1990 GOVT MARKET TOWNS DEV 0.00 40.20 0.00 14.41 10.60 1.19 ET-PE-721 IDA18730 1988 GOVT. EDUCATION VII 0.00 70.00 5.94 13.97 15.50 9.60 Total 0.00 1,122.44 5.94 897.41 194.18 14.85 Active Loans Closed Loans Total Total Disbursed (IBRD and IDA): 194.19 1,537.75 1,731.94 of which has been repaid: 0.00 207.47 207.47 Total now held by IBRD and IDA: 1,116.50 1,269.01 2,385.51 Amount sold : 0.00 6.04 6.04 Of which repaid : 0.00 6.04 6.04 Total Undisbursed : 897.41 20.76 918.17 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. b. Rating of 1-4: see 00 13.05. Annex D2. Preparation of Implenenitation Summary (Form 590). Following the FY94 Annual Review of Portfolio performance (ARPP), a letter based system will be used (HS = highly Satisfactory, S = satisfactory, U unsatistactory, HU highly unsatisfactory): see proposed Improvements in Project and Portfolio Performance Rating Methodology (SecM94-901), August 23, 1994. Note: Disbursement data is updated at the end of the first week of the month. Generated by the Operations Information Systemn (OIS) Annex 11 Page 1 of 2 Ethiopia at a glance 12p8'/97 Sub- POVERTY and SOCIAL Saharan Low- Ethiopia Africa Income Deelopment dlamond Population mid-1996 (mitions) 58.1 600 3.229 GNP per capita 1996 (US$) 110 490 500 Lifa expectancy GNP 1998 (bitons USS) 8.4 294 1.601 Averag annual growth, 190416 Population (%) 2.5-3.0 2.7 1.7 GNP Gross Labor force (%) 2.3-2.9 2.6 1.7 per per / ~~~~~primar', Moat recent etim (ltest year avaible since t989) capita* . enrollment Poverty: headcount Index (% of populaeon) .. .. .. Urban population (% of otal population) 13 31 29 Lifeexpeclancy at birt (years) 49 52 63 Infant mortity (per 1,000 be bits) 112 92 69 Child manutrition (% of chihFen under 5) 47 .. to s Access to safe water (% ofpopulaton) 27 47 53 Illiteracy (X of populaton age 15+) 65 43 34 | Gross primary enrollment (% of sdxoage population) 27 72 105 E pia Male 33 78 112 - Low-income group Female 21 65 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 19SS 1995 1996 = r= . IEconomIc rstlos GDP (billnas USS) *- 6.7 5.8 6.0 Gross domestic investentUGDP 9.0 15.7 21.0 Openness of economy Exports of goods and services/GDP 8.2 14.5 13.1 Gros domestic savings/GDP .. 1.0 6.7 6.6 Gross natnal savingslGDP .. 3.4 14.1 13.3 Current account balance/GDP .. -5.6 -1.6 -7.7 Interest payments/GDP . 0.6 1.0 0.9 Savings Investment Total debt/GDP .. 77.7 178.9 168.1 ! Total debt sevie/exports 7.3 28.4 19.1 42.2 1 Present value of debt/GDP .. .. Present value of debt/exports .. Indebtedness 1975-B5 1986-96 1995 1996 199746 (average annual growth) -Ethiopia GDP .. 2.2 5.4 10.6 6.0 GNP per capita .. -0.4 3.1 7.8 2.9-3.5 Lowincomegrup Exports of goods and services .. -2.3 10.2 4.9 8.0 ! STRUCTURE of the ECONOMY 1975 1986 1995 1996 (% of GOP) Growth rates of output and Investment (%) Agriculture *- 53.2 .. I T Industry .. 12.7 .. .. |_i_ 50. Manufacturing *- 7.2 .. .. Services .. 34.1 .. .. Private consumpbon .. 84.6 825 81.6 s40 Genral government consumption .. 14.4 10.8 11.8 j -o O-GOP Imports of goods and services .. 16.2 23.5 27.5 1 1975-S 1986-96 1995 1996 I (average annualgrowth) , |Growth rates of exports and Imports (%) Agriculture .. 2.4 3.4 14.7 ioo T Industry .. -2.7 8.1 5.6 i 50. Manufacturing .. -3.2 9.0 7.6 o+ Services .. 5.4 7.2 7.0 20 i 4 Private consumption .. 2.8 4.7 5.5 o General govemment consumption .. -4.8 2.7 20.7 4o - Gross donesic ivestment .. 5.9 9.4 47.6 4O-l Imports of goods and services .. 0.4 6.9 26.8 . m Grossnatlonalproduct .. 2.1 6.0 11.0 Note: (i) Data in ftal yesr ending in the year shown, except debt data which is in calendar years. (h)1996 data are preliminary estimates. (ii) Curent account balance exc.iofficial capitl transfers. ' The diamonds show four key indicator in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. Annex 11 Page 2 of 2 Ethiopia PRICES and GOVERNMENT FINANCE 1976 1986 1995 1996 Infation Domestic prIflaconss (% change) 25 - Consumer prires 6.6 19.1 13.4 0.9 20 Implicit GDPfc deflator .. 29.5 13.4 0.9 t\ Govemment flnance - on commitmet basis (% of GOP) 9l o 93 9 Current revenue .. 16.8 17.2 18.0 92 93 94 9S 96 Current budget balance .. -2.7 1.5 1.1 I -GDP def. -OCP Overall surplus/deficit (excluding grants) .. -11.3 -8.2 -8.4 TRADE 1975 1986 1995 1996 (millions US$) Export and import levels (mIll. US$ Total exports (fob) 230 359 454 410 Commodity 1: Cofee .. 225 288 273 . t,4O Commodity 2: Leather and leather products .. 46 60 49 ! 2oo - Manufactures .. .. .. .. 1,000 Total imports (cif) 276 975 1,063 1,413 900 Food .. 283 181 215 . '° *J I Fuel and energy .. 186 169 215 Capital goods .. 249 334 460 o I I Export price index (1987=100) .. 96 130 111 90 91 92 93 94 95 96 Import price index (1987=100) .. 101 85 89 m *Exports *Imports Terms of trade (1987=100) .. 95 154 126 | BALANCE of PAYMENTS 1975 1986 1995 1996 (millions US$) Current account balance to GOP ratio (%) Exports of goods and services 330 549 784 783 Imports of goods and services 409 1,082 1,272 1,647 Resource balance -79 -533 -488 -864 -2 Net income -17 -33 -60 -44 Net current transfers 45 193 459 446 Current account balanr..e, 5 I II* I before official capital transfers -52 -373 -90 -461 Financing items (net) 45 420 343 544 7 - Changes in net reserves 7 -48 -253 -83 4 Memo: Reserves induding gold (mill. USS) 315 216 816 905 Conversion rate (locaYlS$) .. 2.1 5.9 6.3 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1996 1996 (milblons USs) Composltion of total debt, 1996 (mill. USS) Total debt outstanding and disbursed 344 5,206 10,308 10,076 1 IBRD 69 49 0 0 ; F G IDA 73 437 1,470 1,555 ._ 502 34 1555 Total debt service 25 159 152 346 IBRD 9 7 4 IDA 1 6 23 25 Composiffon of net resource flows Official grants 35 514 475 524 Official creditors 65' 527 188 211 Private creditors -3 59 -48 -210 Foreign direct investment 19 0 7 4 , Portfolio equity 0 0 0 0 6643 World Bank program Commitments 71 32 142 156 A-IBRD E-Bilateral Disbursements 26 50 84 142 8-IDA 0 - Other nultilateral F - Private Principal repayments 4 7 16 14 f C-IMF G - Short-tern Net fows 22 43 67 128 _ Interest payments 6 7 11 11 Net transfers 16 36 56 116 Development Economics 12/18/97 Note: (i) 1996 data are pretiminary estimates. (ii) The debt data includes ruble-denomninated debt. MAP SECTION 315' ETHIOPIA EDUCATION SECTOR DEVELOPMENT PROG (9) NATIONAL CAPITALS STATE/REGION BOUNDARIES ERITRE ZONE BOUNDARIES Khartoum Asmara* INTERNATIONAL BOUNDARIES 15'- 0 100 200 300 AM 500 L KILOMETERS A W-t T I Clr, S U D A\iN Goridtlel Four 13 Lake TanaJg- DJ One w", o tMetc!"! Goicim N. kp'Aqewowi! Ecisi -7 6 A -10, ;hevvo SOMALIA Addis A6a6a Si I lo ie rq h 1110 C." Ai i o m i Vl- 'y"y )N, "v, Moji 0 (1, LL, Rurk -5- Deroshl' 4- Burella -111. Liben Lake rkano > r) f UGANDA 35' K E N Y A 40' A5- 00