Document of The World Bank

FOR OFFICIAL USE ONLY

Report No.: 45140-ET

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 33.5 MILLION (US$ 50.0 MILLION EQUIVALENT)

TO THE

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

IN SUPPORT OF THE FIRST PHASE OF THE

GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM (GEQIP)

November 24, 2008

Human Development III Country Department Eastern Africa 3 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS (Exchange Rate Effective October 31, 2008)

Currency Unit = Ethiopian Birr SDR 0.67 = US$1 US$ 1.49 = SDR 1

Ethiopian Fiscal Year (EFY) July 8 – July 7

ABBREVIATIONS AND ACRONYMS

ABE Alternative Basic Education MDTF Multi-Donors Trust Fund APL Adaptable Program Loan MDG Millennium Development Goals ARM Annual Review Meeting M&E Monitoring and Evaluation AWP Annual Work Plan MEFF Macroeconomic and Fiscal Framework BOFED Bureau of Finance & Economic Development MOE Ministry of Education BPR Business Process Reengineering MOFED Ministry of Finance and Economic Development CAS Country Assistance Strategy MOU Memorandum of Understanding CRC Cluster Resource Center NCB National Competitive Bidding CSR Country Status Report NER Net Enrollment Rate CTE Colleges of Teacher Education NGO Non-Governmental Organization CPAR Country Procurement Assessment Report NLA National Learning Assessment CPD Continuous Professional Development OFAG Office of the Federal Auditor General DFID UK Department for International Development PAD Project Appraisal Document TDP Teacher Development Program PASDEP Plan for Accelerated and Sustained Development to End Poverty EFA Education For All PBS Protection of Basic Services EFY Ethiopian Financial Year PER Public Expenditure Review ELIC English Language Improvement Center PFM Public Financial Management ELID English Language Improvement Department PIM Program Implementation Manual ELTIP English Language Teaching Improvement Program PPAD Planning and Policy Analysis Department ELQIP English Language Quality Improvement Program PPF Project Preparation Facility EMCP Expenditure Management and Control Program PrPAD Procurement and Property Administration Department EMIS Education Management Information System PSCAP Public Sector Capacity Building Program EPTED Educational Programs and Teacher Education

Department PSEP Post-Secondary Education Project

ESDP Education Sector Development Program PSNP Productive Safety Nets Project ESAA Education Statistics Annual Abstract PTA Parent Teachers Association ETB Ethiopian Birr QCBS Quality Cost-Based Selection FPPA Federal Public Procurement Agency REB Regional Education Bureau FM Financial Management RGCC Regional GEQIP Coordination Committee FTI CF Fast Track Initiative Catalytic Fund RPPA Regional Procurement Public Agency GCC GEQIP Coordination Committee SAF School Self-Assessment Form GDP Gross Domestic Product SBEM School Based English Mentoring GECFDD General Education Curriculum Framework Development

Department SBD Standard Bidding Document

GEQAEA General Education Quality Assurance & Examinations Agency

SGG School Grant Guideline

GER Gross Enrollment Rate SIDA Swedish International Development Agency GEQIP General Education Quality Improvement Program/Project SIL Specific Investment Loan HIV/AIDS Human Immunodeficiency Virus/Acquired Immune

Deficiency Syndrome SIP School Improvement Program

HDP Higher Diploma Program SNNPR Southern Nations, Nationalities and Peoples Region GOE Government of Ethiopia SWAp Sector Wide Approach IBEX Integrated Budget and Expenditure TDP Teacher Development Program IDA International Development Association TEI Teacher Education Institution ICB International Competitive Bidding TOR Terms of Reference ICT Information Communications Technology TVET Technical, Vocational Education & Training IFR Interim Financial Report UNICEF United Nations Children’s Fund IT Information Technology UNESCO United Nations Educational, Cultural and Scientific Organization JBAR Joint Budget and Aid Review USAID United States Agency for International Development JRM Joint Review Mission WEO Woreda Education Office KETB Kebele Education & Training Board WOFED Woreda Office of Finance & Economic Development LAMP Leadership and Management Program ZEO Zonal Education Office MAP Management and Administration Program ZOFED Zonal Office of Finance and Economic Development

Vice President: Obiageli Katryn Ezekwesili

Country Director: Kenichi Ohashi Sector Director: Yaw Ansu

Sector Manager: Lynne D. Sherburne-Benz Task Team Leader: Halil Dundar

FOR OFFICIAL USE ONLY

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.

ETHIOPIA GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM

TABLE OF CONTENTS

Page

I. STRATEGIC CONTEXT AND RATIONALE.............................................................1

A. Country and sector issues................................................................................................................................... 1

B. Rationale for Bank involvement ........................................................................................................................ 4

C. Higher level objectives to which the project contributes ................................................................................ 4

II. PROJECT DESCRIPTION ........................................................................................5

A. Lending instrument............................................................................................................................................. 5

B. Program objectives and phases.......................................................................................................................... 5

C. Project development objective and key indicators........................................................................................... 7

D. Project components ............................................................................................................................................. 7

E. Lessons learned and reflected in the project design ...................................................................................... 13

F. Alternatives considered and reasons for rejection......................................................................................... 15

III. IMPLEMENTATION.............................................................................................17

A. Partnership arrangements................................................................................................................................ 17

B. Institutional and implementation arrangements ........................................................................................... 18

C. Monitoring and evaluation of outcomes/results ............................................................................................. 20

D. Sustainability ..................................................................................................................................................... 20

E. Critical risks and possible controversial aspects............................................................................................ 21

F. Loan/credit conditions and covenants............................................................................................................. 25

IV. APPRAISAL SUMMARY.....................................................................................26

A. Economic and financial analyses ..................................................................................................................... 26

B. Technical ............................................................................................................................................................ 28

C. Fiduciary ............................................................................................................................................................ 29

D. Social................................................................................................................................................................... 32

E. Environment ...................................................................................................................................................... 35

F. Safeguard policies.............................................................................................................................................. 35

G. Policy Exceptions and Readiness ..................................................................................................................... 35

List of Annexes Annex 1: Country and Sector or Program Background ................................................................ 36 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies.......................... 50 Annex 3: Results Framework and Monitoring.............................................................................. 51 Annex 4: Detailed Project Description ......................................................................................... 62 Annex 5: Project Costs................................................................................................................. 88 Annex 6: Implementation Arrangements...................................................................................... 93 Annex 7: Financial Management and Disbursement Arrangements .......................................... 106 Annex 8: Procurement Arrangements......................................................................................... 126 Annex 9: Economic and Financial Analysis.............................................................................. 141 Annex 10: Fast Track Initiative Catalytic Fund Grant Approval Letter..................................... 159 Annex 11: Safeguard Policy Issues............................................................................................. 161 Annex 12: Project Preparation and Supervision ........................................................................ 162 Annex 13: Documents in the Project File ................................................................................... 164 Annex 14: Statement of Loans and Credits ................................................................................ 165 Annex 15: Country at a Glance................................................................................................... 167 IBRD Map No. 33405 R1

ETHIOPIA GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM

PROJECT APPRAISAL DOCUMENT AFRICA AFTH3

Date: November 24, 2008 Team Leader: Halil Dundar Country Director: Kenichi Ohashi Sector Manager: Lynne D. Sherburne-Benz Sector Director: Yaw Ansu

Sectors: EP – Primary Education; ES – Secondary Education; EZ – General Education Themes: P – Education for All; S – Education for the Knowledge Economy

Project ID: P106855 Environmental screening category: “C” Lending Instrument: Adaptable Program Loan

Project Financing Data

[ ] Loan [X] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 50.0 Proposed terms: 40-year maturity with a 10-year Grace Period

Program Financing Data (US$m) for IDA Indicative Financing Plan Estimated Implementation Period

APL IDA Credit Total Effectiveness Date Credit Closing Date APL1 Credit 50.0 50.0 January 31, 2009 July 7, 2013

APL2 Credit 80.0 80.0 July 8, 2013 July 7, 2017

Total: 130.0 130.0

Financing Plan (US$m) for APL1 Source Local Foreign Total

BORROWER/RECIPIENT 84.5 0.0 84.5 IDA 22.5 27.5 50.0 FTI 1 31.5 38.5 70.0 FTI 2 44 54 98.0 Finland 4.3 5.3 9.6 Italy 9.2 11.2 20.4 Netherlands 11.9 14.5 26.4 Sweden 5.5 6.8 12.3 UK (DFID) 14 17.1 31.1 Other 6.7 8.3 15.0 Total: 234.1 183.2 417.3 Borrower: The Federal Democratic Republic of Ethiopia Responsible Agencies: Ministry of Finance and Economic Development P. O. Box 1905 Tel. 251-11-155 24 00, Fax. 251-11-515-51-35 Addis Ababa, Ethiopia Ministry of Education P. O. Box 1367 Tel. 251-11-155-31-35, Fax. 251-11-155-08-77 Addis Ababa, Ethiopia

Estimated disbursements (Bank FY/US$m) FY 2009 2010 2011 2012 2013

Annual 2.0 39.4 7.0 0.6 1.0 Cumulative 2.0 41.4 48.4 49.0 50.0 Project implementation period: Start: December 18, 2008 End: July 7, 2013 Expected effectiveness date: January 31, 2009 - Expected closing date: July 7, 2013 Does the project depart from the CAS in content or other significant respects? [ ]Yes [X] No Does the project require any exceptions from Bank policies? Have these been approved by Bank management? Is approval for any policy exception sought from the Board?

[ ]Yes [X] No [ ]Yes [ ] No [ ]Yes [X] No

Does the project include any critical risks rated “substantial” or “high”? [X]Yes [ ] No Does the project meet the Regional criteria for readiness for implementation? [X]Yes [ ] No Project development objective: The development objective of the Program is to improve the quality of general education (Grades 1-12) throughout the country. The development objectives of Phase 1 of the GEQIP (2009-2013) are to: (i) improve teaching and learning conditions in primary and secondary education; and (ii) improve management planning and budget capacity of the Ministry of Education and Regional Bureaus of Education. Project description: The proposed first phase Project consists of the following components: (i) Curriculum, Textbooks and Assessment; (ii) Teacher Development Program (TDP), including English Language Quality Improvement Program (ELQIP); (iii) School Improvement Program (SIP), including school grants; (iv) Management and Administration Program (MAP), including EMIS; and (v) Program Coordination, including monitoring and evaluation activities. Which safeguard policies are triggered, if any? None Significant, non-standard conditions, if any, for: Conditions of Board Presentation: None Conditions of Loan/credit Effectiveness

(i) Appointment of one international consultant each for procurement and education planning and one national consultant for financial management in MOE, and one national consultant for financial management in MOFED, in accordance with TORs satisfactory to IDA;

(ii) Submission of the final Project Implementation Manual (PIM), (including the School Grant Guidelines and Procurement and Financial Management Manuals), satisfactory to IDA;

(iii) Submission of the final Annual Work, Procurement and Training Plans, satisfactory to IDA; and

(iv) Ratification and Legal Opinion (Standard condition of Effectiveness). Specific Dated Covenants

(i) By March 31, 2009, MOFED in consultation with the OFAG to appoint Program auditors for GEQIP, in accordance with TORs satisfactory to IDA;

(ii) By April 1, 2009 and then annually, adoption of annual work plans; (iii) By June 30, 2009, appoint the independent Procurement Auditor ; (iv) By December 1, 2009, participation in review of the first annual project performance; (v) By April 1, 2010 and then annually, carry out annual independent procurement audits to

verify compliance with agreed procurement procedures; (vi) By April 1, 2011, finalization of national and regional GEQIP Annual Work Plans, including

a costing with contributions from Government and pooled DPs; (vii) By April 1, 2011, participate in mid-term review exercise; (viii) Submit IFRs for the Program for each fiscal quarter within 75 days of the end of the quarter;

and (ix) Submit annual audited financial statements and audit report within 6 months of the end of

each fiscal year.

- 1 -

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and sector issues

1. Country Background. Ethiopia is the second most populous country in Africa (estimated around 80 million, of which approximately 12 million are pastoralists and 80 percent of the population live in rural areas), and has a decentralized government structure. Having invested heavily in physical infrastructure and human resources over the past decade, the economy has achieved impressive growth (averaging 11.8 percent annually in the period of 2004-07). Despite recent growth and an abundance of natural resources, it is one of the poorest countries in the world with per capita income of less than US$180 in 2007 and 39 percent of the population estimated to live below the poverty line in 2004/05.1 Ethiopia is ranked 169 out of 177 countries on the United Nations Development Program’s Human Development Index. Under the highly centralized Derg regime (1975 to 1991), Ethiopia’s regional and woreda governments were marginalized. After the fall of the Derg, the Government of Ethiopia (GOE) adopted decentralization as the cornerstone for building a multi-ethnic democratic country. Combined with a commitment to fiscal decentralization, this signifies the Government’s intention to give local governments more direct and transparent control over public spending.

2. Ethiopia’s Development Strategy. Ethiopia is currently implementing its second poverty reduction strategy, known as the Plan for Accelerated and Sustained Development to End Poverty (PASDEP). The PASDEP shows a strong vertical coordination of sectoral strategies with the overall government strategy and is well integrated with the budget through the Macroeconomic and Fiscal Framework (MEFF) and the government/donor Joint Budget and Aid Review (JBAR). The PASDEP’s strategic vision is one of rapid and sustained growth primarily through scaled up development assistance and large domestic investments targeted at eliminating the poverty traps that have hindered the development of the country. Strengthening human resource capacity and achievement of the Millennium Development Goals (MDGs), of which education is a key element, is a cornerstone of the World Bank’s Country Assistance Strategy (CAS)2 covering 2008-2011. Several operations financed by IDA and other development partners (e.g., the Protection of Basic Services Project, Public Sector Capacity Development Project) also provide support in priority areas that will have significant benefits for the education sector.

3. Ethiopia’s Education Sector. In Ethiopia, primary education lasts 8 years and is split into grades 1-4 (primary first cycle) and grades 5-8 (primary second cycle). Secondary education is also divided into two cycles, each with its own specific goals. Grades 9-10 (secondary first cycle) provide general secondary education and, upon completion, students are streamed either into grades 11-12 (secondary second cycle) as preparation for university, or into technical and vocational education and training (TVET), based on performance in the secondary education completion certificate examination. General education comprises grades 1 to 12. The provision of education is the concurrent responsibility of federal, regional and local

1 The Ministry of Finance and Economic Development (MOFED) (2006). The Plan for Accelerated and Sustained Development to End Poverty (PASDEP) (2006-2010). 2 The CAS was presented to the Board in April 2008. The CAS continues to consolidate support for PASDEP’s governance, growth and service delivery targets, and this project will directly support service delivery efforts.

- 2 -

governments. The Federal Government plays the dominant role in the provision of post-secondary education, while also setting standards and providing overall policy guidance and monitoring and evaluation for the entire sector. Regional governments are responsible for the oversight of the training of primary school teachers, for providing primary textbooks and for adapting the primary syllabus to local conditions. Woreda (district) governments are responsible for paying and recruiting primary and secondary teachers, and for supervision and training of primary and secondary teachers.

4. The Government prepared the national Education and Training Policy (ETP) in 1994, and within the framework of the ETP launched the first five year Education Sector Development Program (ESDP I) in 1997 as part of a twenty-year education sector plan. As a result of a series of important organizational, financial and programmatic measures, the target set for ESDP I of raising primary enrollment from 3.7 million to 7 million was surpassed with enrollment reaching 8.1 million in 2000/01 and 13.5 million in 2005/06, when ESDP III was launched. Over this period, the gross enrollment rate (GER) increased from 61.6 to 91.3 percent and net enrollment from 52.2 to 77.5 percent. Repetition rates dropped significantly from 15.7 percent and 18.6 percent for boys and girls, respectively, in 1996/97, to 3.8 percent and 4.0 percent for boys and girls, respectively, in 2003/04. First cycle secondary enrollment trends show significant increases (GER from 17.1 percent in 2001/02 to 33.2 percent in 2005/06) and although second cycle secondary enrollment is low (20,795 in 2005/06), it is increasing. This has been a remarkable achievement and has occurred at the same time as a major expansion of both the TVET and higher education sub-sectors.

5. Despite rapid expansion of the education system, Ethiopia’s education sector faces the following four key challenges.3 Access to education opportunities continues to be an obstacle, especially for females and other “most vulnerable children”4, poor students and pastoral areas (e.g., Somali and Afar). Inequities in access to quality education are widespread, as better resourced schools are generally located in urban areas and in the non-emerging regions. There are socio-cultural barriers to participation (especially for girls in rural areas) and there are financial constraints with households paying a large share of non-salary recurrent education expenditures.

6. Achievements in access have not been accompanied by adequate improvements in quality. In some areas, quality has deteriorated at least partly as a result of rapid expansion. The 2007 National Learning Assessment (NLA) in grades 4 and 8 show that student achievement is below the required levels and has declined during the period of expansion. For example, the composite score for learning achievement in grade 4 shows a reduction from 48 percent in the 1999/2000 baseline learning assessment to 41 percent in the 2007 NLA. Similarly, the composite score for grade 8 shows a decline from 43 percent in 2000 to 40 percent in 2007. Key factors identified in the 2007 NLA relating to low student learning outcomes include school organization and management; teacher training on new techniques; school supplies; availability of textbooks, curricular and instructional materials, and language of instruction (see Annex 1 for details). However, completion rates at both grades 5 and 8 (used as a proxy indicator for quality)

3 World Bank (2005). Education in Ethiopia: Strengthening the Foundation for Sustainable Progress. 4 The most vulnerable children in Ethiopia are “rural & pastoralist children, orphans, children in remote locations, street children and drop outs”, as well as those with disabilities (see UNICEF 2008).

- 3 -

have improved over the past three years (from 57 percent to 65 percent in grade 5 and from 34 percent to 43 percent in grade 8).5

7. The rapid expansion of the education system has left a considerable financing gap between available funds and the anticipated cost of investments needed to improve and maintain quality. The indicative budget in the ESDP III is Birr 53 billion, but only Birr 37 billion is provided for in PASDEP.6 Under the proposed GEQIP, the estimated funding requirement for quality improvement is over US$1 billion (or Birr 10 billion) over a period of five years.7 At the same time, a high proportion of the education recurrent budget for primary and secondary education is allocated to teacher salaries (over 90 percent). In fact, the non-salary education budget at the woreda level has actually decreased from 1998 to 1999 EFY (JRM 2006). This has the effect of constraining the availability and predictability of resources for other inputs critical to support effective teaching and learning (e.g., training, textbooks and other materials, assessment, monitoring and evaluation systems, etc.) to enhance learning outcomes.

8. The capacity to plan, manage and monitor is weak. In Ethiopia, the management and financing of primary and secondary education is the responsibility of regions and woredas based on the national policy and standards developed and approved by the Ministry of Education (MOE). However, some regional and woreda governments have weak capacity to gather and report on key performance indicators on time in order to manage and monitor effectively the implementation of education reforms. The key issues related to policy making, management and monitoring capacity include: (i) weak institutional capacity for the delivery of general education, hampering implementation of a consistent and effective education policy; (ii) inadequate strategic planning and management capacity to support tasks such as policy development and medium to long term planning; and (iii) limited monitoring and evaluation systems making the reform process difficult to operationalize. Compounding these capacity gaps is the constant turnover of key staff in the sector at different levels of the system, as well as insufficient numbers of qualified staff.8

9. Government Strategy. The Government’s current vision for education development is described in the PASDEP, with the ESDP III serving as the overarching framework, giving high priority to quality improvement at all levels. Within the framework of the ESDP III, the MOE has developed a draft General Education Quality Improvement Program9 (GEQIP). A key recommendation of the education sector Annual Review Meeting (ARM) in 2007 was that MOE and Development Partners (DPs) work together to implement the GEQIP through a pooled funding mechanism. The proposed Program will support the implementation of the first four of the six components of the GEQIP, namely: (i) Teacher Development Program (TDP) including English Language Quality Improvement Program (ELQIP); (ii) Curriculum, Textbooks and Assessment; (iii) Management and Administration Program (MAP) with an Education Management Information System (EMIS) sub-component; and (iv) School Improvement

5 2007 PASDEP Report. 6 Ministry of Education (2006). Five Year Education Sector Capacity Development Strategic Plan: Main Report. 7 If the GEQIP is fully implemented, the anticipated fiscal shortfall is US$800 million based on the MOE’s preliminary cost estimates. 8 UNESCO (IIEP)/UNICEF (expected 2008). Capacity Building within the Education System in Ethiopia. 9 The draft GEQIP is outlined in an Amharic document, which is a key companion document to the design of the proposed Program.

- 4 -

Program (SIP) with a School Grants sub-component.10 Government has also prepared the preliminary cost estimates and financing plan of the proposed program, suggesting a funding gap of over US$800 million over the next five years.11

10. Government’s Letter of Development Policy). The Government prepared a letter of development policy, on the basis of the GEQIP program document, outlining the sector policy focusing on quality improvement in general education. The letter reflects the views of both national and international partners and there is strong consensus around these policy areas.

B. Rationale for Bank involvement

11. There are three main rationales for Bank involvement. First, the operation is consistent with the second strategic objective of the CAS covering the period 2008-2010, whose aim is “improving access to and quality of basic service delivery”. The operation will support the Government’s GEQIP to improve the quality of education, together with the on-going Protection of Basic Services (PBS) Project, which provides block grants to regional and local governments to support the delivery of basic services, including general education. The GEQIP will concentrate on quality reforms such as the new curriculum implementation, textbook development and provision, school grants to enhance school-based development reforms, as well as institutional development at the federal, regional and woreda levels. On the other hand, the proposed Second PBS Project will continue to provide support through block grants, which are used mostly for recurrent expenditures for staff salaries, including salaries of primary and secondary school teachers. The operation is also consistent with the objectives of the Africa Action Plan, which calls for investment in the achievement of MDGs, including education. Second, the Bank is well-placed to draw upon global experience and innovations in the design and implementation of education reform programs, including substantial experience in low income countries. The learning experience will be beneficial for other low income countries, especially in Sub-Saharan Africa. Third, the Bank’s financial and technical contribution is critical in leveraging other development partners’ financing, particularly the Fast Track Initiative Catalytic Fund (FTI CF). Analysis of financing requirements for general quality improvement and currently confirmed commitments shows that Bank resources continue to be required to fill a substantial funding gap to achieve the objectives of the proposed program, although the Government still needs to mobilize additional resources for the program financing.

C. Higher level objectives to which the project contributes

12. At the international level, the project will contribute to the attainment of the education and gender related MDGs. At the national level, the program will support the Government’s PASDEP, which recognizes the strategic importance of education within the context of poverty alleviation and economic growth. The operation is also consistent with the objectives of the

10 The last two components of the GEQIP, not included in the current project, are Civics and Ethical Education and Information Communications Technology. 11 Cost estimates are preliminary based on the draft national GEQIP and a costing exercise of basic inputs. These estimates reflect the sum of proposed quality interventions and do not account for (a) the composition and sequencing of proposed expenditures; (b) possible effiency gains as a result of project interventions; and (c) fiscal impact of project interventions. Cost estimates will be reviewed and updated as part of the planned Education Expenditure Review, financed by development partners, in partnership with the World Bank, during the first year of the GEQIP

- 5 -

CAS, contributing to the Government’s objective to improve access to and quality of basic service delivery through the implementation of the GEQIP.

II. PROJECT DESCRIPTION

A. Lending instrument

13. The proposed support from IDA will be provided within the framework and principles of a thematic Sector Wide-Approach (SWAp) through a pooled funding mechanism, focusing only on “quality improvement in general education”. The proposed IDA instrument to support the GEQIP will be an Adaptable Program Loan (APL), implemented in two phases. The first phase of the APL will be US$50 million equivalent, implemented over a period of four years (2009-2013). The expected date of effectiveness of the IDA Credit is January 31, 2009, and the Closing Date is July 7, 2013.

14. The FTI CF will provide US$70 million in a grant channeled through the pool during the first three years of the program (see Annex 10 for CF Grant Approval Letter).12 The expected date of effectiveness of the FTI CF Grant Agreement is January 31, 2009, following the effectiveness of the IDA Credit. It is expected that five development partners13 will be contributing approximately US$115 million during the first phase of the program. Regions will allocate on average, at a minimum, 5 percent of recurrent expenditures towards non-salary, GEQIP-related inputs. The federal government will gradually increase its contribution during the first phase of GEQIP, as a share of the total donor partner contributions to the pooled fund as follows: 5 percent (Year 1), 10 percent (Year 2), and 15 percent (Years 3 and 4) (see Annex 5).

15. The Bank’s Project Appraisal Document (PAD) is regarded as a key reference document not only for the Bank’s APL Phase 1 financing, but also for the program as a whole, including the FTI CF grant and development partners joining the pooled funding mechanism.

B. Program objectives and phases

16. The overall objective of the proposed Program is to improve the quality of general education (Grades 1-12) throughout the country.

17. The proposed APL will be implemented in two phases over a period of eight years. The first phase of the APL will be implemented over a period of four years and the second phase will be implemented over a period of four years with additional funding expected from other donor partners. The IDA contribution to Phase 1 of the APL is estimated at about US$50 million, and the estimated amount for Phase 2, if approved, is about US$80 million. An overlapping APL, where the second phase could start prior to the completion of the first phase, has been agreed with Government. If the Government completes the activities defined under the triggers for Phase 2, then Phase 2 can begin earlier. The APL has been chosen as the most appropriate

12 The Government anticipates the second grant from the FTI CF in the amount of US$98 million in the spring of 2009 and has included the anticipated funds in the cost and financing plan. However, the FTI Secretariat has not confirmed the timing and amount of the second grant and indicated that Ethiopia is eligible to apply but the CF Committee will make the decision. Approval is also subject to the performance of the initial allocation. 13 The amount provided by each development partner is summarized in Annex 5.

- 6 -

instrument, because the longer-term perspective of an APL would give the Government support to carry out a system-wide quality improvement reform, while providing the flexibility to adjust and refine interventions on an ongoing basis. At the end of Phase 2, it is expected that the general education sub-sector will be better equipped to increase access to higher quality general education, and will have the capacity to make more efficient and effective use of its physical, financial and human resources to deliver quality education for all.

18. The Bank’s assistance will be divided into two phases:14

Phase 1: Setting Standards and Foundations for Quality Improvement Reforms (2009-2013)

19. The development objectives of the First Phase of the GEQIP (2009-2013) are to: (i) improve teaching and learning conditions in primary and secondary education and (ii) improve management, planning and budget capacity of the Ministry of Education and the Regional Education Bureaus. The proposed interventions can be grouped in two broad categories: (a) quality improvement for general education through a curriculum reform and implementation for Grades 1-12 in all subjects, followed by the provision of textbooks compliant with the curriculum, new training programs for teacher educators and pre- and in-service teacher training and school grants to enhance community based management of schools and (b) capacity development to effectively plan, manage and monitor service delivery at the federal, regional, woreda and school levels, and with respect to education management information systems, especially at the federal and regional levels. Given the extremely poor conditions of most primary and secondary schools, especially in more disadvantaged regions and rural areas, it is important to note that the first phase of the GEQIP will focus on setting standards and foundations for quality improvements, and provide “essential inputs” for improved teaching and learning conditions within the concept of the effective school model through a set of integrated basic inputs based on available resources available.

Phase 2: Expansion and Consolidation of Quality Improvement Reforms (2013-2017)

20. Phase 2 (US$80 million from IDA), if approved, will have a duration of four years and scale up interventions and programs to have full coverage and scope, and consolidate and complete reforms for quality improvement in general education based on the lessons learned under the first phase. During this phase, additional resources will be mobilized from both domestic and external resources to address any gap in financing to expand and consolidate quality improvement reforms launched under the first phase of the GEQIP. At the end of Phase 2, the following achievements are expected: (i) improved learning outcomes; (ii) improved completion rates in Grades 5 and 8; and (iii) improved Gross Enrollment Rate (GER) in the first and second cycles of secondary education.

21. Compliance with some key performance indicators for Phase 1 would also function as “triggers” for consideration of the Second Phase of Bank support. Table 1 below summarizes the list of triggers for moving from Phase 1 to Phase 2.

14 Pooled funding DPs also plan to provide support in two phases for the implementation of the GEQIP, but they have not yet confirmed their estimated contributions for the second phase.

- 7 -

Table 1: Triggers for the Second Phase of the APL

Components Triggers for Phase II (to be assessed before authorization of Phase II of APL

Curriculum, Textbooks, Assessment

Contracts are signed for the development, printing, and delivery to woredas of textbooks and teachers guides in Grade 1-8 in the four core subjects of mathematics, the mother tongue, English, and the sciences,15 following open and competitive selection from offers made by publishers.

Teacher Development Program

The pre-service teacher education strategy has been reviewed and revised, as appropriate, taking into account the findings of the impact and sustainability study of TDP2 implementation, conducted with Terms of Reference (TORs) satisfactory to IDA.

School Improvement Program

The Parent Teacher Associations (PTAs)/School Boards of 75 percent of primary and secondary schools are managing their own operational budgets consistent with the Bluebook Guidelines.

Management and Administration Program

Finalization of national and all regional ESDP IV plans.

C. Project development objective and key indicators

22. The overall purpose of the GEQIP is to improve the quality of general education (Grades 1-12) throughout the country. The Program will be monitored closely through a set of key performance indicators (see Annex 3). The first phase of the GEQIP will also support the development of a robust monitoring and evaluation sub-component, and will assist the MOE in further improving the existing EMIS capacity.

23. The monitoring and evaluation (M&E) system of the program will rely on the Government’s M&E system, which provides key system performance data on a regular basis through its EMIS. Baseline data for program outcomes in terms of learning outcomes are available based on the results of national-sample based student learning assessments of grades 4 and 8. Baseline data for several key performance indicators (e.g., percentage of teachers with qualifications) are available from the EMIS data. Under Phase 1, indicators based on available data (including input-based indicators) will be used to provide the first quantitative evidence concerning program performance. The first phase of the GEQIP will also support several monitoring and evaluation studies and the development of monitoring and evaluation capacity in the MOE (see Annex 3).

D. Project components

24. The proposed Phase 1 of the Project consists of the following components: (i) Curriculum, Textbooks and Assessment; (ii) Teacher Development Program (TDP), including English Language Quality Improvement Program (ELQIP); (iii) School Improvement Program (SIP), including school grants; (iv) Management and Administration Program (MAP), including EMIS; and (v) Program Coordination, including monitoring and evaluation activities.

15 The science subjects include environmental science (G1-4), integrated science (G5-6), and biology, chemistry, and physics (G7-8).

- 8 -

25. GEQIP takes a holistic approach to improving the quality of general education by adapting the concept of the school effectiveness model (World Bank 2000). The framework is particularly suitable for GEQIP given the politically and fiscally decentralized structure of the Ethiopian education system, paired with the Government’s recent efforts to implement a broad sector reform to improve the quality of education. While GEQIP does not address all eight domains of the school effectiveness model, the components of the first phase Project are designed to align with ongoing sector activities supported by the Government and development partners. The “value added” contribution of GEQIP, towards fulfilling the objective of improving the quality of general education, rests on the extent to which the components are implemented in coordination with other inputs. GEQIP will contribute to the overall quality improvement of the Ethiopian education system by providing support for activities that complement inputs in other domains, such as teacher salaries and school construction, financed mostly through PBS and the government budget.

26. The cross-component linkage is an important feature of GEQIP, which is designed to enhance coordination and synergy among components that have operated separately in the past. The newly revised curriculum will serve as a cross-cutting foundation for the first three components of the program. The revised curriculum will guide the revision of the textbooks and teacher guides, as well as the teacher educator and pre- and in-service teacher training program curricula that will be developed under GEQIP. The MAP also cuts across the other components since capacity building is needed within each project component.

27. Each component includes a set of priority programs, is closely linked to the other components, and is implemented at different tiers of government. As a result, each level of government may have some responsibility for the implementation of each component to achieve the project’s development objectives. To achieve the overall objectives, the project requires: (i) a flexible approach in design so that resources are provided to MOE and implementing units at the national level and regions based on their work plans; and (ii) effective coordination not only among components/sub-components, but also among different levels of government and implementing units. Therefore, the base costs under the components are indicative only, as allocation of budgets will be defined annually by federal, regional and institutional work plans.

Component 1: Curriculum, Textbooks and Assessment (estimated base cost: US$146.7 million)

28. The main objectives of this component are to: (a) implement a new school curriculum; (b) provide textbooks and teacher guides developed for the new curriculum; and (c) align student assessment and examinations with the new curriculum and reform the inspection system. The component will consist of the following sub-components.

29. Sub-component 1.1: Curriculum Reform and Implementation. This sub-component will support the reform of the curriculum for Grades 1-12 to improve the quality of general education. The project will support the following activities: (i) orientation programs about the new curriculum; (ii) development of a new strategy for teaching science and mathematics; (iii) alignment of the curriculum for the Alternative Basic Education (ABE) with the new revised general education curriculum; and (iv) monitoring and evaluation of the implementation of the new curriculum.

- 9 -

30. Sub-component 1.2: Teaching and Learning Materials. In the context of available resources and capacity, priority will be given to the development and provision of textbooks and teacher guides for Grades 9-12 mathematics, biology, chemistry, and physics which national and international publishers can readily adapt from their market-tested series; provision of Grades 9-12 textbooks and teacher guides in the other subjects; and provision of textbooks and teacher guides for Grades 1-8. Where the required quantities are small, as for books for certain languages of instruction at the primary level, the project will seek alternative methods of provision, including negotiation with contracted publishers for translation and publication in those languages. The acquisition of textbooks and teacher guides will be made using open and competitive procurement procedures and be delivered to MOE in designated woredas.

31. Sub-component 1.3: Assessment and Examinations. Under the first phase of the project, this sub-component will focus on detailed review and analyses to develop strategies for implementation during the second phase. The analytical work would include identifying measures to strengthen the capacity of the MOE General Education Quality Assurance and Examination Agency (GEQAEA), including the Inspectorate Department, to ensure that national examinations and assessments are aligned with the newly developed curriculum. The program may support the expansion of the NLA to include Grades 10 and 12. The program may also support preliminary work on inspection system reforms, based on the results of the Inspection Reform Study to be conducted during Year 1 with GEQIP support.

Component 2: Teacher Development Program (TDP) (estimated base cost: US$62.2 million)

32. The component will support the Government’s efforts to increase the supply of effective teacher educators, teachers and facilitators in primary and secondary education through the implementation of teacher education, and in-service and pre-service teacher development programs. MOE has gained some implementation experience under the previous Teacher Development Program (TDP1), financed through a pooled funding arrangement by a consortium of bilateral development partners. TDP1 closed in June 2008. Under GEQIP, MOE plans to continue to support teacher development activities, including improved targeting of access to primary teaching, enhanced practical teaching experience during teacher training, expanded in-service professional development opportunities and training for the facilitators (or teachers) in the ABE Centers.

33. Sub-component 2.1: Pre-Service Teacher Education Quality Improvement. GEQIP will provide support to enhance the pre-service teacher training program for regular and ABE programs. The teacher training program will focus on six elements: (i) improved selection of entrants to teacher training; (ii) provision of teaching materials in the teacher education institutions (TEIs); (iii) enhanced practicum for teacher candidates; (iv) in-service pedagogical training for teacher educators; (v) enhanced English language supports in the TEIs; and (vi) provision of a training program for ABE facilitators.

34. Sub-component 2.2: In-Service Teacher Education Quality Improvement. The in-service teacher training sub-component includes revision of the following program areas: (i) enhancing the provision of continuous professional development at schools; (ii) providing English language training for teachers of English and developing a cadre of school-based English

- 10 -

mentors who will support all teachers using English as a medium of instruction; (iii) developing a teacher career structure and licensing and re-licensing system which recognizes professional development and behavior; and (iv) upgrading primary teachers from a certificate qualification to a diploma qualification. The Department of Education Programs and Teacher Education (EPTED) of the MOE will take the main responsibility for management and implementation of this sub-component in collaboration with the English Language Improvement Department (ELID).

Component 3: School Improvement Program (SIP) (estimated base cost: US$151.7 million)

35. The objectives of the School Improvement Program (SIP) component are to: (i) improve the capacity of schools to prioritize needs and develop a school improvement plan; (ii) enhance school and community participation in resource utilization decisions and resource generation; (iii) improve the government’s capacity to deliver specified amounts of schools grants at the woreda level; and (iv) improve the learning environment by providing basic operational resources to schools.

36. Sub-component 3.1: School Improvement Program. The project would build on a pilot program that included developing a School Self-Assessment Form (SAF) for schools, through which schools identified problem areas, developed priorities based on identified problems and ultimately developed a School Improvement Plan to address the prioritized needs. A broad revision of the SAF and School Improvement Plan templates is proposed, to ensure that the instruments are appropriate, user-friendly for schools, and result in prioritized operational plans. Capacity building at the woreda and school levels will also be delivered through the MAP component described below to ensure that the SAF and School Improvement Plan processes are properly implemented. An ongoing monitoring process through the School Grants Utilization Survey, to be conducted every two years, will ensure that the instruments and training materials are updated regularly for appropriateness and effectiveness.

37. Sub-component 3.2: School Grants. The key issue facing the provision of school grants in Ethiopia is not related to difficulties in disbursement, financial management or accountability16; rather, it is the acute constraints on woreda budgets which result in a much lower overall level of disbursement across the country than is prescribed in the Bluebook. The project will support the implementation efforts at the federal, regional and woreda levels, particularly with respect to establishing an effective system to monitor the flow of funds. The school grants sub-component has been designed to address this constraint through the provision of a minimum amount of funds based on enrollment rates to all schools and ABE Centers. The grant will be used to finance elements of the SIP. To assist with implementation of the school grants sub-component, the draft School Grants Guidelines (SGGs) have been developed and expected to be finalized before Effectiveness. These Guidelines provide guidance on all aspects of implementation at federal, regional, woreda and school/community levels and are cross referenced with the SIP guidelines. The SGGs are consistent with Government’s Bluebook guidelines, but will be implemented as a stand-alone document to ensure that key responsibilities and outputs are understood at different levels.

16 With the exception of Oromiya, where disbursement has been a problem.

- 11 -

Component 4: Management and Administration Program (MAP) (estimated base cost: US$21.4 million)

38. This component supports the Government’s initiatives to strengthen the planning, management, and monitoring capacity of MOE, REBs, and WEOs to implement system-wide primary and secondary education programs effectively and efficiently. The following objectives will be addressed: (i) improve the effectiveness and efficiency of education planning, management, resource allocation and utilization through human capacity development; and strengthen the linkages between the woreda, regional and federal levels; (ii) design and implement a transparent, low-cost and productive system of management and administration; and (iii) strengthen the EMIS including improved collection and use of system data for planning, management, evaluation and policy making. During the first phase of the GEQIP, this component will support capacity development for: (a) education sector planning and management; (b) school planning and management; and (c) EMIS at all levels. During the first year, the predominant activity will be a detailed analytical and design work (i.e., MAP Design Study), followed by a more comprehensive implementation program from the second year.

39. Sub-component 4.1: Capacity Development for Education Sector Planning and Management. A key priority for this sub-component is to build capacity for federal and regional level strategic planning and budget analysis, and to strengthen systems for resource allocation and transfer. This will include analysis of capital and recurrent expenditure needs, including salary and non-salary expenditures. Gender budgeting in education has been identified as a particular planning priority (and MOFED has developed training materials in collaboration with the MOE). The MAP Capacity Development Design Study (MAP Design Study) will be carried out under this sub-component. No other activity will be implemented in Year 1 (though non-pooled DPs will continue such support); other programs will be developed and implemented starting in Year 2, based on the results of the impact and needs assessment.

40. Sub-component 4.2: Capacity Development for School Planning and Management. The objective of this sub-component is to contribute towards strengthening participatory school planning, management and monitoring for the purpose of greater effectiveness, efficiency and accountability in school performance, and improved teaching and learning. An essential aspect of improving quality will be to improve performance through strengthening planning and management capacity at the point of service delivery, i.e. the school. This sub-component has two major elements (i) SIP training and (ii) the Leadership and Management Program (LAMP), which was started under TDP1. This sub-component will be closely coordinated with the SIP, including application of the specific planning and assessment tools to be developed under SIP. Additional programs will be developed and implemented from the second year, dependent on findings from the MAP Design Study.

41. Sub-component 4.3: Education Management Information Systems (EMIS). Under the first phase of the GEQIP, the MOE plans to strengthen the existing EMIS system through a combination of: (i) capacity development for policy analysis and planning; (ii) renewal, renovation, repair and ongoing maintenance of information technology (IT) infrastructure at the federal, regional and woreda levels; and (iii) several enhancement initiatives that will make education information more accessible and relevant. This sub-component will support MOE and

- 12 -

REBs to: (a) strengthen the existing education management information systems; and (b) build MOE capacity for policy analysis and planning to improve education provision.

Component 5: Program Coordination and Monitoring and Evaluation (estimated base cost: US$10.4 million)

42. Effective implementation of the GEQIP will depend upon efficient coordination mechanisms, proper financial management and procurement practices, timely implementation, and effective monitoring and evaluation of project outcomes. This component will provide the necessary resources for effective coordination and monitoring and evaluation, and the implementation of an information and communications strategy at the national and sub-national levels (see Annex 6). There are two main sub-components:

43. Sub-component 5.1: Program Coordination. The GEQIP will be implemented at the federal, regional and woreda levels as well as at the participating public universities and teacher training institutions, responsible for pre-service and in-service teacher development programs, and coordinated by the MOE with the regional and woreda governments, and the participating institutions. At the federal level, the Planning and Policy Analysis Department of the MOE will coordinate the implementation of the GEQIP, reporting directly to the State Minister for General Education, with inputs from relevant departments and institutions. The technical support for implementation includes a team of short and long-term consultants, specializing in project implementation (including project management, financial management, procurement and M&E), resident in MOE, and providing regular support to regions. MOE will play a key role in technical and procurement aspects of the project, whereas MOFED will be responsible for financial management aspects. At the regional level, it was agreed that each region will have a similar institutional arrangements as the federal level, and the Planning Department of the REB in each region will coordinate the implementation of the regional GEQIP, reporting directly to the Head of the REB. Funds would flow from MOFED to BOFED to WOFED as directed and then directly to the implementing institutions (i.e., CTEs, schools) while keeping the REBs informed about the transactions.

44. Sub-component 5.2: Monitoring and Evaluation (M&E). This sub-component will support the establishment of a robust M&E system at the federal, regional and woreda levels to monitor and evaluate project outcomes and broader educational trends to provide feedback to improve performance. The MOE will continue to update data to facilitate accurate reporting on the key progress indicators identified in the Results Framework as described in Annex 3. Most of the data for monitoring project outcomes will come from existing mechanisms such as EMIS, or regular project reports, supplemented by project preparatory studies and a baseline survey undertaken prior to effectiveness. A number of surveys are planned as part of the M&E strategy as follows: (i) baseline survey at the beginning of Year 1; (ii) School Grants Utilization Survey at the end of Years 1 and 3; (iii) mid-term review in the middle of Year 2; and (iv) exit survey at the end of Year 4 to assess impact of Phase 1 and to plan for Phase 2. In addition, various policy and evaluation studies will be financed to address key issues (e.g., quality, financing, teacher effectiveness and utilization), as well as annual reviews and impact assessments under the supervision of the PPAD. The M&E sub-component will include the development and implementation of a gender and equity needs assessment that covers all of the GEQIP

- 13 -

components during Year 1. Efforts will be made to connect education review processes with PBS review processes, including the JBARs.

E. Lessons learned and reflected in the project design

45. The project design takes into account lessons from previous IDA-financed projects in Ethiopia, including the Education Sector Development Project17 which closed in July 2004, and the Post-Secondary Education Project (PSEP) which has been under implementation since 2005, as well as similar projects elsewhere in the region. The Education Sector Development Project was problematic at the outset as a result of overly ambitious project objectives and a complex design structure, even though the project was rated “marginally satisfactory”. The PSEP is being implemented at the MOE and nine participating universities. The project had limited improvement in implementation performance in 2008, but its implementation performance has been slow, due to: (i) weak project design which allocated a fixed amount of funding to each participating university irrespective of size, need and implementation capacity; and (ii) weak implementation capacity (including project coordination, procurement, financial management and M&E) and high staff turnover at MOE and universities, resulting in delays in the effective use of innovative grants. Finally, the project takes into account lessons learned under the TDP1 which closed in June 2008, and was financed by a group of bilateral donors over the past five years.18 In addition, the project design reflects lessons and findings from ongoing analytical and project preparation work in the areas of education expenditures, teacher education, institutional assessment, EMIS, and so forth. Lessons have also been learned from non-education projects (e.g., PBS, PSCAP and PSNP).

46. Key lessons learned and reflected in the project design include the following:

• For education projects in decentralized systems, performance-based grants, together with capacity development support, are effective at bringing about institutional changes. A combination of minimum conditions and performance measures has provided regional governments with strong incentives to improve key institutional performance areas like planning, budgeting, financial management and project implementation, but also with respect to good governance. Performance of institutions will be monitored during Year 1 and performance-based grants may be included in GEQIP in Years 2 or 3.

17 The designs of the Education Sector Development Project and GEQIP show some similarities. Both have national coverage and support interventions to improve the quality of primary and secondary education such as the provision of textbooks and teacher training. Both are also complex operations, including a number of key areas of focus from infrastructure development to quality improvement. Despite similarities, major differences exist between these two operations. First, the Education Sector Development Project was an IDA-financed project, while GEQIP is a pooled funding operation, including funds from IDA, FTI and DPs, and use government procurement, financial management and M&E procedures to the extent possible. Second, the Education Sector Development Project supported the development of the entire education sector from primary through tertiary education, but the GEQIP plans to support only general education through the provision of a set of integrated inputs to improve the quality of education for Grades 1-12. 18 It is important to note that there was no comprehensive review of the TDP1 at the end of the project. In the absence of such a review, the Midterm Report was used to identify lessons learned under the TDP.

- 14 -

• Focus on schools through the provision of a coordinated set of key inputs in a coordinated manner to enhance the effectiveness of service delivery. In Ethiopia, a decentralized service delivery system centered on schools and the communities they serve at the regional and woreda levels will be critical for effective service delivery. Delivery modalities for key activities such as teacher development and school improvement (including a school grants program) have already been established by the Government. However, the Government also identified as a key lesson under the ESDP: the need to move from a “component-driven” modality to a more holistic and effectively decentralized planning and implementation process focused on schools and key areas of quality, access, monitoring and evaluation and capacity building. The design of the GEQIP is based on a holistic, integrated set of interventions (referred to as “the Package” by the Government).

• Realistic assessment of institutional capacity and level of readiness before project effectiveness will increase the chances for success. Lessons learned from TDP1 as well as PSEP indicate that the Government may have difficulty providing quarterly financial reports according to World Bank guidelines, which could possibly delay disbursement of the second tranche onwards. In addition, TDP1 took some time to gain momentum. Thus some components under GEQIP are likely to experience delays in achieving full implementation unless sufficient incentives are introduced and adequate capacity development activities through technical assistance and training are provided. Second, project effectiveness is considerably enhanced when there is strong leadership, political ownership and commitment to education reform at the national and sub-national levels. Third, the amount allocated per region must be sufficient and focused to have a catalytic impact on the implementation of education sector plans.

• Effective and efficient project delivery requires a jointly agreed results-based M&E system, including well-defined and measurable performance indicators, to be used effectively as a tool for monitoring progress during implementation.

• Sustainability of project interventions will increase if country systems and procedures for procurement, financial management and M&E arrangements are used to the extent possible. This requires the identification and introduction of well-designed risk mitigating factors to avoid implementation delays under the program. Through the use of country systems, implementation procedures and reporting requirements are harmonized, transaction costs are minimized, and strong government ownership is ensured. In addition, the sustainability of project interventions will be enhanced substantially as they will be integrated into the design of the government-led sector plans.

• Program effectiveness is considerably enhanced when sustained technical assistance and training are available, especially in the context of low capacity in project implementation, procurement, financial management and M&E, as well as rapid turnover of staff.

- 15 -

• Effectiveness of donor support is considerably enhanced when support is provided for the implementation of a comprehensive Government-led education plan. Although the GEQIP is a first step towards a comprehensive approach using a pooled funding mechanism, Government and donors realize that the design and financing modality for the GEQIP program would need to go much further to align donor rules and procedures with government systems in order to increase government ownership and reduce transaction costs. Consequently, Government and donors have agreed to design the GEQIP within the principles of a SWAp with several features: (i) pooling of resources by bilateral development partners, IDA and FTI CF, in addition to both federal and regional government resources; (ii) reliance on government rules and procedures for disbursing, monitoring and reporting program expenditures to the extent possible; (iii) development of a common and simplified monitoring framework for program outcomes aligned with existing government M&E systems; and (iv) focus only on quality aspects of the general education sub-sector. In addition, GEQIP will build linkages with ongoing programs supported by non-pooled donors (e.g., USAID and UNICEF).

F. Alternatives considered and reasons for rejection

47. Development Policy Lending (DPL) and a Sector-Wide Approach (SWAp). The possibility of using the Development Policy Lending instrument was considered but ultimately rejected by the Government. The Government requested support from IDA, FTI CF, and bilateral development partners to support the implementation of the GEQIP through the provision of a set of related quality interventions as both federal and sub-national governments have not been able to allocate adequate resources during the expansion of general education. Key elements of the early design have been retained – providing “earmarked’ resources under the pooled funding arrangements based on the review of annual work plans prepared by the implementing units (e.g., MOE, REBs, universities and CTEs). Institutional reforms regarding financial management, procurement and management and planning of service delivery are also integral to the performance criteria for the program.

48. Integrating GEQIP with PBS. The advantages of establishing GEQIP as part of PBS would be to ensure closer coordination and synergy with government planning, management, monitoring, and financing mechanisms (most of which are government processes). This may include closer integration with PASDEP planning and monitoring processes and the JBAR process and would strengthen cooperation with MOFED. However, the disadvantages are: (i) the possibility that several DPs will not fund GEQIP if it is a component of the PBS, and therefore the possibility of less funding; (ii) the possibility that GEQIP funding (as part of PBS) may be cut or suspended in the event of any ‘political’ issues between the donor community and the Government; (iii) the FTI CF grant could not be included in the PBS since it has been provided specifically for quality improvements in general education; and (iv) GEQIP funds are supposed to be earmarked for quality enhancement interventions in general education at all levels of government. It would be operationally difficult to earmark funds for general education within PBS, as it provides “block grants” to regions and woredas.

49. Pooling FTI CF and IDA Credit. The Government and DPs agreed to use a pooled funding mechanism, including the then anticipated FTI CF Grant, during the preparation of the GEQIP Document. This concept was also endorsed during the Project Concept Note (PCN)

- 16 -

stage in October 2007 for the proposed IDA-financed GEQIP project. The CF grant in the amount of US$70 million was approved in December 2007 in Dakar. However, the processing timetable for the FTI CF Program Document and the CF Grant Agreement remained very tight, since very limited technical work had been carried out on the design of the GEQIP. Originally, it was expected that GEQIP would be appraised and the CF Grant Agreement would be signed in July 2008. In the absence of adequate technical work on the design of the proposed Program (e.g., implementation plan, including work and procurement plans; procurement, financial management and M&E arrangements), the alternative of processing the CF Grant separately to finance one or two of the GEQIP components that were well-advanced (e.g., school improvement or teacher development) was considered. However, this was rejected for two reasons. First, the GEQIP was considered as an integrated set of interventions, maximizing the impact of available funds from Government, IDA, and development partners, including the CF, using a pooled funding mechanism. Second, the Government agreed to accelerate preparatory work, in part supported by the Project Preparation Facility (PPF).

50. Specific Investment Loan (SIL) vs. Adaptable Program Loan (APL). Use of the Specific Investment Loan (SIL) instrument to support the GEQIP was considered, but was rejected for three reasons. First, the GEQIP reflects Government strategies, priorities and time lines to improve the quality of general education during the period of 2009-2013. The APL with two phases is more compatible with the Government program. Second, under the APL, performance would be judged against defined triggers before proceeding to the next phase. The design of the APL will provide a stronger annual monitoring framework, flexibility, and better linkage between disbursements and performance, thereby increasing donors’ ability to manage risks in an uncertain environment. Third, government ownership of the APL is strong.

51. Scope of the First Phase of the GEQIP. The program will focus on general education, covering primary and secondary schools in urban and rural environments. The primary and secondary schools would be supported following a “whole school development” approach based on the GEQIP by providing a set of “core” inputs in a holistic and coordinated manner to improve the quality of general education. The Government and DPs considered whether to prepare a single investment project in selected regions, with a focus on a few interventions to maximize the impact of the project and learn lessons before further expansion. While the scope of the first phase of the GEQIP is still ambitious and complex, requiring effective coordination and implementation capacity at each level of government, it was agreed that national coverage will be more effective, supporting the implementation of regional GEQIP, and allowing each region to make adjustments tailored to its particular plans. There are several reasons for selecting a design that is national in scope. First, this will permit the implementation of the curriculum reform to be linked naturally to other components such as textbook development and provision, teacher training, and assessment/examination reform, while achieving minimum standards across the country. Second, adopting GEQIP as a national program also strengthens the decentralization process in the education sector and promotes equity among regions. Third, the risks related to the national coverage of the program would be minimized through the preparation of a prioritized implementation schedule based on the annual work and procurement plans.

52. Investment in infrastructure. Unlike the IDA-financed Education Sector Development Project, the GEQIP does not provide support for the improvement and expansion of

- 17 -

infrastructure for primary and secondary schools. Poor physical conditions are likely to be a major risk for the achievement and sustainability of the project’s development objective as most schools are overcrowded and do not meet minimum standards, and lack facilities such as water and toilets. Separate and coordinated efforts will be made to improve the physical conditions of school infrastructure, including: (i) community-supported infrastructure programs for primary schools; (ii) regional infrastructure programs financed by the regional councils; and (iii) several other projects (e.g., Water, Sanitation and Hygiene Program; UNICEF Girls’ Education Program, UN Girls Education Initiative, and the Local Investment Grants program as it rolls out). The MOE and regional councils will coordinate and monitor the availability and quality of infrastructure facilities, and examine their impact on the quality of general education.

III. IMPLEMENTATION

A. Partnership arrangements

53. For Ethiopia’s education sector, there are currently 15 DPs that provide support linked to specific sector initiatives and that are represented in the Education Technical Working Group.19 In line with the Paris Declaration on Aid Effectiveness, the Government has shown leadership in improving coordination of a number of development actors and initiatives to support the implementation of the GEQIP. The Bank and other key donor partners are playing a catalytic role in the broader aid effectiveness agenda by promoting mechanisms of mutual accountability, emphasizing government-owned processes and promoting alignment of development assistance to country needs. In the education sector, a group of bilateral donors financed the TDP1 through a pooled funding mechanism over the past four years. In other sectors, the Bank and DPs established pooled funding mechanisms to support the government-led sector programs (e.g., PBS, PSNP).

54. Ethiopia joined the FTI Partnership in 2004 and the CF Grant will constitute an important share of the overall GEQIP financing plan. The CF committee approved an initial allocation of US$70 million in December 2007 and a second CF grant in the amount of US$98 million is anticipated to be available during the first phase of GEQIP20 once progress on the use of the initial allocation can be shown. It was agreed that the CF Grant would be pooled with the IDA Credit and funds from other donors joining the pooled funding mechanism, and that the Bank’s PAD will be used as a reference document for the CF program document.

55. The GEQIP will be financed by a group of DPs through pooled funding arrangements. Currently, the UK Department for International Development (DFID), the Netherlands, Italy (Italian Development Cooperation), Finland and Sweden have stated their commitment. In addition, several agencies (USAID and UNICEF) expressed interest in supporting the implementation of the GEQIP through their own projects without joining the pooled funding

19 DPs include the following: African Development Bank, European Commission, Finland, Germany, Ireland, Italy, Japan, Netherlands, Sweden, UK, UNESCO, UNICEF, USA, World Food Program, and the World Bank. Four DPs provide support through Component 1 of the PBS Project; six DPs supported the implementation of the TDP using a pooled funding mechanism, and 12 DPs provide their support solely through projects. 20 Based on discussions with the FTI Secretariat, the MOE anticipates the second grant in the amount of US$98 million and this is included in the cost estimates and financing plan, with implications for the design and interventions of the program. However, the second grant needs to be approved by the CF Steering Committee.

- 18 -

arrangements. The MOE will coordinate support of non-pooled partners in the implementation of the GEQIP at the federal and regional levels, based on the integrated GEQIP plans as support and implementation plans of the non-pooled partners become clearer during the first year of the GEQIP implementation.

56. The Government’s objective of increased harmonization with all donors will be addressed through a Memorandum of Understanding (MOU) among the pooled fund DPs that reflects mutual commitment to the Government’s objectives of achieving enhanced cooperation, and decreasing the transaction costs of partnership for the Government. The MOU will describe the mutual roles and responsibilities of signatory partners. Further reduction in the administrative burden on Government will be achieved through streamlined modalities for monitoring and reporting on selected outputs and outcomes.

B. Institutional and implementation arrangements

57. The GEQIP will be implemented at three levels of government – federal, regional and woreda levels – corresponding to the roles and responsibilities for the management and financing of general education. At the federal level, in addition to overall coordination of GEQIP implementation, the MOE will also be responsible for certain assigned activities, including large procurement packages (such as textbook, vehicles, and IT equipment) on behalf of Regions. In addition, universities at the federal level and Colleges of Teacher Education (CTEs) at the regional level will be responsible for teacher development activities in close coordination with the MOE and REBs, respectively. Regions and woredas will be responsible for the implementation of specific activities based on their respective GEQIP plans that are consistent, on the one hand, with national standards and on the other, with regional priorities. According to a defined formula, each region will receive a grant to implement the agreed regional GEQIP plan (see Annex 5).21 Oversight and coordination arrangements of the GEQIP are as follows:

58. Ministry of Education (MOE). At the federal level, overall oversight and coordination will be provided by the GEQIP Coordinating Committee (GCC). The GCC will: (i) provide overall strategic guidance for the GEQIP implementation; (ii) oversee the equitable distribution of the budget to regions, institutions and components; (iii) ensure that agreed performance targets and timelines for activities under the different components are met; and (iv) ensure effective program implementation and proactively address critical issues that could hinder implementation. The Planning and Policy Analysis Department (PPAD) of the MOE will have overall responsibility for the day-to-day oversight, coordination, monitoring and evaluation of project activities, in close cooperation with MOFED and regional governments.

59. Ministry of Finance and Economic Development (MOFED). MOFED will be responsible for financial management and reporting on the GEQIP. The specific responsibilities of MOFED will be to: (i) have overall responsibility for GEQIP financial management aspects; (ii) disburse resources to the implementing institutions (federal and regional); (iii) provide guidance, training and support to the various implementing agencies (BOFEDs, WOFEDs, Universities, CTEs, REBs, MOEs, schools) to ensure that financial management (FM) aspects

21 Base costs are based on preliminary cost estimates from federal and regional plans, and subject to variation based on regional priorities in line with federal standards and guidelines, set by MOE (see Annex 5).

- 19 -

are handled satisfactorily in all project institutions; (iv) assist the regional BOFEDs and WOFEDs on financial management, disbursement and reporting of the GEQIP resources, so as to ensure the timely implementation and reporting on the program; and (v) prepare consolidated quarterly and annual Interim Financial Reports (IFRs). A GEQIP focal person is recommended within MOFED to work closely with the MOE to oversee financial management and reporting on the project.

60. At the regional level, the eleven Regional Education Bureaus (REBs), including two city administrations, will be responsible for coordinating and implementing the GEQIP. The REBs will be responsible for the overall quality and timeliness of project implementation in their respective jurisdictions, and for allocation of program resources (i.e., school grants) to woredas consistent with the SGGs. The Planning Department of the REB will coordinate the implementation of the GEQIP at the regional level and will report to the head of REB, but will also report to the MOE PPAD regarding the activities of the GEQIP.

61. The Bureau of Finance and Economic Development (BOFED) will be responsible for (i) transferring the budget to the implementing units at the regional level with close coordination with the REB based on the agreed work plans; and (ii) preparing consolidated financial reports for submission to MOFED. It should be noted, however, that BOFED will serve not only as conduit for transfer of the money to the concerned institutions, but will also be involved in the planning and budgeting of the program activities. For this purpose, a local GEQIP focal person will be identified in each BOFED to work closely with REB.

62. At the woreda level, the Woreda Manager’s office of the Woreda Education Office (WEO) will be responsible for the SIP component of GEQIP, addressing financial management/performance requirements; preparing multi-year and annual investment plans and budgets consistent with appropriate consultation and accountability for good practices; processing sub-project proposals; appraising sub-projects; supervising implementation; and ensuring sound maintenance of assets. The WEO will be responsible for maintaining project monitoring information and reporting on progress in a timely fashion to the regional GEQIP coordination body (REB Planning Department). Lastly, the school grants will be implemented at the school level, distributed through WOFED.

63. Woreda Office of Finance and Economic Development (WOFED). WOFEDs will receive funds for the school grants from the BOFEDs and pass these on to schools.

64. At the school level, PTAs, School Boards, and School Improvement Committees will be responsible for the allocation of resources transferred under the SIP component. In addition, PTAs/School Improvement Committees (SICs) will be involved in the school self-assessment and improvement processes in their respective schools and the issuing of school grants.

65. The project will use existing government structures and systems to the extent possible. Any new or additional processes will be simple and will be introduced as measures to strengthen national systems and procedures. Adequately staffed and skilled personnel are keys to program implementation. The adoption of a common M&E framework will streamline data collection and analysis, and build capacity at the regional and woreda levels to produce more timely and reliable information on program outputs and outcomes. The Program Coordination and M&E

- 20 -

component is designed to enhance linkages between federal, regional, woreda and school levels. This component will be supported by a team of short and long term consultants, in the areas of education planning, monitoring and evaluation, procurement and financial management, as well as in technical areas such as teacher development, curriculum and textbook specialist, and teacher development.

C. Monitoring and evaluation of outcomes/results

66. The GEQIP will support the enhancement of the current M&E system at the federal and regional levels to monitor GEQIP progress and provide continuous feedback to improve project performance. To achieve these objectives, MOE will continue to develop the existing M&E system in order to address the data and monitoring and evaluation requirements. REBs will carry out the main elements of GEQIP monitoring using data collected at the regional and woreda levels. The data will be reviewed and compiled at the MOE level to feed into the M&E system. The Results Framework in Annex 3 details the expected outcomes to be achieved through this project, and the agreed key performance indicators.

D. Sustainability

67. Three key factors could affect the sustainability of the GEQIP.

(i) Commitment to the GEQIP. Both the federal and regional governments are highly committed to education reforms supported under the GEQIP, including the achievement of the education related MDGs. The findings of the social assessment showed that there is a strong demand for quality education in Ethiopia, as indicated by the growth of enrollment and willingness of low income parents to contribute to education when the public sector is able to provide effective service delivery. In addition, GEQIP explicitly promotes a budget planning process with the participation of regions and other implementing institutions to ensure that the priorities of citizens are reflected in school improvement activities. Ownership of the program at the school level, particularly for the SIP (including school grants), is crucial to the long-term sustainability of the project.

(ii) Technical Viability. A rigorous appraisal process of the proposed project and a strong M&E sub-component will ensure that proposed activities are viable and that the project will deliver expected benefits in improving the quality of education through cost-effective approaches.

(iii) Sustainability of GEQIP Investments. Four main investment issues have been considered for this project: (i) activities initiated by the project are not likely to generate additional post-project costs, except minor operations and maintenance costs for EMIS, costs of salaries for the additional number of teachers that may be required to lower average classroom sizes and the costs associated with upgrading teacher qualification and skills; (ii) regions will allocate on average, at a minimum, 5 percent of recurrent expenditures towards non-salary, quality related inputs starting in Year 3; (iii) the federal government will gradually increase its contribution during the first phase of GEQIP, as a share of the total donor partner contributions as follows: 5

- 21 -

percent (Year 1), 10 percent (Year 2), and 15 percent (Years 3 and 4); and (iv) the project will strengthen the capacity of the MOE, regions and woredas to plan, manage and monitor for more effective service delivery and accountability to their stakeholders (see Annex 9 for a summary of economic and fiscal impact analysis).

E. Critical risks and possible controversial aspects

68. The table below summarizes the potential risks and risk mitigation/minimization measures.

Risk factors

Description of risk

Ratinga of

risk

Mitigation measures

Ratinga of

residual risk Sector Governance, Policies and Institutions

The ESDP III is in its third year of implementation. Improving education quality, especially primary and secondary is a cornerstone of the plan. Government’s self-developed GEQIP strategy is the central component of the quality initiative, an effort supported by all sector donors.

Low The MOE has been working closely with donors to develop an integrated program in support of the GEQIP. Monthly donor meetings with the Minister and more frequent design meetings with the PPAD is helping to ensure harmonization among donors and common objectives.

Low

The resource requirement to fully fund basic quality improvement is large and will depend upon contributions by a number of donors, FTI and Government. A stable supply of funds from DPs will be necessary to ensure continuity of the program, especially those activities which depend upon annual replenishments such as the textbook and school grants sub-components.

Moderate DPs are using the Bank’s PAD to negotiate commitments with their respective home offices. Sufficient lead time has been provided in the design of the program to allow for discussions with home offices. The lead donors (DFID, the Netherlands, Italian Development Corporation) expect to have formal authorizations by the end of December 2008.

Moderate

- 22 -

Risk factors

Description of risk

Ratinga of

risk

Mitigation measures

Ratinga of

residual risk Operation-specific Risks

Technical/Design Monitoring and reporting capacity, especially at lower levels of government, is weak.

Substantial Monitoring and reporting mechanisms will be integrated into existing government systems as much as possible. Capacity of relevant government staff and consultants to carry out M&E will be strengthened through training and mentoring.

Moderate

Complex program requires detailed implementation planning at all levels of government and by universities.

Substantial The MOE will strengthen the relevant units through additional hiring, technical assistance, and focused training. The MOE, each region and each participating institution have identified focal persons for each component. A PIM with work/procurement plans has been prepared with a specific timeline for hiring/assigning new staff positions, training government staff, and achieving project benchmarks.

Moderate

Provision of textbooks based on the new curriculum may not be available during the first two years, diminishing the quality impact of the program.

Substantial Adequate procurement capacity would be established before Effectiveness through: (a) MOE would hire a consultant with experience in curriculum/textbook procurement to assist the MOE and regions in procuring textbooks in a timely fashion using Bank procurement procedures and guidelines; and (b) more flexible approach by MOE for the procurement of textbooks by allowing regions to procure "re-prints" during the first year and by using the adaptation method for science and mathematics textbooks for grades 9-12.

Moderate

- 23 -

Risk factors

Description of risk

Ratinga of

risk

Mitigation measures

Ratinga of

residual risk Provision of incentives to students,

teachers, and TEIs may be insufficient to have the expected benefits under the TDP1. Earlier activities under TDP1 have built up expectations of additional payments (e.g., top ups, honoraria, incentive payments) for teachers, lecturers and other government employees engaging in some project related activities. Such payments will not be made in GEQIP.

High The program will continue to finance part of recurrent costs of training programs supported under TDP1 (such as travel and per diem) during the first phase of the GEQIP. Non-financial incentives will be explored and discussed during the initial phase. The Government is committed to mainstreaming these activities in the regular operations of the colleges and universities.

Moderate

School grants may not have the expected effects on the quality of schooling, because of (a) low grant amount (b) replacement of the existing school grants available in some regions; and (c) weak accountability.

Moderate (a) The implementation of the school grants program will be reviewed (through an audit) and revised based on the lessons learned; (b) consideration will be given to complementing already existing schools grants and developing a monitoring system to assess the new design; (c) SGGs have been prepared and discussed, and will be distributed to all schools before the implementation of the program; and (d) PTAs/school boards, who will be involved in the implementation of the program, will be properly oriented to play an effective role in increasing accountability in the use of funds.

Low

- 24 -

Risk factors

Description of risk

Ratinga of

risk

Mitigation measures

Ratinga of

residual risk Implementation capacity and sustainability

Decentralized service delivery, which now accounts for most of the delivery of basic services in the country, is still relatively new (especially decentralization to woredas which started in 2003), and capacity is weak.

Substantial Various capacity building initiatives are taking place to strengthen capacity at the central and sub-national levels (e.g., PSCAP). The Business Process Re-engineering (BPR) is expected to re-organize the MOE and REBs to further strengthen its capacity for more effective service delivery. For the implementation of the GEIQIP, MOE and regions have already; (i) taken serious steps to enhance capacity for planning, formulating policies, implementation, and M&E during program preparation; (ii) identified component coordinators and focal persons at the MOE and regional levels; and (iii) requested a PPF to further strengthen MOE implementation capacity, including procurement and financial management, before effectiveness.

Moderate

Harmonization and donor coordination issues can be challenging with a multi-donor operation like the GEQIP.

Moderate Discussions have taken place regularly at meetings of the Donor Group, including the GEQIP sub-group. The PAD will be a reference document for all the pooled partners. In addition, a MOU defining the basic principles of cooperation will be signed by the DPs before effectiveness.

Low

Financial management

The large number of institutions handling project funds poses inherent challenges. There are some weaknesses in the country’s PFM system notably capacity gaps at the local levels (Woredas). School grants program is new and country-wide roll out needs close monitoring.

High FM and reporting arrangements are aligned with country’s regular PFM system and reporting arrangements, which enhances controls and minimizes additional work. MOFEDs and BOFEDs will provide FM support to other implementing entities. SGGs are being developed. Extensive dissemination and training will be conducted before the start of the program. Action plans to address GEQIP-specific and broader FM weaknesses in sector institutions have been agreed.

Substantial

- 25 -

Risk factors

Description of risk

Ratinga of

risk

Mitigation measures

Ratinga of

residual risk Procurement The MOE has worked before with IDA-

financed projects, but has proven to have little procurement capacity. Similarly, regions and most participating institutions have little familiarity with Bank procurement procedures and have weak procurement capacity. Strong management is required to ensure that procurement staff respond to comments or clarifications in a timely and effective manner.

High Weak MOE procurement capacity may be partly mitigated through (a) additional procurement staff; (b) training, and (c) the use of consultants, where capacity gaps exist. If engaged, the roles and responsibilities of the procurement agent/consultant will be clearly defined and the work of the consultants carefully monitored and facilitated by MOE management.

Substantial

Social and environmental safeguards

The project has a C rating because no environmental or adverse social impacts will arise from project activities.

Low Safeguard colleagues will be consulted if the project objectives or components should change.

Low

Overall Risk (including Reputational Risks)

Substantial Moderate

Risk Rating – H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk)

F. Loan/credit conditions and covenants

Conditions of Board Presentation: None

Conditions of Effectiveness:

(i) Appointment of one international consultant each for procurement and education planning and one national consultant for financial management in MOE, and one national consultant for financial management in MOFED, in accordance with TORs satisfactory to IDA;

(ii) Submission of the final Project Implementation Manual (PIM), (including the School Grant Guidelines and Procurement and Financial Management Manuals), satisfactory to IDA;

(iii) Submission of the final Annual Work, Procurement and Training Plans, satisfactory to IDA; and

(iv) Ratification and Legal Opinion (Standard condition of Effectiveness).

Conditions of Disbursements: None

- 26 -

Specific Dated Covenants

(i) By March 31, 2009, MOFED in consultation with the OFAG to appoint Program auditors for GEQIP, in accordance with TORs satisfactory to IDA;

(ii) By April 1, 2009 and then annually, adoption of annual work plans;

(iii) By June 30, 2009, appoint the independent Procurement Auditor ;

(iv) By December 1, 2009, participation in review of the first annual project performance;

(v) By April 1, 2010 and then annually, carry out annual independent procurement audits to verify compliance with agreed procurement procedures;

(vi) By April 1, 2011, finalization of national and regional GEQIP Annual Work Plans, including a costing with contributions from Government and pooled DPs;

(vii) By April 1, 2011, participate in mid-term review exercise;

(viii) Submit IFRs for the Program for each fiscal quarter within 75 days of the end of the quarter; and

(ix) Submit annual audited financial statements and audit report within 6 months of the end of each fiscal year.

IV. APPRAISAL SUMMARY

A. Economic and financial analyses

69. Rationale for public investment in general education. The rationale for public sector intervention in primary and secondary education is universally accepted in both developed and developing countries. The economic and social externalities that are attributable to education are sizeable and are essential for sustained and rapid economic development and poverty alleviation. Market forces alone are insufficient to enable individuals to invest optimally in basic education, especially where poverty is endemic and acute.

70. Rates of return to investment in education quality. Empirical evidence is limited on Mincerian rates of return to education in Ethiopia based on recent household surveys. The 2005 Country Status Report (CSR), Education in Ethiopia: Strengthening the Foundation for Sustainable Progress, reviews seven rates of return to education studies for Ethiopia and incorporates the authors’ own estimates. The authors note that all the studies, as well as their own estimates, suffer from data limitations and other shortcomings. Drawing on the most reliable estimates, the authors conclude that rates of return to education for secondary and post-secondary education are appreciably higher than those for primary education.

71. In recent years, the empirical evidence on the importance of the quality of education, in addition to access, has led to a greater emphasis on quality and measuring learning outcomes. Hanushek and Wößmann (2007) present evidence that there is “a statistically and economically

- 27 -

significant positive effect of the quality of education on economic growth…that is far larger than the association between the quantity of education and growth.”22

72. Investments in primary and secondary education which improve the quality of services delivered and strengthen the outcomes of these processes can help to alleviate poverty in several ways. First, there is a proven link between years of schooling, what is learned in school, and economic productivity. Second, in an economic system such as Ethiopia's which is focused in the medium term on global economic participation, a qualified, competitive and adaptable labor force is a critical underpinning of success. Third, research literature demonstrates that educated populations, especially with respect to girls and women, have lower birthrates, healthier populations, participate more in civic life, and tend to be more self efficacious in their daily lives.

73. Economic growth and skill development. In Ethiopia, the diversification of the country’s human resource base is central to the federal government’s strategies to promote new and sustainable sources of economic growth while improving living standards. A key goal is to facilitate the expansion of diversified agricultural and rural non-farm sectors as well as the development of new industrial activities. High quality, relevant education provides the foundation to produce a skilled, globally competitive labor force and fosters the development of growth sectors, such as ICT, electronics, engineering, banking, insurance and financial services.

74. Equity and poverty impact. Evidence across developing countries shows that the provision of properly targeted high quality education alleviates the intergenerational transmission of poverty. Primary and secondary schooling can provide the main avenues for social mobility as educated individuals commonly enter professions requiring higher skill levels than their parents. The GEQIP focuses on raising education quality through improvements in the learning environment, teacher competencies, assessing learning outcomes and management of the education system. The GEQIP objectives are consistent with existing evidence concerning the interventions that increase quality in primary and secondary education.

75. By strengthening the secondary education system, a better prepared cadre of students will be equipped to enter post-secondary education. Post-basic education reduces poverty through redistribution and empowerment. Specifically, it generates empowerment through the building of social capital and facilitates redistribution by expanding opportunities for employability, income and social mobility. Improving the quality of secondary school graduates indirectly also improves the quality of individuals who may eventually enter the ranks of primary school teachers as well as those who may go on for higher education.

76. Fiscal Sustainability Analysis. In order to maximize the fiscal sustainability of the proposed interventions, the GEQIP is designed to: (i) avoid displacement of federal and regional contributions to non-salary recurrent expenditures, and (ii) gradually increase the federal and regional contributions for quality inputs over time. Regions will allocate on average, at a minimum, 5 percent of recurrent expenditures towards non-salary, GEQIP-related inputs. At the federal level, the MOE will gradually increase its contribution during the first phase of GEQIP,

22 Hanushek, Eric A., and Ludger Wößmann. 2007. “The Role of Education Quality in Economic Growth.” Policy Research Working Paper 4122, World Bank, Washington, D.C

- 28 -

as a share of the total DP contributions to the pooled fund as follows: 5 percent (Year 1), 10 percent (Year 2), 15 percent (Year 3), and 15 percent (Year 4.

77. The project is designed so that the pooled funding will finance limited recurrent expenditures for operating costs to carry out specific activities under the TDP component. These expenditures include per diem and travel expenditures for teaching staff and candidate teachers participating in the practicum and selection programs. Such expenditures were financed under TDP1 extensively, and the Government requested that these expenditures continue to be financed until the end of the first phase of the APL to avoid disruption in the implementation of the GEQIP. They are expected to be part of the budget of universities and teacher training institutions after the completion of the first phase.

78. Data are not yet available to examine the potential fiscal impact of the first phase of the GEQIP, but the fiscal impact is expected to be low since it will focus on the improvement of the quality of the existing institutions and schools. It is therefore expected that these activities can be sustained over the long run. However, the Government’s budget would need to be prepared to replicate the planned institutional and budgetary activities and procedures that will be initiated through the five components. To ensure that these initiatives are sustained, the Government will need to introduce several policy reforms during and/or following the completion of the program. These reforms may include: (i) reform of university and teacher training budget allocation to finance teacher training programs; (ii) reform of incentives for faculty and teachers to help retain teaching staff in universities, teacher training institutions and schools; and (iii) reform of school finance to allow schools to receive school grants and mobilize additional resources from parents/communities to implement the school plans effectively.

B. Technical

79. The technical design of the project is based on the comprehensive reform priorities of GEQIP, with a focus on improving the quality of basic education. Regions will play a key role in the quality improvement reform process by allocating resources and implementing activities based on the regional GEQIP plans. The project will address systems management by strengthening key functions of the MOE, regions, woredas and schools to monitor sector performance. Both of these objectives are closely aligned with the findings and recommendations of the recent World Bank’s evaluation of Bank support to primary education (see World Bank 2006).

80. The design of several components was based on lessons learned from other initiatives implemented by the Government and other development partners. First, the design of the TDP was based on lessons learned under the ongoing program, which was designed to improve the effectiveness and qualifications of teachers in primary and secondary education. Second, the project was developed on the basis of a set of project preparation studies completed by the Government with a team of national and international consultants, which resulted in consultations among key stakeholders and beneficiaries and brought in international perspectives. Finally, during project preparation, lessons learned from the previous education projects in Ethiopia and the relevant experiences of the international agencies working in Ethiopia were taken into account.

- 29 -

81. The project description section above explains the technical design of the project, which is adapted from the “school effectiveness model”23, and which will support priority investments while also strengthening the capacity of school communities, woredas and regions to plan and monitor the performance of schools. The project has been designed to focus on learning outcomes and effective teaching and learning as the key indicators of quality education. The project will not only support supply-side interventions but also demand-side interventions through the implementation of a school improvement component, which will empower school communities to address access to quality general education. The following main principles guide the technical design of the project: (i) provide support through a whole-school development approach, which consists of the provision of a set of key inputs rather than a set of ad-hoc, uncoordinated inputs; (ii) support teachers and principals, who need professional development and the support of peers to improve the quality of teaching and learning; (iii) recognize and encourage school and local community initiatives to improve quality of and equity in access to schooling; and (v) improve the effectiveness of system management through targeted institutional development activities.

C. Fiduciary

82. The project will be built on the experience of the previous Bank-supported education projects in Ethiopia. The MOE’s implementation capacity with regard to previous Bank-assisted education projects has been weak and the MOE will therefore require technical assistance and training to enhance capacity. Procurement and financial management capacity of the implementing units has been assessed and details are in the project files. Annexes 7 and 8 describe financial management and procurement risks and provide action plans to mitigate such risks.

83. Financial Management. Financial management (FM) arrangements for the program are discussed in Annex 7. The FM arrangements for the program are anchored in the country’s regular public financial management (PFM) system. Specifically, funds flow and banking arrangements will follow the regular government system; regular government rules and procedures will apply for the program; and the regular government Chart of Accounts and accounting system will be used. This is particularly relevant given that large number of implementing institutions and given that the program would operate throughout the country in all Regions and Woredas. These financial management arrangements would cover all program funds i.e., those financed by the Government and all development partners. The FM design for the program thus follows an approach of harmonization among all development partners around country PFM systems. The conclusion of the Bank’s FM assessment is the FM arrangements meet the IDA’s requirements as per OP/BP 10.02. 23 A review of the literature shows that there are a number of causal relationships between input, process and outcomes indicators (see World Bank 2006; di Gropello 2003; Heneveld and Craig 1996; Lockheed and Longford 1989; UNESCO 2004). Education outputs/outcomes can be achieved if a set of key financial, human and material inputs is provided; within the appropriate context (e.g., classroom, school and system) which consists of a set of factors that enable effective teaching and learning. These factors at each level of the teaching and learning process can be grouped as follows: (a) classroom level (e.g., curriculum, teacher background and style, classroom management and quality instruction, and student characteristics); (b) school level (e.g., education leadership, monitoring and evaluation) and (c) context level (e.g., system management, community, and family background). This model shows an effective understanding of causal relationships among the factors as well as between the factors and outputs/outcomes in order to achieve the desired results (see Annex 4).

- 30 -

84. GEQIP will inherit the various strengths of the country’s PFM system. Several aspects of the PFM system function well e.g., budget process, classification system, compliance with the financial regulations, and the well-defined accounting system, including the computerized Integrated Budget and Expenditure (IBEX) accounting system at the federal and regional levels.

85. Weaknesses in the country’s PFM system may also impact on GEQIP e.g., shortage of qualified accountants and auditors (mainly at Woredas), delays in reporting, limited focus of internal audit, and understaffing of the audit function. The scale of the program and complexity arising from the large number of implementing institutions pose implementation challenges. Financial reporting for the program requires submission and consolidation of timely and accurate reports from a large number of institutions. This is challenging, as there are delays in submission of monthly financial reports from the woredas and other institutions (including MOE). This may also delay the audit. Country-wide rollout to all schools (about 22,900 schools) of the school grants scheme needs to be monitored and supported. Design features to address these weaknesses include: (a) aligning the GEQIP reporting arrangements with the country’s regular PFM system and reporting arrangements, which enhances controls and minimizes additional work; (b) FM support to be provided by MOFEDs and BOFEDs to other implementing entities; (c) early appointment of auditors, and carrying out of interim audit to facilitate early completion of the external audit; and (d) development of SGGs to be distributed together with standardized materials and formats of registers. An extensive dissemination and training plan is also being designed to train both trainers at the Regional and Woreda levels, and the schools and communities, on the School Grants program. These preparatory steps need to be properly implemented before the school grants are disbursed.

86. There is significant ongoing work to improve the country’s PFM system through the Government’s Expenditure Management and Control Program (EMCP, supported by the Bank and other development partners) which will strengthen the fiduciary environment in the country and also help in financial management of the GEQIP. The IBEX system is proposed to be rolled out to the Woreda level. Improvements which are relevant to the education sector will also be supported through GEQIP.

87. The FM risk for the project is rated as High and is expected to reduce to Substantial when mitigating actions are implemented. The FM Manual (part of PIM), which outlines how the Government’s PFM system, would operate with respect to the GEQIP, and also documents program-specific FM aspects will be finalized before Effectiveness. Action plans on the various actions to be completed with regard to GEQIP FM arrangements and to address broader FM weaknesses in MOE and education sector institutions have been agreed. Other FM-related covenants include submission of IFRs for the program for each fiscal quarter within 75 days of the end of the quarter; submission of annual audited financial statements and audit report within 6 months of the end of each fiscal year; and appointment of project auditors no later than March 31, 2009 (2 months after Effectiveness).

88. Procurement. Procurement arrangements required to ensure that the Bank continues to meet its fiduciary obligations under the SWAp include the assessment of the Procurement Risk within the Education Sector and the design of mitigation measures. At the sectoral level, a joint government-donor procurement management capacity assessment of the implementing agencies has been carried out to ascertain whether there is adequate capacity to conduct procurement

- 31 -

efficiently (see Annex 8). The assessment was conducted at the Public Procurement Agency (PPA); the MOE; and the three regions of Harar, Oromia, and Southern Nations, Nationalities and Peoples Region (SNNPR); as well as the City Administration of Dire Dawa. In each of the regions, the universities, BOFEDs, REBs, WOFEDs, CTEs, Zones, WEOs and schools have been sampled to provide a view of the procurement management capacity in the education sector. The PPA, MOE and universities provide a representative sample of the Federal level implementing agencies, and the BOFEDs, REBs, WOFEDs, CTEs, Zones, WEOs and schools in the three regions and City Administration are a representative sample of the regional (local government or sub-national) implementing agencies in the Education Sector.

89. The Government has continued to implement procurement reforms at both the national and sub-national levels. The PPA is developing a Manual of Public Procurement with Bank support through the PSCAP, and has conducted an assessment study of the capacity building needs in procurement at both the national and sub-national levels with support from DFID. These efforts will feed into a Capacity Building Strategy that is being developed with assistance from the Canadian International Development Agency to address the enormous capacity gap in Ethiopia’s public procurement function.

90. The last Country Procurement Assessment Report (CPAR) update of 2002 identified procurement capacity as one of the major weaknesses in Ethiopia’s public sector procurement system. As part of the effort to implement the recommendations of the 2002 CPAR, a public procurement law was enacted in January 2005, and the enabling Directives were issued in July the same year. Standard Bidding Documents (SBDs) were also prepared and issued for all procurements financed by public funds. Under the Government’s decentralized system, the autonomous Regional Governments and City Administrations should each adapt the public procurement law, “Determining Procedures of Public Procurement and Establishing its Supervisory Agency Proclamation No. 430/2005” as well as the “Federal, Public Government Procurement Directive” to govern public procurement at the sub-national level.

91. All regional governments and city administration have adapted the public procurement law as well as the public government procurement directive to govern public procurement at the sub-national level. All procurement under GEQIP will therefore be expected to take place under the new legal framework for public procurement. The Bank has not yet engaged in dialogue on the procurement reforms taking place at the sub-national level, and only the CPAR update planned for FY10 will provide an insight of the standards and practices of public procurement at the sub-national level. A study to compare the legislation and practices at Federal level with those at the Regions is being carried out. It is also proposed to conduct a more detailed procurement capacity study covering all the implementing agencies of the project in the course of the first year of implementation. The results of these studies will be used to refine the Action Plan for mitigating the procurement risks identified in the Procurement Capacity Assessment.

92. In Ethiopia, there is widespread lack of capacity to implement Bank financed procurement at the national level but capacity is even weaker at the sub-national level. Therefore, the Government and the donors have agreed on remedial measures to mitigate the risks identified by the procurement management capacity assessment (see Annex 8).

- 32 -

93. The Procurement and Contract Administration Procedures section of the PIM will: (a) describe the actors in the procurement activities, with their roles and responsibilities over which decisions; (b) describe the methods of procurement to be used for goods and services; (c) mandate the preparation of the standard templates mentioned above; (d) set the thresholds and frequency for prior and post reviews and procurement audits; and (e) describe the means of resolving bidders’ complaints.

D. Social

94. Key Issues. A social assessment was conducted in early 2008, based on review of relevant literature and consultation of a range of stakeholders in three regions (Addis Ababa, Afar and Oromia). In addition, program documents for PASDEP, ESDP III, and GEQIP were reviewed, as were ESWs (e.g., CSR, PER, and Poverty Assessment), TDP1 Midterm Review, and Implementation Completion Reports for previous education projects.

95. Three main social challenges were highlighted through the social assessment: (i) persistent gender gap in the education system; (ii) low quality of education in pastoralist regions and rural communities; and (iii) insufficient capacity and data to enhance delivery of education to children with special needs and to build on the Government’s efforts to promote inclusive education. GEQIP will support a Gender and Equity Needs Assessment during the first year to develop strategies to address such social challenges. The needs assessment would cut across the first four components (except the Program Coordination and M&E Component), so that activities under each component can be reviewed and ultimately redesigned if necessary to improve learning outcomes for girls, pastoralists, rural students, and children with special needs.

96. Girls’ Education. Girls’ access to primary education has increased significantly in the last decade with GER rising from 41 percent in 1999/2000 to 91.7 percent in 2006/07. Despite the increase in access, girls’ learning outcomes are lower than boys’ across all levels of general education, as evidenced by literacy rate (27 percent of girls, as opposed to 50 percent of boys). The disparity increases at the secondary level across the country, due to traditional gender stereotypes, heavy housework load, and early marriage. Harassment and abusive behavior by male teachers and students, and lack of proper latrine facilities for girls create an environment unfit for girls’ learning. The three outcome indicators for the Program Development Objectives will be disaggregated to ensure that the gender gap with respect to student achievement (Grades 4 and 8), drop out rate (Grades 5 and 8) and GRE (first and second cycle secondary) will be monitored during the lifetime of GEQIP.

97. Pastoralist and Remote Rural Communities. Growth in education indicators, in both access and achievement, remain sluggish in pastoralist regions and some remote rural communities. The Government implemented the ABE program to expand access to equitable and quality education in pastoralist regions and remote rural areas. However, financial constraints have limited the success of the program. The implementation of ABE programs can also vary within the same region, sometimes from one woreda to another.

98. Gender disparity in access to and quality of education is even starker in pluralist and rural communities, making them cross cutting issues. Female teachers are in the minority, particularly

- 33 -

at the secondary level, where female teachers constituted only 11 percent of the total teaching population in 2006/07.

99. Special Needs Education. The level of awareness and capacity to address special needs education are low, with limited or non-existent special needs education schools or classes across the country. While few reliable data sources exist, the Special Needs Education Program Strategy estimates that less than one percent of children with special needs access to primary education. Following the development of the Special Needs Education Program Strategy in 2005, special needs education courses are beginning to emerge at teacher education institutions.

100. Equity Impact of the Project. The GEQIP will have national coverage, providing “basic inputs” for all primary and secondary education to improve educational quality. Several dimensions of equity impact of the GEQIP can be summarized as follows:

• Rural Communities. Evidence is not available about the availability of school inputs by urban or regional location except teachers, but in general there are considerable disparities between rural and urban areas in terms of enrollments in primary and secondary education. Under the GEQIP, students in rural areas would benefit from program interventions disproportionately more than in urban areas, as they will have access to basic inputs.

• Pastoral Communities. The program will target ABE centers through school grants with significant impact on poor students as they are overwhelmingly in rural and pastoral areas, and thus will serve some of the country’s most disadvantaged children. GEQIP will also focus on the two regions with the worst indicators in the first phase – Somali and Afar – and enhance the ABE program based on the key findings from the social assessment and other studies. To improve the quality of learning at ABE centers, the GEQIP will have three specific interventions. First, the ABE curriculum will be revised during the first year of the program. Second, it will support the quality of the pre-service training program for ABE facilitators. Finally, ABE centers will receive school grants through GEQIP to ensure that community level decision making is enhanced.

• Gender Disparities. Gender disparities are substantial, particularly in rural locations. Female students are expected to benefit from improved quality of education, and the retention of girls in schools is expected to be enhanced by the increased proportion of female teachers, resulting from the revised pre-service teacher training selection sub-component and the recruitment of girls and prospective teacher candidates from rural and pastoralist communities.

• Special Needs. The Gender and Equity Needs Assessment will provide the Government with more accurate data on the prevalence and types of disabilities in order to develop an effective strategy to meet these children’s needs and ensure that they have access to quality education. Capacity will be built in key institutions in the first phase to prepare for a scaling up of training of special needs teachers in the second phase of the program.

- 34 -

101. Participatory Approach. The preparation of the project relied on a national plan prepared by the Government in consultation with regions and key stakeholders during the past year. The design of the project was also based on a social assessment in which key stakeholders [e.g., teachers, head teachers/principals, local community leaders, students, their families, and local non-governmental organizations (NGOs)] were consulted on the issues concerning education and about their needs and priorities. In addition, the MOE and each regional government organized Participatory Stakeholder Workshops (March 17-23, 2008 in Bar Dahar) to discuss the GEQIP, and the priorities for the proposed project.

102. The MOE plans to hold further consultations with NGOs and civil society, and enhance participation of local communities at the school level, particularly under the SIP component. Using rotational meetings, annual workshops and publicity brochures throughout the life of the project, MOE will inform key stakeholders of the overall objectives and performance of the project and gather feedback from the project's key stakeholders on project implementation.

103. Consultations with Other Stakeholders. MOE used the participatory approach to involve key stakeholders in the preparation of the GEQIP and the proposed project. Initially, the MOE efforts focused on their own officials at the federal level, but subsequently the MOE discussed the draft GEQIP with other key ministries and representatives from regional and woreda government. In addition, MOE has organized several workshops, involving regional planning officials and various stakeholders. Development partners have actively participated in the preparation and review of the GEQIP, and supported the Government’s application for the CF Grant. As part of the SIP, local constituents, including NGOs, will assist in the training of communities on establishing school management committees and the development of the School Improvement Plans.

104. Social Development Outcomes. A system for quantitative monitoring for results has been established and will be further strengthened during project implementation. MOE's management information systems will monitor social development outcomes of the project, including participation of girls, and will provide feedback to help adjust the project as implementation progresses. Household surveys would monitor participation of children from low-income or disadvantaged areas (by region and residence). As noted above, the three outcome indicators for the program development objectives are disaggregated by gender.

- 35 -

E. Environment

105. The project has been classified as category C, indicating that there are no environmental issues raised by the project. No funds will be used for construction or for other activities that may have environmental impact.

F. Safeguard policies

106. There are no safeguard issues that will be raised by the project. Resources will be used in existing schools and administrative offices and will be allocated on the basis of equity and implementation capacity and performance.

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [ ] [x] Natural Habitats (OP/BP 4.04) [ ] [x] Pest Management (OP 4.09) [ ] [x] Physical Cultural Resources (OP/BP 4.11) [ ] [x] Involuntary Resettlement (OP/BP 4.12) [ ] [x] Indigenous Peoples (OP/BP 4.10) [ ] [x] Forests (OP/BP 4.36) [ ] [x] Safety of Dams (OP/BP 4.37) [ ] [x] Projects in Disputed Areas (OP/BP 7.60)* [ ] [x] Projects on International Waterways (OP/BP 7.50) [ ] [x]

G. Policy Exceptions and Readiness

107. The Project is entirely consistent with Bank Policy and requires no exceptions from Bank policies, and meets the regional criteria for readiness for implementation.

- 36 -

Annex 1: Country and Sector or Program Background

Country Background

1. Ethiopia is experiencing a period of economic stability yet poverty remains a development obstacle. GDP per capita has increased marginally from US$102 in 2000 to US$180 in 2007, but still remains at one of the lowest levels in the world. Thirty-one million people live below the national poverty line on less than half a dollar a day. The population growth rate of approximately 2 million people per year carries serious implications for distribution of resources, the performance of the economy and the ability of the government to deliver services. Ethiopia ranks 169th out of 177 countries in the 2007/08 Human Development Index, a composite index that combines GDP with adult literacy and life expectancy. Almost 85 percent of Ethiopians live in rural areas, with the majority relying on rain-fed agriculture and livestock rearing for their livelihoods.

2. Ethiopia has a three-tiered ethnic-based federal system of government, comprising the federal government; nine ethnically based administrative regions, two chartered cities, and over 800 woredas. The federal government is committed to decentralization that provides each region with sufficient autonomy and is accompanied by fiscal decentralization which devolves decision making powers to lower tiers of government. Many reforms have been moved forward to enhance decentralization but implementation remains patchy. Some regions and many woredas do not have the skills or capability to implement their new mandates on service delivery. Systems for monitoring progress and ensuring value for money are limited and often poorly implemented. Building on and enhancing public sector reform and capacity development, particularly at lower levels of government, will remain a priority now and in the future.

Macroeconomic Context, Policies and Performance

3. The ongoing macroeconomic crisis threatens gains during the past decade. Although most countries in the world currently face a difficult macro environment, the situation in Ethiopia is unusually severe. This is the first time in the last two decades that Ethiopia has been confronted with twin challenges of high inflation and low international reserves. The inflation rate is at a historical peak, with the twelve month average inflation reaching 33.6 percent for the period ending in August 2008, and the twelve month end-of-period inflation rate reaching 61.6 percent—far higher compared to its own past as well as to other countries in the region. At the same time, the international reserves have gradually depleted and were barely enough to cover 1.2 months of imports of goods and nonfactor services at the end of June 2008 (see Table 1).

- 37 -

Table 1: Ethiopia – Selected Macro indicators

2003/04 2004/05

pre act 2005/06 pre act

2006/07 pre est

2007/08 Est

National income & prices, growth in percent GDP at constant price (factor cost) 11.7 12.6 11.6 11.4 8.4 GDP deflator 3.9 9.9 11.6 16.8 26.1 Consumer prices (period average) 8.6 6.8 12.3 15.8 25.3 Consumer prices (end of period) 1.7 13.0 10.8 15.1 55.3 External sector, (in percent of GDP) Current account balance, incl. official transfers -4.0 -6.0 -9.1 -4.5 -5.0 Current account balance, excl. official transfers -9.6 -12.4 -14.8 -10.6 -10.3 Export, f.o.b. growth in percent 24.4 41.1 18.1 18.8 23.7 Imports, c.i.f., growth in percent 39.3 40.4 26.4 11.6 23.5 Gross official reserves, (in months of GNFS of following year)

3.7

3.4

2.2

2.1

1.2

External debt 73.3 48.9 37.3 11.8 12.5 Financial balance (percent of GDP) Gross domestic saving 5.0 3.0 3.7 5.6 4.3 Gross domestic investment 25.5 23.0 24.2 25.0 22.7 Broad money, growth in percent 10.9 19.6 17.4 19.7 20.4 Source: 2008 IMF Article IV Staff Report and memo.

4. The social impact of the current crisis is expected to be considerable. The escalating food prices together with the failure of the belg rains have forced 4.6 million people—in addition to the more than 7.3 million chronically food insecure people—to temporarily rely on food aid. The price of the consumption bundle that the poor consumes is estimated to have risen by 71 percent in urban areas and by 63 percent in rural areas during the last two years. While the income of farmers has risen faster than the increase in the general price level24, given that nearly 50 percent of rural households are net food buyers, the net impact of inflation is likely to be modestly welfare reducing in rural areas and marked increase in poverty in the urban areas.

Government’s Response

5. Ethiopia’s macroeconomic difficulties have been caused by a combination of several factors. First, there has been a growing imbalance between domestic demand growth and supply response. The Government strategy to invest heavily in infrastructure and social services as a way of jump-starting strong, private sector led growth had created rapid expansion in domestic demand and overall GDP growth in the last several years. While the business environment has improved, the supply response has not kept pace with the double-digit demand growth. This has laid the ground for rising trade deficits and inflationary tendency. Second, two exogenous shocks have precipitated the situation in 2008. The steep rise in global prices has increased Ethiopia’s import bills, and affected the domestic inflation (especially fuel). Ethiopia also suffered from the failure of the belg rain and declined production of small cropping season, which caused shortage of food in some areas and a general rise in food prices. Third, an accommodative monetary policy and significant borrowing by public enterprises have fueled aggregate demand, raising prices and increasing the demand for imports. Finally, with the relentless price rise, inflationary expectations have taken root and exacerbated the problem in recent months.

24 This is based on the fact that producer price index has grown faster than the consumer price index.

- 38 -

6. In recognition of the seriousness of the problem, Government has undertaken a number of actions to reduce aggregate demand and to cool down the overheated economy. Specific measures include:

• Considerable adjustment on the fiscal front: The Government has announced a tight budget for FY09 that includes a reduction in the fiscal deficit to 3.2 percent of GDP (from 4.3 percent of GDP in FY08), a decline in the total federal expenditure to 19.6 percent of GDP (from 21.3 percent of GDP in FY08), and a lowering in the domestic borrowing requirement to 1.5 percent of GDP (from 2.4 percent of GDP in FY08). The Government has further indicated that it will reduce domestic borrowing to zero percent if the proposed emergency food operation is approved. However, there is no evidence yet showing slowdown in the investment program of the public enterprises—a key source of inflationary pressure in the past (see Table2).

• Elimination of fuel price subsidy. The Government has recently eliminated the fuel subsidy by fully adjusting the domestic prices to import parity level. The prices of gasoline, diesel, fuel oil, and kerosene have been adjusted upwards by 6 percent, 39 percent, 32 percent, and 50 percent, respectively. This measure alone is expected to reduce off-budget expenditure by nearly US$200-250 million annually.

Table 2: Ethiopia - General Government Finances Operations, (in percent of GDP)

2003/04 2004/05 pre

act 2005/06 pre

act 2006/07 pre

est 2007/08

Est. 2008/09 proj

Revenue 16.1 14.6 14.8 12.8 12.8 12.7 Tax Revenue 12.6 11.6 10.8 10.2 10.2 10.1 Nontax revenue 3.5 3.0 4.1 2.6 2.7 2.5 External grants 4.6 4.3 3.6 5.0 4.1 3.7 Expenditures 23.7 23.3 22.3 20.8 21.3 19.6 o/w: Pro-poor sectors 11.7 13.2 13.9 13.1 13.5 13.0 Defense 2.8 2.7 2.3 1.8 1.5 1.4 Debt service 1.2 0.9 0.8 0.7 0.7 0.7 Other sectors spending

7.8 6.4 5.3 5.2 5.6 4.5

Memo: Federal block grants

5.8 5.2 5.4 5.5 6.2 6.0

Fiscal balance, excluding grants

-7.6 -8.7 -7.4 -8.1 -8.4 -6.9

Fiscal balance, including grants

-3.0 -4.4 -3.9 -3.1 -4.3 -3.2

Primary deficit -1.7 -3.4 -3.1 -2.4 -3.6 -2.5

Domestic borrowing, net

2.5 3.3 2.1 3.1 2.4 1.5

Source: 2008 IMF Article IV staff report, IMF, and MOFED.

• Modest tightening of monetary policy. The National Bank of Ethiopia has raised the minimum reserve requirements on commercial bank deposits twice (from 5 to 10 percent, and then to 15 percent), and has increased the minimum time and saving deposit rate from 3 to 4 percent during the past twelve months. The money growth target for FY09 has been set in the 18-19 percent range, lower than the 20.4 percent growth achieved during FY08.

- 39 -

• Flexibility in the exchange rate. During the discussion with the IMF Article IV mission in May 2008, the authorities have agreed that more flexibility in exchange rate movement could in principle be beneficial, but were anxious to avoid sharp corrections of the exchange rate—not least, because they could fan inflationary expectations. With global fuel and food prices now easing, the authorities are expected to introduce some flexibility in the exchange rate.

• Measures to mitigate the impact of inflation. To soften the impact of inflation on the most vulnerable population, the Government has imported 300,000MT of food grains (around 10 percent of domestic production) using its own resources and has sold part of it to urban poor at a subsidized price. The government has also removed valued added tax, turnover tax, and surtaxes on some food items. It has also increased the cash transfer in its safety net programs from Birr 6 to Birr 8 per day and is contemplating further adjustment.

7. Future outlook. Ethiopia’s economy is expected to significantly slowdown in the coming years on account of the macroeconomic difficulties at home and the financial turmoil abroad. Most economic activities dependent on imported inputs have already begun to slowdown in the past few months (e.g., construction and infrastructure projects and a number of manufacturing activities). The growth rate of exports, in volume terms, has nearly halved during FY08. With impeding recession in developed countries, the flow of remittances to Ethiopia is likely to slowdown as well. These factors have lead the IMF to lower Ethiopia’s medium-term growth forecast to 6.5-7.5 percent from nearly 10-11 percent in the past years.

8. Sustainability of External Debt. The recent Debt Sustainability Analysis undertaken in July 2008 concluded that Ethiopia’s risk of debt distress remains moderate because of the large financing needs of the public enterprises over the next ten years. Ethiopia reached its Highly Indebted Poor Countries (HIPC) Initiative completion point in 2004 and benefited from debt relief under the MDRI in 2006. The debt relief provided under both initiatives helped to lower the debt ratio to less than 10 percent of GDP at the end of 2006/07. Although the current debt burden indicators remain below the policy dependent-thresholds for the whole projection period as in the last Debt Sustainability Analysis (May 2007), three stress tests breach the threshold for the net present value of debt to exports ratio when the debt stock is measured inclusive of public enterprises.

Status of Dialogue on Structural Issues

9. The periodic nature of its macroeconomic problems point to certain structural weakness in the Ethiopian economy. They reflect an economy that is trying to grow faster than the supply side can keep up. The widening imbalance between rapidly growing demand and sluggish supply, in our view, is at the core of the rising trade deficit as well as escalating inflation. The Bank and the Government are therefore in active discussion to address this problem. The policy discussions have been centered on three areas: (i) structural reforms to improve the investment climate and to attract more foreign investment into the manufacturing sector; (ii) creating a more efficient and cost-effective services sector including financial and telecommunication services; and (iii) improving the allocation efficiency of the land market. The Government has implemented certain structural reforms in recent months, which though

- 40 -

modest, signal its commitment to address the structural constraints underlying the macro problems. For example, it has recently liberalized the entry norm for private operators in the domestic civil aviation sector, allowed the entry of a new domestic bank whose business model is based on extensive use of information technology and lending to consumers (unlike the existing set of private banks that have mimicked the business model of the public sector bank) and has set up a modern commodity exchange for bulk trading by the private sector.

The education system

10. The structure of the formal school system is eight years of primary school followed by two years of general secondary and two years of preparatory secondary education. The eight years of primary education are split into two four year cycles. There are a total of 21,000 public and private primary schools, approximately 1,000 secondary schools and approximately 1000 ABE Centers. There are also 388 government and non- government TVET institutions and 26 government teachers’ colleges. The Federal Government is responsible for 22 federal universities.

11. The non-state sector makes a small but growing contribution to the education sector in Ethiopia. In 2006/07, 5.7 percent of students in Grades 1-4 were enrolled in non-government schools, 6.5 percent in Grades 5-8, 4.3 percent in Grades 9-10 and 6.5 percent in Grades 11-12. Figures are higher in tertiary, however, with 22 percent of students enrolled in non-government institutions.

Government’s reform agenda

12. The Ethiopian Government has a strong commitment to the MDGs related to both gender equity and universal enrollment by 2015. To this end, there has been a massive investment in system expansion. This has occurred not only at the primary level, but also at the secondary, TVET and tertiary levels. It has been recognized that achieving the MDG of universal primary education can only be achieved if complementary and alternative approaches to supplying education are adopted in some of the remote regions with children from difficult-to-reach populations. In ESDP III, the Government commits to scaling up the provision of alternative basic education (ABE) and multi-grade teaching to reach these groups.

13. Recently, the Government has signaled its intention to increase the focus on quality improvements in the system. It has launched a General Education Quality Improvement Program (GEQIP) as a vehicle to improve learning outcomes. Donors have been asked by the Government to support this ambitious quality-focused reform program. The program will help the Government to revise the curriculum revise, improve the quality of in-service and pre-service teacher training, increase the availability and quality of textbooks based on new curriculum, reform the examination and assessment system, support quality school improvement through effective planning and the provision of school grants, and strengthen planning and management capacity in the sector at all levels, initially focusing on MOE and regional governments, as well as school management, governance and leadership development.

- 41 -

Access to primary and secondary education

14. Primary enrollment rates have increased rapidly over the past five years in Ethiopia, especially in rural areas. Table 3 below shows the increase in NER for primary level by gender over the last three years. However, there are high rates of drop out at grade 1 (20 percent nationally) and low completion rates to grade 8 (only 42 percent nationally).

Table 3: Net Enrollment Rate in Primary School, By Sex (2004/05–2006/07)

2004/05 2005/06 2006/07 Girls 64% 73% 76% Boys 73% 82% 83%

Source: MOE

15. Access to first cycle of secondary education has also been increasing. In 2005/06, the gross enrollment rate was 91 percent (99 percent males and 84 percent females), but this reached 92 percent in 2006/07. This reflects a large investment in school building, with 971 secondary schools in the country in 2006/07 compared to only 835 in 2005/06.

16. The remarkable expansion in access to both primary and secondary education in Ethiopia masks large regional variations. Table 4 below shows the grades 1-8 Net Enrollment Rate (NER) for primary school in the 9 regions and 2 city administrations for the year 2006/07.

Table 4: Primary Net Enrollment Rate, By Region (2006/07)

Region (%) Region (%) Tigray 91 SNNPR 86 Afar 16 Gambella 122 Amhara 83 Harari 96 Oromia 78 Addis Ababa 99 Somali 35 Dire Dawa 62 Benishangul-Gumuz 99 Total 79

Source: MOE

17. The table shows that regions such as Afar and Somali, both of which contain sizeable pastoralist communities and have poor infrastructure, are particularly challenging with respect to achieving the MDG of universal primary education.

18. Geographical location also plays out across the rural/urban continuum. Analysis of 2006/07 data shows that while 78 percent of primary enrollment was accounted for by rural areas, the reverse is true for lower secondary where only 9 percent of enrollment is in rural areas. This suggests that children living in rural areas either have to travel to a secondary school in the nearest urban area, or drop out altogether.

19. Gender is also a major determinant of access to schooling. As Table 3 above shows, there is a sizeable gender gap in both first and second cycle primary schooling. The gap is even more pronounced in the transition from primary to secondary schools. Table 5 below shows how the percentage of females drops as they go through the education system (2006/07 data). There are several reasons why girls’ access to education is constrained, including early marriage,

- 42 -

personal safety (especially when traveling long distances to school), demand for girl’s labor at home (opportunity costs) and other issues related to Gender Based Violence at school and in the community such as verbal abuse by teachers and other members of the community, corporal punishment and bullying (SCF report, AA Education Bureau, 2008).

Table 5: Percentage of Girls Enrolled, By Level of Education (2006/07)

Level of schooling Boys Girls Total % Girls

Kindergarten 112,400 106,666 219,066 49

Primary 1-4 5,181,792 4,594,509 9,776,301 47

Primary 5-8 2,401,516 1,836,191 4,237,707 43

Secondary 9-10 760,674 462,988 1,223,662 38

Secondary 11-12 117,000 58,219 175,219 33

Undergraduate 156,879 53577 210,456 25

Source: MOE

20. HIV/AIDS is also a factor affecting access to education. In 2006, there were around 1 million people living with HIV/AIDS in Ethiopia and an estimated 744,100 AIDS orphans.25 ESDP III identifies the multifaceted impact of HIV/AIDS on education. Demand for education is threatened due to sickness and death of school-age children, in addition to which orphans and vulnerable children may have little opportunity to attend school. Increases in the number of teachers and other personnel who become sick and die from the epidemic result in a reduction and shortage of human capital in the education sector, affecting the supply side. A shift in the limited resources to fund activities to combat the pandemic affects the mobilization of resources to improve quality. Frequent teacher and student absenteeism due to factors related to HIV/AIDS adversely affects the quality and efficiency of education. At the same time, education is identified as the most ‘practicable vaccine’ for HIV/AIDS and the government has prioritized actions to tackle HIV/AIDS in the sector plan.

Public expenditure on education

21. Ethiopia spends over 45 percent of its annual budget on poverty targeted expenditure. In 2005/06, this represented over ETB 22 billion. In the same year, the education sector accounted for over one-third of this expenditure at federal and regional levels. In Ethiopia, the regions and woredas are responsible for providing primary and secondary education. In 2006/07, 31.9 percent of regional spending was focused on the education sector. Since 2004, the amount of money spent on education at the regional and woreda levels has increased at an average rate of over 24 percent per year. Within this allocation, primary education has accounted for over 73 percent of expenditure.

22. The majority of regional and woreda level financing for education is spent on recurrent costs. In 2006/07 recurrent expenditure accounted for 90 percent of expenditure, with only 10 percent going to capital expenditure. Of the recurrent expenditure, the majority is spent on teacher salaries. Only about 6 percent of woreda recurrent budget was available for quality

25 The Education Sector Policy for Responding to HIV and AIDS Challenges in Ethiopia (draft, January 2008)

- 43 -

interventions and operating expenditures in 2006/07, and the figure has been falling. The FTI benchmark for recurrent non-salary expenditure is 33 percent.

23. A further squeeze is likely to be placed on the recurrent non-salary budget by two factors. First, the share of education spending is set to fall at the regional level as other sectors, such as health, are prioritized more. Second, the education system is expanding, increasing the number of teachers on the payroll, while a new policy increasing the pre-service training requirement for teachers contributes to the teacher shortage problem.

24. The limited amount of financing for recurrent non-salary expenditure also means that education sector financing at the primary and secondary school levels is highly constrained. According to Bluebook guidelines, woredas are expected to provide an unspecified block grant to schools to cover non-salary costs. The 2006 JRM Report showed that if schools received this grant at all, it is typically below the amount stipulated in the guidelines (See Box 1).

Quality and relevance of education

25. It is widely acknowledged that achievements in access have not been accompanied by sufficient improvements in quality. The 2007 NLA conducted in grades 4 and 8 demonstrates that the overall level of student performance had not improved over the previous seven years. In fact, there is some evidence of deterioration in core subjects. As shown in Table 6, proxy indicators for quality show that there is a considerable challenge to meet the ESDP III targets set for 2009/10.

Table 6: Selected Proxy Indicators for Quality

Indicator 2006/07 PASDEP Target for

2009/10 Primary Pupil Teacher Ratio 59 50 Secondary Pupil Teacher Ratio 48 40 % of Qualified Teachers (g 5-8) 53.4% 95% % of Qualified Teachers (g 9-12) 49.8% 88% Drop Out (grade 1) 20.1% 6.3%

Source: MOE

26. The 2007 NLA conducted in grades 4 and 8 demonstrates that the overall level of student performance had not improved over the previous seven years. In fact, as Table 7 below shows, there is some evidence of deterioration in core subjects. For example, the composite score for learning achievement in grade 4 shows a reduction from 48 percent in the 1999/2000 baseline learning assessment to 41 percent in the 2007 NLA. Similarly, the composite score for grade 8 shows a decline from 43 percent in 2000 to 40 percent in 2007. The NLA also analyzes factors that relate to performance and some of these are explored below.

- 44 -

Table 7: Comparison of mean scores between three national assessments

Grade 4 2000 2004 2007 Math 39.3 39.7 40.3 Reading26 64.3 64.5 43.9 English 40.5 38.7 36.5 Composite score27 47.9 48.5 40.9 Grade 8 English 38.7 41.1 38.4 Math 38.2 40.9 34.1 Composite score28 41.1 39.7 35.6

Source: MOE

27. Curriculum Relevance. The mismatch between the curriculum and instructional time, and the over-complexity of the curriculum, were identified as impediments to learning in the 2005 NLA. This is confirmed in the 2007 NLA, where respondents reported that in some instances even teachers do not understand the concepts.

28. School Materials and Supplies. The quantitative data in the 2007 NLA found significant relationships between availability of subject syllabi, teachers’ guides and textbooks and student achievement; the qualitative data supported this finding. Parent focus groups identified a shortage of textbooks as a problem in six out of nine regions.

29. School Facilities. In 2007, issues raised in nearly all regions included a lack of reading rooms and classrooms, insufficient utilization of the available support services, lack of toilets and poor equipment maintenance. As in the 2004 NLA, schools were generally successful in mobilizing community support for the construction of classrooms and teacher housing, but large class sizes and shortage of classroom space continue to be problematic. As noted earlier, school infrastructure is not included in GEQIP, but the interplay between inputs is acknowledged and integrated into the design through the adaptation of the school effectiveness model.

30. School Management and Finance. The 2007 NLA analysis includes a focus on school level variables related to the teaching and learning process. The overwhelming message from the focus groups is that schools lack facilities, qualified staff and textbooks. Most schools have few resources to improve the quality of teaching and learning at the school level, as most cannot prepare and implement their own school improvement plans.

31. To address the low non-salary recurrent budget issue, the Government included a school grants sub-component in the design of the GEQIP (see Box 1). While schools already receive school grants, most do not receive the amount specified in the Bluebook due to resource constraints at the woreda level. Currently, schools together with PTAs prepare school plans and submit them to WEO. Depending on the availability of resources at the woreda level, some resources are allocated to the schools for operating expenses, while many of the schools do not receive anything and the gaps are filled by community contributions.

26 Reading test reported to have changed considerably since 2004 test 27 Composite score also includes environmental science 28 Composite score also includes Biology, Chemistry and Physics results

- 45 -

Box 1: School Grants Programs in Ethiopia

The provision of school grants already exists in Ethiopia. The MOE Bluebook specifies the amount that schools should receive: 10 Birr per year for every Grade 1-4 child that is enrolled in school, 15 Birr per year for every Grade 5-8 child, 20 Birr per year for every Grade 9-10 child and 50 Birr per year for every Grade 11-12 child (see JRM 2006; and MOE 2008). In addition, the implementation of school grants in some regions, several development partners (e.g., USAID) have also provided school grants, but often using guidelines that are inconsistent from one program to another and not aligned with the government’s existing school grants programs. However, as shown below, the use of the grant policy varies considerably across the country.

Addis Ababa Schools (467 + 97 government primary and secondary schools) serve as cost centers and have individual budgets covering teachers’ salaries and operating costs, but not textbooks.

Amhara School block grant applied but not to proposed standards – mostly in cash.

Benishangul-Gumuz

School block grants not administered except in one pilot woreda where schools were informed about the program and subsequently submitted requests to the WEO for goods. Per student spending varies significantly (e.g., for primary schools, less than 1 birr/student in Bambesi in 1999 (down from 2 birr in 1998) against 11 birr/student in Kurmuck and 19 birr/student in Sirba Abay in 1998).

Dire Dawa In Dire Dawa (80 + 10 primary and secondary schools) school operating budgets are not based on per student rate (allocation is made in a “somewhat empirical manner”). Moreover, schools are getting support in kind. School directors do not know well how allocations are being calculated.

Gambella Varies across woredas and schools - some in kind, some cash.

Oromia Woredas provide in-kind support and schools are not involved in the decision-making process. Per student spending varies considerably from one woreda to another, e.g., from 0.55 birr/student to 11.25 birr/student in two of the three woredas visited by the JRM team.

SNNPR Policy applied consistently but standards not adhered to. Variation from 0.59 birr per student to 7.5 birr per student in two woredas among the three visited by the JRM team. Schools complain about lack of certainty over when block grant is released.

Tigray Policy applied consistently but standards difficult to adhere to for secondary schools. Variations among woredas for primary schools: Grades 1-4 from 3 to 7 birr/student and Grades 5-8 from 8 to 15 birr/student. Cash released in two installments (semester) in some woredas. Reports from schools, monthly in some woredas, every semester in other woredas. PTA/parents receive report on whole school finances including schools’ own revenues and block grant funds.

Source: MOE

32. Teacher’s Qualifications and Behavior. The data from the 2008 NLA for grade 8 students provide some evidence of the correlates of learning. The study found a significant positive correlation between teacher participation at in-service on teaching techniques, and the number of times a teacher had been supervised. Teacher absenteeism had a significant negative effect on achievement. The qualitative data emphasize the importance of teachers providing remedial classes and following up on homework assignments. The Government and development partners have been supporting efforts to improve the quality and relevance of pre-service and in-service teacher training since 2003. The findings of several impact studies under

- 46 -

TDP1 indicate that these efforts are beginning to have an impact on teacher behavior in the classroom.

33. Teacher Education Institutions. The donor-funded, Government-implemented TDP1 was implemented in an era of rapid change among teacher education institutions as well as in the teacher education sector. Thirteen new public universities, with mandates for training secondary school teachers, were opened and operationalized, and several new CTEs were opened during this period. In addition, the existing universities and CTEs were charged with the provision of teacher education during a period where enrollment rapidly increased, stretching their training capacity. The teacher education sector is transitioning as well. The TDP impact studies found a general decline in the quality and interest of teacher candidates, and that the practicum experiences offered for teacher candidates were short in duration and in relevance to likely posts that teacher candidates would receive. Teacher educators themselves were found to have had little recent experience in their own classrooms, and almost none in the primary classrooms many were preparing teachers to teach in (see Box 2). The TDP2 program addresses these concerns in its design.

Box 2: Main Lessons Learned from TDP1

• Limited capacity in MOE to effectively manage and oversee the program. MOE has committed to increasing the staffing of EPTED in order to ensure that the program is fully institutionalized.

• TDP1 financed a range of university and CTE operating costs thus negatively affecting the program’s sustainability. TDP2 will focus on areas of investment and reform while MOE will increase its contribution for operating costs, particularly with respect to programs such as selection and practicum.

• Problems and delays with producing financial reports for TDP1 and a lack of communication between MOE and MOFED. GEQIP has sought to enhance the engagement of MOFED and BOFEDs in the design of the financial reporting system.

• The English Language Improvement Program (ELIP) was spread too thinly as it tried to reach all teachers. The program has been revised to focus on a longer period of in-service training for English subject teachers in primary and secondary schools.

• TDP1 was narrowly focused and thus did not have the intended impact on the overall quality of teaching and learning. GEQIP focuses on a package of input, thus maximizing the aggregate impact of the program over time.

• TDP1 lacked robust baseline data to track change and impact longitudinally. GEQIP will support a baseline study to provide the basis for assessing change over time at the school and classroom level and the impact on teaching and learning.

Source: Summarized from the DFID TDP Completion Report.

34. In-service Teacher Professional Development. Ethiopian teachers historically have had very few opportunities for professional development after the onset of their careers. Under TDP1, the Continuous Professional Development (CPD) program provided ongoing training for existing teachers. Evaluations of the CPD program showed that it was haphazardly implemented, seldom translated into the languages teachers best understood, and delivered in a lecture format inappropriate for the adult learning that CPD should foster. The Government recently decided that the training provided to Ethiopia’s first cycle primary school teachers (certificate programs of about 9 months) was insufficient and began requiring that all primary teachers earn a three year diploma. Similarly, the Government plans to employ special summer

- 47 -

sessions to upgrade a significant number of Ethiopia’s certificate holding teachers to the diploma level.

35. Student and Parent Characteristics. The quantitative analysis in the 2007 NLA for Grade 8 found a significant negative relationship between achievement and lack of textbooks at home, and the distance students travel to school. Student absenteeism was reported by teachers to be a major factor impacting learning. One of the factors driving absenteeism appears to be the need for children to engage in economic activities, particularly girls. Parents were reported to have limited support for their children’s education, and engaged with the school only on issues related to fundraising. The current drought has greatly affected attendance for children in both the formal system and more negatively for the ABE learners.

36. Medium of Instruction. The 2006 JRM identified language policy as a key factor affecting education quality. The national policy is to promote mother tongue teaching in primary education and then introduce English as a subject in grade 1 and as the medium of instruction in secondary education. Some regions struggle to implement mother tongue teaching in primary because of lack of instructional materials, and because in some regions children in one class may have several different mother tongues. The policy of introducing English as a subject in grade 1 was also criticized as potentially undermining efforts to ensure that children are secure in their mother tongue before introducing a second language.

Management and governance

37. The provision of education is the concurrent responsibility of the federal, regional and woreda levels of government. Table 8 below summarizes some of the mandates at different levels of the system, focusing on the delivery of primary and secondary education.

-

48 -

Tab

le 8

: Ins

titu

tion

al M

anda

tes,

By

Lev

el o

f Gov

ernm

ent

GE

QIP

Com

pone

nts

Fed

eral

leve

l R

egio

nal l

evel

W

ored

a le

vel

Pol

icy

and

stan

dard

s •

Gen

eral

ove

rsig

ht o

f th

e pr

ogra

mm

e, p

olic

y fo

rmul

atio

n an

d se

tting

nat

iona

l tar

gets

and

ben

chm

arks

•

Reg

iona

l pol

icy

form

ulat

ion,

impl

emen

tatio

n of

sta

ndar

ds,

and

setti

ng s

tand

ards

for

Wor

edas

•

Lar

gely

impl

emen

t pol

icy

and

stan

dard

s 1.

Tea

cher

Dev

elop

men

t pr

ogra

m (T

DP

) •

Han

dlin

g m

ajor

pol

icy

issu

es

• M

onito

r ac

tiviti

es b

ased

on

stan

dard

s •

Pre-

serv

ice

trai

ning

of

seco

ndar

y gr

adua

te te

ache

rs in

the

Uni

vers

ities

• A

ssis

t CT

Es

for

TD

P Im

plem

enta

tion

for

Pre-

serv

ice

trai

ning

of

dipl

oma

teac

hers

and

in-s

ervi

ce tr

aini

ng o

f te

ache

rs in

G1-

12 (

in c

olla

bora

tion

with

Wor

edas

);

• M

onito

r an

d pr

ovid

e fe

edba

ck o

n w

ored

a le

vel

impl

emen

tatio

n

• Pa

rtic

ipat

e in

sel

ectio

n of

te

ache

rs f

or in

-ser

vice

and

pr

e- s

ervi

ce tr

aini

ng;

• Pa

y an

d re

crui

t tea

cher

s

2. C

urri

culu

m, T

extb

ooks

an

d A

sses

smen

t,

Tex

tboo

ks a

nd te

achi

ng

mat

eria

ls

• Pr

ocur

e an

d di

stri

bute

text

book

s fo

r G

9-12

• Pr

ocur

e an

d di

stri

bute

Tex

tboo

ks f

or G

1-8

(in

som

e re

gion

s w

ored

as h

ave

the

man

date

)

• B

udge

t for

text

book

s, b

ut

proc

ures

or

dele

gate

s up

war

ds

Cur

ricu

lum

• D

evel

opin

g N

atio

nal C

urri

culu

m F

ram

ewor

k an

d M

inim

um

Lea

rnin

g C

ompe

tenc

ies

• D

evel

opin

g cu

rric

ulum

fra

mew

ork

for

G1-

12

• D

evel

opin

g sy

llabu

s an

d gu

idel

ines

for

pri

mar

y ed

ucat

ion

in

colla

bora

tion

with

reg

ions

• A

dapt

ing

sylla

bi f

or G

1-8

• Pr

epar

es g

uide

lines

for

teac

hers

’ or

ient

atio

n on

text

book

s

• E

nsur

es c

urri

culu

m

impl

emen

tatio

n at

sch

ool

leve

l

Ass

essm

ent a

nd

exam

inat

ions

•

Exa

min

atio

ns a

t gra

des

10 a

nd 1

2,

• N

atio

nal L

earn

ing

Ass

essm

ent

• E

xam

inat

ions

for

gra

de 8

•

Supp

ort t

each

ers

in

cont

inuo

us a

sses

smen

t

Insp

ectio

n •

Sets

sta

ndar

ds

• Su

perv

ises

G11

-12

• Su

perv

ises

G1–

10

3. M

anag

emen

t and

A

dmin

istr

atio

n

• C

apac

ity b

uild

ing

prog

ram

s fo

r re

gion

al le

vel s

taff

; •

LA

MP

adva

nced

dip

lom

a tr

aini

ng f

or s

econ

dary

pri

ncip

als

and

supe

rvis

ors

thro

ugh

the

Uni

vers

ities

•

Col

late

s na

tiona

l sch

ool c

ensu

s da

ta th

roug

h ce

ntra

l EM

IS

• C

entr

al le

vel t

rain

ing;

•

Dev

elop

men

t, pr

intin

g an

d di

stri

butio

n of

mat

eria

ls

• C

apac

ity b

uild

ing

for

Wor

eda

and

sch

ool l

evel

sta

ff ;

• L

AM

P di

plom

a tr

aini

ng f

or p

rim

ary

prin

cipa

ls a

nd

supe

rvis

ors

thro

ugh

the

CT

Es

• C

olla

tes

regi

onal

dat

a th

roug

h re

gion

al E

MIS

; •

RE

B’s

for

reg

iona

l and

wor

eda

trai

ning

•

Tra

inin

g of

wor

eda

educ

atio

n ex

pert

s, s

choo

l pri

ncip

als

and

supe

rvis

ors

on S

IP

• R

EB

’s f

or tr

ansl

atio

n, p

rint

ing

and

dist

ribu

tion

of

mat

eria

ls

• Pl

ans

for

capa

city

bui

ldin

g at

sch

ool a

nd w

ored

a le

vel;

•

Impl

emen

ts a

nnua

l sch

ool

cens

us

• Sc

hool

leve

l tra

inin

g

4. S

IP

Scho

ol G

rant

s •

Sets

sta

ndar

ds

• M

onito

r im

plem

enta

tion

of S

IP

• R

evis

e an

d up

date

Sch

ool S

elf

Ass

essm

ent F

orm

and

Sch

ool

Impr

ovem

ent P

lan

tem

plat

e •

Coo

rdin

ate

shar

ing

of b

est p

ract

ices

acr

oss

regi

ons

• A

ssis

t the

wor

edas

in s

choo

l gra

nt im

plem

enta

tion

• A

ssis

t sch

ools

in S

IP

com

mitt

ee e

stab

lishm

ent;

• Su

perv

ise

scho

ol u

se o

f sc

hool

gra

nts

-49-

Examinations and Assessment

38. Examinations and Assessment. The Government administers national learning assessments and examinations, both of which are implemented by the General Education Quality Assurance and Examination Agency (GEQAEA). First, the NLA has been implemented every three to four years since 1999/2000. The main objectives of the assessment are to obtain adequate information about the overall learning achievement of grade 4 and 8 students and to identify major factors that potentially influence academic performance. Under GEQIP, the NLA will be administered in Grades 4, 8, 10 and 12, every three to four years. Second, GEQAEA administers the annual national examination to Grades 8, 10 and 12. The exclusive reliance on multiple-choice questions for the national examinations may be causing a negative back-wash effect on classroom practice as wider understanding and mastery of analytical and practical skills are not tested. The current reform will explore ways of incorporating open-ended questions that would test students’ ability to write, reason and analyze.

39. Inspection. The MOE recently established an inspection department to oversee the ongoing supervision and inspection systems at the regional level. The department is currently conducting a needs assessment and developing guidelines to bring coherency to the supervision and inspection system at the national level. The new department will require capacity building and international expertise.

Education Management Information Systems (EMIS)

40. The EMIS has been supported by the UNESCO Institute of Statistics, but there continue to be problems both with respect to the completeness, accessibility, quality and timeliness of education data, as well as publication of the annual abstract, and also making use of available data to inform decision making. A recent rapid data quality assessment in the health and education sectors as part of the preparation of the PBS also identified the lack of appropriate M&E training at all levels of the systems, lack of robust data quality assurance mechanism at lower levels; inadequate linkages of lower level M&E systems with the national M&E systems, and some weakness in data management processes.29 A recent analysis of the accuracy and validity of the data generated also shows a considerable variance between periodic survey data and regular administrative data. The enhancement of EMIS will require more coordination and focus on consistency and quality in the coming years.

41. Several recent assessments30 identified several capacity limitations related to EMIS at all levels of management and identified a number of areas for strengthening. Most importantly, the EMIS has insufficient capacity for effective analytical work needed to operate the large Ethiopian education system. Key issues include limited IT infrastructure (e.g., a computerized, networked and internet-connected system), understaffing, lack of appropriate skills and limited coordination with key operating departments/units including, critically, the REBs. Regional personnel are unevenly trained, and some regions are unable to plan, manage and monitor due to both under-staffing and under-training.

29 PBS Partners' Secretariat (August 2008). Rapid Data Quality Assessment Draft Report. 30 See UNESCO (2004). EMIS Diagnostic Report; and MOE (August 2008). EMIS Technical Paper.

-50-

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies

Financier Project ISR or IEG ratings (WB)

Completed Outcome Sustainability World Bank Education Sector Development Project (US$100 m),

improving the overall educational attainment of the population, while achieving greater social equity.

Moderately Satisfactory

Unlikely

World Bank PRSC II (US$130 m), including delivery of education services

Moderately Unsatisfactory

Unlikely

Ongoing Projects Implementation Progress

Development Objective

World Bank Post-Secondary Education Project (US$41.5 m) strengthening the quality of post-secondary education (including university and TVET programs)

Unsatisfactory Moderately Unsatisfactory

World Bank Protection of Basic Services (US$430 m), providing support for the delivery of basis services including primary and secondary education (mostly teacher salaries through block grants)

Satisfactory Satisfactory

Bilateral Pooled Fund (DFID, Netherlands, Finland, Belgium, Ireland, Sweden).

Teacher Development Program (TDP) (US$80m) support to the implementation of pre-service and in-service teacher training programs.

n.a.* n.a.

Netherlands €15 million over 5 years for support to Higher Education at the national level

n.a. n.a.

Italy €27 million, supporting the implementation of the ESDP (e.g., capacity building at MOE and REB levels; provision of textbooks, ABE, teacher training for primary education; and support for TVET and post graduate programs at Addis Ababa and Haremaya Universities).

n.a. n.a.

JICA Support to school construction and capacity building in Oromia (1.7 billion Japanese yen)

n.a. n.a.

ADB Education III project (2000-2008): upgrading and new construction of primary schools (US$51.2 m)

n.a. n.a.

USAID Basic Education Program (US$15 m): (ABE, School Grants, training and capacity building)

n.a. n.a.

UNESCO US$1.8 million (2007-2011) (support for policy and strategy development including curriculum development)

n.a. n.a.

World Food Program

Children-In-Local-Development-Based Food for Education(CHILD/FFE) (US$8.7m/yr)

n.a. n.a.

UNICEF Basic Education Program(2007 – 2011) focusing on Universal Primary Education (UPE) and Gender Equality (US$17 million)

n.a. n.a.

European Commission

Capacity Development Project for the MOE (€2 million) to provide technical assistance and training for the MOE for capacity development.

n.a. n.a.

GTZ GTZ provides technical assistance of senior experts to MOE’s TVET sector.

n.a. n.a.

*n.a. not applicable.

-51-

Annex 3: Results Framework and Monitoring

PDO Project Outcomes Indicators Use of Project Outcome Information

Program Development Objective for the General Education Quality Improvement Program (2009-2017): Improved Quality of General Education

Improved learning outcomes % of students scoring at least 50% in national learning assessments in Grades 4 and 8 in core subjects

Improved efficiency in Grades 5 and 8

Completion rate in Grades 5 and 8

Improved efficiency in 1st & 2nd cycle secondary

Gross Enrollment Rate (GER) in 1st and 2nd cycle secondary

1. Monitor the overall progress on the achievement of the project’s objectives 2. Report back to citizens on government performance on the implementation of the project and contributions to the ESDP/GEQIP

Project Development Objectives for First Phase APL (2008-2010): Improved Teaching and Learning Conditions in Primary and Secondary Education & Planning and Budgeting

Improved availability of instructional materials for core subjects

Pupil to new textbook ratio in core subjects in (a) Primary (including ABE Centers) and (b) Secondary (math and science & other core subjects)

Improved supply of qualified teachers % of teachers with appropriate qualifications (Diploma or degree) in G1-4, G5-8, and G9-12

Consistent government commitment to quality input

Recurrent non-salary expenditures as % of general education budget for each region

Education expenditure as % of total government budget

Consistent federal government commitment to education

General education expenditure as % of total education budget

1. Assess the progress on the achievement of the project’s objectives 2. Together with annual reports, determine whether modifications are needed to GEQIP and provide feedback to the preparation of AWPs and GEQIP 3. Report back to citizens on Government performance on project implementation and contributions to the ESDP/GEQIP 4. Ensure that sectoral and intra-sectoral allocations are in line with the government’s commitment to quality improvement as outlined in the Letter of Policy Development

Component Breakdown Intermediate Outcomes Intermediate Outcome Indicators

Use of Project Outcome Information

Component One: Curriculum, Textbooks and Assessment

1.1 Curriculum Reform and Implementation:

Increased use of revised general education curriculum

% of schools and ABE centers with one set of syllabi in core subjects for all grade levels

Inform whether program objectives are achieved to improve the quality and relevance of general education through curriculum revision and implementation

1.2 Textbooks and Teacher Guides Improved availability of new textbooks & teacher guides in core subjects

Number of textbooks and teacher guides in core subjects distributed in a) primary & b)secondary (math and science & other core subjects)

Inform whether program objectives are achieved to improve the quality and relevance of general education through the provision of textbooks and teacher guides

-52-

Component Breakdown Intermediate Outcomes Intermediate Outcome

Indicators Use of Project Outcome Information

Component Two: Teacher Development Program (TDP)

# intake into CTEs for diploma pre-service training

Increased supply of qualified regular teachers # intake into TEIs for degree pre-

service training

Assess production capacity of regular pre-service teacher training

Increased supply of qualified ABE facilitators

# of ABE facilitators qualified in Afar and Somali (3 month certificate level)

Assess production capacity of ABE pre-service teacher training

2.1: Pre-Service Teacher Education Quality Improvement

Improved supply of qualified teacher educators

# teacher educators qualified annually (HDP)

Assess production capacity of HDP program

Improved qualification of teachers through upgrading program

# of teachers upgraded from certificate to diploma

Assess delivery of upgrading program across and within regions

Improved in-service teacher training through CPD

# of teachers provided CPD training

Assess delivery of CPD across and within regions

Improved teachers qualification

# of teachers upgraded from certificate to diploma (intake each year)

Assess delivery of upgrading program across and within regions

2.2 In-Service Teacher Education Quality Improvement

Improved supply of qualified English teachers

ELQIP: English Language Teaching for Grades 1-12 No of teachers trained (ELTIP training, intake) No of teachers trained as mentors (SBEM training))

Assess training capacity of ELQIP program

Component 3: School Improvement Program (SIP)

with School Grants

3.1 School Improvement Program (SIP)

Improved school planning % of primary and secondary schools and ABE Centers with completed School Improvement Plans approved by PTAs/School Boards/School Improvement Committees

Assess functioning of application of SIP information on the implementation of school grants

3.2 School Grants Improved utilization of school grants

% of schools and ABE Centers using Schools Grants to address priority areas identified in SIP

Assess functioning of application of SIP information on the implementation of school grants

-53-

Component Breakdown Intermediate Outcomes Intermediate Outcome

Indicators Use of Project Outcome Information

Component 4: Management and Administration Program (MAP)

MOE produce ESDP IV

% of schools received revised SIP instrument training

Intake into secondary school principals LAMP advanced diploma program

4.1 CB for Education Sector Management and Planning 4.2 CB for School Planning and Management 4.3 Education Management Information Systems

Improved school management and planning at all levels

Education Statistics Annual Abstract produced and disseminated by October

1. Inform managers whether the RBEs and woredas have effective capacity for preparing and adopting education sector plans 2. Inform managers whether the MOE has effective capacity for preparing and adopting education sector plans

Component 5: Program Coordination and M&E

% of woredas and regions report on physical, financial, and performance progress data on quarterly basis

Improved project management, coordination and monitoring and evaluation systems operationalized at federal level Annual production by MOE and

MOFED of consolidated sector report, including GEQIP

5.1 Project Coordination and Monitoring & Evaluation

Improved understanding of how GEQIP can address gender and equity issues

Gender and equity needs assessment across all components

Regular publication and dissemination of data and performance monitoring results and their use in policy formulation

-5

4-

Arr

ange

men

ts fo

r R

esul

ts M

onit

orin

g

Dat

a C

olle

ctio

n an

d R

epor

ting

P

roje

ct O

utco

mes

Ind

icat

ors

B

asel

ine

1999

(2

006/

07)

Tar

get I

ndic

ator

Val

ues

2009

(201

6/20

17)

F

requ

ency

and

R

epor

ts

Dat

a an

d C

olle

ctio

n In

stru

men

ts

Res

pons

ibili

ty fo

r D

ata

Col

lect

ion

Pro

gram

Dev

elop

men

t Obj

ecti

ve fo

r th

e G

ener

al E

duca

tion

Qua

lity

Impr

ovem

ent P

rogr

am (2

009-

2017

): I

mpr

oved

Qua

lity

of G

ener

al E

duca

tion

%

of

stud

ents

sco

ring

at l

east

50

% in

nat

iona

l lea

rnin

g as

sess

men

ts in

Gra

des

4 an

d 8

in

core

sub

ject

s

Gra

de 4

Fe

mal

e 18

.9%

M

ale

21.8

%

Tot

al 2

0.0%

G

rade

8

Fem

ale

6.1%

M

ale

14.4

%

Tot

al 1

0.2%

Gra

de 4

F

25%

M

22%

T

23%

G

rade

8

F 12

%

M 1

5%

T 1

3.5%

Eve

ry 3

yea

rs

Nat

iona

l Lea

rnin

g A

sses

smen

t Rep

ort

MO

E, E

xam

inat

ion

&

Ass

essm

ent U

nit

Com

plet

ion

rate

in G

rade

s 5

and

8

Gra

de 5

Fe

mal

e 56

%

Mal

e 69

.2%

T

otal

62.

7%

Gra

de 8

Fe

mal

e 32

.9%

M

ale

50.1

%

Tot

al 4

1.7%

Gra

de 5

F

70%

M

75%

T

72%

G

rade

8

F 45

%

M 5

5%

T 5

0%

Yea

rly

EM

IS

MO

E, E

SDP

Plan

ning

and

Po

licy

Ana

lysi

s D

epar

tmen

t

Gro

ss E

nrol

lmen

t Rat

e (G

ER

) in

1s

t and

2nd

cyc

le s

econ

dary

1st

cyc

le s

ec

Fem

ale

28.6

%

Mal

e 45

.7%

T

otal

37.

3%

2nd c

ycle

sec

Fe

mal

e 3.

7%

Mal

e 7.

3%

Tot

al 5

.5%

1st c

ycle

sec

F

38%

M

50%

T

44%

2nd

cyc

le s

ec

F 6%

M

8%

T

7%

Yea

rly,

Ann

ual

Edu

catio

n St

atis

tical

A

bstr

act

EM

IS

MO

E, E

SDP

Plan

ning

and

Po

licy

Ana

lysi

s D

epar

tmen

t

-5

5-

Pro

ject

Dev

elop

men

t Obj

ecti

ves

for

Fir

st P

hase

AP

L (2

009-

2013

):

Impr

oved

Tea

chin

g an

d L

earn

ing

Con

diti

ons

in P

rim

ary

and

Seco

ndar

y E

duca

tion

& P

lann

ing

and

Bud

geti

ng

Pro

ject

Dev

elop

men

t In

dica

tors

B

asel

ine

1999

(2

006/

07) /

Yea

r 1

2001

(200

8/09

)

Yea

r 2

2002

(2

009/

10)

Yea

r 3

2003

(2

010/

11)

Yea

r 4

2004

(2

011/

12)

Fre

quen

cy a

nd

Rep

orts

D

ata

and

Col

lect

ion

Inst

rum

ents

R

espo

nsib

ility

for

Dat

a C

olle

ctio

n

Pupi

l to

new

text

book

rat

io in

co

re s

ubje

cts

in a

) Pr

imar

y (i

nclu

ding

AB

E c

ente

rs)

& b

) Se

cond

ary

(mat

h an

d sc

ienc

e &

ot

her

core

sub

ject

s)

Prim

ary

core

sub

ject

s

- no

ne

Seco

ndar

y m

ath

and

scie

nce

- no

ne

Seco

ndar

y ot

her

core

su

bjec

ts -

non

e

none

1:

1 no

ne

1:2

1:1

1:2

1:1

1:1

1:1

Ann

ual p

rogr

ess

repo

rts

EM

IS; S

urve

y at

sc

hool

leve

l M

OE

GE

CFD

D, w

ith R

EB

s

% o

f te

ache

rs w

ith a

ppro

pria

te

qual

ific

atio

ns (

Dip

lom

a or

de

gree

) in

G1-

4, G

5-8,

and

G9-

12

G1-

4 3.

4%

G5-

8 53

.4%

G

9-12

49

.8%

G1-

4 3.

4%

G5-

8 54

.0%

G

9-12

56

.5%

G1-

4 3.

4%

G5-

8 55

.0%

G

9-12

63

.0%

G1-

4 15

.7%

G

5-8

56

.0%

G

9-12

70

.0%

Mid

term

ev

alua

tion

EM

IS

MO

E, P

lann

ing

and

Polic

y A

naly

sis

Dep

artm

ent

Rec

urre

nt n

on-s

alar

y ex

pend

iture

s as

% o

f ge

nera

l ed

ucat

ion

budg

et f

or e

ach

regi

on

5%

5%

5%

5%

M

OFE

D A

nnua

l re

port

s E

cono

mic

and

fi

nanc

ial r

epor

t M

OFE

D

Edu

catio

n ex

pend

iture

as

% o

f to

tal g

over

nmen

t bud

get

15.3

%

14

.5%

14

.5%

14

.5%

M

OFE

D A

nnua

l re

port

s E

cono

mic

and

fi

nanc

ial r

epor

t M

OFE

D

Gen

eral

edu

catio

n ex

pend

iture

as

% o

f to

tal e

duca

tion

budg

et

66.6

%

66.6

%

66.6

%

66.6

%

MO

FED

Ann

ual

repo

rts

Eco

nom

ic a

nd

fina

ncia

l rep

ort

MO

FED

-5

6-

Com

pone

nt B

reak

dow

n In

term

edia

te

Out

com

e In

dica

tors

T

arge

t Ind

icat

ors

Val

ues

Dat

a C

olle

ctio

n an

d R

epor

ting

Bas

elin

e/Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 F

requ

ency

and

R

epor

ts

Dat

a an

d C

olle

ctio

n In

stru

men

ts

Res

pons

ibili

ty f

or

Dat

a C

olle

ctio

n C

ompo

nent

One

: Cur

ricu

lum

, Tex

tboo

ks a

nd

Ass

essm

ent

1.1

Cur

ricu

lum

Ref

orm

an

d Im

plem

enta

tion:

%

of

scho

ols

and

AB

E

cent

ers

with

one

set

of

sylla

bi in

cor

e su

bjec

ts

for

all g

rade

leve

ls

Non

e G

1-8

100%

G1-

12

AB

E

100%

G1-

12

AB

E

100%

Ann

ual p

rogr

ess

repo

rts

EM

IS

MO

E G

EC

FDD

, with

R

EB

s

1.2

Tex

tboo

ks a

nd

Tea

cher

Gui

des

Num

ber

of c

umul

ativ

e te

xtbo

oks

and

teac

her

guid

es in

cor

e su

bjec

ts

dist

ribu

ted

in a

) pr

imar

y &

b)s

econ

dary

(m

ath

and

scie

nce

&

othe

r co

re s

ubje

cts)

Prim

ary

core

-

none

Se

c m

ath

& s

cien

ce

- no

ne

Sec

othe

r co

re –

no

ne

none

4.

2 m

il no

ne

50.8

mil

4,2

mil

3.6

mil

76.7

mil

4,2

mil

7.3

mil

Ann

ual p

rogr

ess

repo

rts

EM

IS

MO

E G

EC

FDD

, with

R

EB

s

Com

pone

nt T

wo:

Tea

cher

Dev

elop

men

t Pro

gram

(T

DP

)

2.1:

Pre

-Ser

vice

Tea

cher

E

duca

tion

Qua

lity

Impr

ovem

ent

# in

take

into

CT

Es

for

dipl

oma

pre-

serv

ice

trai

ning

16,8

48

19,1

73

21,8

19

24,8

30

Ann

ual

Ann

ual P

rogr

ess

Rep

orts

M

OE

ESD

P PP

AD

, R

EB

Hea

d

#

inta

ke in

to T

EIs

for

de

gree

pre

-ser

vice

tr

aini

ng

24,0

99

28,8

42

34,3

51

40,9

11

A

nnua

l A

nnua

l Pro

gres

s R

epor

ts

MO

E E

SDP

PPA

D,

RE

B H

ead

#

of A

BE

fac

ilita

tors

qu

alif

ied

in A

far

and

Som

ali (

3 m

onth

ce

rtif

icat

e le

vel)

263

(1.1

4%)

2,09

3 (9

.1%

) 5,

863

(25.

5%)

9,56

3 (4

1.6%

) A

nnua

l A

nnua

l Pro

gres

s R

epor

ts

MO

E E

SDP

PPA

D,

RE

B H

ead

#

teac

her

educ

ator

s qu

alif

ied

annu

ally

(H

DP)

2,53

8 (5

3%)

3,29

2 (6

8.6%

) 4,

046

(84.

3%)

4,80

0 (1

00%

) A

nnua

l A

nnua

l Pro

gres

s R

epor

ts

MO

E E

SDP

PPA

D,

RE

B H

ead

-5

7-

Com

pone

nt B

reak

dow

n In

term

edia

te

Out

com

e In

dica

tors

T

arge

t Ind

icat

ors

Val

ues

Dat

a C

olle

ctio

n an

d R

epor

ting

Bas

elin

e/Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 F

requ

ency

and

R

epor

ts

Dat

a an

d C

olle

ctio

n In

stru

men

ts

Res

pons

ibili

ty f

or

Dat

a C

olle

ctio

n #

of te

ache

rs u

pgra

ded

from

cer

tific

ate

to

dipl

oma

16,4

47

18,7

97

21,1

47

23,4

96

Ann

ual

Ann

ual P

rogr

ess

Rep

orts

M

OE

ESD

P PP

AD

, R

EB

Hea

d

# of

teac

hers

pro

vide

d C

PD tr

aini

ng

0 50

,000

10

0,00

0 15

0,00

0 A

nnua

l A

nnua

l Pro

gres

s R

epor

ts

MO

E E

SDP

PPA

D,

RE

B H

ead

# of

teac

hers

upg

rade

d fr

om c

ertif

icat

e to

di

plom

a (i

ntak

e ea

ch

year

)

5,41

7 (3

.4%

) 5,

417

(3.4

%)

5,41

7 (3

.4%

) 5,

417

(3.4

%)

Ann

ual

Ann

ual P

rogr

ess

Rep

orts

M

OE

ESD

P PP

AD

, R

EB

Hea

d

2.2

In-S

ervi

ce T

each

er

Edu

catio

n Q

ualit

y Im

prov

emen

t

EL

QIP

: Eng

lish

Lan

guag

e T

each

ing

for

Gra

des

1-12

N

o of

teac

hers

trai

ned

(EL

TIP

trai

ning

, in

take

) N

o of

teac

hers

trai

ned

as m

ento

rs (

SBE

M

trai

ning

)

0 0

4,63

5 0

4,47

9 2,

995

0 0

Ann

ual

Ann

ual P

rogr

ess

Rep

orts

M

OE

ESD

P PP

AD

, R

EB

s, E

nglis

h L

angu

age

Impr

ovem

ent

Dep

artm

ent

Com

pone

nt 3

: Sch

ool I

mpr

ovem

ent P

rogr

am

(SIP

) wit

h Sc

hool

Gra

nts

3.1

Scho

ol I

mpr

ovem

ent

Pro

gram

(SI

P)

% o

f pr

imar

y an

d se

cond

ary

scho

ols

and

AB

E C

ente

rs w

ith

com

plet

ed S

choo

l Im

prov

emen

t Pla

ns

appr

oved

by

PTA

s/Sc

hool

Boa

rds

No

base

line

Scho

ols

70%

A

BE

C

ente

rs

40%

Scho

ols

80%

A

BE

C

ente

rs

45%

Scho

ols

90%

A

BE

C

ente

rs

50%

Bie

nnia

l Sc

hool

Gra

nts

Util

izat

ion

Surv

ey

MO

E P

PAD

3.2

Scho

ol G

rant

s %

of

scho

ols

and

AB

E

Cen

ters

usi

ng S

choo

ls

Gra

nts

to a

ddre

ss

prio

rity

are

as id

entif

ied

in S

IP

No

base

line

Scho

ols

70%

A

BE

C

ente

rs

40%

Scho

ols

80%

A

BE

C

ente

rs

45%

Scho

ols

90%

A

BE

C

ente

rs

50%

Bie

nnia

l Sc

hool

Gra

nts

Util

izat

ion

Surv

ey

MO

E P

PAD

-5

8-

Com

pone

nt B

reak

dow

n In

term

edia

te

Out

com

e In

dica

tors

T

arge

t Ind

icat

ors

Val

ues

Dat

a C

olle

ctio

n an

d R

epor

ting

Bas

elin

e/Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 F

requ

ency

and

R

epor

ts

Dat

a an

d C

olle

ctio

n In

stru

men

ts

Res

pons

ibili

ty f

or

Dat

a C

olle

ctio

n C

ompo

nent

4:

Man

agem

ent a

nd A

dmin

istr

atio

n P

rogr

am (M

AP

)

4.1

CB

for

Edu

catio

n Se

ctor

Man

agem

ent a

nd

Pla

nnin

g

MO

E a

nd M

OFE

D

prod

uce

ESD

P IV

N

/A

N/A

N

ov

2009

N

/A

MO

E P

PAD

, MO

FED

% o

f sc

hool

s re

ceiv

ed

revi

sed

SIP

inst

rum

ent

trai

ning

Non

e 50

%

50%

N

/A

Bie

nnia

l Sc

hool

Gra

nts

Util

izat

ion

Surv

ey

MO

E P

PAD

4.

2 C

B f

or S

choo

l P

lann

ing

and

Man

agem

ent

In

take

into

sec

onda

ry

scho

ol p

rinc

ipal

s L

AM

P ad

vanc

ed

dipl

oma

prog

ram

400

700

700

0 A

nnua

l pro

gres

s re

port

s R

egio

nal A

nnua

l Rep

ort

MO

E E

SDP

PPA

D,

RE

Bs

4.3

Edu

catio

n M

anag

emen

t Inf

orm

atio

n Sy

stem

s

Edu

catio

n St

atis

tics

Ann

ual A

bstr

act

prod

uced

and

di

ssem

inat

ed b

y O

ctob

er

Apr

200

8 N

ov

2010

O

ct

2011

O

ct

2012

A

nnua

l pro

gres

s re

port

s Pr

ojec

t EM

IS

MO

E E

SDP

PPA

D,

RE

Bs

Com

pone

nt 5

: P

rogr

am C

oord

inat

ion

and

M&

E

% o

f w

ored

as a

nd

regi

ons

repo

rt o

n ph

ysic

al, f

inan

cial

, and

pe

rfor

man

ce p

rogr

ess

data

on

quar

terl

y ba

sis

Wor

edas

60

%

Reg

ions

10

0%

70%

10

0%

80%

10

0%

90%

10

0%

Ann

ual p

rogr

ess

repo

rts

Proj

ect M

onito

ring

M

OE

ESD

P PP

AD

, R

EB

s, M

OFE

D,

BO

FED

, WO

FED

Ann

ual p

rodu

ctio

n by

M

OE

and

MO

FED

of

cons

olid

ated

sec

tor

repo

rt, i

nclu

ding

G

EQ

IP

N/A

N

ov

2010

O

ct

2011

O

ct

2012

A

nnua

l pro

gres

s re

port

s Pr

ojec

t Mon

itori

ng

MO

E E

SDP

PPA

D,

RE

Bs

5.1

Pro

ject

Coo

rdin

atio

n an

d M

onito

ring

&

Eva

luat

ion

Gen

der

and

equi

ty

need

s as

sess

men

t ac

ross

all

com

pone

nts

1 N

one

Non

e N

one

Onc

e G

ende

r an

d E

quity

N

eeds

Ass

essm

ent

MO

E E

SDP

PPA

D

-59-

Arrangements for Results Monitoring

1. Institutional Arrangements. The guiding principle of GEQIP monitoring, evaluation and review processes is to use and strengthen the established systems of the Government. The MOE will be responsible for overall monitoring and evaluation of the GEQIP together with the REBs. The MOE Department of Planning and Policy Analysis (PPAD) will consolidate information provided by implementing departments, the REBs/WEOs and teacher training institutions in order to track progress towards the PDO based on the agreed results framework. The reporting formats as specified in the PIM will be used for this purpose. A monitoring and evaluation specialist employed full time by the MOE will consolidate the progress reports on a regular basis as agreed in the PIMs.

2. Semi-annual national consolidated GEQIP performance reports will be prepared in line with the existing Government reporting cycle. The first report will cover the first half of the EFY and the second report will cover the second half and will also summarize the full year to serve as an Annual GEQIP Performance Report covering the period of the previous school year. The first six monthly reports will feed into the ESDP Annual Review Meeting (ARM) in April. The second six monthly and annual reports will feed into the ESDP Joint Review Mission (JRM) in November. In this way, GEQIP will form part of the sector-wide review process, enabling review of GEQIP within the overall sector policy, strategic and financing context. The JRM and ARM have always reported on general education performance and as such this will not entail any significant changes to the established process.

3. Each region will be responsible for producing semi-annual Regional GEQIP Performance Reports, respectively, in line with the above system to feed into the national consolidated reports. Data from woredas on school grants will be consolidated into the Regional GEQIP Performance Report.

4. The second of the semi-annual GEQIP performance reports (national and regional) will be prepared as part of annual ESDP performance report, which covers the whole sector.31 While this reporting system is established, it is currently not systematically followed and reports are either not produced or are not readily available. The reports will include summary financial performance.

5. The Annual GEQIP Performance Report will focus on the extent to which objectives and outcomes have been achieved as opposed to monitoring progress on individual activities and accounting for inputs. The report will include assessment of progress towards meeting indicators and targets, and will include lessons learned and recommendations as a basis for discussions during the ARM. An important aspect of the review will be to assess progress against the GEQIP Results Framework. It will be important to assess how GEQIP targets are reached, through monitoring progress in the implementation of specific strategies and in the allocation and deployment of resources. Key issues related to management and capacity will also be highlighted.

6. In addition to the annual reports, WOFEDs and BOFEDs will be required to submit GEQIP financial reports. These reports will outline financial disbursements using Government monthly financial reporting systems. A consolidated report will be produced by MOFED at the 31 The Annual ESDP Performance Report will feed into the PASDEP Annual Progress Report.

-60-

federal level, including financial disbursements through MOE and the universities. These reports will be summarized in the GEQIP six-monthly/annual reports described above.

7. GEQIP report formats are provided in the PIM. In addition to the six-monthly/annual reports and the quarterly financial reports, specific policy, thematic, impact and evaluation studies will be undertaken as required and usually as part of specific components. These may be presented and discussed during JRMs and ARMs as appropriate. Reporting can be summarized as follows:

Report Period Preparation Review Process 1st Six Monthly GEQIP Performance Report

July - December End of February Annual Review Meeting in April

2nd Six Monthly and Annual GEQIP Performance Report

January – June and full year summary

End of September Joint Review Mission in November

Quarterly Financial Reports July – September October – December January – March April – June

Mid November Mid February Mid May Mid August

ARM and JRM will assess summary financial performance as part of six-monthly GEQIP reports and quarterly financial reports will be reviewed through the GCC

8. Data Collection. The majority of the outcome and intermediate outcome level indicators have been selected from the agreed ESDP core sector performance indicators. Annual performance against most of the indicators is available from the EMIS in September/October for reporting purposes (although the final version of the Education Statistics Annual Abstract (ESAA) is usually not published by then). One of the outcomes of the EMIS sub-component is to improve the timeliness of the finalization and dissemination of the ESAA. An M&E plan will be developed for each indicator

9. The Government will carry out periodic studies on issues that will be identified during the course of project implementation. The following areas, inter alia, are being considered: teacher effectiveness, teacher utilization, girls’ education, review of secondary education, review of higher education, and school improvement program evaluation.

10. A baseline study will be conducted in Year 1 to collect both qualitative and quantitative data that are currently missing to enable MOE to track change in schools and classrooms over time. Interview and observation instruments will be designed to capture school and classroom level data related to (but not limited to):

• Pupil time-on-task • Inclusion (including relating to gender and level of attainment) • Lesson content (including relevance and accuracy) • Lesson structure • Textbook utilization (by pupils and teachers) • Impact on pupil learning

11. Capacity Development. The GEQIP will support both MOE and REBs to implement the M&E system that will include the establishment of a project baseline and the identification of the key development indicators that will be used to monitor performance of GEQIP. In the process, MOE’s capacity to be results-focused in its monitoring and reporting will be strengthened through on-going training and on-the-job support. REBs and WEOs will develop their own baselines based on the national guidelines and framework and annual targets for the key

-61-

performance indicators and these will be addressed in the regional reports. The monitoring of woreda level targets will require the strengthening of education planning and monitoring capacities of the WEOs, including the specific development of EMIS capacity at Woreda level. The MAP component will provide capacity building support in these areas. The project will also provide support to strengthen the EMIS to enable rapid monitoring of key outputs and outcomes at the national regional, woreda and school levels. The focus will be on system redesign, data collection procedures, computerization, and capacity building at all levels.

-62-

Annex 4: Detailed Project Description

Project Description

1. The GEQIP is a national program that aims to improve the quality of general education through the provision of a set of key inputs/interventions. It will be implemented both at the federal level through MOE and in the 9 regions and 2 city administrations, which are responsible for management and financing of primary and secondary education. The MOE sets the national standards based on a coherent national framework for their achievement and additional resources “earmarked” to achieve these standards.

2. The proposed support from IDA will be provided within the framework and principles of a SWAp through a pooled funding mechanism. The proposed IDA instrument to support the GEQIP will be an Adaptable Program Loan (APL), implemented in two phases. The first phase of the APL will be financed through an IDA Credit of US$50 million equivalent, and will be implemented over a period of three years (2009-2013). The estimated amount for Phase 2, if approved, is about US$80 million, and the implementation period would be four years. The APL has been chosen as the most appropriate instrument, because the longer-term perspective of an APL would provide the Government with support to carry out a system-wide quality improvement reform, while providing the flexibility to adjust and refine interventions on an ongoing basis.

3. GEQIP consists of five components: (i) Curriculum, Textbooks, and Assessment; (ii) Teacher Development Program (TDP), including English Language Quality Improvement Program (ELQIP); (iii) School Improvement Program (SIP), including schools grants; (iv) Management and Administration Program (MAP), including EMIS; and (v) Program Coordination and Monitoring and Evaluation.

4. GEQIP is designed to enhance coordination and synergy among components that have operated separate programs in the past. The newly revised curriculum will serve as a cross-cutting foundation for the firs three components of the program. The revised curriculum will guide the revision of the textbooks and teacher guides, as well as the teacher educator and pre- and in-service teacher training program curricula that will be developed under GEQIP. The national examination system will also be aligned with the revised curriculum. The MAP also cuts across the other components, as capacity building is needed within each project component. The cross-component linkage is an important design feature of GEQIP.

5. While the project is primarily focused on the improvement of general education quality, improving the quality of schooling is expected to provide an incentive for parents to enroll their children in school (access); improve equity in access to quality education, especially for girls and disadvantaged children in rural areas; to ensure that children are promoted on time to higher grade levels (internal efficiency) and to ensure that children complete school (attainment) with quality learning outcomes. This operation will also contribute to the sectoral objectives related to both poverty reduction and economic growth by supporting the quality and relevance of

-63-

primary and secondary education, both of which would help Ethiopia create more educated and skilled labor force.

6. GEQIP takes a holistic approach to improve the quality of general education by adapting the concept of the school effectiveness model (World Bank 2000). Figure 1 below presents the eight domains of the school effectiveness model. The eight domains of school effectiveness that contribute to high quality teaching and learning are: (i) curriculum; (ii) teacher quality and professional development; (iii) school leadership and management: (iv) general well-being of students; (v) linkage between schools and communities and stakeholders: (vi) school governance and accountability; (vii) quality assurance; and (viii) physical infrastructure.

7. While GEQIP does not address all eight domains of the school effectiveness model, the figure above illustrates how the project components are designed to align with ongoing sector activity supported by the Ethiopian Government and other donors. The “value added” contribution of GEQIP rests on the extent to which the project components are implemented in coordination with other inputs. For instance, GEQIP does not include infrastructure investment32 or finance teacher salaries. A prior study on the determinants of schooling investments among primary school students in Ethiopia concludes that supply constraints (including availability of schools in communities and distance children must travel to school) play an important part in preventing some children from attending school (World Bank 2000). Increasing the supply of

32 The first phase of the GEQIP will not address directly the physical environment of school domain (e.g., infrastructure, health and safety, and equipment); and will address several others indirectly (e.g., general well-being, quality assurance systems). However, efforts will be made by MOE and REBs to coordinate the implementation of various activities supported by both Government and other DPs to ensure maximum impact of the program.

-64-

schools alone will not enhance the quality of education or improve student learning. GEQIP will contribute to the overall quality improvement of the Ethiopian education system by providing support for activities in specific domains of school effectiveness that complement inputs in other domains.

8. The framework is particularly suitable for GEQIP given the decentralized structure of the Ethiopian education system, paired with the Government’s recent efforts to carry out a broad reform of the curriculum in all subjects at all levels, improve the quality of teaching, reform the examination and assessment systems to align with the reformed curricula, enhance school leadership and management and increase stakeholder voice and community participation, as an interpreted prototype.

9. It should be noted that the scope and nature of most activities under each GEQIP component are not “predefined” with associated ex-ante allocation of funds as in a traditional investment credit design. The scope of interventions and level of resource requirements will vary by level of government and across regions, based on approved work plans. The overall objectives and framework of GEQIP have been developed at the federal level and shared with regions and woredas. Through consultative meetings and awareness raising workshops, regions and woredas have developed annual plans at their respective levels to implement activities aligned with the broader GEQIP objectives and within the categories of interventions prescribed in the federal guidelines. GEQIP is therefore designed in such a way to ensure flexibility in funding and programmatic design for regions and woredas to respond to their own changing needs through the life span of the project. The project design is expected to enhance impact and sustainability of the project investments, while strengthening the capacity of policy making, planning, management and monitoring at national (MOE) and sub-national levels (regions and woredas).

10. Component 1 will support: (i) implementation of revised curriculum from Grades 1-12; (ii) provision of textbooks and teacher guides based on new curricula; and (iii) the improvement of assessment and examination systems. Component 2 will support the implementation of teacher educator and pre-service and in-service teacher development programs, focusing primarily on teachers in primary and secondary education, but will also provide resources for English Language Quality Improvement Program and the Alternative Basic Education program. In addition, GEQIP may also provide resources to teacher development programs for Early Childhood Care and Education and Special Needs Education based on the findings of needs assessments conducted by pooled and non-pooled Donor Partners and based on availability of resources in latter years of Phase 1, proposed activities are in line with the objectives of the proposed program. Under Component 3, schools will complete self-assessments and develop school improvement plans and receive school grants to implement their plans, while strengthening the capacity of schools to participate in the management of resources in a more effective and efficient manner. Component 4 will support the institutional development of the MOE and regions, with particular focus on enhancing the capacity of education officials to perform their roles, and strengthening the EMIS. Component 5 provides support to MOE and regions in overall coordination and monitoring and evaluation. The details of the project components are described in the following paragraphs and further elaborated in the PIM.

-65-

Component 1: Curriculum, Textbooks and Assessment (estimated base cost: US$146.7 million)

11. The main objectives of this component are to: (i) implement a new school curriculum designed to be responsive to international economic realities, national democracy, and gender equity; (ii) provide textbooks and teachers guides developed for the new curriculum; and (iii) align student assessment and examinations with the new curriculum.

12. Sub-component 1.1: Curriculum Reform and Implementation. Since its introduction 15 years ago, the curriculum has been revised once, to address concerns in civic education, gender equity, HIV/AIDS education, and other government policies and strategies. The reform addresses overloading, improves the sequencing of content, and orients instruction toward the adoption of more active learning methodologies. This sub-component would support the reform of the curriculum for grades 1-12 to improve the quality of general education. This curriculum reform is based on a needs analysis carried out in 2007.

13. The MOE has completed the development of a National Curriculum Framework, minimum learning competencies, content flow charts and the revision of syllabi in Grades 1-12 for all subjects, with technical assistance from a team of local and international consultants supported by the European Commission. The revised syllabi for Grades 1-8 are being readied for implementation in the 2009/10 school year. The revision of syllabi for Grades 9-12 would also be completed for implementation in the 2009/10 school year for secondary science and mathematics subjects at the preparatory level. The printing, translation, and distribution of these curriculum materials are expected to be completed before the start of the project.

14. 1.1.1 New Curriculum Orientation. The project will support the introduction of the new curriculum through awareness campaigns and teacher orientation. The new curriculum awareness campaign would be delivered in two phases. The first phase would target MOE departments, REBs and teacher training institutions to introduce the essential curriculum changes. The orientation would enhance ownership and understanding of the curriculum and promote effective integration of the curriculum with other school inputs. The second phase would be aimed at schools, where such changes are likely to encounter the greatest challenges in implementation. To enhance teacher ownership of the revised curriculum, support and practical guidance will be provided on approaches to implementing the curriculum at the classroom level. School-level support will also include campaigns to inform parents and community members of the expected changes in the classroom. The awareness campaign will be planned and led by the General Education Curriculum Framework Development Department (GECFDD). All phases of the campaign will be supported by the use of media (including radio and television) to reach target audiences. The campaign will also inform audiences of the changes in textbook procurement and in assessment procedures.

15. Under the first phase of the program, support will be provided to organize short-term summer programs to introduce the new curriculum to all teachers. The programs will be coordinated by the GECFDD in close cooperation with the REBs. They will be carried out using the cascade model, with cluster training involving GECFDD personnel and regional experts who have been involved in the review and revision of the syllabi. REB experts, supervisors, and selected teachers will be trained as trainers of trainers.

-66-

16. 1.1.2 Science and Mathematics Strategy. A new strategy for science and mathematics will be developed to help teachers teach these core subjects more effectively. A draft strategy document has been prepared by GECFDD subject specialists with assistance from international consultants. During Year 1 of the project, the draft strategy will be reviewed at a workshop to be attended by teachers of science and mathematics as well as by subject specialists from central MOE and the REBs. The recommendations of the workshop will be incorporated into a final document for approval by the Minister of Education. About 30,000 copies of the strategy document will be printed and distributed during Year 2 of the project: 25.000 copies for schools, the rest for REBs, woredas, and other stakeholders. This will be followed by an orientation program for science and mathematics teachers, which is planned for Year 3 of the project.

17. 1.1.3 New Curriculum for Alternate Basic Education (ABE). Syllabi for the ABE program will consist of integrated and condensed content of the syllabi for Grades 1-4, organized into three “stages” of the program. The ABE syllabi will be developed in Year 1 of the project, after the official issuance of the Grades 9-12 syllabi.

18. 1.1.4 Monitoring and Evaluation. The suitability of the revised curriculum to bring about envisioned changes will be monitored, in teaching methodologies, student attitudes, and, to a certain extent, learning outcomes. On a sample basis, GECFDD will conduct twice-yearly field visits to schools to collect data on the implementation of the revised curriculum and on observed changes in the teaching and learning process. Monitoring and evaluation for all grades will begin during Year 2 of the project.

19. Sub-component 1.2: Teaching and Learning Materials. In prior years, MOE undertook the writing of manuscripts for textbooks and contracted the printing at the lowest possible cost, frequently with government printers. The textbooks benefited from no field-testing or feedback from classroom teachers nor were they designed to catch and hold the short attention span of school children. Manufactured for maximum economy, the books were generally printed in a single color (black) on locally available paper. The resulting textbooks were unattractive and provided no help or guidance to teachers, as there were no accompanying teacher materials.

20. The first phase of the GEQIP project will address the above inadequacies in textbook content and provision. High quality standards in content will be maintained by requiring that the books follow the new MOE curriculum, be developed for active learning, and trial-tested in actual classroom situations. The new books will also benefit from the knowledge and experience as well as the attractive book design and presentation and quality paper, printing, and binding offered by international publishers. Distribution to MOE-selected woredas will minimize warehousing and handling at central MOE and at the REBs and make the books reachable by schools.

21. The MOE has designed a comprehensive national development and provision program for making available to all schools textbooks and teacher guides in all subject areas at primary and secondary levels (Grades 1–12), compliant with the requirements of the new curriculum. Textbooks will be provided for the subjects in each grade level as indicated in Table 1. Several syllabi were incomplete at the time of Negotiations, thus have been excluded; when the syllabi have been prepared and appraised to be satisfactory, the printing and distribution of information

-67-

technology (IT), Economics and Basic Business textbooks for Grades 11-12 will be included in GEQIP (estimated to cost US$1.2 million).

Table 1: GEQIP-Financed Textbooks by Grade

GEQIP-Financed Syllabi Incomplete (at Negotiations)

Grades 1-2 Math, English, Mother Tongue, Environmental Science 4 Grades 3-4 Math, English, Mother Tongue, Environmental

Science, Amharic 5

Grades 5-6 Math, English, Mother Tongue, Integrated Science, Amharic, Social Science, Civics

7

Grades 7-8 Math, English, Mother Tongue, Amharic, Social Science, Physics, Chemistry, Biology, Civics

9

Grades 9-10 Math, English, Mother Tongue, Amharic, Physics, Chemistry, Biology, Geography, History, Civics

10

Grades 11-1233 Required: Math, English, Mother Tongue, Amharic, Civics (5) Science Stream: Physics, Chemistry, Biology, Technical Drawing (4) Social Science Stream:, Geography, History (2)

5 plus 6 (considered 3 for costing)

IT, Economics, Basic Business

Source: MOE 2008

22. The program envisions the acquisition of at least 92 textbook titles in series and 92 accompanying teacher guides, initially during the first phase of the project, and possibly extending to the second phase of the project. Provided at the ratio of one book per student, the total new textbook requirement under the program is estimated at 94.8 million copies at the base cost of US$140.0 million. In addition, 2.5 million textbooks will be reprinted in Year 1 for SNNPR and Tigray regions, at an estimated cost of $2.0 million. Tables 2-4 below provide a summary of the textbook provision program for primary and secondary levels, including reprinting of textbooks for the three regions.

33 Students in Grades 11 and 12 are streamed into Science and Social Science Streams. For costing purposes, the number of subjects is divided by two.

-6

8-

Tab

le 2

: Est

imat

ed N

umbe

r of

Tex

tboo

ks a

nd C

ost f

or P

rim

ary

Lev

el

Pri

mar

y 1

2 3

4 5

6 7

8 T

otal

P

rim

ary

Enr

ollm

ent

2000

3,

499,

603

2,23

8,42

6 1,

984,

396

1,88

6,78

7 1,

443,

539

1,07

1,66

0 94

1,95

3 89

8,96

1 13

,965

,325

T

each

ers

Cop

ies

87,4

90

55,9

61

49,6

10

47,1

70

36,0

88

26,7

92

23,5

49

22,4

74

349,

133

Tot

al

Tex

tboo

ks

3,58

7,09

3 2,

294,

387

2,03

4,00

6 1,

933,

957

1,47

9,62

7 1,

098,

452

965,

502

921,

435

14,3

14,4

58

Tea

cher

s G

uide

s 87

,490

55

,961

49

,610

47

,170

36

,088

26

,792

23

,549

22

,474

34

9,13

3 B

ooks

per

su

bjec

t 3,

674,

583

2,35

0,34

7 2,

083,

616

1,98

1,12

6 1,

515,

716

1,12

5,24

3 98

9,05

1 94

3,90

9

Req

uire

d su

bjec

ts

4 4

5 5

7 7

9 9

B

ook

requ

irem

ent

14,6

98,3

31

9,40

1,38

9 10

,418

,079

9,

905,

632

10,6

10,0

12

7,87

6,70

1 8,

901,

456

8,49

5,18

1 80

,306

,781

U

nit

Cos

t (U

S$)

1.25

1.

25

1.25

1.

25

1.50

1.

50

1.50

1.

50

T

otal

Cos

t (U

S$)

18,3

72,9

14

11,7

51,7

37

13,0

22,5

99

12,3

82,0

40

15,9

15,0

17

11,8

15,0

52

13,3

52,1

84

12,7

42,7

72

109,

354,

314

Sour

ce:

MO

E.

-6

9-

T

able

3: E

stim

ated

Num

ber

of T

extb

ooks

and

Cos

t for

Sec

onda

ry L

evel

Tab

le 4

: Est

imat

ed T

otal

Num

ber

of T

extb

ooks

and

Cos

t

Seco

ndar

y G

rade

9

Gra

de10

G

rade

11

Gra

de12

T

otal

Tot

al P

rim

ary

Tot

al

Rep

rint

ing

Tot

al

Seco

ndar

y G

RA

ND

T

OT

AL

E

nrol

lmen

t200

1 72

6,64

8 50

7,65

2 97

,138

89

,239

1,

420,

677

Tea

cher

s C

opie

s 18

,166

12

,691

2,

428

2,23

1 35

,517

T

otal

Tex

tboo

ks

744,

814

520,

343

99,5

66

91,4

70

1,45

6,19

3.98

T

each

ers

Gui

des

18,1

66

12,6

91

2,42

8 2,

231

35,5

16.9

3

B

ooks

per

sub

ject

76

2,98

0 53

3,03

5 10

1,99

5 93

,701

Req

uire

d su

bjec

ts

10

10

8 8

B

ook

requ

irem

ent

7,62

9,80

5 5,

330,

346

815,

959

749,

608

14,5

25,7

17

80,3

06,7

81

2,45

8,97

3 14

,525

,717

97

,291

,471

U

nit

Cos

t (U

S$)

2.00

2.

00

3.00

3.

00

T

otal

Cos

t (U

S$)

15,2

59,6

09

10,6

60,6

92

2,44

7,87

8 2,

248,

823

30,6

17,0

01

109,

354,

314

2,05

0,00

7 30

,617

,001

14

2,02

1,32

2 So

urce

: M

OE

.

Sour

ce:

MO

E.

-70-

23. 1.2.1 Textbook Provision Strategy. In the context of scarce financial resources and developing management capacity, the textbook provision program would put priority on the following: (i) the procurement of textbooks and teacher guides for Grades 9-12 mathematics and the sciences (biology, chemistry and physics) as these subjects are of “universal” content and can be developed more readily through adaptation of textbook series which have been prepared and market-tested by experienced publishers in regional and international markets; (ii) the procurement of textbooks and teachers guides for the other subject areas of Grades 9-12; and (iii) the development and provision of textbooks and teacher guides for Grades 1-8. To regulate the flow of large volumes of books through the regions and woredas where storage and handling capacity is limited, annual deliveries would be phased, following a book to pupil ratio of about 1:3.

24. The textbook provision process, which would involve the writing or adaptation, field testing, design, printing, and distribution of materials, is expected to take a minimum of one year to complete. To ensure the uninterrupted supply of textbooks to schools, the MOE has adopted an interim measure. In Year 1 of the project, selected textbooks currently in use would be reprinted in limited quantities in Tigray, SNNPR and Somali, to replenish supply in schools until the arrival of the new textbook series. The list of textbooks for reprinting with corresponding quantities is included in the PIM.

25. Supplementary reading materials are likely to be provided by non-pooled donors (e.g., USAID). The provision of supplementary reading books and other materials would be scheduled for possible introduction in the second phase of the project, as the annual cost of replacing them is high, and as it is more beneficial for learning outcomes to provide textbooks as a priority. This approach is in accordance with MOE objective of making available textbooks and teacher guides to improve education quality.

26. 1.2.2 Textbook Procurement. To enhance relevance of textbooks to be provided to the schools and to improve the effectiveness of the provision of textbooks, the MOE has adopted a two-fold procurement policy of fostering greater involvement of private sector publishers and allowing textbook choice at lower levels of the education system. The former consists of inviting as many qualified publishers as possible to enter their textbooks in series of titles in open competition for supply to all schools. The latter consists of decentralizing the responsibility of selecting the textbooks to the regional level where regional educators and administrators can choose the textbooks series that, in their judgment, respond adequately to the specific learning needs of the students of the region.

27. The procurement of textbooks and teachers guides would be organized in groups called procurement packages containing textbook-teachers guide titles in series. For this project, the groupings will be organized by region (the bid package), language (the bid lots), and subject and grade series (the bid items). The quantity required of each textbook and teachers guide item is specified in each lot and package.

28. At the national level, MOE would issue a call for offers to supply textbooks conforming to the requirements of the new curriculum. The offer would consist of the following: (i) multiple copies of sample pages (8-12 interior pages for Grades 1-4, 16-24 interior pages for Grades 5-8, and at least 32 interior pages for Grades 9-12), with accompanying teachers guide pages, written,

-71-

edited, designed, typeset, illustrated, proof-printed, and with dummy showing book format, number of pages, paper stock, cover finish, binding; and (ii) price per copy per region, delivered to woredas specified by the MOE. The publishers would be required to remove their identifying marks from the sample pages (cover and title pages, running headings carrying the publisher's name or logo or trade name).

29. The mandatory procurement steps include the following:

(i) Wide advertising in the dgMarket, U.N. Development Business, newspapers of wide circulation nationally, and announcement to the diplomatic community in Addis Ababa;

(ii) Use of the World Bank's SBD for Textbooks and review of the draft bidding documents by the Bank;

(iii) Reception of bids at central MOE and public opening and recording of both the technical proposal and the offered price;

(iv) First evaluation of offers at central MOE using national-level criteria, elimination of non-complying offers, and ranking of the complying offers;

(v) For primary textbooks, a second evaluation of offers at the regional level, using regional-level sub-criteria, and recommendation of the final ranking of offers;

(vi) At central MOE, application of the combined evaluation of quality and price formula required by the World Bank's SBD for Textbooks; and

(vii) Recommendation for contract award, review by the Government, and the World Bank, and contracting.

30. The criteria provided in the World Bank's SBD for Textbooks would be used for developing the MOE's specific selection sub-criteria and would include the following: (i) compliance with the new curriculum; (ii) preference for active learning strategies; (iii) appropriateness of language; (iv) provision of teacher material; and (v) effective design and illustration. The textbook selection criteria, sub-criteria, and scoring rubric would be refined to make the instrument more sensitive for the national-level evaluation as well as for the regional level evaluation.

31. MOE textbook evaluation teams comprised of experienced teachers, academic supervisors, school principals, and curriculum specialists would review the offers for quality, following a set of evaluation criteria agreed with the Bank. The offers would then be ranked from best evaluated offer to least, in accordance with the quality and price formula required in the World Bank's SBD for Textbooks. The MOE would select the complying offers, which would be sent for further evaluation at the REB, following a set of regionally sensitive evaluation criteria agreed with the Bank. The resulting REB recommendation would be forwarded to central MOE for final ranking of the offers and contracting.

32. For several zones in the country (as in those in the SNNP region), the quantity to be published in a language of instruction would be less than 50,000 copies for a primary Grade 1 textbook. Not attractive to book publishers, those textbook series of limited volume would not be included in the competitive bidding packages of the project. To make those books available, the MOE would request for translation, adaptation, or other arrangements with publishers whose textbook series in the same subject but in another language of instruction have successfully

-72-

passed the national level evaluation (step “iv” in the procurement steps listed above). Alternatively, the MOE would continue with the practice of the REB translating, or contracting for the translation of, MOE-provided materials.

33. The textbook procurement schedule, showing the target availability of textbooks and teachers guides by subject and grade over the first three-year phase of the project, is presented in the PIM.

34. 1.2.3 Policy Guidance for the Textbook Program. The MOE has adopted a textbook policy which will be adopted widely promoted through the project. The policy sets out the MOE's pedagogical and administrative expectations of students, teachers, administrators, and education officials with regard to textbooks and teachers guides. In addition to the textbook policy, new Textbook Guidelines will be drafted before Effectiveness. The Textbook Guidelines would elaborate on processes for textbook selection, distribution, proper care, utilization, and storage, and accountabilities attendant to textbook provision. The Textbook Guidelines would be collected in a document that would be printed and widely distributed throughout the school system.

35. Institutional Arrangements. To implement the textbook procurement effectively, a procurement team will be organized within the MOE’s Procurement and Property Administration Department (PrPAD) and be provided the necessary office equipment the team will be led by the Department head. Six additional procurement staff will be assigned to the Department and three staff will be transferred from the General Education Curriculum Framework Development Department. One of the six new staff will be assigned the task of Textbook Procurement Focal Person, to ensure that the textbook procurement process receives due attention and is managed effectively. The team, including the Department head, will receive training on World Bank procurement procedures, especially for textbooks. The training and experience acquired by the staff during project implementation would strengthen the procurement capacity of the MOE.

36. The procurement team will be supported by the expert services of one long-term textbook procurement consultant (24 staff-months), with experience in competitive selection and sale of books to public institutions, including schools, CTEs and universities. The consultant will oversee the initial bidding packages for the purchase of textbook series and train national counterparts in institutionalizing the processes in procurement, evaluation, and monitoring. Two national procurement consultants will also assist the team. Finally, the international curriculum and textbook consultant will work with the PPAD and provide support for procurement processes. The following are the actions relating to the implementation of the textbook program:

• The MOE textbook policy submitted to the Bank in November;

• Assign six staff to the MOE Procurement and Property Administration Department and three staff transferred from the General Education Curriculum Framework Development Department and assign one of them as the Textbook Procurement Team Leader, coordinating the implementation of the textbook program by November 30, 2008; and

-73-

• Appoint one international textbook procurement consultant and two national procurement consultants by Effectiveness. These appointments are in addition to the international curriculum and textbook consultant already appointed.

37. Sub-component 1.3: Assessment and Examinations. In this sub-component, the project will provide support to the following activities of the General Education Quality Assurance and Examinations Agency (GEQAEA): (i) national examination development study; (ii) inspection reform study; and (iii) implementation of national learning assessment at Grades 10 and 12.

38. 1.3.1 National Examinations – Current Practice. National examinations are conducted at the end of Grades 8, 10, and 12. The national examination at the end of Grade 8 serves as the primary completion examination. The examination framework and guidelines are developed at the federal level, and preparation and administration of examinations are carried out by the regions. This is currently practiced in Tigray, Addis Ababa, Amhara and Oromia. For the other regions and city administrations, which may lack the capacity to develop the regional examinations, the central MOE prepares the examination on their behalf. Where translation is needed, the region translates the examination to the appropriate languages of instruction. The printing, distribution, and marking of examinations for Grade 8 are the responsibility of the regions. The pass norm is also determined by the region, usually based on the number of student places available in Grade 9.

39. For Grade 10, the MOE develops, prints, administers and marks the examinations. The results of the Grade 10 national examinations are the bases for placing students in the preparatory or university track or the technical and vocational education and training track. Grade 12 national examinations serve as the university entrance examinations for students who are placed on the preparatory track. Addis Ababa University develops the examination, and the federal government prints and administers them.

40. Under the first phase of the project, activities in the development of national examinations would consist in analytical work on the status of examinations in Ethiopia. The analytical work would identify and develop strategies for possible programming and implementation during the second phase of the project. It could include operational recommendations and cost estimates for developing the capacity of the GEQAEA for aligning national examinations and assessments with the objectives of the new curriculum developed at GECFDD, improving the comparability of the national examinations from year to year and across regions, migrating legacy examination data into digital archives, and expanding the coverage of the NLA.

41. 1.3.2 Inspection Reform Study. Recognizing the critical role of inspectors in the academic supervision and coaching of teachers to deliver quality education, the MOE would conduct a review of current practices in teacher support in general and school inspection in particular. In carrying out this review, the GEQAEA would also seek information from other countries in the region currently undertaking inspectorate reform to derive best practices and lessons learned in transforming the inspection function from administrative supervision to academic and pedagogical support.

-74-

42. 1.3.3 National Learning Assessment (NLA). The MOE has gained substantial experience in carrying out sample-based student assessments during the past decade, in part through technical assistance provided by USAID. The MOE plans to continue to carry out the fourth NLA in April 2010, with the expectation that the NLA would be repeated every three years. While the NLA has traditionally been conducted in Grades 4 and 8, the next NLA would include Grades 10 and 12. Instruments for Grades 4 and 8 have been prepared, while instruments for Grades 10 and 12 are being tested. USAID would continue to support the NLA for Grades 4 and 8. The proposed project would support the NLA for Grades 10 and 12 and integrate the ABE program into the NLA as well. The support would include general administration of the assessment and field costs, printing and administration of the tests, as well as the transportation, per diem and accommodation of enumerators, and capacity building for federal and regional officials to manage the expanded NLA.

43. Institutional Arrangements. The GECFDD will be responsible for the activities under the first sub-component (curriculum) and will provide liaison and monitoring support to the MOE PrPAD, which will be responsible for implementing the procurement activities in the second sub-component (teaching-learning materials). The GEQAEA will be responsible for the activities of third sub-component (assessment and examinations). The curriculum reform team will work in close collaboration with the textbook and assessment teams as well as with the teacher development team. The regions and woredas will collaborate with central MOE to keep project activities implementing according to schedule at their respective levels.

Component 2: Teacher Development Program (TDP) (estimated base cost: US$62.2 million)

44. The TDP2 aims to enhance the quality of instruction and student learning by enhancing the capacity of teachers in primary and secondary education. This component builds on the experience of the earlier “Teacher Development Program (TDP1)”. The TDP2 comprises two sub-components; (a) Pre-Service Teacher Education Quality Improvement; and (b) In-service Teacher Education Quality Improvement.

45. Sub-component 2.1: Pre-Service Teacher Education Quality. With the expansion of student enrollment, the number of teachers in Ethiopian schools is increasing rapidly, with an average annual growth of 14 percent in primary teachers and 19 percent in secondary teachers. However, there is concern regarding the ability and skills of the recently recruited teachers. In the first cycle of primary education, the majority of teachers have only a one-year certificate following a grade 10 education. In response to these concerns, the government has abolished the 1-year certificate training program for the first cycle primary teachers (Grades 1-4), and expects that all new recruits will have a 3-year diploma qualification. In the second cycle of primary education (Grades 5-8) a 3-year diploma qualification is expected, but only 53 percent of teachers are qualified. Secondary teachers (Grades 9-12) are expected to have a degree and an additional year of teacher training (diploma), but only 50 percent meet this standard. The selection system is not attracting the most suitable candidates to teacher training. Among teacher candidates for pre-service, females and those from rural areas and linguistic and ethnic minorities are under-represented, and an estimated 90 percent of teacher candidates interviewed did not identify the teaching profession as their preferred career. The quality of the pre-service teacher training is also weak, with shortages of teaching materials in Teacher Education Institutions

-75-

[TEIs, comprising of Colleges of Teacher Education (CTEs) responsible for primary teacher training and universities responsible for secondary teacher training], didactic teaching methods, inadequacy of practice teaching and insufficient support for teacher candidates with poor English language competence. Further, over half a million pupils, mainly in the less densely populated areas, are enrolled in ABE centers, where there are 23,000 facilitators, most of whom are considered untrained.

46. The TDP2 will address these issues through five pre-service quality improvement sub-components: (i) revise the intake and selection of student teachers; (ii) update the teacher education curriculum and training modules;(iii) enhance pre-service practice teaching; (iv) improve the capacity of teacher educators; (v) improve training for instruction in English; and (vi) provide training for ABE facilitators. These sub-components are summarized in more detail below.

47. 2.1.1 Management of intake and selection processes for Pre-Service Teacher Education. Each REB will monitor teacher attrition and make projections of requirements for primary and secondary education on a subject by subject basis. These projections will be used to adjust intake into the TEIs annually, in order to provide the appropriate number of students in each course and subject specialism. The selection system for the primary diploma will be adjusted to increase the intake of students who are interested in teaching as a career, female students, students from rural areas and linguistic and ethnic minorities. The selection will be based on a combination of an admission test and an interview. Testing will be carried out in multiple secondary schools to increase both the access for those in remote areas, and awareness of the profession. From those who reach an acceptable score, selection will be made by interview, allowing affirmative action policies which will favor those motivated to teach, female students, students from rural areas and linguistic and ethnic minorities. The project will support (i) annual analysis of new teachers required in the system and developing a plan for training, (ii) development of a question bank and tests in each region, and (iii) administration of tests and interviews annually to about 60,000 grade 10 students in a range of schools across the region.

48. 2.1.2 Updating of teacher education curriculum and training modules. With the transition to a revised primary school curriculum and the introduction of the 3-year diploma for first cycle primary teachers, there is a need for developing and adapting the content and materials in pre-service training courses. A new secondary teacher training curriculum is to be developed for the new one-year “add-on” professional training course to prepare graduates to become secondary teachers. The curriculum for the teacher education diploma courses (for primary and secondary education) will be revised. Modules covering major components of the teacher education curriculum will be developed and distributed nationally. These modules are expected to guide instruction in CTEs and Universities, and provide study material for teacher candidates. The project will support (i) management and quality control for the module development process, (ii) development of modules for the primary and secondary teacher education diplomas; and (iii) reproduction of these modules to provide copies for about 55,000 trainees for primary schools and 15,000 for secondary schools.

49. 2.1.3 Enhanced pre-service practice teaching. Despite the acknowledged importance of a period of structured and supervised teaching practice during pre-service training, not all TEIs have a full practicum program, and opportunities for practical experience are severely

-76-

constrained by the absence of suitable transport. The practicum will be expanded and the preparation of supervisors, mentor teachers and teacher candidates will be strengthened. This sub-component will support (i) development of guidelines for practicum, and training of supervisors and mentors; (ii) provision of vehicles to TEIs to facilitate transport of teacher candidates and supervising lecturers to schools; and (iii) cost of travel and subsistence of teacher candidates and their supervisors while on school placement for about 25,000 students each year.

50. 2.1.4 Enhancing the capacity of teacher educators. A Higher Diploma Program (HDP) was established to enhance the quality of teacher educators in both CTEs and universities. The HDP is a one-year part time course delivered at the TEIs. This course aimed at developing the pedagogical skills of teacher educators will be expanded to reach the majority of teacher educators. This sub-component will support (i) the revision of the HDP curriculum and development of teaching materials; (ii) development of a network of “moderating institutions” each assigned to a cluster of institutions to maintain the quality of HDP; and (iii) the delivery of the HDP in each of the relevant TEIs.

51. 2.1.5 Improving pre-service training for English language instruction. Recognizing the difficulties caused by a low standard of English amongst teacher candidates, English Language Improvement Centers (ELICs) were established at some TEIs during TDP1. These were facilities, staffed by teacher educators, (sometimes with additional support from international volunteers), were often drop-in centers providing courses for students in need of additional English language training. TDP2 will support the (i) establishment of new ELICs as required in TEIs currently without centers, (ii) upgrading of the equipment and facilities in the existing ELICs, and (iii) technical support to REB and TEI ELIC coordinators to form regional networks and improve the quality of course materials and instruction. In order to ensure sustainability of the ELICs, each college receiving support will agree to release one lecturer at least half time to coordinate the ELIC.

52. 2.1.6 Improving quality in Alternative Basic Education (ABE). Most of the ABE facilitators are untrained, and others have had a variety of training offered through government or NGO channels. A three-month certificate course for ABE facilitators is now being provided. In addition opportunities will be provided for facilitators without a 10th grade certificate to upgrade their secondary education. Continued provision of training by NGOs will be encouraged, and where possible recognized as equivalent to the certificate course. In the first year, good practices in ABE and comparable activities will be examined, and a set of minimum standards will be developed. The TDP2 program will support (i) expansion of the ABE facilitator training to more CTEs; (ii) revision of curriculum and materials; (iii) capacity building for tutors delivering the course; and (iv) delivery of the course to about half the ABE facilitators in Afar and Somali.

53. Sub-component 2.2: In-Service Teacher Education Quality Improvement. In addition to enhanced pre-service teacher training, the TDP2 aims to enhance the quality of existing teachers in primary and secondary schools. With the recent requirement of teachers in the first cycle of primary to possess a diploma, the majority of existing teachers at this level fail to meet the criteria. At upper primary and secondary levels, approximately half the existing teachers do not have the required qualification. Even for qualified teachers, there is a need for continuing professional development and a career structure that encourages ongoing development. This

-77-

applies for those primary schools where English is the language of instruction, as well as primary schools in rural areas and emerging regions where local language teaching materials are not available.

54. The TDP2 will address in-service support for teachers through four sub-components (i) enhancing the provision of continuing professional development at the school level; (ii) providing English language training for teachers of English and teachers using English as a medium of instruction; (iii) developing a career structure and licensing and re-licensing system, which recognizes the professional development of teachers; and (iv) upgrading primary teachers with a certificate qualification to diploma level.

55. 2.2.1 Continuous Professional Development (CPD). Under TDP1, continuing professional development for teachers was introduced in most schools, employing weekly sessions, drawing on either school-based, cluster or district-level expertise. Based on this experience, the CPD materials will be revised and enhanced and provision will be expanded. A separate track, including the use of an experienced mentor, will be provided for newly deployed teachers. The TDP2 program will support (i) development, printing and distribution of CPD manuals at the federal and regional levels, (ii) awareness-raising to facilitate the expansion of the program to reach 60 percent of teachers within 4 years; and (iii) capacity building for CPD tutors at the regional level.

56. 2.2.2 English Language Quality Improvement Program (ELQIP). This sub-component provides opportunities for English teachers to improve their English through face-to-face training and for these and other teachers to be supported by school-based English mentors. The ELTIP training is designed as 120 hours of contact time to be taught during one 4-week session in the summer. The School Based English Mentoring (SBEM) training is 120 hours of contact time plus reflective action tasks to be undertaken over 3 sessions during a 14-month period. Training will be done by specialist ELTIP and SBEM trainers, some of whom may be recruited from existing teachers or trainers known as Key English Language Training Advisors and Key English Language Trainers; and coordinated by designated staff in the REBs. This component will include three main activities: (i) ELTIP training for 9,100 English Language teachers in primary and secondary schools, (ii) SBEM training for 2,995 experienced English teachers in primary and secondary schools, and (iii) trainer training for 530 ELTIP and 230 SBEM trainers who deliver the training at local level. An EMTIP course will also be designed in preparation for EMTIP training, scheduled to start in Phase 2.

57. 2.2.3 Development of a teacher promotion and licensing and re-licensing system. In order to enhance standards and provide incentives for teachers to develop their skills and performance, a teacher licensing and re-licensing system will be developed. This will include developing a system of licensing and re-licensing teachers and setting in place performance criteria for promoting teachers to different levels in the system. A similar system will also be developed for head teacher and cluster supervisor positions. It is anticipated that this revised career structure will be implemented in the second phase of the GEQIP. During Phase 1, TDP will support the (i) development of processes, standards and guidelines and (ii) activities to build awareness and support for the introduction of the licensing and re-licensing system at the regional levels.

-78-

58. 2.2.4 Upgrading Teacher Qualifications. Primary teachers with a certificate qualification will be offered the opportunity to upgrade to a diploma qualification through a 3 year in-service program, using self study modules, 2 three-day tutorials per year and a 6-week residential training during each of the 3 summer vacations. The TDP2 will support (i) provision of the modules and course materials, and (ii) cost of travel and subsistence for the residential courses for the over 20,000 teachers who will participate in this course each year.

59. Institutional Arrangements. Overall coordination of the TDP2 will be the responsibility of the MOE Education Programs and Teacher Education Department (EPTED). Each sub-component will be implemented both at the federal and regional levels based on the agreed annual work plans. At the federal level, the EPTED will coordinate the implementation of teacher development activities, except the English language sub-component, including activities carried out by universities. The English language sub-component, including the ELICs and ELQIP, will be coordinated by the English Language Improvement Department (ELID) of the MOE, in close coordination with EPTED. For institutional activities, each university will prepare an institutional TDP plan to be supported under the project, consistent with the objective of the GEQIP. Each university will assign a TDP coordinator for the implementation of teacher development activities supported under the GEQIP. EPTED will be responsible for strategic planning and implementation issues, and will report directly to the GEQIP Coordinating Committee. Specifically, EPTED will: (i) develop and coordinate the implementation of annual work plans and budgets; (ii) produce semi-annual and annual reports; and (iii) monitor implementation of planned activities and resource utilization. Two senior staff, reporting to the EPTED director, will take responsibility for oversight of the pre-service and in-service components. The management of the TDP will be further strengthened by recruitment of one national and one international consultant, two monitoring and evaluation specialists, and several international volunteers, to be based in EPTED.

60. At the regional level, the REBs will coordinate teacher development activities, including CTEs in each respective region. A TDP coordinator will be assigned in the REB to manage both in-service and pre-service. This coordinator will have responsibility for overall management of the program and will report to the Head of the REB and to EPTED. At CTE level, an existing staff member will be designated to take responsibility for TDP implementation.

61. M&E activities are integrated into all TDP2 sub-components. These activities comprise monitoring visits by MOE staff, self- and cross-monitoring by TEIs, and formal Semi-Annual and Annual reports by TDP Implementers, and financial reports by BOFEDs and MOFED and annual audits. Impact studies are planned throughout Phase 1 to fine-tune the design and implementation of the Program in preparation for further activities planned under Phase 2.

Component 3: School Improvement Program (SIP) (estimated base cost: US$151.7 million)

62. This component consists of two sub-components: (a) School Improvement Program (SIP); and (b) the School Grants Program. The main objectives of the component are to: (i) improve the capacity of schools to prioritize needs and develop a school improvement plan; (ii) enhance school and community participation in resource utilization decisions and resource generation; (iii) improve the Government’s capacity to deliver specified amounts of schools

-79-

grants at the woreda level; and (iv) improve the learning environment by providing sufficient resources to schools.

63. Sub-component 3.1: School Improvement Program (SIP). Despite international evidence showing that school personnel, parents and communities are best placed to make informed decisions regarding some aspects of resource utilization, most Ethiopian schools face an acute shortage of discretionary funds. To enhance community participation and ownership of schools, the MOE initiated a pilot SIP in 2006. This included development of a SAF for schools, through which schools identified problem areas, developed priorities based on identified problems and ultimately developed a School Improvement Plan to address prioritized needs. The SAF encourages schools to identify areas of concern along four domains: (i) teaching and learning, (ii) student environment; (iii) leadership and management; and (iv) community involvement. The SAF and School Improvement Plan completion process includes consensus-building among major stakeholders (parents, teachers, community members, etc.). The School Improvement Committee (SIC) or stakeholder group takes the lead to develop a 3-year or 5-year School Improvement Plan, or a strategic plan that identifies how schools will address the problem areas identified through the SAF and an annual year operational plan.

64. Currently, it has been reported that about 80 percent of primary schools and 60 percent of secondary schools have completed the SAF and developed a School Improvement Plan. However, the SAF and accompanying Guidelines are overly complicated and long, and a user-friendly template for the School Improvement Plan currently does not exist.34 In addition, ABE Centers have not been involved in the roll out of the planning process to date. Therefore, the project would support the simplification and revision of the SIP materials (SAF, SIP instruments and Guidelines) during the first year of GEQIP implementation to ensure that they are practical, manageable and appropriate for both schools and ABE Centers. In particular, the process needs to generate a prioritized and focused plan which will ensure maximum impact from limited resources. This revision will involve the following steps:

• Participatory workshops will be held in each Region with key stakeholders to review and document the lessons learned, as well as emerging best-practices to date. These workshops will be structured so that stakeholders can have a frank discussion on how they have implemented the SIP Guidelines, and what they have achieved. These lessons would be drawn together in a SIP Review Report which would list recommendations from stakeholders on how the SIP could be improved.

• The MOE will contract an in-depth assessment of the achievements and emerging impact of the SIP. In addition to a SIP Assessment Report, this assessment will update and improve the SIP Guidelines, including a user-friendly template for a School Improvement Plan. Lessons from the participatory workshops will be factored into the revised SIP materials. The assessment will also ensure that the materials are adapted for use at ABE Centers.

• The revised SIP Guidelines will be printed and distributed to all schools and ABE Centers. Considerable capacity building will be required at the woreda and school

34 The MOE has developed a number of documents on the SIP, three of which have been translated into English, namely: (i) SIP Program Framework; (ii) SIP Guidelines; and, (iii) SIP.

-80-

levels to ensure that there is wide understanding of how to implement the SIP to realize measurable gains in school performance. The MOE will ensure that (i) at least two copies of key SIP documents are provided to each school and (ii) key school SIP stakeholders (headmasters, deputy headmasters, ABE facilitators, and PTA/School Improvement Committee/School Board members) are given quality training on how to successfully undertake effective school improvement planning. The SIP team will be expected to work closely with the MAP team to ensure that the capacity to implement the SIP is in place at the regional, woreda and school levels. The SIP team in the MOE will oversee this activity, which will be implemented by the REBs.

65. Sub-component 3.2: School Grants. School-based planning processes are of limited impact without resources to finance the plans. Currently, in Ethiopia, despite the recommendations in the Bluebook Guidelines, schools generally do not receive cash from woredas. This is not because of difficulties in disbursement, financial management or accountability, rather, it is the acute constraints on woreda budgets which results in a much lower overall level of disbursement across the country than is prescribed in the Bluebook (see Annex 1 for a summary of the implementation of school grants programs). Building on lessons learned from the existing school grants program, the GEQIP has been designed with interlocking sub-components to ensure that the following problems are addressed: (i) funding unpredictability; (ii) competing budget priorities; (iii) lack of autonomy in decision making and related authority; and (iv) weak monitoring and evaluation mechanisms.

66. The provision of school grants through GEQIP is expected to address needs identified through school-based needs assessments and planning for quality improvements. Capacity building support will also be provided through GEQIP at the woreda and school levels in the areas of planning, community participation, financial management, accountability and monitoring, in collaboration with the MAP team.35 Under the project, an updated and simplified Manual for Education Organization and Management, Community Participation and Finance (i.e., Bluebook) will be used to standardize the program across the country.

67. The school grants program under GEQIP has been designed to address this constraint through the provision of a minimum amount of funds based on enrollment rates to all schools, including ABE Centers. These minimum amounts are listed in Table 5 below.

35 An important and successful aspect of the USAID-financed BEP support has been school level capacity building for KETBs, school staff, PTAs and communities in school planning linked to the BEP conditional grant. These approaches will continue through USAID support, integrated with the SIP and MAP capacity development components, and linked to the provision of the school block grant (but not an additional separate grant provided by USAID).

-81-

Table 5: Minimum per pupil allocations – Birr amounts

Type of Institution

Blue Book per pupil capitation

GEQIP per pupil grant (minimum)

Difference

Primary School (First Cycle) 15 15 0 Primary School (Second Cycle) 20 15 5 Secondary School (9-10) 30 20 10 Secondary School (11-12) 65 20 45

Source: MOE Note: The first cycle primary school includes ABE centers.

68. The grant amount per school is determined based on the latest EMIS enrollment data and a per student amount specified at each grade level cluster. The school grants sub-component under GEQIP will supplement the regional or woreda school grant allocation, but, as Table 2 shows, it will not provide the whole costs of school grants as per the Bluebook guidelines. Regions and woredas will be strongly encouraged to make up the difference from their own non salary recurrent funds.

69. The funds will flow through MOFED to the BOFEDs and then down to the WOFEDs. WOFEDs will be responsible for ensuring that school principals and ABE representatives receive the cash, and will keep a record of each school/center and the amount disbursed. This record should be shared with the WEO. Regular woreda supervision by the WEO should focus on how the grants are handled at school level and how they contribute to improvements in school quality.

70. To assist with implementation of the school grants component, a draft School Grants Guidelines (SGGs) has been developed. The SGGs provide guidance on all aspects of implementation at Federal, Regional, Woreda, and School/community levels. The SGGs are consistent with Bluebook Guidelines but will be implemented as a stand-alone document as this will ensure that key responsibilities and outputs are understood at different levels. The SGGs will be finalized and ready to print and distribute prior to GEQIP effectiveness.

71. In order to ensure that the School Grants program functions effectively, a comprehensive public information, communication and consultation program will be designed and implemented. This will ensure that key stakeholders such as parents, teachers, local communities, political constituencies, and education administrators, understand the purpose of the school grant, and their roles and responsibilities. Of critical importance will be explaining clearly that the School Grants program will complement, as opposed to replace, existing funding that schools receive from parents in the community and from government. This should be implemented at the start of the GEQIP.

72. The draft SGGs will be finalized, printed and widely disseminated through training before school grants are disbursed. Regional and woreda education officers and head teachers will be sensitized and trained in its application. In particular, there will be a need to ensure adequate capacity in financial management at the school level, sufficient engagement with community members on planning and managing finances, as well as a shared understanding of factors that contribute to quality education and how these can be captured in the school improvement planning process.

-82-

73. The verification of GEQIP school grant expenditure and financial management will be based on an annual continuous random audit check of a ten percent sample of schools (see Annex 7)). In addition, an evaluation of the program through a School Grants Utilization Survey at the end of the first year and every two years thereafter will be carried out. The Survey will examine the implementation of the school grants, how they have been utilized for school improvement activities, and whether the grant amounts are sufficient to raise quality.

74. In Year 1, the evaluation will focus on how schools which act as cluster resource centers (CRCs) could utilize additional financing to facilitate in-service teacher training activities. The grant amounts for CRCs may be revised accordingly in Year 2.

75. Institutional Arrangements. At the federal level, the PPAD will coordinate the implementation of the school grants program at the national level, with collaboration from the SIP and the MAP teams. A full time school grant coordinator will be assigned to oversee the implementation of the program. At the regional level, REBs will liaise with woreda personnel to organize training for woreda and school levels in both SIP planning and the SGGs.

Component 4: Management and Administration Program (MAP) (estimated base cost: US$21.4 million)

76. This component supports the Government’s initiatives to strengthen the planning, management, and monitoring capacity of regions and woredas to implement system-wide primary and secondary education programs effectively and efficiently. The following objectives will be addressed: (i) improve the effectiveness and efficiency of education planning, management, resource allocation and utilization through human capacity development and strengthening the linkages between the woreda, regional and federal levels; (ii) design and implement a transparent, low-cost and productive system of management and administration; and (iii) strengthen the EMIS including improved collection and use of system data for planning, management, evaluation and policy making.

77. During the first phase of the GEQIP, this component will support capacity development for: (i) education sector planning and management; (ii) school planning and management; and (iii) EMIS at all levels. During the first year, the predominant activity will be a detailed analytical and design work (MAP Design Study), followed by a more comprehensive implementation program from the second year, based on the outcomes of the study. This will aim to ensure that capacity development strategies are based on rigorous evidence-based needs assessments and that they respond to wider institutional issues facing the sector. The analytical work will focus on (i) how GEQIP capacity development programs can respond to institutional and organizational changes resulting from the Business Process Reengineering (BPR); (ii) how ongoing civil service reforms will affect sector management and performance; and (iii) impact assessment of capacity building programs currently under implementation.

78. The capacity development sub-component of the MAP will coordinate and work closely with capacity development activities supported by other programs and projects. These programs include the PSCAP and planned support for capacity building from USAID and UNICEF (non-pooled GEQIP development partners), given the support planned over the next five years in education management and planning at the regional, woreda and school levels. The MOE is

-83-

currently working with these partners to agree on the process of integrating these interventions into GEQIP. It will be important to ensure that: (i) common approaches are used; (ii) transaction costs associated with the use of different systems are minimized; and (iii) programs ensure equitable and optimal coverage.

79. Sub-component 4.1: Capacity Building for Education Planning and Management. Under this sub-component, the GEQIP will contribute towards improving the effectiveness and efficiency of general education planning and management at all levels for the purpose of enhanced decision making and resource utilization resulting in sustained improvements in sector performance. A key priority is to build capacity for regional and woreda level strategic planning and budget analysis, and to strengthen systems for resource allocation and transfer. This will include analysis of capital and recurrent expenditure needs, including salary and non-salary expenditures. Gender budgeting in education has been identified as a particular planning priority (and MOFED has developed training materials in collaboration with the MOE). The program predominantly focuses on decentralized capacity building for education planning and management, including training for MOE, REBs, zones (where appropriate), WEOs, KETBs and PTAs. Non-pooled donors will continue their support to these areas.

80. The MAP Design Study will be carried out under this sub-component. The study will be implemented in relation to the finalization of BPR strategies. No other activity will be implemented in Year 1. Other programs will be developed starting in Year 2, based on the results of the analytical and review work.

81. Sub-component 4.2: Capacity Building for School Planning and Management. The objective of this sub-component is to contribute towards strengthening participatory school planning, management and monitoring for the purpose of greater effectiveness, efficiency and accountability in school performance, and improved teaching and learning. An essential aspect of improving quality will be to improve performance through strengthening planning and management capacity at the point of service delivery, i.e. the school. This sub-component has two major elements (i) SIP training and (ii) the Leadership and Management Program (LAMP), which was started under TDP1. This sub-component will be closely coordinated with the SIP, including application of the specific planning and assessment tools to be developed under SIP. Additional programs will be developed and implemented from the second year.

82. 4.2.1 School Improvement Program (SIP) Training. Following the development of SIP in 1999, SIP training was rolled out to all schools in 2007. It is estimated that approximately 80 percent of school staff (directors and teachers) have received training. The training focused on the SIP process from concept to implementation strategies including the use of the SIP Guidelines, the SIP Handbook and the School Self-Assessment Form (SAF). The training followed a cascade approach comprised of three stages:

• Training of Trainers at MOE for REB experts and CTE staff;

• Training of woreda level trainers (WEO experts, supervisors, some school directors) at regional centers; and

• Training for schools (directors, teachers and PTA members) including a combination of plasma and participatory techniques, at woreda centers.

-84-

83. REBs and WEOs have identified further SIP Training as a priority. In particular, in order to maintain the momentum and to improve the implementation of SIP, training in the use of existing tools will continue to be implemented during Year 1, particularly on the use of the School Assessment Form. Training will target school staff and PTA members who have not yet received training. REBs and WEOs will provide the resource persons and will identify which schools require assistance. Specific regional training plans and budgets will then be developed. A review of SIP training will be carried out as part of the MAP Design Study. On the basis of this, SIP training needs and design restructuring will be identified and new materials will be developed for school-based training which focus not only on rolling out the revised SIP and SAF tools, but also on monitoring, planning and building accountability structures.

84. 4.2.2 Leadership and Management Program (LAMP). The LAMP was initiated under the TDP to build the capacity of school principals and supervisors in planning and management, ultimately leading to a Certificate or Diploma qualification. Training for primary school principals and supervisors will be implemented through Diploma Programs delivered by the CTEs. Training for secondary school principals and supervisors will be implemented through the Advanced Diploma Programs, delivered by the universities. The duration of the programs are six months over three years (implemented during the summer vacation). Following the MAP Design Study, LAMP is expected to be modified and then continued.

85. Sub-component 4.3: Education Management Information Systems (EMIS). This sub-component will support MOE and REBs to (i) strengthen the existing education management information systems; and (ii) build the capacity for policy analysis and planning of the MOE in order to improve education provision.

86. MOE has made significant progress in collecting, analyzing and reporting key education data under technical cooperation with the UNESCO Institute for Statistics under EC funding, following earlier cooperation with USAID and SIDA. Under GEQIP, the data collection process for the ESAA will be reviewed and revised to accelerate the overall speed of completion, improve the accuracy and enhance the flow of data among schools, woredas, zones and regions. The Abstract will be further developed and new products will be developed to meet a range of users’ needs. Emerging regions will be supported and the software system will be integrated and improved.

87. A key feature of making EMIS responsive is to establish several simple goals for presenting information. Those goals are: (i) to provide relevant data for each year on time; (ii) to deliver information to those who need it as quickly as possible; and, (iii) increase levels of accuracy each year. The development of skills to analyze and apply the resulting data to policies and administration at all levels is important in itself and it also increases the stake held throughout the system in improving the quality and timeliness of the data.

88. Under this sub-component, MOE will arrange for an independent evaluation of EMIS that compares the data against those collected through other sources, such as the recent region-level analysis with household data prepared by PBS. This work will be coordinated closely with the proposed PBS 2 Project.

-85-

89. 4.3.1. Capacity Development for Policy Analysis and Planning. Training will be provided to improve the timeliness, completeness and quality of the data supplied: annual questionnaire training will be given to all woredas, schools and ABE Centers through dedicated workshops – reviving previous practice - unless it can usefully be integrated with other training. EMIS staff from woredas to the Federal level will be trained in the statistical and IT skills needed to run the system and analyze the data. Training will be given to planners at all levels to use the system and apply the results to their plans. During the first phase, a needs analysis for training will be undertaken at all levels and a training plan will be developed to address gaps, and to identify those areas requiring either refresher or initial training. MOE is assisting REBs to make an initial assessment of their training needs. The approach to training will first be addressed through the MAP Design Study which will consider the prior experience of similar training in the MOE – and future plans - with partners such as USAID.

90. 4.3.2. Information Technology (IT) Infrastructure. IT infrastructure of the MOE is currently being upgraded under the Post Secondary Education Project (PSEP) through the planned IT procurement in the amount of US$500,000. This sub-component will support additional upgrading, including a data center and an ICT training center, if necessary. MOE is making an assessment of the needs to upgrade the regional and zonal (as appropriate) IT infrastructure for the development of basic EMIS capacity, which will be funded under the sub-component. During the first phase of the GEQIP, woredas with electricity but without access to a suitable PC will receive one PC for analytical purposes, supported through non-pooled partners. REBs may then decide to switch data entry to progressively lower administrative levels where viable to improve timeliness and accuracy.

91. Procurement for IT equipment at MOE and the REBs will be undertaken at the federal level. It is envisaged that the IT procurement for the zones will be managed by the REBs. Further needs assessment, costing and consideration of regional procurement arrangements will be undertaken before the Effectiveness of the GEQIP. Training will be provided by the federal and the regional level as appropriate.

92. 4.3.3. School Report Cards. School Report Cards will be introduced to provide valuable feedback to schools and communities on the EMIS information on their school and how it compares with others. As well as offering to increase local accountability for school operation, empower local Parent-Teacher Associations and increase the transparency of the education system, the report cards may encourage schools to provide more complete and accurate data.

93. 4.3.4. Technical Assistance. An international EMIS Adviser with statistical, analytical and policy-oriented skills will assist the MOE in the design and implementation of the EMIS sub-component. The current national IT adviser position will continue and confirmation of the availability of UNESCO funds has been requested. The need for a national Training Adviser will be considered after the MAP Design Study has been completed. Additional international and national short-term consultants will be provided to support the work.

94. Staffing. High turnover of staff – especially IT-trained staff - at all levels is a major issue in all aspects of this sub-component. For the advisers to work alongside and train national staff, and for the work to be done at the federal level and led at the regional level, a significant staff increase over the existing two federal-level statisticians is needed. An initial assessment

-86-

suggested 8-10 more staff may be required. As a minimum, MOE will engage at least two IT staff and three more statistical staff in Year 1 in the EMIS Unit of the MOE. This will provide for an overall EMIS Unit, two statisticians to concentrate on routine production, two statisticians to focus on analysis and developing new products and for the IT staff to maintain and develop the hardware and software. Regional staffing levels will be reviewed by REBs and reflected in their work plan, following the completion of the regional EMIS capacity assessment in each region, prior to Effectiveness.

95. Implementation Arrangements. Overall coordination and implementation of the education sector and school management and planning training and EMIS will be the responsibility the PPAD, in close collaboration with REBs. At the regional level, the Planning Department in each REB will be responsible for the coordination of the implementation of the regional EMIS plan, in close coordination with the EMIS Unit and WEOs.

Component 5: Program Coordination and Monitoring and Evaluation (estimated base cost: US$10.4 million).

96. Effective implementation of the GEQIP will depend on efficient coordination mechanisms; proper financial management and procurement practices and the timely implementation and effective monitoring of project outcomes. This component will provide the necessary resources for effective coordination and monitoring and evaluation, and the implementation of an information and communications strategy at the national and regional levels. This component has two main sub-components.

97. Sub-component 5.1: Program Coordination. The GEQIP will be implemented at the federal, regional and woreda levels, as well as in participating teacher training institutions (universities and CTEs) and schools benefitting from the School Grants program. MOE will coordinate the project closely with the regional and woreda governments. At the federal level, MOE will play a key role with all technical aspects of the Project, including large procurement activities. The PPAD will coordinate the implementation of the project in close coordination with the relevant departments of the MOE, REBs and teacher training institutions. MOFED will be responsible for financial management and reporting aspects of the GEQIP. While MOE will be involved in overall planning, and review of program work plans and budgets for the various institutions, and allocation of resources, MOFED will manage the pooled funding, disburse resources to implementing institutions, disbursement and reporting, including consolidated quarterly and annual financial reporting, and assist BOFEDs and WOFEDs on financial management issues. At the regional level, REBs will play a key role in all technical aspects of the Project. They will have a similar institutional arrangement, and the Planning Department will coordinate the implementation of the GEQIP, reporting directly to the Head of the REB.

98. The project will finance the investment and non-salary operating costs associated with program coordination, including office equipment, software and furniture, auditing services and training and seminars related to program implementation and coordination. The technical support for the implementation of the program includes a team of short and long-term consultants, specializing in project implementation (including project management, financial management and procurement), resident in MOE, and providing regular support to regions. Under this sub-component, an information and communications strategy will be implemented to:

-87-

(i) inform the general public about the program; (ii) provide targeted messages to highlight the benefits of education; and (iii) build support among key beneficiary/stakeholder groups.

99. Sub-component 5.2: Monitoring and Evaluation (M&E). This sub-component will support the establishment of a robust M&E system at the federal, regional and woreda levels to monitor and evaluate project outcomes and broader educational trends to provide feedback to improve performance. The MOE will continue to update data to facilitate accurate reporting on the key progress indicators identified in the Results Framework as described in Annex 3. Most of the data for monitoring project outcomes will come from existing mechanisms such as EMIS, or regular project reports, supplemented by project preparatory studies and a baseline survey undertaken prior to effectiveness. Under this sub-component, various policy and evaluation studies will be financed to address key issues as they emerge (e.g., quality, financing, teacher effectiveness and utilization, social assessments); and annual reviews and impact assessments.

100. The following surveys are planned as part of the GEQIP M&E strategy: (i) baseline survey at the beginning of Year 1, (ii) school grants utilization survey at the end of Years 1 and 3, (iii) mid-term review in the middle of Year 2, and (iv) exit survey at the end of Year 4 to assess the impact of Phase 1 and to plan for Phase 2. In addition, each component is expected to conduct its own monitoring and evaluation, in close coordination with the PPAD.

-88-

Annex 5: Project Costs

Program Costs, Sources of Funding and Disbursement/Financing Percentages

1. Table 1 presents total program costs by component and type of expenditures; Table 2 presents GEQIP program costs by year for Phase 1. Table 3 presents the estimated financing available from both domestic and external sources for the implementation of GEQIP. These resources will be used to support the implementation of GEQIP most effectively and equitably within the framework of the overall GEQIP. Funding from non-pooled fund donors who will support complementary activities through their programs/projects has not been included in project costs and the financing plan.

2. The IDA contribution to Phase 1 of the APL is estimated at about US$50 million, and the estimated amount for Phase 2, if approved, is about US$80 million. An overlapping APL, where the second phase could start prior to the completion of the first phase, has been agreed with Government. If the Government completes the activities defined under the triggers for Phase 2, then Phase 2 can begin earlier. In order to maximize the fiscal sustainability of the proposed interventions, the GEQIP is designed to (i) avoid displacement of federal and regional contributions to non-salary recurrent expenditures and (ii) gradually increase the federal and regional contributions for quality-inputs over time. Regions will allocate on average, at a minimum, 5 percent of recurrent expenditures towards non-salary, GEQIP-related inputs starting in Year 3. At the federal level, the MOE will gradually increase its contribution during the first phase of GEQIP, as a share of the total DP contributions to the pooled fund as follows: 5 percent (Year 1), 10 percent (Year 2), 15 percent (Year 3), and 15 percent (Year 4).

Table 1: Total Program Costs

Program Cost By Component Local Foreign Total

US $million US $million US $million

Curriculum, Textbooks & Assessment 70.7 76.0 146.7

Teacher Development Program 30.0 32.2 62.2

School Improvement Program 104.2 47.5 151.7

Management & Administration Program 10.3 11.1 21.4

Program Coordination, M & E 5.0 5.4 10.4

Total Baseline Cost 220.2 172.2 392.4

Physical/Price Contingencies 14.0 10.9 24.9

Total Program Costs 234.2 183.1 417.3

-8

9-

T

able

2: P

rogr

am C

osts

for

Pha

se 1

(Tot

al C

osts

Inc

ludi

ng P

hysi

cal a

nd C

onti

ngen

cies

)

Pro

gram

Cos

t By

Com

pone

nt

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

Tot

al

1 C

urri

culu

m, T

extb

ooks

& A

sses

smen

t 7.

3 76

.2

37.6

25

.6

14

6.7

2 T

each

er D

evel

opm

ent P

rogr

am

10.4

25

.7

26.1

0.

0

62.2

3

Sch

ool I

mpr

ovem

ent P

rogr

am

30.9

35

.6

40.5

44

.7

15

1.7

4 M

anag

emen

t & A

dmin

istr

atio

n Pr

ogra

m

1.6

9.4

10.4

0.

0

21.4

5

Pro

gram

Coo

rdin

atio

n, M

& E

1.

7 3.

7 2.

8 1.

2 1.

0 10

.4

Sub-

Tot

al

51.9

15

0.6

117.

4 71

.5

1.0

392.

4 Pr

ice/

Phys

ical

Con

tinge

ncy

3.3

6.6

0.0

0.0

15.0

24

.9

Gra

nd T

otal

55

.2

157.

2 11

7.4

71.5

16

.0

417.

3 N

ote:

Pri

ce a

nd p

hysi

cal c

ontin

genc

ies

are

prel

imin

ary

estim

ates

and

min

imum

sin

ce m

ost e

xpen

ditu

res

are

for

the

proc

urem

ent o

f te

xtbo

oks

and

expe

cted

to ta

ke p

lace

du

ring

the

firs

t tw

o ye

ars

of th

e Pr

ojec

t. A

djus

tmen

ts w

ill b

e m

ade

on th

e pr

ovis

ion

of te

xtbo

oks

and

othe

r te

achi

ng m

ater

ials

dep

endi

ng o

n th

e av

aila

bilit

y of

the

seco

nd

CF

Gra

nt.

-9

0-

Tab

le 3

: Sou

rces

of F

undi

ng fo

r G

EQ

IP A

PL

(US$

)

P

HA

SE 1

P

HA

SE 2

2001

20

02

2003

20

04

2005

20

05

2006

20

07

2008

20

09

20

08/0

9 20

09/1

0 20

10/1

1 20

11/1

2 20

12/1

3 20

12/1

3 20

13/1

4 20

14/1

5 20

15/1

6 20

16/1

7

PH

ASE

1

TO

TA

L

PH

ASE

2

TO

TA

L

PR

OG

RA

M

TO

TA

L

GE

QIP

Poo

led

Par

tner

s

IDA

2.

0 39

.4

7.0

0.6

1.0

20.0

20

.0

20.0

15

.0

5.0

50.0

80

.0

130.

0 FT

I C

F 1

33.2

36

.8

- -

- -

- -

- -

70.0

-

70.0

FT

I C

F 2

- 37

.0

45.1

15

.9

- -

- -

- -

98.0

-

98.0

Fi

nlan

d -

4.8

4.8

- -

- -

- -

- 9.

6 -

9.6

Ital

y 10

.2

5.1

5.1

- -

- -

- -

- 20

.4

- 20

.4

Net

herl

ands

3.

7 6.

9 7.

9 7.

9 -

- -

- -

- 26

.4

- 26

.4

Swed

en

- 4.

1 4.

1 4.

1 -

5.0

5.0

5.0

5.0

- 12

.3

20.0

32

.3

UK

(D

FID

) 3.

5 8.

8 8.

8 10

.0

- 10

.0

10.0

10

.0

10.0

-

31.1

40

.0

71.1

O

ther

- 15

.0

15

.0

- 15

.0

Tot

al P

oole

d P

artn

ers

52.6

14

2.9

82.8

38

.5

16.0

35

.0

35.0

35

.0

30.0

5.

0 33

2.8

140.

0 47

2.8

Fed

eral

Gov

t.

Con

trib

utio

n 2.

6 14

.3

12.4

8.

8 -

5.3

5.3

5.3

4.5

- 38

.1

20.3

60

.8

Reg

iona

l Gen

. Ed.

N

on-S

alar

y R

ecur

rent

22

.2

24.2

-

26.0

28

.1

30.3

32

.8

- 46

.4

117.

2 16

3.6

Tot

al G

EQ

IP B

udge

t 55

.2

157.

2 11

7.4

71.5

16

.0

66

.3

68.4

70

.6

67.3

5.

0 41

7.3

277.

5 69

7.2

(a)

The

Gov

ernm

ent o

f Eth

iopi

a in

tend

s to

app

ly fo

r th

e F

TI C

F G

rant

2 in

200

9; th

e in

dica

ted

amou

nt o

f US$

98 m

illio

n is

not

iona

l. I

f the

gra

nt is

not

app

rove

d, th

e te

xtbo

ok s

ub-c

ompo

nent

of t

he

annu

al w

ork

plan

s an

d pr

ocur

emen

t pla

ns w

ill b

e am

ende

d ac

cord

ingl

y.

(b)

Fin

land

has

com

mitt

ed €

3.5m

(co

nver

ted

at e

xcha

nge

rate

on

10/1

5/08

) fo

r Ye

ars

2 an

d 3,

sub

ject

to M

OF

A a

ppro

val i

n D

ecem

ber

2008

; no

furt

her

com

mitm

ents

hav

e be

en in

dica

ted.

Fin

land

w

ill c

onfir

m in

ear

ly N

ovem

ber

2008

whe

ther

they

will

join

the

MD

TF.

(c)

Ital

y ha

s co

mm

itted

€7.

5m, €

3.75

m, €

3.75

m (

conv

erte

d at

exc

hang

e ra

te o

n 10

/15/

08)

for

Year

s 1,

2 a

nd 3

, res

pect

ivel

y; n

o fu

rthe

r co

mm

itmen

ts h

ave

been

indi

cate

d, b

ut a

ny fu

rthe

r co

mm

itmen

ts

are

subj

ect t

o th

eir

Boa

rd a

ppro

val.

(d)

The

Net

herl

ands

has

com

mitt

ed €

2.8m

, €5.

2m, €

6.0m

, €6.

0m (

conv

erte

d at

exc

hang

e ra

te o

n 10

/15/

08)

for

Year

s 1-

4, r

espe

ctiv

ely;

no

furt

her

com

mitm

ents

hav

e be

en in

dica

ted.

(e

) Sw

eden

has

com

mitt

ed 3

0m S

EK

for

Year

s 2

and

3, s

ubje

ct to

its

CA

S ap

prov

al;

all s

ubse

quen

t com

mitm

ents

are

tent

ativ

e.

(f)

The

UK

has

com

mitt

ed G

BP

2m

for

Year

1 a

nd G

BP

5m

for

Year

s 2

and

3 (c

onve

rted

at e

xcha

nge

rate

on

10/1

5/08

), s

ubje

ct to

ann

ual a

ppro

val;

all

subs

eque

nt c

omm

itmen

ts a

re te

ntat

ive.

-91-

Budget Allocation by Region

3. As summarized in Annex 4, the GEQIP will be implemented at three levels of government based on the national standards developed by the MOE. Based on their roles and responsibilities, available resources are first divided between the federal and regional governments. The regional allocation will be further divided among the nine regions and two city administrations based on a weighted formula using school enrollment (75 percent) and school aged population (25 percent). This is consistent with the Government’s Federal Budget Grant Distribution Formula for Education which states that “regions with higher participation rates (in relative terms) spend more than those with lower rates and this needs to be taken into account”. Regional budget allocations will be calculated annually based on official EMIS data.

4. In addition to resources being transferred to regions, some elements of GEQIP will require expenditure at the federal level. In particular:

• Secondary level teacher training is implemented through universities as a federal mandate. Experiences from TDP show that around 40 percent of TDP expenditure is disbursed to universities (i.e., the budget is managed at the federal level) and 60 percent of expenditure is allocated to primary teacher training through the BOFEDs/REBs.

• Curriculum and assessment expenditure will take place at the federal level.

• The majority of MAP will be implemented in the regions with some federal level capacity building and production and distribution of training materials.

Budget Allocation by Component

5. Regional Allocations. Regional budget allocations for school grants and textbook and teacher guides will be determined by costing the requirement of achieving agreed common national targets for the per capita school grant and textbook to pupil ratios, based on official EMIS enrollment data

6. For other components, following the regional allocation formula described above, budget allocations will allow regions considerable autonomy regarding how to spend the GEQIP funds based on what they perceive to be their priorities. Thus, regions will decide how to allocate budgets for all components except for the School Grants and Teaching and Learning Materials sub-components.

7. Institutional Allocations. The university allocations for the first annual work plans are based on a combination of the following criteria: (i) enrollment; (ii) capacity building needs (new universities not receiving supplemental support); and (iii) additional resources for universities responsible for implementing special programs (e.g. ABE). The CTE allocations were developed through consultations between the relevant REB and the CTEs based on implementation needs and as part of the overall regional budget (allocated on school enrollment and school age population criteria) taking into account resource requirements for other components. The above institutional allocations were applied for the development of the AWP

-92-

for Year 1. The institutional allocations will be reviewed and agreed with DPs, and based primarily on student enrollment starting in Year 2.

-93-

Annex 6: Implementation Arrangements

1. The GEQIP comprises a part of the larger Third Ethiopia Education Sector Development Program (ESDP 3) to improve the quality of general education through a set of specific interventions. The first phase of the GEQIP will be implemented over a period of four years, using a pooled funding mechanism. The following are the key features of the GEQIP, which distinguishes it from other centrally supported education programs:

• There is strong government ownership of the program and the components are integrated into the regular government education program and ESDP 3.

• External support to GEQIP will be provided through pooled funding that will follow the government regular public financial management (PFM) system.

• GEQIP will follow the existing Government implementation structures, financial regulation procedures and procurement procedures, to the extent possible.

• GEQIP will follow existing government mandates for general education at different levels.

• GEQIP will be complementary to the PBS project.

• GEQIP will mobilize both external and domestic resources for quality improvement.

• A formula-based approach will be used to ensure equity of resource allocations to regions, woredas and participating teacher education institutions.

• Institutions that are responsible for the implementation of the program at all levels will be assessed and their capacity will be strengthened.

• Where national or international TA support is needed, an element of capacity building for government employees will be built in.

2. Funding Modality. Funds flow and financial management arrangements for GEQIP will follow the Government’s regular public financial management systems. This will ensure that GEQIP funds are “on-budget”. However, it will be important to ensure guidelines and standards are established to ensure coordination and synergy with PBS, PSCAP and PASDEP planning and monitoring processes.

3. Joint Appraisal of Regional Annual Work Plans and Performance Reviews. The first phase of the GEQIP will finance consolidated annual federal, regional, and TEI work plans which will include a package of activities to improve the quality of primary and secondary education based on the overall national standards/framework. Regions and TEIs will have autonomy to determine their priorities within the context of the nationally defined GEQIP framework and will be supported to prepare, refine and cost out their annual work plans. The goal is to provide flexible support to MOE, regions, and TEIs to fund a full range of activities and inputs, including procurement of goods; enhanced supervision and training; and expanded outreach activities. The steps outlined below will be followed on an annual basis to enhance quality assurance of federal, regional, and TEI work plans and to monitor performance against those plans.

-94-

• Federal MOE and each region, including each TEI, prepare an annual work plan (AWP) based on federal, regional and TEI needs and within the nationally defined GEQIP framework. Each region and university will submit the annual work plan to MOE by end-February. The MOE submits the consolidated plans to the Bank and DPs for review. (CTEs will submit their AWPs to their respective REB for review).

• A team of experts from various disciplines, convened by MOE, appraises each regional and TEI AWP based on agreed criteria to ensure technical soundness. MOE provides comments and suggestions for revision on each regional and TEI AWP. MOE works with each region and TEI to produce finalized plans. MOE prepares and annual performance contract for each region and TEI, based on the work plans with clearly specified packages of activities and indicators. Regions and TEIs sign and submit the annual performance contracts to MOE by end-March.

• MOE submits all regional and TEI plans and signed annual performance agreements to the Bank and DPs at least two weeks prior to the JRM. At the same meeting, the interim financial reports (IFRs) will also be reviewed.

• DPs provide comments and suggestions for revision on each regional and TEI plan during JRM, or provide approval through non-objection process, within two weeks after the JRM

• MOE and regions develop procurement plans based on work plans. Implementation of each regional and TEI work plan commences by end-May.

• REBs prepare consolidated progress reports for woredas (only for School Grant disbursements), TEIs and the REB, and an update on progress against key education indicators, including for GEQIP related activities, by end of October.

• MOE consolidates regional and TEI progress reports with the Federal progress report and prepares an annual review of sector progress by mid November.

• Joint stakeholder review of the annual progress report, including progress against key sector indicators, takes place end of November/early December each year.

-95-

4. The steps above are summarized in the table below.

Action Responsible Unit(s) Due Date

• Submit annual work plan (AWP)to MOE REBs and TEIs End-February

• Expert committee reviews annual work plans

• AWP finalized

• Prepare annual performance agreement for each region and TEIs

• Prepare annual performance agreements for each region and TEIs

• Sign and submit annual performance agreements

MOE

MOE, REBs & TEIs

MOE

REBs & TEIs

End-March

• Submit regional and TEI AWP and performance agreements for each region and TEI to pooled funding DPs

MOE 2 weeks prior to JRM

• Review AWP and provide comments, or approve through non-objection Bank and DPs Within 2 weeks after JRM

• Prepare procurement plans

• Implement AWPs

MOE & REBs

REBs & TEIs

End-May

• Prepare consolidated progress report REBs with WEOs and TEIs

End-October

• Consolidate federal, regional and TEI progress reports into an annual review of progress

MOE Mid November

• Annual Review of sector progress MOE End November

Project Implementation and Management Arrangements

5. The roles and responsibilities of the different levels of government offices in the implementation and coordination of the program are summarized below and described in detail in the PIM. Overall implementation will be carried out using existing government structures and systems of the MOE and MOFED, as described below.

6. Coordination of the project will be carried out by component or sub-component coordinators or assigned focal persons. They will be responsible for the planning, management and monitoring and evaluation of their assigned technical tasks, components, or sub-components. At the institutional level, there will be one GEQIP focal person assigned at each institution. Additional focal staff for procurement and financial management will be assigned at the institutional level.

-96-

Central Level

7. Figure 1 below shows the proposed institutional arrangements for GEQIP.

Figure 1: GEQIP Implementation Arrangements

8. Ministry of Education (MOE). The MOE will be responsible for policy formulation, overall coordination and monitoring and evaluation of the program, facilitation of capacity building at the regional level and policy formulation as well as implementation of the federally mandated portions of the components. Within the MOE, a GEQIP Coordination Committee (GCC) will be established. The GCC will be chaired by the Minister or State Minister for General Education and will include representatives from MOE, REBs, MOFED and civil society. Donor Partners will participate in GCC meetings as observers, and by request from the Government.

State Minister

Curriculum &

Textbooks (GECDD)

Assessment (GEQAEA)

TDP (EPTED & ELID)

SIP (EPTED)

Minister (MOE)

GEQIP Coordination, M&E (Planning and Policy Analysis Department)

School Grants

(PPAD)

MAP (PPAD)

Procurement (PrPAD)

Finance (DoF)

REGIONS

MOFED

BOFEDs

Universities

GEQIP Coordination

Committee

-97-

9. GEQIP Coordination Committee (GCC). The roles and responsibilities of the GCC will include the following:

• Provide overall strategic guidance for GEQIP planning implementation;

• Provide an oversight function to the plans and budgets of the implementing institutions at the federal and regional levels;

• Review and approve the plans of the federally mandated implementing institutions and consolidating plans;

• Provide oversight over financial management aspects including reviewing internal and external audit reports, and management responses and actions taken on these reports;

• Agree on the formula for allocating GEQIP funds to federal, regional and woreda levels;

• Set bands for allocation of GEQIP funds to the four components in the first year, and review these in subsequent years; and

• Ensure that agreed performance targets and timelines for activities under the different components are met.

10. MOE Planning and Policy Analysis Department (PPAD). The PPAD will be responsible for overall GEQIP coordination and management, and will provide technical support to the GCC. PPAD will liaise with other MOE departments and units responsible for GEQIP pillars and sub-components to ensure efficient planning and implementation. PPAD will also provide technical support to planning, budgeting and procurement. As shown in Figure 1, the PPAD will have inter alia the following responsibilities:

• Coordinate and oversee the program to ensure that it meets the objective of improving the quality of general education in the country;

• Coordinate the pooled fund procurement activities and ensure that all goods and services are procured according to the plan;

• Ensure that the implementing institutions for which they have a mandate have the required capacity;

• Review GEQIP plans of the federally mandated implementing institutions and submit to the GCC for approval;

• Review and provide feedback on plans and reports submitted by regional coordination committees and submit to the GCC for oversight and follow-up;

• Provide technical support to regional coordination committees on coordination and implementation of different components and sub-components of the GEQIP;

• Facilitate information exchange and document experiences and lessons learned across regions;

-98-

• Monitor and evaluate effectiveness of utilization of resources and program through the existing M&E unit of the PPAD; and

• Consolidate GEQIP progress reports.

11. Component and Sub-Component Coordinators. The current responsibility arrangements are as follows: (i) Curriculum and Textbook is with the MOE General Education Curriculum Framework Development and the relevant focal person of the component will be part of the coordination group within the PPAD, and Assessment is with the General Education Quality Assurance and Examinations Agency; (ii) Teacher Development Program (TDP) and School Improvement Program (SIP) are with the Educational Program and Teacher Education Department (EPTED) and will also be part of the coordination group within the PPAD; and (iii) MAP and school grant (SG) will be coordinated by the PPAD. The general responsibilities of the GEQIP component and sub-component coordinators are as follows:

• Collaborate with PPAD on planning, implementation, monitoring and reporting processes;

• Manage communication and information including stakeholder consultations;

• Provide guidance and technical support to implementing institutions and REBs, including through regional visits; and

• Manage technical assistance support and other contracted activities.

12. Universities. A number of older universities participated in the implementation of teacher development activities under TDP1. Under the GEQIP, all universities, including newly established 12 new universities, will be supported to implement interventions under the TDP component. They are responsible for preparing their plans, budget and progress reports and submitting them directly to the PPAD for review. The PPAD will then submit the budget and plan to the GCC after which it is submitted to the MOFED for transfer of funds according to the approved budget.

-99-

13. The following table lists the current 21 universities.

UNIVERSITY

Region

Faculty

Enrollment

1 Addis Ababa University Addis Ababa 220 5,116

2 Samera University Afar 125 1,200

3 Bahir Dar University Amhara 389 5,032

4 Debre Birhan University Amhara 112 1,799

5 Debre Markos University Amhara 120 1,889

6 Desse/Kombolcha (Wollo) Amhara 164 1,520

7 Dire Dawa University Dire Dawa 86 1,528

8 Meda Wolebu University Oromia 122 1,255

9 Adama University Oromia 274 2,537

10 Ambo University College Oromia 75 1,059

11 Haramaya University Oromia 132 2,966

12 Jimma University Oromia 204 2,927

13 Wollega University Oromia 119 836

14 Arba Minch University SNNPR 77 1,345

15 Dilla University SNNPR 134 3,248

16 Hawassa University SNNPR 51 960

17 Mizan/Tepi University SNNPR 115 989

18 Wolaita-Sodo SNNPR 69 1,102

19 Jijiga University Somali 172 1,336

20 Axum University Tigray 127 1,247

21 Mekelle University Tigray 100 2,639

2,987 42,530 Source: MOE 2008

14. Financial Management and Procurement. The implementation plan also involves coordination with the finance and procurement departments since the MOE will implement some of the components of the GEQIP. The two departments will report directly to the MOE. The experience of TDP1 shows that there were delays in disbursing resources to the universities resulting in under utilization of resources, and delays in reporting mainly due to limited capacity of the finance and procurement units. Therefore, it should be noted that capacity enhancement of the two departments will be crucial for efficient financial management and timely purchases of goods and services for the program components that will be implemented at the federal level.

-100-

15. Ministry of Finance and Economic Development (MOFED). MOFED will be responsible for financial management and reporting on the GEQIP. For this purpose, a GEQIP focal person is recommended within MOFED who will closely work with the MOE. The specific responsibilities of MOFED will be:

• Have overall responsibility for GEQIP financial management aspects;

• Disburse resources to the implementing institutions (federal and regional);

• Provide guidance, training and support to the various implementing agencies (BOFEDs, WOFEDs, Universities, CTEs, REBs, MOEs, schools) to ensure that FM aspects are handled satisfactorily in all project institutions;

• Assist the regional BOFEDs and WOFEDs on financial management, and disbursement and reporting of the GEQIP resources, so as to ensure the timely implementation and reporting on the program; and

• Prepare consolidated quarterly and annual Interim Financial Reports (IFR).

Regional Level

16. Figure 2 below shows the proposed institutional arrangements at regional level.

Figure 2: GEQIP Implementation Arrangements at Regional Level

Head of REB

Curriculum &

Textbooks

TDP

Regional President

Regional GEQIP Coordination

MAP

Finance Procurement

CTEs

WoFEDs

BoFED

School Grants

SIP

Schools

REB Planning Departments

-101-

17. At the regional level, each region will have a similar institutional arrangement, and the Planning Department will coordinate the implementation of the GEQIP, reporting directly to the Head of the REB. Funds will flow from MOFED to BOFED to WOFED as directed and then directly to the implementing institutions (i.e., CTEs, universities, schools) while keeping the REBs informed about the transactions.

18. Regional Education Bureaus (REBs). The REBs will be responsible for planning, management and overall coordination of the elements of the project that are mandated at the regional level. In addition, it will implement the GEQIP components that are supposed to be the responsibilities of the bureau. If necessary, technical assistance will be assigned at the regional level to support the coordination of the project.

19. Regional GEQIP Coordination Committee (RGCC). At the regional RGCCs housed at the REBs will be established. The RGCC will be chaired by the Regional President or his/her designate and members will include head of REB, REB department heads and zonal education department heads (as applicable). The responsibilities of the RGCC will include the following:

• Based on the overall policy of the Government, oversee the GEQIP implementation at regional level;

• Review the plans and budgets of the implementing institutions that will be submitted by the regional GEQIP Coordination Unit;

• Ensure that agreed performance targets and timelines for activities under the different components are met in the region; and

• Ensure effective program implementation and proactively address critical issues that could hinder project implementation in the region.

20. Planning Departments of REBs. The head of each REB Planning Department will serve as a focal person in his/her relevant area responsible for the implementation of specific component or sub-component. The organizational structures of the departments in the regions are similar to the federal structures. TDP and SIP are in the EPTED and MAP and School Grants will be managed by the planning departments of the REBs. The REB Planning Departments will be responsible for planning, reviewing and reporting of the GEQIP activities for the region and specific responsibilities are as follows:

• Ensure the implementation of the program at regional level, as appropriate;

• Ensure that the guidelines and manuals for the implementation of the GEQIP components are distributed to the relevant institutions;

• Assist the woredas in planning and implementation of the program where applicable;

• Work closely with governmental and non-governmental organizations working on education quality improvement related projects and integrate their projects in the regional plan as appropriate;

• Provide overall guidance to the woredas to ensure coordination on planning and implementation of the SIP and the school grants;

-102-

• Coordinate procurement activities which are regionally mandated;

• Review the regional GEQIP plans and activities prepared by the REB, including CTEs;

• Review and provide feedback on consolidated reports from REB and ensure timely physical reporting to the federal level;

• M&E of the GEQIP at regional and woreda levels;

• Provide technical support to the head of REB on implementation of the different components and sub-components; and

• Consolidate regional plans and budget for the RGCC.

21. Colleges of Teacher Education (CTEs). CTEs were engaged in TDP1 and will continue implementing TDP under GEQIP through planning, budgeting and implementation of the program. They will submit their plans and budget to the REB Planning Department for review, and then their budget will be reviewed at the regional level, based on guidelines from MOE. The REB Planning Department will review and submit the plans and budgets to the RGCC which will in turn approve and forward to the MOE for information.

-103-

22. The following table lists the current 26 CTEs.

CTE

Region

Faculty

Enrollment

KotebeCTE, Degree Addis Ababa

1 KotebeCTE, Diploma Addis Ababa 125 900

2 Asaita CTE Afar 14 300

3 Debre Berhan CTE Amhara 110 900

4 Debre Markos CTE Amhara 114 1,435

5 Debre Tabor CTE Amhara 30 450

6 Dessie CTE Amhara 55 720

7 Gondar CTE Amhara 104 1,500

8 Woldiya CTE Amhara 33 450

9 Gilgel Beles CTE Benshangul 30 168

10 Gambella CTE Gambella 17 200

11 Harar CTE Harar 27 293

12 Asella CTE Oromia 59 394

13 Dembidollo CTE Oromia 51 600

14 Jimma CTE Oromia 78 764

15 Mettu CTE Oromia 39 1,118

16 Nekemte CTE Oromia 35 550

17 Robe CTE Oromia 53 1,000

18 Sebeta CTE Oromia 19 400

19 Arba Minch CTE SNNPR 100 700

20 Bonga CTE SNNPR 86 538

21 Hawassa CTE SNNPR 94 1,020

22 Hossana CTE SNNPR 80 700

23 Jijiga CTE Somali 44 300

24 Abbiy Addi CTE Tigray 27 500

25 Adwa CTE Tigray 33 500

26 Mekelle CTE Tigray 41 448

16,848 Source: MOE 2008

23. Bureau of Finance and Economic Developments (BOFEDs). The MOFED will transfer the budget to regional BOFEDs for the GEQIP components that will be implemented at regional level. Then, BOFEDs in close coordination with the REBs, will transfer the funds to the concerned implementing institutions. It should be noted, however, that BOFEDs will not only serve as the conduit for transfer of the funds, but will also be involved in the planning and budgeting of the program activities. For this purpose, it is proposed to have one GEQIP focal person within each BOFED to work closely with REB. The specific responsibilities for regional BOFEDs are as follows:

• Plan and budget GEQIP components with REB;

• Assist the WOFEDs in planning and budgeting for GEQIP school grants as part of the regular program;

• Disburse resources to the woredas and TEI according to the plan in a timely manner;

-104-

• Assist the schools in planning and budgeting for the School Improvement Program, through the WOFED and WEO; and

• Prepare periodic consolidated regional financial reports of the program and submit to MOFED.

Zonal Level

24. The zones are important, particularly in SNNPR where they have constitutional rights and decision-making roles in terms of budget allocations to woredas. Other large regions such as Amhara and Oromia also use the zones as technical and administrative bridges since they cannot easily reach the woredas. Therefore, the zones are also included under the GEQIP implementation arrangements.

25. Zonal GEQIP Coordination Units. These units will be established and chaired by the zonal administrator or his/her designate in some regions, as appropriate. The members could be the zonal education department head and heads of WEOs within the zone. The responsibilities of the zonal/woreda GEQIP Coordination Unit will be as follows:

• Coordinate the implementation of the GEQIP components in the woredas;

• Serve as centers for training of woreda education experts and school principals and supervisors on various issues of the GEQIP; and

• Report problems and progress made in the implementation of GEQIP to the regional GEQIP Coordination Unit.

Woreda Level

26. Woreda Education Offices (WEOs). The WEOs will be responsible for providing assistance to schools in planning and managing and also in school grants, including financial and procurement management, and monitoring and evaluation. WEOs will carry out the following primary responsibilities:

• Ensure that the SIP and school grants implementation manuals are distributed to cluster centers and schools and assist in training in the use of the manuals;

• Work closely with governmental and non-governmental organizations working on education quality improvement related projects and integrate their projects in the woreda plan as appropriate;

• Work closely with WOFED in planning and budgeting for school grants as per the School Grant guidelines;

• Document good practices in education quality improvement and share with the region;

• Monitor the progress of the program at cluster and school levels and use the results for the improvement of the program implementation; and

-105-

• Together with the REB, ensure the relevance of pre-service and in-service practicum for education quality improvement at the woreda level.

27. Woreda Office of Finance and Economic Development (WOFEDs). As stated earlier, GEQIP will follow the existing structures and systems at all levels. GEQIP will follow the current practice of each woreda having a bank account for treasury funds. In summary, the responsibilities of WOFEDs in the implementation of the GEQIP will be:

• Work closely with the WEO in planning and budgeting of the program;

• Assist the schools in planning and budget for the SIP; and

• Disburse funds to the schools in a timely manner.

School Level

28. The schools will be responsible for the SIP, including school grants that should be implemented at the school level. The schools will have the following responsibilities:

• Prepare annual school plans and budget with PTAs;

• Establish SIP committees with stakeholders, including teachers, students and others, represented;

• Ensure that the SIP committees are aware of their responsibilities in improving the quality of education, based on the SIP manuals prepared/translated into local languages;

• Ensure that teachers participate in the GEQIP related training programs that are organized by the WEO and REB;

• Manage the school grants according to the action plans and the allocated budget;

• Share the good practices and lessons learned regarding GEQIP with other schools through the school clusters and WEO; and

• Create a conducive environment to ensure that the teaching and learning processes are within the schedule of the academic year.

-106-

Annex 7: Financial Management and Disbursement Arrangements

Introduction

1. A financial management (FM) assessment was conducted in accordance with the Financial Management Practices Manual issued by the Financial Management Sector Board. The objective of the assessment was to determine whether the implementing entities have acceptable financial management arrangements to ensure: (i) the funds are used only for the intended purposes in an efficient and economical way; (ii) the preparation of accurate, reliable and timely periodic financial reports; and (iii) safeguard the entities’ assets.

2. An effective financial management system is vital for the project because of the need to deliver services quickly to a wide variety of stakeholders. The objectives of the project’s financial management system are to: (i) ensure that funds are used only for their intended purposes in an efficient and economical way while implementing agreed activities; (ii) enable the preparation of accurate and timely financial reports; (iii) ensure that funds are properly managed and flow smoothly, rapidly, adequately, regularly and predictably to implementing agencies at all levels (federal, regional and Woreda as well as at schools and Universities, and others); (iv) enable project management to efficiently monitor project implementation; and (v) safeguard the project’s assets and resources.

3. The Bank team visited the MOE, MOFED, Office of the Federal Auditor General (OFAG), and selected BOFEDs, WOFEDs, Universities, CTEs, REBs and schools. The team also met with the DPs and discussed the various project issues and the way forward. An Education Sector Financial Management Assessment has been carried out as part of the preparation of the project, which also informed the FM assessment for the project. This sector wide assessment will be used to inform the risk mitigation actions and capacity building actions to be implemented during the project implementation period.

Project Background

4. Project Objectives. The overall objective of the proposed Program is to improve the quality of general education (Grades 1-12) throughout the country. The proposed APL will be implemented in two phases. The first phase of the APL will be implemented over a period of four years and the second phase will be implemented over a subsequent period of four years. The project will be financed by the Federal and Regional Governments and development partners including IDA, FTI-CF, four bilateral pooled partners (Finland, Italy, Netherlands, Sweden) through an IDA-administered MDTF), and DFID, which is not part of the MDTF.

5. Project Components. The first phase Project consists of the following components: (i) Curriculum, Textbooks and Assessment; (ii) Teacher Development Program (TDP), including English Language Quality Improvement Program (ELQIP); (iii) School Improvement Program (SIP), including school grants; (iv) Management and Administration Program (MAP), including EMIS; and (v) Program Coordination and Monitoring and Evaluation.

6. Implementation Arrangements. Project implementation arrangements are outlined in Annex 6 (Implementation Arrangements). The institutions that are involved in project implementation and will use project funds are: (a) MOE; (b) 11 REBs and city administrations);

-107-

(c) 21 Universities; (d) 26 CTEs; and (e) about 22,900 schools (including ABE Centers). Funds flow to these institutions through: the MOFED, 11 BOFEDs or corresponding City Council-equivalents and all the Woreda Office of Finance and Economic Development (WOFEDs or corresponding Towns, numbering around 800). In addition, all the Zonal Office of Finance and Economic Development (ZOFED) also have a role in financial reporting.

7. MOE and the REBs will be involved in overall planning, and review of work plans and budgets for the various institutions, and allocation of resources. While each of the institutions involved will be responsible for FM aspects in respect of activities carried out by them including internal controls, accounting and record keeping, MOFED will have overall responsibility for the FM aspects, and for consolidated financial reporting. MOFED, BOFEDs and WOFEDs will be involved in disbursing resources; and MOFED and BOFEDs will receive information and reports from the institutions involved in project implementation, and prepare financial reports (at the program and regional levels, respectively).

8. Key Principles Underpinning Design of FM Arrangements. The FM arrangements for the program are anchored in the country’s regular PFM system. Specifically, funds flow and banking arrangements will follow the regular government system; regular government rules and procedures will apply for the program; and the regular government Chart of Accounts and accounting system will be used. This is particularly relevant given that there are a large number of implementing institutions and given that the program would operate throughout the country in all Regions and Woredas.

9. The GEQIP FM arrangements are being outlined in a FM Manual, which is under development, and will be included in the PIM. An early draft of the FM Manual has been prepared. Since the GEQIP FM arrangements utilize the Government’s regular PFM system, the FM Manual outlines how the government’s PFM system would operate with respect to the GEQIP, and also documents program-specific FM aspects (such as formats of the financial reports, Terms of Reference for the audit, etc). The PIM including the FM Manual will be finalized before Effectiveness.

10. The financial management arrangements outlined in the FM Manual will cover all program funds i.e., those financed by the Government and DPs. Specifically these FM arrangements will apply to the entire project – covering all project costs (including those financed by Government – federal and regional – and all partners financing GEQIP). The FM design for the project thus follows an approach of harmonization among all DPs around country PFM systems.

COUNTRY ISSUES

11. The Government has been implementing a comprehensive public financial management (PFM), with support from DPs, including the Bank. The main instrument used for effecting Ethiopia’s PFM reforms has been the Expenditure Management and Control sub-program (EMCP) of the Government’s civil service reform program (CSRP). This is being supported by the IDA financed-PSCAP and further support is envisaged under the proposed Second PBS Project.

-108-

12. The latest PFM study for Ethiopia was completed in 2007 using the Public Expenditure and Financial Accountability (PEFA) PFM performance measurement framework. The assessment was done at the federal and regional levels (covering 7 regions) and two separate reports were issued. The PFM study notes that Ethiopia has made significant progress in strengthening PFM in recent years at both federal and regional levels. Satisfactory progress has been made in budgeting and accounting reform but the adequacy and quality of budget reporting needs further improvement. The classification of the budget meets international standards and the information included in the budget documentation is of good quality. The fiscal relations between the federal government and the regions are transparent. The budget process is well ordered with the existence of a budget calendar generally adhered to, and a budget circular issued to budgetary institutions. Cash flow management is not fully established. Government posts financial information including the annual budget on its website and also publishes the same information in the official Gazette, but there is scope for improvement in public access to fiscal information. Payroll and procurement controls are satisfactory while control for non-salary expenditure shows some weaknesses. There is need for further improvements in financial reporting (reducing delays in in-year and annual financial reporting), internal audit, external audits and scrutiny of public finances. The first phase of the reform (transaction platform) has taken place through budgeting, planning, accounting, and information systems. The second phase of the reform, the policy platform, is continuing at the sub-national level with reforms to the block grant mechanisms and a move towards more performance based budgeting. The government leadership and ownership regarding ongoing PFM reform efforts are both high.

13. The PFM study also notes that at the regional level, the status of PFM reform and performance varies between regions. SNNP and Tigray regions have been the beneficiaries of investment and local initiatives to support PFM reform. They both show improvement in the overall public finance function and a consequent reduction in fiduciary risk. A few other Regions, such as Amhara and Oromia, have also shown significant progress in PFM while others are at an earlier stage of investment in PFM or have not yet commenced their plans and therefore have demonstrated less progress in PFM improvement. There have been improvements in some areas, including budgetary transparency in recent years, robust budget preparation, internal audit scrutiny and follow up, timeliness of in-year and annual financial reports, and mutual supportiveness of the federal and regional Auditor Generals. Nonetheless, the report noted that the quality and nature of internal audit needs to be improved. Untimely clearance of suspense accounts and significant delays in producing timely in-year and end of year information in some regions are also major weaknesses. There are capacity issues in reviewing annual budgets. It was noted that supplementary budgets are endorsed by the Parliament as needed. There continue to be capacity and staffing issues in areas such as audit in all the regions. An insufficient number of qualified professional staff at the sub-national level, particularly at the woreda level, and lack of some basic office infrastructure is a major challenge. It must be noted that there is a shortage of qualified accountants and auditors in the country.

14. An additional concern is that while there have been improvements in the financial discipline associated with government funds, the use of other parallel FM mechanisms as in some projects financed by DPs has the potential to increase fiduciary risk. The use of alternative FM arrangements also creates additional workload in areas where capacity is already stretched.

-109-

15. MOE has experience in the IDA- financed Post Secondary Education Project (PSEP). The PSEP is being implemented at the MOE and nine participating universities. The project showed limited improvement in implementation performance in 2007, but its implementation performance has been slow. According to the July 2008 mission Aide Memoire, the project has been rated as moderately unsatisfactory – both overall and on FM aspects. The FM risk level is rated as substantial. The major FM issues identified include delays in submission of financial reports, disbursement delays, payments for ineligible expenditures, weak performance of internal audit departments, and delayed and unsatisfactory reporting of Universities to MOE. These have been taken into account in designing the FM arrangements for this program, and the FM action plan also addresses these issues.

16. Education Sector FM Assessment. An Education Sector FM assessment was carried out to provide a more detailed understanding of the working of the PFM system in the education sector. This assessment was based on a sample of the various education sector institutions. A draft report has been prepared and will be finalized after discussions with Government and other stakeholders. The assessment indicates that many of the strengths and weaknesses of the overall PFM system are also reflected in the education sector. Basic PFM systems operate reasonably well, e.g., regular preparation of budgets; procedures and controls in expenditures approval, authorization and processing; and recording of accounting transactions and maintenance of records. The assessment indicates that: (i) the budget process could be further improved, e.g., strengthening the budget-policy link; monitoring of ESDP financial plans and linking the ESDP financial plans to annual budgeting processes; better link between capital and recurrent expenditures; and better integration of donor-financing; (ii) budget transparency could be improved by publication of budgets of the MOE and the various education sector institutions. Schools also need to be better informed about their allocated budgets; (iii) while cash management appears to be satisfactory, it could be improved with better forecasting; (iv) the MOFED, BOFEDs and WOFEDs appear to have reliable systems that can account for and report on funds transferred to education sector institutions. However, there are major issues with regard to regularity and timeliness of bank reconciliations, closing of monthly accounts and preparation of financial reports by the various education sector institutions (except possibly REBs); (v) there is need to ensure satisfactory inventory controls, in particular maintenance of inventory sheets and matching of physical counts with inventory records (e.g., for textbooks, education supplies); (vi) procedural weaknesses in MOE (regarding the handling of monthly payroll) need to be addressed to improve controls, although overall payroll controls appear reasonable; (vii) there is significant need for development of internal and external audit (scope, nature and follow-up); and (viii) oversight mechanisms (e.g., legislative oversight, audit committees). The assessment also notes overall need for higher level of management control and involvement/responsibility of top management over financial management aspects in the various institutions.

17. An action plan to address the various weaknesses has been agreed, and will be implemented in the first 1-2 years of project implementation. Immediate term actions include ensuring regularity and timeliness of accounting, bank reconciliations and financial reporting in all education sector institutions; satisfactory internal controls including inventory and payroll; and timely and appropriate follow-up actions on internal and external audit findings. The action plan also notes that specific actions will be identified and implemented over the next 1-2 years to address the other major areas noted above. In addition, some of the issues would be addressed through the PFM improvements being effected by the government’s EMCP.

-110-

PROJECT FM ARRANGEMENTS

A. Budgeting

18. The Ethiopian budget system reflects the fiscal decentralization structure. The budget is processed at federal, regional, zonal (in some regions), and Woreda and municipality levels. Budget procedures are documented in the Budget Manual.36 The federal budgeting process usually starts by issuing the budget preparation note to the Budgetary Institutions (BIs). The BIs prepare their budgets in line with the budget ceilings and submit these to MOFED within six weeks following the budget call. The budgets are reviewed at first by MOFED and then by the Council of Ministers. The final recommended draft federal budget is sent to Parliament in early June and is expected to be cleared at the latest by the end of the previous Ethiopian Fiscal Year (EFY).

19. Detailed GEQIP work plans, project costs and procurement plans are being developed, and will be finalized and agreed by Effectiveness. These have formed the basis for the project costs noted in the PAD (which would also be reflected as the program budget in financial reports). Activities and costs noted in the work plans and budgets would be “eligible expenditures” under the project.

20. The MOE will prepare the consolidated annual budget of GEQIP, based on strategic plans and following government budget processes. The institutional arrangements for budget review are discussed in Annex 6 (Implementation Arrangements).

• The budget for the project would be based on the annual work, training and procurement plans.

• Annual budgets would be prepared by MOE in consultation with REBs and all the implementing institutions.

• Work, training and procurement plans and budgets for activities implemented by concerned Universities will be prepared by each concerned University and reviewed and approved by MOE. Similarly work plans and budgets for activities implemented by CTEs will be prepared by each concerned CTE and reviewed and approved by the concerned REB.

• The MOE would have the responsibility for reviewing and appraising all regional and institutional work and training plans, before submitting them to the Bank and pooled fund DPs for review.

• Annual work and training plans and budget will be discussed and agreed with development partners during JRMs or as other joint missions. The Bank will review and clear the draft procurement plans in accordance with the agreed procurement arrangements (see Annex 8). As appropriate these would be documented in the JRM's Aide Memoire.

36 Revised Federal Budget Manual

-111-

21. The GEQIP annual budget will be included in the Federal Government’s annual budget for each fiscal year, and will also be reflected in the Regions’ and Woredas’ budgets.

• Under Government’s current practice, projects are included in the Capital Budget.

• The Budget Proclamations would list the GEQIP budget as a separate line item – as distinguished from the general block grant passed on from the Federal Grant to Regions and then to Woredas (called “subsidy”) – so that these funds can only be used for GEQIP purposes.

• GEQIP funds would be passed on from MOFED to Regions and from Regions to Woredas as a non-offsetting grant (to ensure that these are treated as additional resources).

• GEQIP funds would be transferred together with the block grant transfers from the Federal Government to the Regions and from the Regions to Woredas, but GEQIP funds would be identified as a separate line item.

22. The Government’s regular budget execution/utilization reports and the IFRs as well as progress reports would be used for budget monitoring. These are discussed under the section on Financial Reporting below.

23. Chart of Accounts. The Government’s functional classification system follows a tiered structure (e.g., programs, sub-programs, projects). The classification system also allows for budgeting and accounting for funds by region and by source of financing. The economic classification coding structure allows for breakdown expenditures by types of expenditure (e.g., salaries, fuel, educational supplies, etc). The classification system is contained in the Government’s accounting manual37.

24. The classification structure thus allows for GEQIP sub-components in each Region/federal level to be specifically identified within the functional classification system. All GEQIP activities would be uniquely identified within the Government’s Chart of Accounts, thereby facilitating budgeting, accounting and financial reporting for program funds using the government’s regular PFM system. The FM Manual would outline how the project activities would be coded within the government’s Chart of Accounts, and these codes would be uniformly used by all the implementing agencies.

B. Accounting

25. The Government’s accounting policies and procedures will be used for accounting for the project. The Ethiopian Government follows a double entry bookkeeping system and modified cash basis of accounting. This is documented in the government’s accounting manual.38 This has been implemented at the federal level and in many regions. The main elements of the accounting reform are the adoption of (i) comprehensive Chart of Accounts consistent with the budget classification; (ii) a system of ledgers accommodating all types of accounts (including transfers, assets, liabilities and fund balance in addition to revenues and expenditures); (iii)

37 FGE Accounting System, Volume 2 – Chart of Accounts 38 FGE Accounting System, Volume I

-112-

double entry book-keeping (thus, self balancing set of accounts); (iv) a system of control of budgetary commitments (recording commitments as well as actual payments); (v) modified cash basis transaction accounting; and (vi) revised monthly report formats to accommodate double-entry book-keeping and commitment control and permit better cash control. The government’s accounting manual provides detailed information on the major accounting procedures, including controls.

26. Accounting centers for program funds would include: (i) MOE; (ii) MOFED; (iii) Universities; (iv) BOFEDs; (v) REBs; (vi) CTEs; and (vii) WOFEDs. All these institutions would maintain accounting books and records, and prepare financial reports in line with the government’s accounting system. Arrangements for consolidation of GEQIP financial information is discussed under Financial Reporting below.

27. The computerized Integrated Budget and Expenditure (IBEX) accounting system is now operational at the federal level and in most regions. Installation of this system is being carried out in some regions. It is expected that all regions, except Somali, shall use the IBEX system. The rolling out of the IBEX system to zones has continued and three regions (Oromia, SNNPR and Amhara) have already introduced the system in selected zones. The IBEX rolling out exercise is expected to continue and will cover all federal reporting entities and all zones in all regions. Institutions that do not have the IBEX system (such as Universities, CTEs, Woredas) would follow a manual accounting system.

C. Internal Controls

28. Internal control comprises the whole system of control, financial or otherwise, established by management in order to (i) carry out the project activities in an orderly and efficient manner; (ii) ensure adherence to policies and procedures; (iii) ensure maintenance of complete and accurate accounting records; and (iv) safeguard the assets of the project. Regular government systems and procedures would be followed, including those relating to authorization, recording and custody controls.39

29. Internal audit will be carried out by the internal audit departments of the respective entities (MOE, Universities, REBs, CTEs). In addition, MOFED, BOFEDs and WOFEDs have internal audit departments that perform internal audit, including an assessment of whether the budget utilization is in line with the intended purposes. Furthermore there are inspection department at the MOFED and BOFEDs with a role of ensuring quality of internal audits at the Ministries at Federal level and Sector bureaus at region level, following up on the audit recommendations noted by audit reports at different Ministries at Federal level and Sector bureaus at region level, providing training and improving manuals, etc. The staffing of departments varies from region to region. As noted earlier, the PFM analytic work notes that internal audit is weak, and there is need for significant improvements. This is being addressed through the EMCP. As discussed in the section on “External Audit”, the external auditors as part

39 These are contained in the government’s financial regulations and guidelines (Proc. No. 57-1996 Federal

Government of Ethiopia Financial Administration Proclamation; Reg No. 17 -1997 Council of Ministers Financial Regulations; Ministry of Finance & Economic Development, Financial Guidelines (Amharic version). Some institutions such as Universities also have their own financial procedures manual which document aspects such as approval and authorization authority within their organizations; the same would also apply to GEQIP activities.

-113-

of their audit work plan would carry out interim audit and report quarterly to project management (MOE-PPAD and MOFED). This would help mitigate the risk posed by weaknesses of current internal audit capacity.

30. The Education Sector PFM assessment has highlighted some weaknesses with respect to financial management in the MOE. These include substantial delays in closing of monthly accounts and submission of financial reports; delays in bank reconciliations; and some control weaknesses in payroll arrangements. Another area for improvement in the various education sector institutions is ensuring that the procedures for inventory control are adhered to (e.g., for items such as textbooks, education supplies, etc), including maintenance of inventory sheets and matching of physical counts with inventory records. An action plan to address these weaknesses has been agreed, and will be implemented during the Years 1-2 of project implementation.

D. FM arrangements for School grants

31. About 22,900 schools (21,000 primary schools; 900 secondary schools; and 1,000 ABE centers) are expected to receive school grants. School grants (which are based on number of students enrolled) in most cases are expected to be relatively small amounts in value. The design of the FM arrangements for the schools aims to ensure a simple, workable arrangement, while ensuring that robust accountability arrangements are in place. FM arrangements for the school grants will be documented in the SGGs to be issued by the Government and also contained in the FM Manual. The arrangements are summarized below:

• The amount of grants to each school follow a specified formula (fixed amount of grant per student enrolled x the number of students enrolled).

• The grants would be used based on the school work plans which would be prepared by the schools. Procedures for preparation and approval of school work plans, roles of PTAs and communities, and other upstream procedures will be included in the SGGs.

• The Grants will be disbursed half-yearly by WOFEDs to schools (with the exception of year 1 where the full grant will be disbursed in the second semester).

• Simple accounting arrangements in schools would be specified and adhered to. These include: (i) a simple columnar cash book in a standardized format would be maintained regularly; (ii) supporting documents would be maintained for receipts collected and payments made by schools for all their funds (i.e., school grants provided by government and funds raised by the community)

• The PTA/Community would exercise oversight over school funds: (i) PTA chair would approval payments (as is the current practice in most schools); and (ii) copy of the cash book and/or a summary of transaction would be submitted to the PTA/community on monthly basis, and this would be recorded in the PTA Minutes Register.

• Schools that receive grants of more than 15,000 Birr annually will need to have a Bank account for deposit of school grants.

-114-

• Schools would submit quarterly a copy of the cash book along with supporting documents to the concerned WOFED; and these documents would be retained at the WOFED.

• An audit of a random sample covering 10 percent of schools each year would be done to monitor adherence to the above requirements. The sample size will be discussed with the auditor, and adjustments made as appropriate. As implementation progresses, the sample size may be reviewed. The 10 percent of schools audit will be carried out at the WOFED (using the documents retained there). The auditor would visit selective schools to check on specific aspects, as needed. The schools’ audit report will be in a simple format in about 1-2 pages, e.g., certification of a standardized checklist. To ensure even workload, the audit will be carried out throughout the year, and the results of the audit will be reported to project management (MOE-PPAD and MOFED; see Section on Audit below). To address non-compliance with the criteria for the implementation of the school grants program, appropriate remedies will be identified in the SGGs.

• MOE will have overall coordination and management responsibility of the school grants program, including ensuring adherence to the SGGs. Any technical or financial problems identified by the school grants audit would be followed up by woredas, regions, and MOE.

• Inspections by the WOFEDs of school funds will continue in those woredas/regions where this is being done. These inspections will also pay attention to issues highlighted in the schools’ audit.

• Grants to the schools will be accounted as expenditure in the WOFED’s books when disbursed from the WOFEDs to schools. DPs will recognize the grants as eligible expenditures when these are paid to the schools.

• ABE centers would be linked to a primary school; and in exceptional cases where suitable primary schools are not available, the PTAs will be responsible for handling and accounting for the funds.

32. Country-wide rollout to all schools of the school grants scheme needs to be monitored and well supported. Currently, the SGGs are being finalized and will be distributed together with standardized materials and formats of registers. An extensive dissemination and training plan is also being designed to train both trainers at the Regional and Woreda levels, and the schools and communities, on the School Grants program. It is important that these preparatory steps be properly implemented before the school grants are disbursed. An evaluation of the SIP is planned within 1 year of the first disbursement of the school grants.

-115-

Funds Flow Arrangements

IDA

DPs participating in

MDTF

IDA-administered MDTF

Pooled Designated Account at MOFED

(Foreign Currency)

Government’s Regular Birr Account at MOFED which includes Federal Government’s contribution

BOFEDs

WOFEDs

MOE

Universities

REBs

RTI/CTEs

Schools

FTI-CF (IDA-administered)

DFID

Including Regions’ Contribution

-116-

E. Funds Flow and Disbursement Arrangements

33. Funds flow arrangements (funds flow into the project, and within the project to the various project institutions which will handle project funds) are presented in the diagram below. Development partner funds would be deposited into a single pooled foreign-currency “Designated Account” and then pooled into the Government’s treasury (Birr funds) managed by MOFED.40 MOFED’s accounting system will track the allocation among the various partners (IDA, EFA FTI CF Grant, MDTF and DFID) using appropriate ledger accounts. Thereafter the funds flow will follow the country’s regular system for banking and funds flow through the treasury system.41

34. Disbursement Method. Report-based disbursements would be followed i.e., based on quarterly Interim Financial Reports (IFRs). Disbursements will be made quarterly and would cover cash requirements for the next 6 months, based on the forecasts contained in the IFRs. Regularity and timeliness of IFRs are needed to ensure smooth disbursements. Provision would also be made for direct payments and special commitments, for use in exceptional circumstances (although these are not envisaged).

35. Designated Accounts. There would be 1 pooled Designated Account for the IDA Credit, FTI CF, the MDTF (all of which are administered by IDA), and DFID funds. MOFED will open the Designated Account denominated in US Dollars in the National Bank of Ethiopia on terms and conditions acceptable to IDA. The limit of the Designated Account would be 6-months forecasted expenditures.

36. Financing shares of the respective partners to finance the annual work plan and budget would be agreed annually e.g., during the JRM, based on the annual work plans and budget. The financing shares for the period until July 7, 2010 are as follows:

Year 1 Year 2 Financing Source

Amount (US$ mil) Share

Amount (US$ mil) Share

Federal 2.6 5% 14.3 9% Regional 0.0 0% 0.0 0% IDA 2.0 4% 39.4 25% EFA FTI CF 1 33.2 60% 36.8 23% EFA FTI CF 2 0.0 0% 37.0 24% MDTF 13.9 25% 20.9 13% DFID 3.5 6% 8.8 6% TOTAL 55.2 100% 157.2 100%

37. A possible concern that has been raised is the risk of delays in availability of funds to implementing entities, particularly at times of general government cash crunch. As noted earlier, measures to mitigate this risk include (i) program funding and corresponding expenditures would 40GEQIP funds will be identified separately through financial reports. GEQIP (Birr) funds cannot physically be

traced to separate Bank accounts, since these are merged with other government funds. 41Regular government PFM system arrangements and procedures would also be followed for fund flows to Universities. Funds flow arrangement for CTEs (BOFEDs to CTEs) would also follow the country’s regular PFM arrangement.

-117-

be regularly monitored through financial reports; (ii) the Budget Proclamations would specifically identify the GEQIP expenditures as a separate line item distinct from the general block grant (called “subsidy”); and (iii) the coding structure provides for GEQIP costs and financing to be specifically identified and reported. It was confirmed with Government that this system is satisfactory to ensure that GEQIP funds deposited into the Government’s regular treasury account would be used only for GEQIP and that these funds would be made available on a timely basis to the implementing entities. This aspect would be closely monitored during project supervision.

F. Financial Reporting

38. Existing financial reporting to MOFED/BOFEDs as per government procedures will continue.

• MOE and Universities report monthly to MOFED

• REBs and CTEs report monthly to BOFED; and

• WOFEDs report monthly to ZOFEDs who in turn report quarterly to BOFEDs, on all their expenditures including GEQIP expenditures.

39. These reports include information such as trial balance; expenditures by line items (based on the Government’s functional classification system), with a break-down by economic classification for each line item; details of cash and bank balances, and break-down of receivables and payables.

40. MOFED will submit consolidated quarterly Interim (unaudited) Financial Reports (IFRs) to IDA (on behalf of Development Partners)42 within 75 days of the end of each fiscal quarter. The IFRs would include financial information for the quarter, and cumulatively for the year and the project. They would also include comparison with budgets. The IFRs would include: (i) sources and uses of funds; (ii) break-down of project expenditures by sub-components, aggregated to components; and (iii) forecast for the next 2 quarters. The IFRs would also include any notes/explanations, and supporting information as the statement of the Designated Account (opening and closing balances, and movements – inflows and outflows) needed to support disbursement withdrawal applications.

41. MOFED will be responsible for preparing the IFR drawing on information collected from the various agencies on receipts, expenditures and balances. MOE will provide information to MOFED on budgets for the quarter (drawing information from the annual work plan and budget), explanation of variances between budget and actual, and cash forecasts for the next 2 quarters.

42. The timetable for the various steps is given in the table below. Additional 15 days have been built in as a contingency, and to provide for time for any discussions, correction of any errors, etc.

42 DA and other development partners will share among themselves all significant information/reports and communications from/to government e.g., audit reports, IFRs, progress reports, their review comments, etc.

-118-

15 days after end of each month (or less if required by government procedures).

The various agencies would submit financial reports as per regular government procedures (in regular government financial reporting formats) i.e., MOE and Universities would submit financial reports to MOFED; REBs and CTEs would submit financial reports to BOFEDs; and WOFEDs would submit financial reports to ZOFEDs.

30 days after end of each quarter (or less if required by regular government procedures):

ZOFEDs send consolidated reports of WOFEDs to BOFEDs.

ZOFEDs send consolidated reports of WOFEDs to BOFEDs.

45 days after end of each quarter: BOFEDs consolidate financial reports of ZOFEDs, REBs, CTEs, own expenditures and regions’ contributions, and send to MOFED.

60 days after end of quarter: MOFED prepares consolidated GEQIP IFR. This will be based on financial reports from MOE, Universities, BOFEDs, own expenditures, and Federal government contributions and receipts from development partners.

43. The formats of the IFRs have been agreed and will be included the FM Manual.

G. External Auditing

44. Annual audited financial statements and audit report (including Management Letter) of the project will be submitted to IDA within 6 months from the end of the fiscal year.43 The annual financial statements will be prepared in accordance with the International Financing Reporting Standards (IFRSs) and include the sources and uses of funds on the project (containing the same information as the similar statement in the IFRs), with supporting schedules and other information. The formats of the annual financial statements will be included in the FM Manual. The draft annual financial statements will be prepared within 3 months of the end of fiscal year and provided to the auditors to enable them to carry out and complete their audit on time.

45. The audit will be carried out by the Office of Federal Auditor General (OFAG), or a qualified auditor nominated by OFAG and acceptable to IDA.44 The OFAG had noted that it would nominate a professional auditing firm to carry out the audit of GEQIP. The auditor will be appointed by March 31, 2009 (i.e., within 2 months of Effectiveness). To ensure rotation of auditors in line with good practice, private auditors would have a maximum term of 3 years (non-renewable).

46. The auditor would express an opinion on the project financial statements. The audit will be carried out in accordance with the International Standards of Auditing (ISA) issued by the International Federation of Accountants (IFAC). The scope of the audit would also cover the reliability of the IFRs used as the basis for disbursements and the use of the Designated Account.

43As noted earlier, IDA will share these as well as the results of its review with other development partners. 44 According to the Ethiopian Constitution, the OFAG is responsible for auditing all the financial transactions of the

federal government as well as subsidies to the regions. The OFAG through its 5 regional offices audit revenues (including resources from higher tiers of government) utilized by the regions and Woredas. Each of the Regions has an Office of the Regional Auditor General (ORAG), which is responsible for the audit of government financial transactions in the region. PFM study notes the Auditors-Generals were not able to perform the audits per planned schedule due to understaffing.

-119-

The auditor will also provide a Management Letter which will inter alia outline deficiencies or weakness in systems and controls, recommendations for their improvement, and report on compliance with key financial covenants. As requested by the Government, the audit TOR will note that this is a “special purpose audit”. The TOR for the audit has been agreed and will be included in the FM Manual.

47. The auditor will prepare a work plan to ensure adequate coverage of the various institutions that receive project funds and cover all the major risk areas. Given the large number of institutions and to meet the timetable for completion of the annual audit, the auditor will carry out interim audits quarterly following the audit plan. The interim audits are not a separate exercise, but are intended to facilitate the process of the annual audit, and also provide early information to project management to enable them to take corrective actions. The auditor will submit interim audit reports to project Management (MOE-PPAD and MOFED). The same auditor will also carry out the audit of schools (based on a random sample), as described earlier. The detailed schools audit report (checklist) will be submitted to project Management (MOE-PPAD and MOFED), with copies to the respective WOFEDs. A summary of the schools’ audits will be reported in the interim audit reports. The interim audit and schools’ audit will be included in the TOR for the audit. DPs could refer to the interim audit reports during project supervision.

48. MOFED and all project institutions will take the necessary follow-up actions on the audit reports (annual and interim). MOFED will submit the Government’s response to the findings in the annual audit report to IDA and an action plan for any follow-up actions. Audit reports to be submitted are summarized below:

Report Responsible

Agency Due Date

Audited Project Financial Statements and audit opinion thereon for each fiscal year (including Management letter)

MOFED By Jan 7 of each year. The first report would be for the period ended July 7, 2009 and would be due on Jan 7, 2010.

H. Institutional Oversight

49. As noted in Annex 6, a GEQIP Coordination Committee (GCC) will be established at the national level. The Committee’s functions include providing overall strategic guidance for GEQIP implementation; providing oversight over the plans and budgets of the implementing institutions at the regional level; reviewing and approve the plans of the federally mandated implementing institutions; and ensuring that agreed performance targets and timelines are met. Consistent with its oversight functions, the GCC will provide overall oversight over FM aspects of GEQIP. The GCC will discuss the internal and external audit reports relating to GEQIP and management’s response and actions taken on these reports.

I. FM Staffing/Capacity

50. The Central Accounts Department of MOFED will have overall responsibility for GEQIP FM aspects. In the various education institutions (MOE, Universities, REBs, and CTEs), FM

-120-

activities for the GEQIP program will be handled by the Finance Departments of the respective institutions. Similarly the Finance departments in the BOFEDs and WOFEDs will also handle GEQIP FM aspects. Additional identified staffing to GEQIP FM aspects are noted below:

• In the MOFED Central Accounts Department, an accountant dedicated to GEQIP work will be deployed. The accountant will be responsible for consolidation of financial information, prepare IFRs, liaise with auditors, etc.

• In the MOE Finance Department’s Budget Unit, the 3 vacant Budget Analyst positions will be filled.

• In the MOE Finance Department’s Disbursement Unit, 1 accountant will be deployed to work on GEQIP.

51. Staffing adequacy in all the project institutions will be monitored during implementation and additional staffed, if any, will be identified and filled as needed.

52. FM Support and Capacity Building. Experience from other projects has demonstrated the need for FM support and capacity building mechanisms to be built into project design. Within the GEQIP program, mechanisms would be established at the Federal and/or regional levels to provide support to Regions and Woredas, and to assist project management on FM aspects.

• MOFED will provide FM support to help the various institutions (including universities, CTEs, BOFEDs, WOFEDs, MOE and REBs) implement the FM arrangements using 2 national consultants. Their functions will, inter alia, include: (i) initial dissemination and orientation training; (ii) hands-on implementation support and troubleshooting on GEQIP aspects; (iii) periodic training; (iv) updating of the FM manual as needed; (v) carry out any FM-related technical work or studies; (vi) prepare progress reports on FM aspects; (vii) capacity building activities on education sector PFM; and (viii) support in consolidation of financial reports, preparation of IFR and annual financial statements.

• One national consultant will be located in the MOE PPAD to assist the Head of PPAD to manage the GEQIP (on FM aspects). This will, inter alia, include analysis of financial data and reports, drill-down into cost information, assist in putting together program budgets, etc.

• In each of the 11 Regional BOFEDs/City Councils, a “Mobile Accountant” will be deployed to follow-up with the various implementing entities on various FM issues and to provide any technical guidance and support (in local language). These could be staff or consultants.

53. In addition to above staff and consultants, provision will be made in project cost estimates for one international consultant’s inputs for 3 months/year (total 12 months for the

-121-

program) to assist in FM capacity building and performance improvement in the education sector.45 The consultant would be recruited as needed depending on the tasks to be performed.

54. The timelines for these consultant appointments and staff deployment are noted below. This is included in the agreed FM action plan.

Institution

By Effectiveness Within 2 months of Effectiveness

MOFED Appoint one national consultant to provide FM support/capacity building

(a) Appoint remaining one national consultant to provide FM support/capacity building (b) Appoint one accountant dedicated to GEQIP

MOE – PPAD Appoint one national consultant to support on FM aspects.

MOE Finance Department’s Budget Unit

Fill three vacant staff positions

MOE Finance Department’s Disbursements Unit

Appoint one additional accountant dedicated to GEQIP

Each of the 11 BOFEDs/City Councils

Appoint one national consultant or deploy one additional accountant (staff) dedicated to GEQIP for the “Mobile Accountant” role

55. FM-related costs included in GEQIP work plans and budget. The costs of: (i) consultants noted above; (ii) audit costs; and (iii) related logistics costs (e.g., transportation) are included in the GEQIP work plans and budget.

45 Most of the PFM improvement measures would be addressed through the government’s EMCP. If any education

sector-specific measures are supported through GEQIP, these would be consistent with the broader PFM improvement initiatives.

-122-

STRENGTHS & WEAKNESSES AND RISKS

56. The FM risk assessment and the corresponding mitigation measures are as follows:

Risk / Explanation Risk Rating

Risk Mitigating Measures Incorporated into Project Design

Residual Risk Rating

Conditions for Effectiveness

(Y/N)? Inherent Risk

Country Level. Weak capacity, including shortage of qualified accountants and auditors. Weaknesses in country PFM systems (compensated in part by inherent strengths in the PFM system)

S A comprehensive PFM reform program is being addressed by the government’s EMCP which is also supported by the PSCAP project and the proposed PBS-2 project.

M N

Entity Level S (a) As above. (b) Action Plan to address FM weaknesses in MOE and other education sector institutions.

M N

Project Level. The program is inherently complex given the very large number of implementing entities at federal and sub national level, including Regions, Woredas, schools, Universities, and CTEs. The School Grants program is a new concept which is being rolled out immediately to 22,900 schools.

H Alignment of FM arrangements with country PFM systems to avoid and minimize additional procedures. FM support arrangements to provide assistance to the various institutions as needed is built into program design. SGGs, including FM aspects, are being developed, and WOFEDs and schools will be trained before school grants are disbursed.

S Y (appointment

of consultants; development

of School Grant

Guidelines)

H Overall Inherent Risk S Control Risk Budgeting M Work plans and budgets have been

prepared which form the basis of project costs. Budgets would be regularly monitored using financial reports.

M N

Accounting. Non-regularity in accounting and related procedures such as reconciliations in some institutions.

S Alignment with country’s regular accounting system. Staffing needs identified and arrangements being made to fill these positions.

M N

Internal Control. (a) Implementation of new school grants program in about 22,900 schools; (b) generally weak Internal audit function; and (c) Inventory control weaknesses.

H (a) SGG will be prepared and schools will be trained; (b) interim audit by external auditors; and (c) action plan to address internal control weaknesses in MOE and other institutions

S Y (School Grants

Guidelines)

-123-

Risk / Explanation Risk Rating

Risk Mitigating Measures Incorporated into Project Design

Residual Risk Rating

Conditions for Effectiveness

(Y/N)? Funds flow. (a) Delays in submission and approval of monthly financial reports may delay preparation of IFRs, and consequently disbursements; and (b) delays in making funds available to implementing entities.

S (a) Alignment of funds flow and banking arrangements with the country’s regular PFM system and reporting processes, thus minimizing additional work; and (b) arrangements in place to ensure that GEQIP funds deposited into the government’s regular treasury account would be used only for GEQIP and that these funds would be made available on a timely basis to the implementing entities.

M N

Financial Reporting. Delays in financial reporting due to the need for consolidation across large number of entities.

H Information flow and consolidation system with timelines has been well defined. FM support by MOFEDs and BOFEDs to all institutions.

M Y (appointment

of consultants)

Auditing. Delays in submission of external audit reports.

S TOR for the audit agreed early on and documented in the FM Manual. Auditors would be appointed within two months of effectiveness. Interim audits would be done during the year to facilitate early completion of the annual audit.

M N

S Overall Control Risk M H Overall FM Risk S H=High; S=Substantial; M=Moderate; L=Low

Strengths and Weaknesses

57. GEQIP will inherit the various strengths of the country’s PFM system. As discussed earlier, several aspects of the PFM system function well e.g., budget process, classification system, compliance with the financial regulations. There is significant ongoing work on improving country PFM systems through the Government’s EMCP which will also help GEQIP. Improvements which are relevant to the education sector will also be supported through GEQIP.

58. Weaknesses in the country’s PFM system may also impact on GEQIP e.g., shortage of qualified accountants and auditors (mainly at Woredas), delay in reporting, limited focus of internal audit, and understaffing of the audit function. Financial reporting for the project requires submission of timely and accurate reports from a large number of institutions, and their consolidation. This is challenging, especially given that there are delays in submission of monthly financial reports from the woredas and other institutions (including MOE). This may also delay the audit. Design features to address these weaknesses include: (a) aligning the GEQIP reporting arrangements with the country’s regular PFM system and reporting arrangements; (b) FM support from MOFEDs and BOFEDs to all project institutions; and (c) early appointment of auditors, and carrying out of interim audit to facilitate early completion of the external audit. The IBEX system is proposed to be rolled out to the Woreda level. Country-wide rollout to all schools (about 22,900 schools) of the school grants scheme needs to be monitored and well supported. The action plan for key actions to be implemented is noted below.

-124-

FM ACTION PLAN AND COVENANTS

59. The FM action plan summarizing the various actions to be taken is given below, and was confirmed at Negotiations.

Action Responsibility Completion Date Completion of the Financial Management Manual (which would be part of the Project Implementation Manual – PIM)

MOE Effectiveness

Appoint project auditors (private auditor nominated by OFAG)

MOFED By March 31, 2009 (i.e., within 2 months of effectiveness)

Prepare draft annual financial statements to enable auditor to start and complete work on timely basis

MOFED Within 3 months of the end of each fiscal year

Follow-up on audit findings. (a) submit Management’s response to the findings in the annual audit report to IDA and an action plan for any follow-up actions. (b) Take the necessary follow-up actions on the audit reports (annual and interim).

(a) MOFED (b) MOFED and all project institutions

(a) Within 15 days of

submission of audit report

(b) During project implementation

Deployment of key staff and appointment of consultants MOFED / MOE / BOFEDs

As noted in the table under “FM Staffing/Capacity”

Engage additional staff and consultants to support implementation and capacity building (as needed during project implementation)

MOFED, MOE and all project institutions

As and when needed during project implementation

Implement action plan to address FM weaknesses identified in MOE and other institutions

MOE and other institutions

During first two years of project implementation

60. FM covenants and other agreements:

(i) FM-related Conditions of Effectiveness are (i) preparation and adoption of a satisfactory FM Manual (which would be part of the PIM); and (ii) appointment of key FM related staff and consultants (1 consultant in MOFED, 1 consultant in MOE – PPAD).

(ii) FM-related covenants in the Financing Agreement would include: (i) maintenance of a satisfactory FM system for the program; (ii) submission of IFRs for the program for each fiscal quarter within 75 days of the end of the quarter; (iii) submission of annual audited financial statements and audit report within 6 months of the end of each fiscal year; and (iv) MOFED in consultation with the OFAG to appoint project auditors for GEQIP no later than March 31, 2009 (2 months after effectiveness).

-125-

SUPERVISION PLAN

61. The Program’s FM risk is rated “High”, and consequently will need intensive supervision (3-4 times a year), particularly in the initial stages. Supervision will be carried out in coordination with other development partners and will include:

• On-site visits to the various project institutions at all levels including MOFED, MOE, and sample of Universities, CTEs, BOFEDs, REBs, WOFEDs and schools, which would include review of controls and the overall operation of the FM system; review of internal audit and interim audit reports; selected transaction reviews; and sample verification of existence and ownership of assets.

• Reviews of IFRs and follow-up on actions needed.

• Review of audit reports and Management letters, and follow-up on actions needed.

• A detailed review of the internal control environment at mid term review if considered necessary.

-126-

Annex 8: Procurement Arrangements

A. Procurement Environment

1. Public procurement at the Federal level is governed by Proclamation No. 430/2005, ‘’Determining Procedures of Public Procurement and Establishing its Supervisory Agency Proclamation of the Federal Democratic Republic Government of Ethiopia”’ dated January 12, 2005 and the “Federal Public Government Procurement Directive”’ of July 2005. The Proclamation has been reviewed by the World Bank and found to be satisfactory. Following the Proclamation and the Directive, the Public Procurement Agency (PPA) was established at the Federal Government level. Since its establishment, the PPA has (a) prepared and distributed National Standard Bidding Documents (SBD) for the procurement of goods, works and non consultant services, as well as for the selection of consultants, and developed guidelines for their use. The Bank reviewed the National SBD for procurement of goods and works and found them to be generally acceptable except for the need to introduce a more flexible currency clause that would allow foreign bidders to quote and be paid in currencies other than the Ethiopian Birr for foreign goods. The PPA also organized regular public procurement workshops, including training of trainers; is developing a capacity building strategy; and preparing a national public procurement manual with training modules to facilitate further procurement training.

2. The Country Procurement Report (CPAR) carried out in 2002 identified weaknesses in the country procurement system and recommended actions to address the weaknesses. The Government has taken the aforementioned actions to implement the CPAR recommendations. There are still a number of serious issues to be addressed, including:

• Inadequate coordination of procurement reforms;

• Shortage of qualified procurement staff;

• Weak institutional structures for procurement management;

• Inability of procurement oversight bodies to attract and retain staff and to acquire capacity for procurement regulation;

• Weak appeals mechanism for addressing stakeholder complaints;

• Non systematic procurement monitoring and performance evaluation system; and

• Non systematic capacity building program.

3. At the Regional and Woreda levels, public procurement is governed by proclamations enacted by the respective regional governments basing on the federal law as a model. Currently, all regions and city administrations have enacted and adopted new public procurement proclamations. In accordance with the Federal model, the proclamations enacted by the regions and city administrations should be followed by issuance of regional directives and establishment of independent public procurement agencies for effective implementation of the proclamation. However, the regional proclamations have invariably not provided for establishment of independent procurement regulatory agencies. Even in those regions/cities where this provision is included in the law, the agencies have not been established. At the operational level, Tender

-127-

Committees have been established in most of the procuring entities, but the majority of the entities have no formal procurement units.

4. The above macro procurement issues have a direct impact on the education sector and need to be addressed at the micro level to ensure smooth implementation of this project.

B. General

5. Procurement under the proposed project to be financed through pooled funding by IDA, Catalytic Fund Grant, Trust Funds including the MDTF that would be administered by the Bank would be carried out in accordance with the World Bank’s "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004, revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, revised October 2006 and the provisions stipulated in the Financing and Grant Agreements. The contracts other than those subject to International Competitive Bidding (ICB) and Selection of International Consultants for the proposed project at the federal level would be carried out in accordance with the provisions of Proclamation 430/2005 of January 2005 and Federal Public Government Procurement Directive of July 2005 that are consistent with the Bank’s guidelines. Procurement for all other contracts at Regional and Woreda levels would generally involve contracts procured through NCB and Shopping procedures and would be carried out in accordance with regional procurement proclamations and using national SBDs acceptable to the Bank. The various items under different expenditure categories are described in general below. For each contract to be financed under the project, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame will be agreed between the Government and the Bank acting in the name of all the Development Partners participating in the pooled funds and will be captured in the Procurement Plan. The Procurement Plan will be updated semi-annually to reflect the actual project implementation needs and improvements in institutional capacity.

6. Procurement of Works. There will be no Works procured under this project. School infrastructure is not included under this project.

7. Procurement of Goods. Goods procured under this project would include: printing, translation and distribution of the national Curriculum Framework; textbooks and teacher guides involving development, field testing, design, printing and distribution of materials compliant with the requirements of the new curriculum; printing and dissemination of SIP materials; IT infrastructure for education management information systems; vehicles; office equipment; software and furniture related to program implementation. For all ICBs, the procurement of goods will be done using the Bank’s SBD. National SBD will be used for all other procurement methods. The threshold for ICB has been set at US$500,000. Thus, to the extent practical, contracts for goods will be grouped into bid packages estimated to cost US$500,000 or more. While ICB is the preferred method of procurement, other methods may also be appropriate where ICB would not be the most economic and efficient method of procurement, Contracts estimated to cost less than US$500,000 may be procured using NCB. Contracts estimated to cost less than US$50,000 equivalent may use the Shopping method or be procured through UN Agencies. Direct contracting may be used for exceptional cases, such as for the extension of an existing contract, standardization, proprietary items, spare parts for existing equipment and

-128-

emergency situations, in accordance with paragraphs 3.6 and 3.7 of the Guidelines. The main procurement in this project will be the procurement of textbooks and teacher guides. This will involve development, printing and distribution of these materials.

8. Procurement of non-consultant services. Procurement of non-consultant services may be carried out using the Bank’s Sample Bidding Document for ICB contracts and National SBD for all other contracts. National procedures that have been found acceptable to the Bank may be used for operating expenses for smaller contracts (such as transportation, publishing advertisements in the press, etc.) estimated to cost less than US$50,000 and whenever competition for the contract would be very limited.

9. Selection of Consultant. Main consultant services required under the Project include: (a) support for textbook and teacher guide procurement, textbook procurement team leader and three textbook procurement specialists; (b) support for TDP technical support (including ELQIP), including the hiring of one national and two international consultants; (c) support for the revision of SIP materials; (d) support for MAP Capacity Development Study in the context of the BPR strategies; (e) support for various policy and evaluation studies to address key issues such as quality, financing, teacher effectiveness and utilization; (f) technical support for the implementation of the program, including short and long term consultants, specialized in project implementation (including project management, financial management and procurement); and (g) audit services. Consulting firms for services estimated to cost US$200,000 equivalent or more would be selected through the Quality Cost-Based Selection (QCBS). Consulting firms for services estimated to cost less than US$200,000 equivalent may be selected using the consultant’s qualification method. Individual consultants will be selected on the basis of their qualifications in accordance with Section V of the Consultant Guidelines. Consulting services for audits and other services of a standard nature or routine nature may be procured using the Least Cost Selection method. Single source selection may be used where it can be justified. Short lists of consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. All selections of consultants involving foreign firms or for assignments with estimated cost US$200,000 equivalent or more would be carried out by the MOE. Universities and Colleges of Teacher Education are neither legally nor financially autonomous. Thus under normal circumstances they would not be eligible to participate in Bank financed projects as consultants. However, in this project, Ethiopian universities, and teacher training colleges not only possess the requisite expertise to develop teacher training modules but their participation will be critical due to their unique nature and also to continue to build their capacities. Thus, as an exception to the eligibility in accordance with paragraph 1.11(c) of the Consultants Guidelines, these universities and colleges will be allowed to participate as consultants in this project for developing training modules. The selection of appropriate universities and teacher training colleges to develop the modules will be done competitively.

10. Community Participation. Procurement for Grants given to schools for the SIP will follow simplified procedures that can be managed by school personnel, parents and communities. The procedures to be used for procurement will be presented in the PIM.

11. Training. The main training activities for this project will include: (i) pre-service teacher training education quality improvement – 3-year diploma program in CTEs and 3-year degree

-129-

program in universities; (ii) teacher educator professional development – Higher Diploma program; (iii) English Language Centers – support to improvement of conversational and instructional English in pre-service teacher professional development; (iv) alternative basic education – support to training of alternative basic education facilitators; (v) in-service teacher training; (vi) school improvement program workshops; (vii) school improvement program training; (viii) capacity development for policy analysis and planning; and (ix) seminars related to program implementation and coordination. Procurement activities related to training will include: (a) selection of institutions of higher learning for teachers; (b) selection of universities and CTEs for developing training modules; (c) selection of venues for workshops and training; and (d) purchase of materials for workshops. The selection of institutions of higher learning will be done on the basis of quality and therefore the QBS method will be used. Venues for workshops and training and purchase of materials will be done on the basis of at least three quotations. The production of messages for advertising will also be procured through shopping.

12. Operating Costs related to project management and supervision. The operating costs for GEQIP shall consist of: (a) cost of practical field training of teacher trainees including accommodation and subsistence allowances for the trainees and their supervisors; (b) office supplies; (c) operation and maintenance costs for vehicles and equipment; (d) communication charges; and (e) utility expenses, among others. These will be procured using Government procedures as described in the PIM.

13. Standard Bidding Documents (SBDs) and Manuals. The SBDs to be used for each procurement and consultant selection method, as well as model contracts for works, goods and services to be procured, will be presented in the Procurement Manual which is part of the PIM. The Procurement Manual, including SBDs, will be reviewed and cleared for use by the Bank as a condition of credit effectiveness.

C. Assessment of the agency’s capacity to implement procurement

14. Between May and September 2008, the Bank procurement staff, assessed the procurement capacity of the agencies that were selected by the GOE to implement the proposed GEQIP.

15. The MOE through its Planning and Policy Analysis Department (PPAD) is responsible for the overall coordination of GEQIP and reports to the GEQIP Coordinating Committee (GCC). The MOE Procurement and Property Administration Department will be responsible for administering procurement activities related to GEQIP, and the capacity of its staff will be enhanced to ensure the textbook and other procurement activities will be effectively managed. Other GEQIP implementing agencies include: the REBs, Universities, CTEs, and Schools.

16. GEQIP will be financed by Development Partners (DPs), FTI CF Grant, and the Bank through pooled financing as well as by GOE. The DPs participating in GEQIP include DfID, the Netherlands, the Italian Development Cooperation, Finland, and Sweden. A MDTF would also be set up to be managed by the Bank.

17. In the table below are issues, risks, and proposed mitigating actions to address the risks to procurement under GEQIP. The table has been prepared as part of the Procurement

-130-

Management Capacity Assessment of a sample of agencies that will implement GEQIP. Key actions that MOE and/or the other implementing agencies should take before the date of Credit Effectiveness include:

(i) Recruiting 2 International and 2 National Project Procurement Specialists at the MOE;

(ii) Recruiting 6 Procurement Officers at the MOE;

(iii) Designating a Textbook Procurement Focal Person at the MOE;

(iv) Designating Project Procurement Officers in each Project Implementing Agency; and

(v) Disseminating the Procurement Manual including the SBDs and Shopping Templates, after they are cleared by the Bank.

18. In addition, the Government will implement the following measures to mitigate the risks identified by the procurement management capacity assessment before Effectiveness:

(i) Provide all staff involved in the project procurement function access to procurement training, refresher procurement courses, and hand-holding support from Procurement Experts retained under the program;

(ii) Prepare and agree on templates for the invitation of quotations and for the selection of individual consultants. SBDs of the Government, and the standard templates to incorporate the fraud and corruption clauses as required by the Bank’s procurement and consultants’ guidelines;

(iii) 18-month rolling procurement plans to identify the goods and services to be procured have been developed and agreed during project appraisal, including cost estimates, the methods of procurement, and the common thresholds for prior reviews, ICB, and QCBS methods.. The plan will be monitored and updated by the Government semi-annually, and reviewed and approved by joint donor supervision missions;

(iv) All procurement below ICB and hiring of international consultants thresholds will be on the basis of national procurement and consultant selection procedures acceptable to the Bank, participating donors and the Government; and

(v) Complaints against packages subject to prior review will be handled using the Bank’s established procedures. Complaints against packages below the prior review threshold will be handled by the Government but the Bank has been designated to oversee proper resolution of such complaints.

19. An addendum to this report will be issued at the conclusion of a separate study being undertaken to compare the public procurement systems and practices of the regions with the federal public procurement system and practices. A consultant hired by the Bank, is comparing the provisions of the federal public procurement proclamation, directives and practices of the Federal Public Procurement Agency and Procuring Entities with those of the equivalent Entities and practices of each region and city administration.

-1

31-

OV

ER

AL

L S

UM

MA

RY

TA

BL

E O

F I

SSU

ES,

RIS

KS,

AN

D P

RO

PO

SED

AC

TIO

N P

LA

N T

O M

ITIG

AT

E P

RO

CU

RE

ME

NT

RIS

KS

A

SSE

SSM

EN

T

AC

TIO

N P

LA

N

ISSU

E

Stre

ngth

s W

eakn

esse

s R

ISK

R

AT

ING

P

ropo

sed

Act

ion

Res

pons

ible

Ent

ity

Com

plet

ion

Dat

e (1

) (2

) (3

) (4

) (5

) (6

) (7

) (i

) Leg

al A

spec

ts

20

05 F

eder

al

proc

lam

atio

n &

di

rect

ives

in p

lace

, ad

opte

d by

reg

ions

.

Inad

equa

te a

uton

omy

of F

PPA

&

RPP

As

are

units

in B

OFE

D.

(a)

Rev

ise

proc

urem

ent

legi

slat

ion

to s

tren

gthe

n ov

ersi

ght

MO

FED

, FPP

A,

Reg

ions

& B

OFE

Ds

12/3

1/20

09

FPPA

& R

PPA

s es

tabl

ishe

d to

bui

ld

capa

city

, aud

it pr

ocur

emen

t & e

nfor

ce

the

law

.

PPA

s un

able

to a

ttrac

t & r

etai

n st

aff

unde

r C

ivil

Serv

ice

Law

.

(b)

Con

duct

reg

ular

pr

ocur

emen

t sup

ervi

sion

Wor

ld B

ank

C

ontin

uous

Aut

onom

y &

C

apac

ity o

f pr

ocur

emen

t ov

ersi

ght

Proc

urem

ent

man

agem

ent

dece

ntra

lized

No

syst

emat

ic c

apac

ity

build

ing

prog

ram

. L

arge

num

ber

of P

rocu

ring

E

ntiti

es

(c)

Con

duct

ann

ual

inde

pend

ent

proc

urem

ent a

udits

MO

E &

FPP

A

6/

30/2

010,

an

d th

en

annu

ally

Proc

urem

ent

dece

ntra

lized

to e

ntiti

es.

Hea

ds o

f E

ntiti

es &

Pr

ocur

emen

t Com

mitt

ees

have

co

nflic

ting

role

s.

(a)

Rev

ise

proc

urem

ent

legi

slat

ion

to s

trea

mlin

e ro

les

of a

ctor

s

MO

FED

, FPP

A,

Reg

ions

& B

OFE

Ds

12/3

1/20

09

Stru

ctur

es fo

r P

rocu

rem

ent

Man

agem

ent

BPR

is g

ood

oppo

rtun

ity

to e

stab

lish

and

stre

ngth

en s

truc

ture

s

Prof

essi

onal

Pro

cure

men

t U

nits

not

est

ablis

hed

S U B S T A N T I A L

(b)

Re-

orga

nize

and

sta

ff

proc

urem

ent u

nits

in th

e E

duca

tion

sect

or

Eac

h Im

plem

entin

g A

genc

y (M

OE

, R

EB

s, C

TE

s)

July

7, 2

009

-1

32-

A

SSE

SSM

EN

T

AC

TIO

N P

LA

N

ISSU

E

Stre

ngth

s W

eakn

esse

s R

ISK

R

AT

ING

P

ropo

sed

Act

ion

Res

pons

ible

E

ntit

y C

ompl

etio

n D

ate

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(ii)

Pro

cure

men

t C

ycle

Man

agem

ent

Indi

vidu

al

Proc

urem

ent

cons

ulta

nts

avai

labl

e on

the

inte

rnat

iona

l an

d lo

cal m

arke

t

Con

sulta

nts

are

expe

nsiv

e, a

nd

the

civi

l ser

vice

pay

is

inad

equa

te to

attr

act a

nd r

etai

n qu

alif

ied

and

expe

rien

ced

proc

urem

ent s

taff

(a)

Rec

ruit

cons

ulta

nts

to a

ssis

t M

OE

and

RE

Bs

for

two

year

s ea

ch: 1

inte

rnat

iona

l pr

ocur

emen

t spe

cial

ist w

ith

text

book

and

cur

ricu

lum

ex

peri

ence

; 1 in

tern

atio

nal

proc

urem

ent s

peci

alis

t; an

d 2

loca

l pro

cure

men

t spe

cial

ists

MO

E

Bef

ore

Cre

dit

Eff

ectiv

enes

s

Proc

urem

ent A

gent

s e.

g. P

SE a

vaila

ble

on

the

inte

rnat

iona

l and

lo

cal m

arke

t

PSE

has

inad

equa

te e

xper

ienc

e in

sel

ectio

n of

con

sulta

nts

and

text

boo

ks p

rocu

rem

ent

(b)

Rec

ruit

6 qu

alif

ied

Proc

urem

ent O

ffic

ers

in M

OE

Pr

ocur

emen

t and

Pro

pert

y A

dmin

istr

atio

n D

epar

tmen

t

MO

E

Bef

ore

Cre

dit

Eff

ectiv

enes

s

(c)

Send

new

Pro

cure

men

t sta

ff

for

Bas

ic p

rocu

rem

ent c

ours

es

to E

SAM

I or

GIM

PA

MO

E

06/3

0/20

09

(d)

Del

iver

targ

eted

ann

ual

proc

urem

ent t

rain

ing

for

the

educ

atio

n se

ctor

Wor

ld B

ank

Ann

ually

Lack

of q

ualif

ied

and

expe

rien

ced

proc

urem

ent s

taff

Pr

ocur

emen

t Age

nts

are

expe

nsiv

e

H I G H

(e)

Ass

ign

Tex

tboo

k Pr

ocur

emen

t Foc

al P

erso

n in

M

OE

Pro

cure

men

t and

Pr

oper

ty A

dmin

istr

atio

n D

epar

tmen

t

MO

E

11/3

0/20

08

-1

33-

A

SSE

SSM

EN

T

AC

TIO

N P

LA

N

ISSU

E

Stre

ngth

s W

eakn

esse

s R

ISK

R

AT

ING

P

ropo

sed

Act

ion

Res

pons

ible

E

ntit

y C

ompl

etio

n D

ate

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(ii)

Pro

cure

men

t C

ycle

Man

agem

ent

CO

NT

INU

ED

Proc

urem

ent P

lann

ing

not

appr

ecia

ted

as a

tool

for

bud

get

prep

arat

ion

and

man

agem

ent

(a)

Fina

lize

annu

al p

rocu

rem

ent

plan

s ba

sed

on w

ork

plan

s an

d bu

dget

s

MO

FED

, M

OE

, B

OFE

Ds,

R

EB

s, F

PPA

12/3

1/20

08.

and

then

an

nual

ly

Pro

cure

men

t P

lann

ing

Som

e en

titie

s ha

ve

expe

rien

ce w

ith

proc

urem

ent p

lann

ing

from

PSE

P.

Mos

t Pro

cure

men

t sta

ff h

ave

no

expe

rien

ce in

pro

cure

men

t pl

anni

ng

(b)

Tra

in p

rocu

rem

ent s

taff

to

trai

n th

e ot

her

sect

or s

taff

in

proc

urem

ent p

lann

ing

Wor

ld B

ank,

FP

PA,

BO

FED

s

02/2

8/20

09

Inad

equa

te d

isse

min

atio

n of

N

atio

nal S

BD

s

(a)

Dis

sem

inat

e SB

Ds

& g

ood

Tem

plat

es f

or s

tand

ard

com

mon

use

r ite

ms

MO

E, F

PPA

, B

OFE

Ds

12/3

1/20

08

Pre

para

tion

of

Bid

ding

Doc

umen

ts

Wor

ld B

ank

and

GO

E

have

SB

Ds

Paym

ent c

urre

ncy

rest

rict

ions

un

der

NC

B

(b)

Allo

w f

or b

iddi

ng a

nd

paym

ent i

n fo

reig

n cu

rren

cies

fo

r fo

reig

n bi

dder

s un

der

NC

B

FPPA

, All

Impl

emen

ting

Age

ncie

s

Alw

ays

Bid

Eva

luat

ion

and

Con

trac

ts

man

agem

ent

GO

E h

as q

ualif

ied

&

expe

rien

ced

subj

ect

mat

ter

prof

essi

onal

s

Lac

k of

app

reci

atio

n of

the

proc

urem

ent p

rofe

ssio

n &

its

stra

tegi

c ro

le

H I G H

Con

duct

aw

aren

ess

trai

ning

w

orks

hops

for

hig

h le

vel

offi

cial

s

FPPA

, MO

E

12/3

1/20

08

-1

34-

A

SSE

SSM

EN

T

AC

TIO

N P

LA

N

ISSU

E

Stre

ngth

s W

eakn

esse

s R

ISK

R

AT

ING

P

ropo

sed

Act

ion

Res

pons

ible

E

ntit

y C

ompl

etio

n D

ate

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(iii)

Org

aniz

atio

n of

the

Pro

cure

men

t F

unct

ion

Age

ncie

s ar

e m

anda

ted

to &

are

car

ryin

g ou

t th

eir

own

proc

urem

ent

Man

y ag

enci

es h

ave

no

desi

gnat

ed P

rocu

rem

ent

Off

icer

s

(a)

Des

igna

te P

roje

ct

Proc

urem

ent O

ffic

er o

r fo

cal

pers

ons

Eac

h Im

plem

entin

g A

genc

y

Bef

ore

Cre

dit

Eff

ectiv

enes

s P

rofe

ssio

naliz

ing

Pro

cure

men

t Uni

ts

MO

E s

taff

in

Cur

ricu

lum

dep

artm

ent

have

exp

erie

nce

in te

xt

book

pro

cure

men

t

Inad

equa

te e

xper

ienc

e in

text

bo

ok p

rocu

rem

ent i

n th

e Pr

ocur

emen

t & P

rope

rty

Man

agem

ent D

epar

tmen

t

AVERAGE

(b)

Tra

nsfe

r al

l pro

cure

men

t st

aff

to th

e P

rocu

rem

ent &

Pr

oper

ty m

anag

emen

t D

epar

tmen

t

MO

E

Bef

ore

Cre

dit

Eff

ectiv

enes

s

(iv)

Rec

ord

Kee

ping

Mai

nten

ance

of

proc

urem

ent a

udit

trai

l

Spac

e an

d do

cum

ents

ar

e ge

nera

lly a

vaila

ble

Lac

k of

cap

acity

for

sa

tisfa

ctor

y pr

ocur

emen

t dat

a m

anag

emen

t

HIGH

Est

ablis

h sa

tisfa

ctor

y Pr

ocur

emen

t dat

a m

anag

emen

t sy

stem

FPPA

, B

OFE

Ds,

Im

plem

entin

g A

genc

ies

Bef

ore

Cre

dit

Eff

ectiv

enes

s

-135-

C. Setting of International Competitive Bidding and Prior Review Thresholds

20. Overall risk to procurement for GEQIP is rated “HIGH” and the thresholds for prior review, for international competitive bidding (ICB) including the maximum contract value for which the short list may comprise exclusively Ethiopian firms in the selection of consultants are presented in the table below.

Table of Thresholds

CATEGORY PRIOR REVIEW THRESHOLD

ICB THRESHOLD

NATIONAL SHORT LIST MAX VALUE

[$] [$] [$] Goods >=500,000 >=500,000 NA Consultants (Firms) >=200,000 NA <200,000 Consultants (Individuals) >=100,000 NA NA

D. Procurement Assessment of Implementing Agencies

21. A representative sample of implementing agencies was selected for the procurement management capacity assessment with the guidance of the MOE. In total, 15 agencies were visited and assessed through face-to-face interviews and review of procurement files wherever these could be provided. The agencies assessed were:

(i) Federal Public Procurement Agency (ii) Dire Dawa Bureau of Finance & Economic Development

(iii) Harar Bureau of Finance & Economic Development (iv) Ministry of Education (v) Dire Dawa University

(vi) Haramaya University (vii) Adama University

(viii) Dilla University (ix) Hawassa University (x) Dire Dawa Regional Education Bureau

(xi) Harar Regional Education Bureau (xii) Harar Teachers Training College

(xiii) Southern Nations, Nationalities and Peoples Regional Education Bureau (xiv) Kotebe Teacher Training College (xv) Procurement Services Enterprise

22. A summary of the procurement management capacity assessments for these agencies is available in project files

C. Procurement Plan

23. The Borrower has developed a procurement plan for the first 18 months of project implementation which provides the basis for the procurement methods to be applied for this project. The plan has been agreed between the Borrower and the Project Team during

-136-

Negotiation and will be available at the MOE, REBs and WEOs. It will also be available in the project’s database and in the Bank’s external website. The Procurement Plan will be updated in agreement with the Project Team semi-annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

D. Frequency of Procurement Supervision

24. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended two supervision missions per year to visit the field to carry out post review of procurement actions.

E. Details of the Procurement Arrangements Involving International Competition

-137

-

1. G

oods

, and

Non

Con

sult

ing

Serv

ices

(a)

Lis

t of

cont

ract

pac

kage

s to

be

proc

ured

fol

low

ing

ICB

and

dir

ect c

ontr

actin

g:

(b)

ICB

con

trac

ts e

stim

ated

to c

ost U

S$50

0,00

0 eq

uiva

lent

and

abo

ve p

er c

ontr

act a

nd a

ll di

rect

con

trac

ting

will

be

subj

ect t

o pr

ior

revi

ew b

y th

e B

ank.

1 2

3 4

5 6

7 8

9

Ref

. No.

/ P

acka

ge N

o.

Con

trac

t (D

escr

ipti

on)

Est

imat

ed

cost

(U

SD)

Pro

cure

men

t m

etho

d P

requ

alif

icat

ion

(yes

/no)

D

omes

tic

pref

eren

ce

(yes

/no)

Rev

iew

by

Ban

k (p

rior

/pos

t)

Exp

ecte

d bi

d-op

enin

g da

te

Com

men

ts

MO

E/G

EQ

IP/G

-01

/09

Proc

urem

ent o

f te

xtbo

oks

and

teac

her

guid

es

(ada

ptat

ion,

pri

ntin

g an

d di

stri

butio

n) f

or G

rade

s 9-

12

Mat

hem

atic

s, B

iolo

gy

Che

mis

try

and

Phys

ics

11,8

35,8

39

ICB

no

ye

s pr

ior

Feb.

6, 2

009

Fede

ral;

4 L

ots

MO

E/G

EQ

IP/G

-02

/09

Proc

urem

ent o

f te

xtbo

oks

and

teac

her

guid

es

(dev

elop

men

t, pr

intin

g an

d di

stri

butio

n) f

or G

rade

s 9-

12

Am

hari

c, M

othe

r T

ongu

e,

Eng

lish,

Geo

grap

hy, H

isto

ry,

and

Tec

hnic

al D

raw

ing.

15,6

02,0

45

ICB

no

ye

s pr

ior

Feb.

6, 2

009

Fede

ral;

6 L

ots

MO

E/G

EQ

IP/G

-03

/09

Proc

urem

ent o

f C

ivic

s an

d E

thic

s T

extb

ooks

(pr

intin

g an

d di

stri

butio

n) f

or G

rade

s 5-

12

10,0

39,9

96

ICB

no

ye

s pr

ior

Feb.

6, 2

009

Fede

ral

MO

E/G

EQ

IP/G

-04

/09

Proc

urem

ents

of

text

book

s an

d te

ache

r gu

ides

(d

evel

opm

ent,

prin

ting

and

dist

ribu

tion)

for

Gra

des

11-

12 I

nfor

mat

ion

Tec

hnol

ogy,

B

asic

Bus

ines

s, a

nd

Eco

nom

ics

1,17

4,17

5 IC

B

no

yes

prio

r A

pril

30, 2

009

Fede

ral;

3 L

ots

MO

E/G

EQ

IP/G

-05

/09

Prin

ting

and

Dis

trib

utio

n of

A

ll D

iplo

ma,

Deg

ree

and

Supe

rvis

ion

Mod

ules

1,19

5,72

8 N

CB

*1

no

N/A

pr

ior

May

23,

200

9 Fe

dera

l

MO

E/G

EQ

IP/G

-06

/09

Fede

ral a

nd R

egio

nal I

T

Infr

astr

uctu

re f

or E

MIS

51

7,80

0 N

CB

no

ye

s po

st

Feb.

21,

200

9 Fe

dera

l; W

ill

be s

epar

ated

in

to lo

ts

-1

38-

1 2

3 4

5 6

7 8

9

Ref

. No.

/ P

acka

ge N

o.

Con

trac

t (D

escr

ipti

on)

Est

imat

ed

cost

(U

SD)

Pro

cure

men

t m

etho

d P

requ

alif

icat

ion

(yes

/no)

D

omes

tic

pref

eren

ce

(yes

/no)

Rev

iew

by

Ban

k (p

rior

/pos

t)

Exp

ecte

d bi

d-op

enin

g da

te

Com

men

ts

MO

E/G

EQ

IP/G

-07

/09

Proc

urem

ent o

f te

xtbo

oks

and

teac

her

guid

es

(dev

elop

men

t, pr

intin

g an

d di

stri

butio

n) f

or G

rade

s 1-

8 in

all

subj

ects

exc

ept C

ivic

s &

Eth

ics,

in th

e la

ngua

ges

of

Am

hari

c, A

fan

Oro

mo,

So

mlig

na,,

Tig

riny

a, E

nglis

h an

d ot

her

natio

nalit

y la

ngua

ges

used

as

med

ium

s of

inst

ruct

ion

at th

is le

vel.

102,

493,

436

IC

B

no

yes

prio

r A

pril

30, 2

009

Fede

ral;

Will

be

sep

arat

ed

into

lots

fo

llow

ing

rece

ipt o

f de

taile

d in

form

atio

n on

th

e nu

mbe

r of

st

uden

ts f

or

each

lang

uage

of

inst

ruct

ion

from

reg

ions

.

MO

E/G

EQ

IP/G

-08

/09

Rep

rint

ing

and

dist

ribu

tion

of e

xist

ing

prim

ary

text

book

s fo

r T

igra

y

371,

581

NC

B146

no

N

/A

post

Fe

b. 2

3, 2

009

Fede

ral/R

egio

nal

MO

E/G

EQ

IP/G

-09

/09

Rep

rint

ing

and

dist

ribu

tion

of e

xist

ing

prim

ary

text

book

s an

d te

ache

r gu

ides

for

SN

NPR

1,69

0,68

6

NC

B1

no

N/A

pr

ior

Feb.

28,

200

9 Fe

dera

l/Reg

iona

l

MO

E/G

EQ

IP/G

-10

/09

Proc

urem

ent o

f V

ehic

les

and

Mot

or C

ycle

s47

5,30

3,78

3 IC

B

yes

yes

prio

r Fe

b. 2

1, 2

009

Fede

ral:

4 L

ots

MO

E/G

EQ

IP/G

-11

/09

Proc

urem

ent o

f 3

(4x4

)

stat

ion

wag

on V

ehic

les

20

5,26

3 N

CB

no

no

po

st

Dec

. 15,

200

8 Fe

dera

l

46

The

Min

istr

y w

ill r

eque

st a

wai

ver

for

prin

ting

and

dist

ribu

tion

of m

odul

es, a

nd r

epri

ntin

g an

d di

stri

butio

n of

exi

stin

g pr

imar

y te

xtbo

oks

beca

use

of

lang

uage

s.

47 L

ot O

ne -

Dou

ble

cab

pick

-up

vehi

cles

, Lot

Tw

o -

mot

orcy

cles

, Lot

Thr

ee -

4x4

sta

tion

wag

ons,

Lot

Fou

r –

buse

s.

-1

39-

2. C

onsu

ltin

g Se

rvic

es

(a)

Lis

t of

cons

ultin

g as

sign

men

ts w

ith s

hort

-lis

t of

firm

s to

be

sele

cted

thro

ugh

QC

BS

and

inte

rnat

iona

l con

sulta

nts.

1 2

3 4

5 6

7 R

ef. N

o. /P

acka

ge N

o.

Des

crip

tion

of a

ssig

nmen

t E

stim

ated

cos

t (U

SD)

Sele

ctio

n m

etho

d R

evie

w

by B

ank

(Pri

or P

ost)

Exp

ecte

d pr

opos

als

subm

issi

on d

ate

Com

men

ts

MO

E/G

EQ

IP/C

-01/

09

A c

onsu

lting

fir

m to

und

erta

ke a

Rev

iew

of

the

Ass

essm

ent a

nd E

xam

inat

ion

Syst

em.

126,

316

QC

BS

post

M

ay 3

0, 2

009

Fede

ral

MO

E/G

EQ

IP/C

-02/

09

A c

onsu

lting

fir

m to

Pro

duce

(w

rite

, pe

rfor

m in

tern

al q

ualit

y re

view

&

forw

ard

for

prod

uctio

n) A

ll D

iplo

ma

Mod

ules

118,

991

QC

BS

post

M

arch

28,

200

9 Fe

dera

l; T

OR

-31

Nov

. 20

08

MO

E/G

EQ

IP/C

-03/

09

A c

onsu

lting

fir

m to

Pro

duce

(w

rite

, pe

rfor

m in

tern

al q

ualit

y re

view

&

forw

ard

for

prod

uctio

n) A

ll D

egre

e M

odul

es

139,

990

QC

BS

post

A

pril

30, 2

009

Fede

ral

MO

E/G

EQ

IP/C

-04/

09

A c

onsu

lting

fir

m to

Pro

duce

(w

rite

, pe

rfor

m in

tern

al q

ualit

y re

view

&

forw

ard

for

prod

uctio

n) A

ll Su

perv

isio

n M

odul

es

217,

453

QB

SC

prio

r D

ec. 2

7, 2

009

Fede

ral;

TO

R-N

ov

2008

MO

E/G

EQ

IP/C

-05/

09

A c

onsu

lting

fir

m to

und

erta

ke th

e M

AP

Des

ign

Stud

y 26

3,15

8 Q

CB

S pr

ior

Apr

il 15

, 200

9 Fe

dera

l; T

OR

-Dec

. 20

08

MO

E/G

EQ

IP/C

-06/

09

A c

onsu

lting

fir

m to

und

erta

ke E

xter

nal

Qua

lity

revi

ew o

f a

ll D

iplo

ma,

Deg

ree

and

Supe

rvis

ion

Mod

ules

144,

110

QC

BS

post

A

pril

21, 2

009

Fede

ral

MO

E/G

EQ

IP/C

-07/

09

A c

onsu

lting

fir

m to

ass

ist w

ith E

SDP

IV

Dev

elop

men

t 21

0,52

6 Q

CB

S pr

ior

May

15,

200

9 Fe

dera

l

MO

E/G

EQ

IP/C

-08/

09

EM

IS L

ong

term

Adv

iser

s (f

irm

) 40

8,42

1 Q

CB

S pr

ior

May

30,

200

9 Fe

dera

l M

OE

/GE

QIP

/C-0

9/09

G

EQ

IP L

ong

Ter

m E

duca

tion

Adv

iser

s (f

irm

) 1,

391,

579

QC

BS

prio

r M

arch

17,

200

9 Fe

dera

l; T

OR

- N

ov.3

0, 2

008

MO

E/G

EQ

IP/C

-10/

09

Inte

rnat

iona

l Fin

anci

al M

anag

emen

t A

dvis

er (

indi

vidu

al)

252,

632

ICS

prio

r Ja

n. 1

5, 2

009

Fede

ral

-1

40-

1 2

3 4

5 6

7 R

ef. N

o. /P

acka

ge N

o.

Des

crip

tion

of a

ssig

nmen

t E

stim

ated

cos

t (U

SD)

Sele

ctio

n m

etho

d R

evie

w

by B

ank

(Pri

or P

ost)

Exp

ecte

d pr

opos

als

subm

issi

on d

ate

Com

men

ts

MO

E/G

EQ

IP/C

-11/

09

Inte

rnat

iona

l Pro

cure

men

t Adv

isor

(i

ndiv

idua

l)

252,

632

ICS

prio

r Ja

n. 1

5, 2

009

Fede

ral

MO

E/G

EQ

IP/C

-12/

09

A c

onsu

lting

fir

m to

und

erta

ke G

EQ

IP

Bas

elin

e St

udy

185,

000

QC

BS

post

M

arch

30,

200

9 Fe

dera

l

MO

E/G

EQ

IP/C

-13/

09

A c

onsu

lting

fir

m to

und

erta

ke th

e E

valu

atio

n of

Sch

ool G

rant

s Pr

ogra

m I

&

2

210,

526

QC

BS

prio

r A

pril,

30,

200

9 Fe

dera

l

MO

E/G

EQ

IP/C

-14/

09

A c

onsu

lting

fir

m to

und

erta

ke th

e In

depe

nden

t Pr

ocur

emen

t Eva

luat

ion

21

0,52

6 Q

CB

S pr

ior

Jan.

201

0 Fe

dera

l

MO

E/G

EQ

IP/C

-15/

09

GE

QIP

Im

plem

enta

tion

Plan

ning

Adv

iser

(i

ndiv

idua

l)

75,0

00

ICS

post

D

ec. 3

1, 2

008

Fede

ral;

five

m

onth

s co

st

MO

E/G

EQ

IP/C

-16/

09

Cur

ricu

lum

and

Tex

tboo

k A

dvis

er

(ind

ivid

ual)

34

7,36

8 IC

S pr

ior

Dec

. 31,

200

8 Fe

dera

l; 3

year

s M

OE

/GE

QIP

/C-1

7/09

A

con

sulti

ng f

irm

to u

nder

take

the

TD

P Im

pact

Stu

dy

210,

526

QC

BS

prio

r Ju

ly 1

5, 2

009

Fede

ral

MO

E/G

EQ

IP/C

-18/

09

A c

onsu

lting

fir

m to

und

erta

ke G

EQ

IP

Ann

ual A

udits

and

Sch

ool G

rant

Fi

nanc

ial M

anag

emen

t Rev

iew

s

500,

000

QC

BS

prio

r Fe

b. 1

5, 2

009

Fede

ral;

$100

K/y

ear

for

5 ye

ars

(b)

Con

sulta

ncy

serv

ices

est

imat

ed to

cos

t US$

200,

000

equi

vale

nt o

r m

ore

per

cont

ract

and

sin

gle

sour

ce s

elec

tion

of c

onsu

ltant

s (f

irm

s) w

ill b

e su

bjec

t to

prio

r re

view

by

the

Ban

k.

(c)

Shor

t lis

ts c

ompo

sed

entir

ely

of n

atio

nal

cons

ulta

nts:

Sho

rt l

ists

of

cons

ulta

nts

for

serv

ices

est

imat

ed t

o co

st l

ess

than

US$

200,

000

equi

vale

nt p

er c

ontr

act

may

be

com

pose

d en

tirel

y of

na

tiona

l con

sulta

nts

in a

ccor

danc

e w

ith th

e pr

ovis

ions

of

para

grap

h 2.

7 of

the

Con

sulta

nt G

uide

lines

.

-141-

Annex 9: Economic and Financial Analysis

1. This annex summarizes the economic and financial analyses of the first phase of the GEQIP. Concern about poor student outcomes in general education after a rapid expansion of primary education led the Ethiopian Government to embark on a long term plan for quality improvement as part of the Education Sector Development Program (ESDP III). In 2007, the GOE designed the GEQIP and plans to invest an estimated amount of US$1 billion over the next eight years to improve the quality of general education through the implementation of a set of integrated quality-focused interventions. The GEQIP will have two sources of funds: (i) pooled funding supported through funds from federal and regional governments, IDA, EFA FTI CF, and DPs; and (iii) non-pooled funds (e.g., USAID, UNICEF).48

2. GEQIP will provide earmarked funds to the Ministry of Education, REBs, WEOs and participating TTIs for non-salary and quality enhancing expenditures in general education. GEQIP complements funding from PBS: whereas PBS finances mostly staff salaries and operational recurrent expenditures, the GEQIP will provide resources for non-salary recurrent expenditures to improve the quality of general education.

3. International research shows that students in schools with fewer resources (usually measured through student-to-teacher ratios or per student-spending) have poorer attainment and lower earnings in the labor market (Card and Krueger, 1998). Given very limited resources available in most primary and secondary schools, investment in quality interventions are expected to have significant potential returns in terms of improved learning outcomes, individual student’s economic potential, and improved equity.

4. A rigorous cost-benefit analysis of GEQIP is not feasible, as it is difficult to obtain robust estimates of economic and social returns, and the expected outcomes are long term and are difficult to attribute to specific interventions.49

5. A Public Expenditure Review (PER) focusing on public spending in the social sectors, including education, was completed in 2004 (World Bank 2004a) and an in-depth, comprehensive review of the education sector was finalized in 2005 (World Bank 2005a). Both provide a solid base of economic analysis using available data at the time. This annex is based mainly on the findings of these reviews, available recent data, studies in the country, and international evidence on the economics of education.

6. This section summarizes (i) costs and financing of education, with a particular focus on the general education sub-sector; (ii) rationale for investment in quality improvement in general

48 This review focuses on the pooled funding contribution, thus excludes contributions from the non-pooled funding donors. 49 Jimenez and Patrinos (2008) noted that cost-benefit analysis is an important tool in setting priorities and in determining the amount and type of investments. However, they noted that cost-benefit analysis has been less successful as a guide to set priorities for public policy, and has not been used extensively in justifying specific education projects. They argued that several key methodological shortcomings have been responsible, inter alia: (a) the difficulty of estimated social benefits; (b) the complexity of measuring the costs and benefits of other dimensions of education; (e.g., learning outcomes as opposed to enrollment or school attainment); and (c) attribution of outcomes to actual intervention.

-142-

education, (iii) economic analysis of program components; and (iv) fiscal sustainability analysis of the program.

Costs and Financing of Education

7. The PER in 2004 summarized Ethiopia’s unique challenge in human development: “human development needs are arguably the greats of any country in the world, while at the same time the capacity to finance those needs is probably lower than anywhere else” (World Bank, 2004a, p.i). In education, despite sharp increases in the past decade, enrollment rates remain low and the expenditure requirements to provide a minimum level of education services are enormous. The report identified several reasons. First, Ethiopia is starting from an exceptionally low base in terms of the coverage of existing services (see Annex 1). Second, rapid population growth poses a major challenge for financing the delivery of basic services, including education. The population is currently growing at 2 million people per year, further straining coverage and quality of the sector. At the same time, the Government’s capacity to finance these services is far lower than elsewhere. Rapid growth and a low resource base have contributed to declines in per capita student funding, resulting in further stress on education quality. The Implementation Completion Report for the IDA-financed Education Sector Development Project noted that “almost all the inputs related to indicators of quality have moved in the wrong direction. These include textbook availability, teacher-pupil ratio, section size, and per capita recurrent expenditure on non-salary budget items” (World Bank, 2005b).

8. Total public education expenditure in Ethiopia has increased in terms of shares of total government expenditures and a share of GDP since the early 2000s. In 2007, the education budget constituted 19.5 percent of the total government budget and 4.8 percent of GDP, although considerable regional variations exist (see Table 1). These figures are comparable to other low income countries, and in line with the EFA-FTI benchmarks. However, the growth in education expenditure has not kept pace with the rapid expansion in enrollment. In absolute terms, per pupil recurrent expenditure is 166 Birr for Grades 1-4 and 296 Birr for Grades 5-8 and 455 Birr per pupil for secondary education (1998 official data), resulting in inadequate inputs to key school investment priorities. Recurrent spending per pupil in general education declined by about 20 percent over the past five years, due in part to massive enrollment increase.

9. Data are not yet available for recent years to examine trends in public spending for education by functional classification, and level of education, and level of government. However, the PER in 2004 showed that the composition of spending by level of education appears appropriate. During the past few years, there has been an increase in public spending towards higher education with the expansion of the tertiary education system, financed mostly by the federal Government. Despite this increase, the PER reported in 2004 that the over-riding issue is the insufficiency of spending at all levels (World Bank, 2004a).

-143

-

Tab

le 1

: Gov

ernm

ent E

duca

tion

Exp

endi

ture

s by

Fun

ctio

nal C

lass

ific

atio

n, 2

000/

01- 2

007/

08 (E

TB

mill

ion)

20

00/0

1 20

01/0

2 20

02/0

3 20

03/0

4 20

04/0

5 20

05/0

6 20

06/0

7 20

07/0

8

Des

crip

tion

A

ctua

l A

ctua

l A

ctua

l pr

e ac

t P

re.

Act

. P

re.

Act

. B

udge

t P

re.

Act

. B

udge

t

Gen

eral

gov

't cu

rren

t exp

endi

ture

11

,585

11

,110

11

,333

11

,961

13

,228

15

,234

19

,271

17

,165

24

,844

G

ener

al g

ov't

capi

tal e

xpen

ditu

re

4,64

9 5,

440

6,02

9 8,

272

11,3

43

14,0

42

22,5

66

18,3

98

27,6

15

Gen

eral

gov

't ex

pend

iture

16

,235

16

,550

17

,362

20

,232

24

,572

29

,276

41

,837

35

,563

52

,459

R

ecur

rent

Edu

catio

n 1,

577

1,91

9 2,

395

2,51

1 2,

981

3,90

6 4,

535

4,89

6 6,

355

Cap

ital E

duca

tion

601

793

1,38

1 1,

666

1,89

6 2,

479

3,62

8 3,

514

3,69

9 T

otal

Edu

catio

n 2,

178

2,71

2 3,

776

4,17

7 4,

877

6,38

5 8,

163

8,41

1 10

,054

%

of

tota

l cur

rent

exp

endi

ture

13

.6

17.3

21

.1

21.0

22

.5

25.6

23

.5

28.5

25

.6

% o

f to

tal c

apita

l exp

endi

ture

12

.9

14.6

22

.9

20.1

16

.7

17.7

16

.1

19.1

13

.4

% o

f T

otal

Gov

't E

xpen

ditu

re

13.4

16

.4

21.7

20

.6

19.8

21

.8

19.5

23

.7

19.2

%

of

GD

P 3.

2 4.

1 5.

1 4.

8 4.

6 4.

8 4.

8 4.

9 4.

4 %

of

educ

atio

n in

Fed

eral

exp

endi

ture

3.

2 8.

0 13

.9

15.3

14

.0

15.8

17

.4

18.8

15

.5

% o

f ed

ucat

ion

in r

egio

nal e

xpen

ditu

re

33.3

31

.4

33.5

29

.4

30.2

31

.5

22.8

31

.8

23.8

%

of

educ

atio

n in

tota

l exp

endi

ture

13

.4

16.4

21

.7

20.6

19

.8

21.8

19

.5

23.7

19

.2

GD

P at

mar

ket p

rice

68

,027

66

,557

73

,432

86

,661

10

6,47

3 13

1,67

2 17

0,92

2 17

0,92

2 22

9,22

9 So

urce

: M

OFE

D

-144-

10. Data are not available to examine expenditures on key inputs (e.g., textbooks, teacher training, infrastructure, and so forth). However, in terms of the expenditure category composition of public spending for education, a worrying feature of Ethiopia’s education budget is the high share of expenditures allocated for staff salaries within recurrent expenditures. For example, in 2006/07, about 94 percent of recurrent expenditures at the woreda level (mostly for primary education) and 84 percent at the regional level (mostly for secondary education) were allocated for staff salaries (see Figure 1).

Figure 1: Share of Woreda Education Recurrent Expenditures Going on Salaries, 2006/07

93% 98%

76%

94% 97% 96% 94%90% 90%88% 86%

0%

20%

40%

60%

80%

100%

120%

Tigray

Afar

Amha

ra

Orom

iya

Somali

Benish

angul

SNNP

Gambe

la

Harari

Dire D

awa

Ethiopia

Source: Ministry of Education

11. The current level and composition of funding resulted in dramatic under-funding for essential inputs. For example, budgets for school infrastructure have declined over the past decade, even though the stock of schools has increased. The lack of textbooks and other teaching material is a major problem in most regions, with an average of only about one textbook to every three children. There is a shortage of qualified teachers, with approximately half of the teachers in the second cycle of primary education, and in secondary schools, unqualified. In the context of limited resources and low level of spending on education in absolute terms, investment in quality improvement has become a priority for the Government.

12. The PER in 2004 examined the costs of quality improvement in primary and secondary education, focusing on minimum quality improvements at current levels of coverage: (i) improving the availability of adequate non-salary inputs (e.g., supplies, maintenance, general administration support, etc); (ii) providing a full set of textbooks for all students; and (iii) lowering the student-teacher ratio. The estimated cost for minimum adequate levels of non-salary recurrent funding and textbooks per student is around US$44 million annually. It was estimated that the cost of improving the student-teacher ratio to an acceptable level on the basis of current enrollment would cost an additional US$39 million annually. To keep up with population growth, however, the sector would require a real increase of about 60 percent in non-salary recurrent expenditures over the next decade, or an additional ETB800 million annually and capital investment of about ETB 1 billion annually (World Bank, 2004a, pp-43-44).

-145-

13. In Ethiopia, the public sector is the main provider of primary and secondary education.50 In the early 2000s, regions and woreda governments assumed the responsibility for the provision of basic services, including primary and secondary schooling, as a result of decentralization reforms (Garcia and Rajkumar, 2008). Regions and woreda governments finance the delivery of basic services mostly through federal block grants. They have autonomy over the use of funds and allocate based on regional priorities. This has often resulted in keen competition for limited funds among regionally mandated activities. Since 2004, the PBS program has sought to address the low absolute level of Government resources through the provision of block grants to regions to finance the delivery of basic services, including general education.

14. Decentralization improved service delivery by providing greater flexibility and responsiveness to the immediate needs of schools. However, it has also raised questions about the quality of education as most regions and woredas have not been able to allocate adequate resources for non-salary recurrent expenditures. The PER reported that “availability of recurrent funding has been exacerbated, and at least in the short run, as in most cases the amount transferred to woredas has been barely adequate to pay the existing salary bill, making it all but impossible to consider hiring large number of additional teachers within the tightly-constrained block grant” (World Bank, 2004a, p.51). This has resulted in inadequate investment in pre-service teacher programs and professional development activities, lack of textbooks and teaching materials, and deterioration of school infrastructure (World Bank, 2004a; 2008).

15. Additional resources for quality improvement as well as for further expansion of the education sector would come from: (i) faster economic growth; (ii) an increase in the share of the public budget; and (iii) an increase in spending on education as a percentage of that budget. While all three options may be difficult to implement, quality improvement needs to come from improvements in the efficiency of the sector and mobilization of additional resources from both communities/parents and external resources.

16. Equity and the Link with Poverty. In Ethiopia, the poorest 20 percent tend to be left behind, partly because they live in the least accessible areas, while urban dwellers tend to benefit disproportionately (World Banka, 2004, p.iii). Primary enrollment rates are slightly higher for those in the richest 20 percent but relatively evenly spread among the rest of the population, with much of the difference resulting from rural-urban differentials. In secondary education, the benefits are concentrated in the upper income quintile, with children from the richest 20 percent being more than twice as likely to attend secondary school as those from the poorest 20 percent. The PER noted that the actual distribution of primary education benefits across income groups is more equal than that suggested by the enrollment ratios alone since poor households have more children on average, and more over-aged children in school. Second, the distribution of benefits appears to have been improving somewhat, suggesting that the middle-poor, if not the poorest, are benefiting more than the rich from increased public spending (World Bank, 2004a, pp.49-50)

50 The provision of primary and secondary education by the private sector and communities has increased during the past decade, but remains small – accounting for only 2.4 percent of secondary school enrollments and 5.3 percent of primary enrollments. Many of the private schools are NGO-administered faith based schools and the number of truly private schools is very small. The Government’s is open to private provision of schooling, but demand is limited due to low incomes.

-146-

Rationale for Government Investment in Education Quality

17. Investment in education is based on the expected economic and social benefits of education using the human capital model. The economic benefits of education are typically measured in term of rates of return using cost benefit analysis at the micro level; and contribution to the economic growth at the macro level, using enrollment or school attainment as proxies for education outcomes. In addition, recent studies underline the importance of learning outcomes to examine the relationship between education quality and economic growth.

18. Rates of return analysis. The economic benefits of education in terms of increased individual earnings are well documented in the literature. Both social and private rates of return are higher in lower income countries, especially in Sub-Saharan Africa. A recent review of research by Psacharopolous and Patrinos (2002) establishes that an additional year of schooling has large effects on earnings of workers. The average rates of return to another year of schooling averaged over 100 countries is 10 percent (Psacharopolous and Patrinos 2002). The relative scarcity of human capital in low income countries is the main factor for the high returns to education (Jimenez and Patrinos 2008).

19. For Ethiopia, the World Bank (2005a) estimated the social rates of return to primary and secondary education, which are the appropriate guide for public investment. In urban areas, the social rates of return for grades 1-4, grades 5-8 and grades 9-12 were comparable, ranging from 11 to 13 percent a year. In rural areas, the returns for grades 1-4 average 20 percent a year, compared with only 8 percent a year for grades 5-8 and 9 percent a year for grades 9-12. Based on these estimates, the report indicates that expansion of grades 1-4 in rural areas warrants particularly strong support, whereas the case for expansion of subsequent grades is generally weaker (pp.175-176).

20. Table 2 below summarizes the private rates of return available from studies since the early 1990s, where most of the findings show moderate to high returns. This can be seen as a partial explanation for rising enrollment rates in recent years. By increasing quality while maintaining constant the costs to households, GEQIP should raise the private rates of return to education which would lead to increased demand for schooling and thus further increases in enrollment rates.

21. Education quality and economic growth. Although moderate to high rates of return to education provide a justification for prioritizing public investment in education, they are based on enrollment or school attainment micro-level data, without consideration for impact on education quality, measured by learning outcomes. A recent impact evaluation of World Bank support to basic education in Ghana found the “data show that gains in educational outputs are directly linked to better school quality” (World Bank, 2004a). Recently, Hanushek and Wößmann (2007a; 2007b) in their review of the relationship between educational quality and economic growth found strong evidence that educational quality – rather than solely years of school attainment – was powerfully and causally related to an individual’s earnings, and to the distribution of income and to economic growth. They concluded that conventional analysis concentrates on years of school attainment or enrollment rates, which is misleading; and that quality is the key issue for assessing education policies of developing countries. For Ethiopia, although data are not available to examine the impact of quality improvement on economic growth, sizeable economic and social

-147-

benefits are expected from investment in educational quality because of the existing poor conditions of the learning environment across the country.

Table 2: Private Rates of Return to Education in Ethiopia, Selected Studies (percent per year)

Urban areas Private sector Public & private sectors

Rate of return Public sectora/ Formalb/ Formal & Informalc/ Rural areasd/ All arease/

Average rate of return 8.5 7.4 — 18 15.6 (1994; 10.3) (1994; 9.2) (1994) (2000; 3.5) Rate of return by levelf/ Primary 10.6 — n.s. — 32.5 Secondary 15 — 8.2 — 19.2 Higher 15.1 — 21.5 — 22.4 (1997) (1997) (2000)

— Estimate not available. n.s. Estimate not statistically different from 0. Note: Figures in parentheses refer, respectively, to the year of the data and the average years of schooling in the sample of observations. a. Estimates of average rates of return pertain to full-time employees of both sexes working in public and private enterprises or organizations in major towns, based on the results in Mengistae 1998, Table 3.6; estimates of the returns by level of education pertain to urban male workers ages 14–65, computed by the authors from the results reported in Krishnan, Selassie, and Dercon 1998, Table A.3, using the method described in footnote g below. b. Estimates refer to the returns for full-time employees of both sexes in public and private sector enterprises or organizations in major towns, based on the results in Mengistae 1998, Table 3.6. c. Estimates refer to urban male workers ages 14–65, computed by the authors from the results reported in Krishnan, Selassie, and Dercon 1998, Table A.3 using the method described in footnote f below. d. Estimates refer to rural male full-time non-farmers, as reported in Verwimp 1996, Table 3. e. Authors’ estimates based on the 1999/2000 HICES/WMS (subsample of male household heads ages 14–65 in households where they are the only wage earners and they report positive labor market earnings). f. The rates of returns to each level of education are calculated as [exp(bj−bi)−1]/(sj−si) where bi and bj are the regression coefficients of two successive levels of completed education and sj and si stand for the total number of years of schooling in both levels i and j. 3 years of forgone earnings have been assigned for wage earners with primary education completed, 8 years for those with secondary education, and 4 years for those with higher education. Source: Taken from Table T3.4, Education in Ethiopia, World Bank 2005a. See footnotes above for original sources.

22. Market failures. The benefits of education may extend to others beyond the individual student, resulting in substantial externalities. These externalities associated with education imply that an unregulated and purely privately funded market for primary and secondary education would produce sub-optimal outcomes. They justify the rationale for public intervention (not only financing but also provision), because market forces alone are insufficient to enable individuals to invest optimally in this sector. Major market failures in public intervention in education include the following:

• Externalities. Investments in education generate major external benefits that are difficult to quantify. Externalities may be generated at all levels of education, but their magnitude may differ. Many analysts would agree that lower levels of education produce more externalities than higher levels. Although externalities are difficult to quantify, some studies have succeeded in identifying and quantifying externalities (Jimenez and Patrinos 2008). These include: (i) improving a child’s educational level and achievement through parental education; (ii) improving a child’s health through parental education; (iii) reducing fertility rates and population growth; (iv) increasing life expectancy; (v) improving spouse’s health and lowering mortality; (vi) increasing social mobility, (vii) improving contraceptive efficiency; (viii) reducing crime rates;

-148-

and (ix) strengthening the functioning of civil society by promoting greater social cohesion, democratic participation and open debate (Wolfe and Zuvekas, 1995).

• Income distribution and poverty reduction. Investment in education is considered an important tool because of its effects on income redistribution and poverty reduction. International evidence also shows that the provision of properly targeted quality schooling is a prerequisite for breaking down the intergenerational transmission of poverty.

• Imperfections in capital markets. Imperfections in capital markets limit the ability of individuals to borrow sufficiently for education, thereby limiting the participation of students from lower income households.

23. These market failures are also present in the case of Ethiopia, and therefore public spending on the improvement of the quality of general education is justified.

Economic Analysis of the Proposed Program

24. The primary purpose of GEQIP is to enhance the quality of general education across the country. The second purpose is to carry forward reforms to improve the capacity of management and planning of MOE, regions and woredas for more effective delivery of education services. Quality improvements will come from reforms of curriculum; assessment; textbook development, printing and distribution; teacher development (both pre-service and in-service); and school-based management programs (e.g., community/parental participation, school improvement plans, school grants etc). Efficiency improvement will come from management and planning reforms.

25. Cost and Benefit Analysis of the Program. Available evidence in the areas of rates of return to education show strong positive social and private rates of return. However, as noted above, it is not possible to quantify the economic benefits of the first phase of the GEQIP through a cost-benefit analysis based on available data and current techniques (see, for example, Jimenez and Patrinos 2008; Devarajan, Squire and Suthiwart-Narueput, 1997). Based on international evidence, however, the potential benefits of the GEQIP can be expected at the individual, sectoral and social levels. Below is a summary of expected major benefits of the first phase of the GEQIP:

26. Individual level. The following main benefits are expected at this level.

• Improved cognitive skills for each grade completed due to improved quality and relevance of general education. This should better prepare students to enter the labor market and lead to higher earnings.

• Immediate reductions in household poverty due to decreased direct costs of education (e.g., the provision of free textbooks).

27. Sectoral level. The potential benefits of the program would come from improved internal efficiency, resulting from organizational and managerial reforms and institutional development at the national, regional and woreda levels.

-149-

• Due to increased public investment to improve the quality of general education, internal efficiency will be gained through improved learning outcomes, increased enrollment, increased retention rates and reduced drop out rates. Research in other countries has shown that improved in-service training has high payoff in terms of student retention, student promotion and student learning. The level of teachers’ general education and professional training are strongly associated with the level of student dropouts.

• Improved service delivery and accountability through management and planning reforms and school-based development programs.

28. Societal level. As summarized above, multiple externalities result from investments in improved quality in general education. In addition, increases in enrollment and reduced drop-out and repetition, especially for students from disadvantaged families, will result in higher levels of educational attainment and increased productivity and earnings over the long term. Several benefits of education at the societal level can be summarized as follows in the context of Ethiopia:

• Demography. According to a 2005 Ethiopia country study, raising education levels for women is a key factor in accelerating the demographic transition in Ethiopia. This same study stresses the importance of girls’ education in reducing early marriage and fertility and increasing national economic growth. Moreover, female education has positive externalities. Women living in communities with a large proportion of educated women have lower fertility, irrespective of their own level of education. Although the total fertility rate in Ethiopia has begun to decline from 5.9 in 2000 to 5.7 in 2005, it remains high.51 Consequently, if GEQIP succeeds in increasing the number of girls who successfully complete primary schooling and transition to the secondary level, there will be a demographic bonus to the investment in light of the inverse correlation between educational attainment and fertility rates.

• Link with Decentralization. As noted earlier, the bulk of education service delivery, including delivery of primary and secondary schooling and most of TVET, is the responsibility of the regions and woredas while the federal Government is responsible for overall policy making and for university-level education. The federal Government has been responsible for about 23 percent of public expenditure on education; but this share has increased in recent years to 34 percent in the 2003/2004 budget.

GEQIP will further enhance Ethiopia’s commitment to decentralization as this approach will bring decision making closer to local levels and to citizens. Implementation of the GEQIP is expected to lead to improved management and planning of service delivery, enhanced participation of stakeholders, particularly in school improvement, and improved transparency and accountability. Implementation of the school grants sub-component will be the responsibility of local entities at the woreda and sub-woreda levels. Through the provision of training to key officials and community members and by empowering those same individuals to make decisions

51 World Bank. 2005c. Ethiopia Well-Being and Poverty in Ethiopia: The Role of Agriculture and Agency. Washington, D.C.: World Bank.

-150-

about resources that are allocated to them, the Government’s long term agenda of decentralizing power and authority to the local level will be facilitated.

29. Equity Impact of the GEQIP. Evidence across developing countries shows that the provision of properly targeted high quality education alleviates the intergenerational transmission of poverty. Primary and secondary schooling can provide the main avenues for social mobility as educated individuals commonly enter professions requiring higher skill levels than their parents. Research shows that education expenditure affects poverty and income distribution in several ways. First, it has direct impact on incomes of the poor, as returns to their labor increases. Second, education is contributing, along with infrastructure, to economic growth that is central to reducing poverty in Ethiopia. Third, education improves the quality of life of the poor even at existing income levels – through their impact on fertility, health, and empowerment.

30. Several dimensions of equity impact of the GEQIP can be summarized as follows:

• Income disparities. In Ethiopia, economic growth as a mean of reducing poverty is central to the country’s poverty reduction strategy. Enabling the poor to participate in the growth process and make use of the new employment opportunities is vital if growth is to have this effect. Evidence clearly shows that children from poor households are far less likely to attend school, especially schools with better resources than their counterparts from wealthier households. As a result of GEQIP, poor children are likely to benefit from improved quality of general education. By strengthening the secondary education system, a better prepared cadre of students will be equipped to enter post-secondary education. Post-secondary education reduces poverty through redistribution and empowerment. Specifically, it generates empowerment through the building of social capital and facilitates redistribution by expanding opportunities for employability, income and social mobility. Improving the quality of secondary school graduates indirectly also improves the quality of individuals who may eventually enter the ranks of primary school teachers as well as those who may go on for higher education.

• Inter-regional considerations. Regional disparities exist in terms of education outcomes as measured by school attainment. For example, gross enrollment rates vary significantly from a low of 13 percent in the less developed and pastoral regions such as Afar and Somali to a high of 100 percent in Addis Ababa. Spending levels vary substantially from region to region, which is a major concern regarding the geographic distribution of spending benefits. For example, reported recurrent education expenditure spending per capita averages around ETB20 in most of the large regions, but ranged from ETB53 in Addis Ababa to ETB13 in SNNPR and ETB7 in Somali (World Bank, 2004a, p.50). In Ethiopia, poverty and poor education outcomes are evenly distributed across the country, but there are considerable distributional differences within Regions (World Bank, 2004a, p.9). Nevertheless, attempts have been made to address inter-regional disparities in the quality of provision and of education outcomes. Under the pooled fund of the GEQIP, the regional allocation formula would be based on two factors: school enrollments (75 percent) and school aged population (25 percent). This takes into account that regions with more children participating in school need to spend more, but also that basing transfers on existing

-151-

enrollments alone is likely to perpetuate existing inequalities among regions (see Annex 5).

• Rural/Urban disparities. In general there are substantial disparities between rural and urban areas in terms of enrollments in primary and secondary education. Under the GEQIP, students in rural areas would benefit from program interventions disproportionately more than in urban areas, as many will have access to basic quality-related inputs for the first time. In addition, the program will target ABE centers through school grants with significant impact on poor students as they are overwhelmingly in rural and pastoral areas, and thus serve some of the country’s most disadvantaged children.

• Gender disparities. Gender disparities are also substantial, particularly in rural locations. Female students are expected to benefit from improved quality of education, and the retention of girls in schools is expected to be enhanced by the increased proportion of female teachers, resulting from the revised selection to teacher training.

31. The GEQIP objectives are consistent with existing evidence concerning the interventions that increase quality in primary and secondary education. The enhanced participation of disadvantaged groups in general education will be reviewed on a regular basis through a strong social assessment program under the M&E sub-component.

Main Components of the First Phase of the GEQIP

32. As part of the preparation of the GEQIP, the MOE prepared the preliminary cost and financing plan of the GEQIP over the next five years. The anticipated funding shortfall is US$800 million based on the MOE’s preliminary estimates, if the GEQIP is fully implemented. However, it should be noted that cost estimates are preliminary based on the draft national GEQIP and a costing exercise of basic inputs. These estimates reflect the sum of proposed quality interventions and do not account for: (a) the composition and sequencing of proposed expenditures; (b) possible efficiency gains as a result of project interventions; and (c) fiscal impact of project interventions. Cost estimates will be reviewed and updated as part of the planned Education Expenditure Review, financed by development partners, in partnership with the World Bank, during the first year of the GEQIP. Below is a summary of the agreed interventions and estimated base cost for each component.

33. Curriculum, Textbooks and Assessment (Estimated total cost US$146.7m). Under the first phase of the GEQIP, the Government plans to develop, print and distribute new textbooks and teacher guides for grades 1-12 based on the new curricula. The provision of textbooks was the monopoly of the MOE. One of the major reform aspects of the program is to privatize the development, printing, and distribution of textbooks in accordance with the World Bank textbook policy and procurement procedures. The proposed program will allow both national and international publishing and printing firms to compete and provide textbooks and teacher guides under the Program, which are likely to have major implications for the development of local publishing and printing capacity in the long run.

-152-

34. In terms of provision of textbooks, substantial evidence has demonstrated that textbooks have had a consistently positive effect on student achievement (e.g., Heyneman et al., 1980; Heyneman and Loxley, 1983; Schiefelbein and Clavel, 1977; Fuller and Chantavanich; 1976; Tan et al., 1997). Recently, a World Bank study (2004b) found that in Ghana, “textbook provision is among the most cost effective means of improving test scores." Several studies also have had more nuanced findings. For example, Glewwe, Kremer and Slviemoulin (2001) found little evidence of the impact of textbooks on the average test scores of students in Nigeria, contrary to the results they found in Nicaragua and the Philippines. A possible explanation was the lack of training for teachers in the use of textbooks in Nigeria – extensive training in the Philippines and minimal training in Nicaragua. Nannyonjo (2007) found a small correlation between improved textbook provision and higher test scores. The study suggests that the impact of textbooks may be limited by teachers making poor use of textbooks, emphasizing the need for linking appropriate teacher training with other interventions.

35. Evidence from Ethiopia also suggests that textbook usage improves academic achievement. For example, the findings of the 2007 NLA demonstrates that, for all subjects, Grade 8 students with a textbook in a particular subject obtained higher test scores on average. It also finds that having textbooks in English, mathematics and the sciences were all significantly and positively correlated with improved overall learning outcomes of both Grade 4 and Grade 8 students.

36. Under the GEQIP, the MOE is planning to reach a pupil to textbook ratio of 1:1 by 2011, in line with Government’s target in PASDEP. While the evidence on the effectiveness of textbook provision on improving student learning is strong, the cost effectiveness of one textbook per pupil in contexts where there are competing demands on the Government budget is less clear. Under the GEQIP, a review of textbook provision and utilization will be carried out as part of impact assessments, and possible textbook cost reduction strategies will be examined to make textbook costs more affordable (see Box 1).

Box 1: Textbook Cost Reduction Strategies

A recent review of textbooks and school library provision in secondary education in sub-Saharan Africa by the World Bank identified a number of textbook cost reduction strategies that could be considered to make textbook costs more affordable to either government or parents. These are: • Fewer subjects and thus fewer textbooks (this requires a curriculum review). • Reduce page extents (review syllabus content requirements). • Turn textbooks into books of core content by shifting material into teachers’ guides (supplied at 1 book per class rather than 1

book per 1/2/3 students) or into library books. • Extend book life (review minimum physical production specifications). • Book sharing and thus reduced book:pupil ratios. • Reduce use of four colors in secondary textbooks. • Reduce wastage in manufacturing, warehousing, distribution, school storage, and school usage. • Use of textbook loan/rental systems. • Reduce page formats (large formats use more paper and are frequently less durable). • Short-term rather than long-term student loans in order to reduce loss and damage. • Tax exemptions for book manufacturing raw materials. • Greater control over input costs from publishers and printers (review evaluation and approval mechanisms and conditions to

ensure that price is a significant factor in evaluation and approval and that pricing is monitored in parent purchase situations) • Increased use of teachers’ guides Source: World Bank 2008b (pp.18-19)

-153-

37. Teacher Development Program (TDP). (Estimated total cost US$62.2m). International evidence suggests that, after family characteristics, teacher quality is the most important contributor to quality of education (OECD, 2005). It is clear that teacher quality can be improved by both pre-service and in-service training. The World Bank (2004b) found in Ghana that after textbook provision, teacher training was the next most cost effective means of improving test scores. However, it is cleat that not all teacher training interventions have been successful in improving quality, and that the structure and quality of the teacher training is of critical importance.

38. In Ethiopia, there is some evidence of the impact of teacher training. The NLA data shows that higher test scores were significantly correlated with the provision of teacher training (at Grade 4 and 8 in 2004, and at Grade 4 in 2007). However the impact of teacher training is not always clear. In Grade 8 in the 2007 NLA, only one of the five types of teacher training was significantly correlated with improved test scores. Qualitative studies of the TDP1 teacher training interventions found that the training was not always reflected in observed classroom practices. The TDP2 aims to increase the impact of teacher training interventions on classroom practice by supporting greater practical experience in the pre-service course, increasing the pedagogical training of teacher educators, and enhancing the provision of school-based continuous professional development for in-service teachers. To better understand the effectiveness of teacher development programs, a study will be carried out to examine the impact and cost-effectiveness of teacher training programs during the first phase of the APL.

39. The TDP Component provides funding to all universities and CTEs in the country, without taking into account the cost effectiveness of the programs operated by each institution. Some of the newer institutions in the process of academic and institutional development would likely require supplemental funding to establish a sound foundation for their programs, and thus the cost effectiveness of their programs may be low. On the other hand, GEQIP recognizes the importance of supporting new institutions as a key investment for the long-term sustainability of the national teacher training effort. A sector PER will be undertaken early in the first phase of GEQIP to provide unit cost data on cost effectiveness of institutional programs, which will guide future resource allocation.

40. Teacher deployment and supply remain areas of concern. A recent study on teacher deployment in Ethiopia found teachers unevenly distributed, with particular shortages in some rural areas. In addition there is inadequate supply of teachers for some levels and subjects, while there is excess capacity in others, and even some trained teachers who are not employed. Particularly in light of the teacher upgrading policy in place, it is important that teacher supply and deployment policies be calibrated to meet the needs and ensure efficient teacher provision.

41. School Improvement Program (Estimated total cost US$160.2m). International evidence shows that the provision of school grants is an effective mechanism to strengthen school-based management, increase community participation, improve transparency and accountability in the use of available resources, and improve learning outcomes (World Bank, 2007). In Ethiopia, the limited evidence suggests that schools’ discretionary resources have positive impact on student learning outcomes.

-154-

42. Several design issues were addressed under the GEQIP to make the school grants program more effective. First, the amount of existing school grant was seen to be too low to have a discernable impact. Consequently the value of per pupil grant was increased. Second, the amount of school grants will be reviewed on an annual basis and adjusted for inflation. Finally, the school grant component is considered to be supplementary support to each school under the GEQIP, as some regions have already been implementing similar programs. The implementation of the program will be reviewed and evaluated through the School Grants Utilization Survey at the end of the first year to assess the impact of school grants and revise the design based on lessons learned. The School Grants Utilization Survey will subsequently be repeated every two years.

43. Management and Administration Program (Estimated total cost US$21.4m). The project will strengthen the capacity of the MOE, regions, woredas and schools through the implementation of the MAP for more effective management, planning and accountability to key stakeholders. The project will also strengthen the EMIS, including support for the timely publication of the Annual Education Statistical Abstract and school report cards, both of which will further improved efficiency of educational policy, expenditure, and accountability.

Fiscal Sustainability Analysis

44. This section reviews the fiscal impact of the first phase of the GEQIP. The GEQIP will support five main components during the first phase the program. In order to maximize the fiscal sustainability of the proposed interventions, the GEQIP is designed to (i) avoid displacement of federal and regional contributions to non-salary recurrent expenditures; and (ii) gradually increase the federal and regional contributions for quality-inputs over time. Regions will allocate on average, at a minimum, 5 percent of recurrent expenditures towards non-salary, GEQIP-related inputs. At the federal level, the MOE will gradually increase its contribution during the first phase of GEQIP, as a share of the total DP contributions to the pooled fund as follows: 5 percent (Year 1), 10 percent (Year 2), 15 percent (Year 3), and 15 percent (Year 4).

45. Analysis shows three main types of costs that are likely to affect the fiscal sustainability of the proposed interventions, following the completion of the first phase of the GEQIP:

• Incremental salary increases. Providing incremental teacher salary increases resulting from teacher and teaching staff upgrading programs. Assuming that the costs of additional recurrent expenditures for teacher training programs stay at the 2008 level, the total annual costs would be around US$22 million at an exchange rate of Birr 9.8/US$1. As well as the direct cost of upgrading teacher qualifications from Certificate to Diploma, there will also be fiscal impact on salary expenditure as the number of Diploma qualified staff increases. The first cohort to begin upgrading will not graduate until 2010/11, meaning the fiscal impact on salaries will not be felt until the following year. The total increase in salary costs during GEQIP Phase 1 will therefore be approximately US$680,000, with similar incremental salary increases thereafter.

• Costs of additional staff. Hiring of new staff required to implement the proposed components, such as EMIS staff, drivers, and teaching staff for teacher training

-155-

institutions. The exact number of additional staff cannot be determined, but it is expected to be low with minimum additional costs.

• Incremental costs for operation and maintenance of physical resources. Maintaining physical resources such as IT, laboratory resources and vehicles. It is expected that the incremental cost of the provision of EMIS IT would be limited, as it will finance mostly equipment, training, and consultancy during Phase 1 of the program. A limited number of new staff is expected to be hired in the MOE and regional planning offices to strengthen the existing EMIS staff.

46. It is also important to note that the total cost of education is also likely to increase because of educating the additional children, who will attend and complete school as a result of the improvement in educational quality and access to school brought about by the GEQIP. Data are not yet available to examine the potential fiscal impact of proposed program interventions, but the impact is expected to be low since the program will focus on the improvement of the quality of the existing institutions and schools. It is therefore expected that these activities can be sustained over the long-run.

47. Finally, the GEQIP will finance several interventions to improve the quality of teaching and learning in primary and secondary education, which could not be financed through the government budget. They are:

• Recurrent expenditures for teacher training programs. The program is designed so that the pooled funding will finance limited recurrent expenditures for operating costs to carry out specific activities under the TDP2. These expenditures include per diem and travel expenditures for teaching staff and candidate teachers participating in the practicum and selection programs. Such expenditures were financed under TDP1 extensively, and the Government requested that these expenditures continue to be financed until the end of the first phase of the APL. They are expected to be part of the budget of universities and CTEs after the completion of the first phase. It is estimated that the costs of teacher training activities would be about US$42 million under the TDP2.

• Sustaining textbook provision. Sustaining the provision of new textbooks, based on the revised curriculum, which are expected to be reprinted each year at a rate of 25 percent annually. Based on the existing proposed student-textbook ratios and unit costs, the estimated annual costs of textbooks will be about US$35 million. However, the privatization of textbook publishing and printing under the program is expected to have significant cost savings through improved quality and durability of textbooks, and the development of a private textbook development industry in the country. In addition, Government will explore a range of cost reduction strategies during the first phase of the GEQIP.

• Sustaining the school grants program. Limited resources will be provided for all schools throughout the country through the pooled funding mechanism under the GEQIP. However, it is expected that school have access to resources through the school grants program following the completion of the first phase of the GEQIP. If the

-156-

Government intends to provide resources based on the standard rates, the cost of the program will be about $30 million per year.

48. The estimated cost of these interventions will be about US$107 million annually (or about 10 percent of the education budget in EFY08). To sustain the interventions under the GEQIP, the Government’s budget would need to be prepared to replicate the planned institutional and budgetary activities and procedures that will be initiated through the five program components. To ensure that these initiatives are sustained, the Government will need to introduce several policy reforms during and/or following the completion of the program. These reforms may include (i) reform of university and teacher training budget allocation to finance teacher training programs; (ii) reform of incentives for faculty and teachers to help retain teaching staff in universities, teacher training institutions and schools; and (iii) reform of school finance to allow schools to receive school grants and mobilize additional resources from parents/communities to implement the school plans effectively. Finally, for the financial sustainability of key interventions of the GEQIP, the level of recurrent expenditures (mainly teacher salaries) is key and needs to be monitored closely.

-157-

References

Brunswic, E. and Hajjar, H. 1992. Planning textbook development for primary education in Africa: Report of an IIEP seminar, Maputo, 19–22 November 1991. Paris: International Institute for Educational Planning and Swedish International Development Authority.

Card, D. and Krueger, A. 1998. “School Resources and Student Outcomes”. Annals of the American Academy of Political and Social Science, Vol. 559, The Changing Educational Quality and Workforce (Sep., 1998), pp.39-53.

Devarajan, S., Squire, L. and Suthiwart-Narueput, S. 1997. Beyond Rate of Return: Reorienting Project Appraisal. World Bank Research Observer, Volume 12, Number 1, pp.35-46.

Farrel, J. 1993. International Lessons for School Effectiveness. In J. Farrel and J. Oliviera, eds.

Fuller, B., and Chantavanich, A. 1976. A Study of Primary Schooling in Thailand: Factors affecting scholastic achievement of primary school pupils. Bangkok: Office of the National Commission.

Garcia, M. and Rajkumar, A. S. 2008. Achieving Better Service Delivery Through Decentralization in Ethiopia: World Bank Working Paper No.131: Africa Human Development Series. Washington, DC: World Bank.

Hanushek, E. A. and Wößmann, L. 2007a. Education Quality and Economic Growth. Washington, DC: World Bank.

Hanushek, E. A. and Wößmann, L. 2007b. “The Role of Education Quality in Economic Growth”. World Bank Policy Research Working Paper 4122, February 2007. Washington, DC: World Bank.

Heyneman, Stephen, and Jamison, D. 1980. “Student Learning in Uganda: Textbook Availability and Other Factors.” Comparative Education Review 24:206–20.

Heyneman, Stephen, and Loxley, W. 1983. “The Effect of Primary School Quality on Academic Achievement Across 29 High and Low-Income Countries. American Journal of Sociology 88(6):1162–94.

Jimenez, E. and Patrinos, H. 2008. “Can Cost-Benefit Analysis Guide Education Policy in Developing Countries?” World Bank Policy Research Working Paper No. 4568. Washington, DC: World Bank.

Krishnan, P., Selassie, T, and Dercon, S. 1998. “The Urban Labour Market during Structural Adjustment: Ethiopia 1990–1997.” Report No. WPS98-9. Center for the Study of African Economies, Oxford University.

Mengistae, T. 1998. “Wage Rates and Job Queues: Does the Public Sector Overpay in Ethiopia?” Report no. WPS/98-20. Centre for the Study of African Economies, Oxford University.

Montagnes, I. 2000. Textbooks and learning materials 1990-1999. World Education Forum, Education for All 2000 Assessment, UNESCO.

Moulton, J. 1997. How Do Teachers Use Textbooks? A Review of the Research Literature, Academy for Educational Development Technical Paper No. 74.

Psacharopoulos, G. and Patrinos, H.A. 2002. Returns To Investment in Education: A Further Update, World Bank Policy Research Working Paper, No. 2881, September.

Purves, A. 1973. “Literature Education in Ten Countries.” Stockholm: Almqvist and Wiksell.

OECD. 2005. Teachers Matter: Attracting, Developing and Retaining Effective Teachers, Paris: OECD.

Schaffner, J. 2003. The Determinants of Schooling Investments Among Primary School Aged Children in Ethiopia. World Bank

-158-

Schiefelbein, E., and Clavel, C. 1977. Stability over Time of Educational Input-Output Relationships. Santiago: PIIE, Department of Economics, University of Chile, ECIEL.

Smart, A. 2008. Report on Visit to Ethiopia to Develop a Textbook and Curriculum Plan.

Verwimp, P. 1996. “Estimating Returns to Education in Off-Farm Activities in Rural Ethiopia.” Ethiopian Journal of Economics 5(2):27–56.

Wolfe, B.L. and Zuvekas, S. 1995. Nonmarket Outcomes of Schooling. Discussion Paper, No. 1065-9. Institute for Research on Poverty: University of Wisconsin, Madison.

World Bank. 2004a. Ethiopia: Public Expenditure Review: The Emerging Challenge: Volume 1: Public Spending in the Social Sectors 2000-2020. Report No. 29338-ET. Washington, DC: World Bank.

World Bank. 2004b. Books, Buildings, and Learning Outcomes. An Impact Evaluation of World Bank Support To Basic Education in Ghana. Washington, DC: World Bank.

World Bank. 2005a. Education in Ethiopia. Strengthening the Foundation for Sustainable Progress. Washington, DC: World Bank.

World Bank.2005b. Ethiopia: Education Sector Development Project. Implementation Completion Report. Report No: 30706. Washington, D: World Bank.

World Bank. 2005c. Ethiopia Well-Being and Poverty in Ethiopia: The Role of Agriculture and Agency. Washington, D.C.: World Bank.

World Bank. 2007. What is School-Based Management? Washington, DC: Human Development Network, World Bank.

World Bank. 2008a. Ethiopia: Review of Public Finance. Discussion Draft.

World Bank. 2008b. Textbooks and School Library Provision in Secondary Education in Sub-Saharan Africa. Working Paper No. 126. Africa Human Development Series. Washington, DC: World Bank.

-159-

Annex 10: Fast Track Initiative Catalytic Fund Grant Approval Letter

-160-

-161-

Annex 11: Safeguard Policy Issues

1. There are no safeguard issues that will be raised by the project. Resources will be used in existing schools and administrative offices and will be allocated on the basis of equity and implementation capacity and performance.

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [ ] [x] Natural Habitats (OP/BP 4.04) [ ] [x] Pest Management (OP 4.09) [ ] [x] Physical Cultural Resources (OP/BP 4.11) [ ] [x] Involuntary Resettlement (OP/BP 4.12) [ ] [x] Indigenous Peoples (OP/BP 4.10) [ ] [x] Forests (OP/BP 4.36) [ ] [x] Safety of Dams (OP/BP 4.37) [ ] [x] Projects in Disputed Areas (OP/BP 7.60)* [ ] [x] Projects on International Waterways (OP/BP 7.50) [ ] [x]

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

-162-

Annex 12: Project Preparation and Supervision

Planned Actual PCN review October 31, 2007 October 31, 2007 Appraisal September 19, 2008 September 19, 2008 Negotiations November 4, 2008 November 4, 2008 Board/RVP approval December 18, 2008 Planned date of effectiveness January 31, 2009 Planned date of mid-term review April 1, 2011 Planned closing date July 7, 2013 Key institutions responsible for preparation of the project: The World Bank; DFID; The Netherlands Government; and Italian Development Cooperation. Bank staff and consultants who worked on the project included: Name Title Unit Halil Dundar (TTL) Sr. Education Economist AFTH3 Keiko Inoue Operations Officer AFTHD Deborah Mikesell Sr. Operations Officer AFTH3 Virginia Jackson Sr. Operations Specialist AFTH3 Alfonso Guzman CTA Consultant AFTH3 Shimeles Worku ETC (Operation Officer) AFTH3 Aidan Mulkeen Sr. Education Specialist AFTH1 Mohamed Khatouri Lead Monitoring and Evaluation Specialist AFTRL Trichur Balakrishnan Lead Financial Management Specialist AFTFM Abiy Demissie Belay Financial Analyst AFTFM Richard Olowo Sr. Procurement Specialist AFTPC Rogati Kayani Procurment Consultant AFTPC Jonathan Pavluk Sr. Counsel LEGAF Evarist Baimu Counsel LEGAF Luis Schwarz Sr. Finance Officer LOAFC Stella Manda Regional Coordinator AFTH1 Biftu Wordofa Program Assistant AFCE3 Southsavvy Nakhavanit Consultant, Program Assistant AFTH3 Deepak Mishra Lead Economist AFTP2 Oni Lusk-Stover Consultant HDNED Benjamin Piper TDP Consultant AFTH3 Marylou Bradley Sr. Operations Officer AFTH3 Trina Haque Lead Economist AFTH3 Prema Clarke Sr. Education Specialist AFTH3 Development Partners Chris Berry Education Advisor DFID Peter D’Souza Economist DFID Robin Milton Social Scientist DFID Kevin Lillis MAP Consultant DFID Robin Ellison EMIS Specialist DFID Thomas Luschei TDP Consultant DFID Jonathan Caseley School Grants Consultant DFID Mieke Vogel Education Advisor The Netherlands Embassy Franta Wijchers First Secretary The Netherlands Embassy Mariarita Capirci ESDP Coordinator Italian Development Cooperation Olga de Biaggio Social Scientist Italian Development Cooperation Elena Volpi Social Assessment Consultant Italian Development Cooperation Martina Venzo Political Scientist Italian Development Cooperation Malin Ellison Education Specialist SIDA WorkiyeTegegn Education Specialist Finland Embassy QER Reviewers Robin Horn (QER Chair) Sector Manager HDNED Ernesto Cuadra (QER) Lead Education Specialist MSNHD Chingboon Lee (QER) Sector Leader LCSHD Arun Joshi (QER) Education Cluster Leader AFTH1 Jerry Strudwick (QER) Sr. Education Specialist HDNED

-163-

Bank funds expended to date on project preparation:

1. Bank resources: $113,000 2. Trust funds: $253,836 3. Total: $366,836

Estimated Approval and Supervision costs: 1. Remaining costs to approval: $50,000 2. Estimated annual supervision cost: $80,000

-164-

Annex 13: Documents in the Project File

A. Government Documents 1. Ministry of Finance and Economic Development (2008). Government Letter of Development Policy for General Education

Quality Improvement Program (GEQIP). Reference No. Ml-0/1-1-1/256/08, November 4, 2008. 2. Ministry of Education (2002). The Quality and Effectiveness of Teacher Education in Ethiopia: A Report on the Study

Findings and Recommendations for Action (2002) 3. Ministry of Education (2005). Manual for Education Organization and Management, Community Participation and Finance.

. 4. Ministry of Education (2005). Education Sector Development Program III (ESDP III). 2005/2006 - 2010/2011 (1998 EFY

– 2002 EFY). Program Action Plan. (August 2005). 5. Ministry of Education (2006). Five Year Education Sector Capacity Development Strategic Plan: Main Report. 6. The Ministry of Finance and Economic Development (MOFED) (2006). The Plan for Accelerated and Sustained

Development to End Poverty (PASDEP). (2006-2010). 7. Ministry of Education (2007). Draft General Education Quality Improvement Program: Program Document (October 2007). 8. Ministry of Education (2007). Teacher Development Programme 1 (EFYS 1997-1999): Purpose, Outcomes, Activities and

Disbursement, MoE, December 2007. 9. Ministry of Education (2008). The Education Sector Policy for Responding to HIV/AIDS Challenges in Ethiopia (draft,

January 2008). 10. Ministry of Education (2008). Draft Project Implementation Manual. 11. Ministry of Education (2008). Draft Procurement Manual. 12. Ministry of Education (2008). Draft Financial Management Manual. 13. Ministry of Education (2008). Draft School Grants Guidelines. 14. Ministry of Education (2008). GEQIP Work Plans.

B. World Bank Documents 1. Project Concept Note (October 2007). 2. Aide Memoire from the Technical Mission (February 2008). 3. Aide Memoire from the Preparation Mission (May 2008). 4. Aide Memoire from the Pre-Appraisal Mission (July 2008). 5. Aide Memoire from the Appraisal Mission (September 2008). 6. Di Gropello, E. (2003). Monitoring Educational Performance in the Caribbean. World Bank Working Paper No 6:

Washington, DC: World Bank. 7. Heneveld, W. Craig, H. (1996). “School Count: World Bank Project Designs and the Quality of Primary Education in Sub-

Saharan Africa”. World Bank Technical Paper No: 3030. Africa Technical Department Series. Washington, DC: World Bank.

8. Hanushek, E.A. and Ludger, Wobmann (2007). “The Role of Education Quality in Economic Growth”. Policy Research Paper No: 4122. Washington, DC: World Bank.

9. Lockheed, M.E. and Longford, N.T. (1989). A Multilevel Model of School Effectiveness in a Developing Country. World Bank Discussions Paper No: 69: Washington, DC: World Bank.

10. World Bank (2000). Effective Schooling in Rural Africa Report 2. Key Issues Concerning School Effectiveness and Improvement. Washington, DC: Human Development Network, World Bank.

11. World Bank (2005). Ethiopia: Education Sector Development Project. Implementation Completion Report. Washington, DC: World Bank.

12. World Bank (2005). Education Ethiopia: Strengthening the Foundation for Sustainable Progress. 13. World Bank (2006). From Schooling Access to Learning Outcomes and Unfinished Agenda: An Evaluation of World

Support to Primary Education. Washington, DC: World Bank. 14. World Bank (2006). Nigeria: State Education Sector Project. Report No: 38436 – NG. Washington, DC: World Bank. 15. World Bank (September 2008). Draft Ethiopia: Education Sector Public Financial Management Assessment. 16. World Bank (September 2008). Draft Ethiopia GEQIP Procurement Management Capacity Assessment 17. World Bank (2008). Country Assistance Strategy for the Federal Democratic Republic of Ethiopia. Report No.43051-ET.

Washington, DC: World Bank. C. Other 1. DFID (2008). Draft TDP Completion Report. Addis Ababa: DFID Country Office. 2. DFID/World Bank (2008). Ethiopia GEQIP Institutional Capacity Assessment. 3. UNESCO (2004). Education for All: the Quality Imperative. EFA Global Monitoring Report 2005: Paris: UNESCO

Publishing.

-1

65-

Ann

ex 1

4: S

tate

men

t of L

oans

and

Cre

dits

Act

ive

Pro

ject

s

Pro

ject

IDP

roje

ct N

ame

Dev

elo

pm

ent

Ob

ject

ives

Imp

lem

enta

tio

n P

rog

ress

Fis

cal Y

ear

IBR

DID

AG

RA

NT

Can

cel.

Un

dis

b.

Ori

g.

Frm

Rev

'd

Pro

j ID

(S

PN

)La

test

DO

Late

st IP

App

rova

l FY

IBR

DID

AG

rant

sC

ance

l.U

ndis

b.O

rig.

Frm

Rev

'dP

0509

38 E

T-D

ec S

erv

DSM

S20

0326

.26.

0072

1418

1.05

6807

561.

0568

0745

P10

1556

ET

-Ele

ct. A

cceM

SM

U20

0813

013

2.04

526

28.0

1550

383

P07

9275

ET

- C

ap. B

uild

MS

MU

2006

5444

.701

6720

95.

7607

1266

P10

6228

ET

- E

thio

pia

NM

SM

S20

0830

29.6

0154

P09

0789

ET

- S

usta

inab

l##

2008

9P

0910

77E

T-A

PL3

-RS

DS

S20

0722

523

1.82

0401

26.6

6666

666

P09

7271

ET

-Ele

ctric

it y A

MS

MS

2006

133.

412

4.98

1589

297

.290

8821

4P

0493

95E

T-E

ner g

y A

ccM

SM

S20

0313

2.7

98.1

2911

907

73.0

8775

287

59.5

2047

405

P09

4704

ET

-Fin

anci

al S

MS

MS

2006

1513

.491

9327

95.

2867

9568

P05

0383

ET

-Foo

d S

ecu

MS

MS

2002

8540

.192

4033

819

.732

0615

1P

0773

80E

T-G

EF

Ene

r gM

SM

S20

064.

934.

4656

9106

4.13

9024

4P

0784

58E

T-I

CT

Ass

ist e

MS

MS

2005

2517

.376

8597

414

.032

7028

54.

7702

0283

P09

2353

ET

-Irr

i gat

ion

& S

S20

0710

090

.796

6254

720

.666

6361

7P

0980

31E

T-M

ulti-

Sec

t oS

MU

2007

3022

.558

9769

321

.718

7508

8P

0759

15E

T-P

asto

ral C

oMS

MS

2003

300.

2291

390.

4560

1324

-1.7

0875

794

P10

8932

ET

-Pas

tora

l Co#

#20

0880

78.4

3068

P07

8692

ET

-Pos

t Sec

o nS

U20

0540

26.7

9855

966

25.4

5471

68P

0502

72E

T-P

riv S

ec D

eMS

MS

2005

2420

.318

8239

98.

9033

8342

2.26

1287

51P

0980

93E

T-P

rodu

ctiv

e S

S20

0717

553

.187

2658

7.44

7532

92P

0740

15E

T-P

rote

ctio

n oS

S20

0643

038

.709

0455

5-1

93.6

6107

7P

0740

20E

T-P

ub S

ec C

aHS

S20

0410

037

.377

3964

825

.191

7705

P04

4613

ET

-RS

DP

AP

LS

S20

0312

6.8

31.2

9174

624

14.9

5987

669

P08

2998

ET

-Roa

d S

ec D

SS

2005

248.

216

3.58

1502

238

.072

4731

71.

9785

9008

P10

7139

ET

-Sus

tain

abl e

##

2008

2019

.623

5P

0963

23E

T-T

ana

&B

ele#

#20

0845

40.8

2709

6P

1014

74E

T-U

rban

Loc

aSS

2008

150

151.

3744

46.

25P

1014

73E

T-U

rban

WS

SSS

2007

100

92.3

5340

32.

1935

9014

P07

6735

ET

-Wat

er S

ply

SM

S20

0410

067

.643

3823

539

.541

6912

6P

0740

11E

T/N

ile B

asin

IS

S20

0841

.05

41.6

3110

24.

6666

6666

Ove

rall

Res

ult

2696

.35

13.9

30.

2291

3917

19.7

7324

129

4.76

6163

869

.587

3619

2

Su

per

visi

on

Rat

ing

Las

t P

SR

Ori

gin

al A

mo

un

t in

US

$ M

illio

ns

Dis

bu

rsem

ents

a/

Dif

fere

nce

Bet

wee

nE

xpec

ted

an

d A

ctu

al

-1

66-

B8

(IF

C) f

or E

thio

pia

E

thio

pia

Com

mit

ted

and

Dis

burs

ed O

utst

andi

ng I

nves

tmen

t Por

tfol

io

As

of 1

0/31

/200

8 (I

n U

SD M

illio

ns)

C

omm

itte

d

Dis

burs

ed O

utst

andi

ng

FY

A

ppro

val

Com

pany

L

oan

Equ

ity

**Q

uasi

E

quit

y *G

T/R

M

Par

tici

pant

Loa

n E

quit

y **

Qua

si

Equ

ity

*GT

/RM

P

arti

cipa

nt

20

08

Dm

c 55

0

0 0

0

0 0

0 0

0

Tot

al P

ortf

olio

: 55

0

0 0

0

0 0

0 0

0

*

Den

otes

Gua

rant

ee a

nd R

isk

Man

agem

ent P

rodu

cts.

**

Qua

si E

quity

incl

udes

bot

h lo

an a

nd e

quity

type

s.

-167-

Annex 15: Country at a Glance

Ethiopia at a Glance

Sub-POVERTY and SOCIAL Saharan Low-

Ethiopia Africa income2007Population, mid-year (millions) 79.1 800 1,296GNI per capita (Atlas method, US$) 220 952 578GNI (Atlas method, US$ billions) 17.6 762 749

Average annual growth, 2001-07

Population (%) 2.6 2.5 2.2Labor force (%) 2.9 2.6 2.7

Most recent estimate (latest year available, 2001-07)

Poverty (% of population below national poverty line) .. .. ..Urban population (% of total population) 17 36 32Life expectancy at birth (years) 52 51 57Infant mortality (per 1,000 live births) 77 94 85Child malnutrition (% of children under 5) 35 27 29Access to an improved water source (% of population) 42 58 68Literacy (% of population age 15+) 36 59 61Gross primary enrollment (% of school-age population) 91 94 94 Male 97 99 100 Female 85 88 89

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1987 1997 2006 2007

GDP (US$ billions) 10.4 8.9 15.2 19.4Gross capital formation/GDP 16.1 19.8 24.2 25.0Exports of goods and services/GDP 6.0 11.4 13.8 12.8Gross domestic savings/GDP 10.5 13.2 1.5 5.5Gross national savings/GDP 11.9 17.8 15.1 20.7

Current account balance/GDP -4.2 -2.2 -9.1 -4.5Interest payments/GDP 0.6 0.5 0.4 ..Total debt/GDP 70.5 113.3 15.3 ..Total debt service/exports 38.3 9.5 7.1 ..Present value of debt/GDP .. .. 5.9 ..Present value of debt/exports .. .. 38.7 ..

1987-97 1997-07 2006 2007 2007-11(average annual growth)GDP 2.0 6.2 10.9 11.1 ..GDP per capita -1.3 3.3 8.0 8.4 ..Exports of goods and services 1.2 12.8 -0.2 10.2 ..

STRUCTURE of the ECONOMY1987 1997 2006 2007

(% of GDP)Agriculture 54.3 57.6 47.9 46.3Industry 13.3 10.7 12.7 13.4 Manufacturing 5.5 5.0 4.5 5.1Services 32.5 31.7 39.4 40.3

Household final consumption expenditure 79.0 78.8 86.4 83.9General gov't final consumption expenditure 10.6 8.0 12.1 10.6Imports of goods and services 11.7 17.9 36.5 32.2

1987-97 1997-07 2006 2007(average annual growth)Agriculture 3.1 4.3 10.9 9.4Industry -1.5 7.8 10.2 11.0 Manufacturing -2.8 5.7 10.6 10.5Services 1.5 7.7 12.9 13.9

Household final consumption expenditure 3.1 6.4 14.3 8.9General gov't final consumption expenditure -2.9 6.4 8.1 -3.8Gross capital formation -0.8 6.6 18.5 17.4Imports of goods and services 0.7 10.4 18.0 3.8

Note: 2007 data are preliminary estimates.This table was produced from the Development Economics LDB database.

* The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.

-10

0

10

20

30

02 03 04 05 06 07

GCF GDP

Growth of capital and GDP (%)

-10

0

10

20

30

40

02 03 04 05 06 07

Exports Imports

Growth of exports and imports (%)

Ethiopia

Low-income group

Development diamond*

Life expectancy

Access to improved water source

GNIpercapita

Grossprimary

enrollment

Ethiopia

Low-income group

Economic ratios*

Trade

Indebtedness

Domesticsavings

Capital formation

-168-

Ethiopia PRICES and GOVERNMENT FINANCE 1987 1997 2006 2007 Domestic prices (% change) Consumer prices -9.5 -6.4 12.3 17.8 Implicit GDP deflator -6.1 4.5 11.6 16.8 Government finance (% of GDP, includes current grants) Current revenue 14.5 15.4 16.7 16.3 Current budget balance 2.3 5.5 5.2 5.9 Overall surplus/deficit -4.1 -1.3 -5.5 -4.9

TRADE 1987 1997 2006 2007 (US$ millions) Total exports (fob) 391 599 1,000 1,185 Coffee 253 355 354 424 Pulses and oil seeds 9 23 248 258 Manufactures 74 75 94 105 Total imports (cif) 1,081 1,309 4,592 5,126 Food 194 17 333 259 Fuel and energy 109 147 861 875 Capital goods 466 528 1,552 2,020 Export price index (2000=100) 115 132 110 118 Import price index (2000=100) 99 87 139 151 Terms of trade (2000=100) 116 152 79 78

BALANCE of PAYMENTS 1987 1997 2006 2007 (US$ millions) Exports of goods and services 623 1,011 2,105 2,486 Imports of goods and services 1,217 1,589 5,548 6,266 Resource balance -594 -578 -3,443 -3,780 Net income -48 -97 -38 13 Net current transfers 204 484 2,095 2,885 Current account balance -437 -191 -1,386 -882 Financing items (net) 416 -94 989 1,050 Changes in net reserves 21 285 397 -168 Memo: Reserves including gold (US$ millions) 224 558 1,158 1,326 Conversion rate (DEC, local/US$) 2.1 6.5 8.7 8.8

EXTERNAL DEBT and RESOURCE FLOWS

1987 1997 2006 2007 (US$ millions) Total debt outstanding and disbursed 7,364 10,077 2,326 .. IBRD 57 0 0 0 IDA 601 1,532 553 711 Total debt service 249 99 164 .. IBRD 13 0 0 0 IDA 9 26 39 6 Composition of net resource flows Official grants 346 357 5,015 .. Official creditors 422 104 306 .. Private creditors 72 23 -45 .. Foreign direct investment (net inflows) -3 288 364 ..

MAP SECTION

Ras DashenRas DashenTerara (4620 m) Terara (4620 m)

E t h i o p i a nE t h i o p i a nP l a t e a uP l a t e a u

De

na

ki l D

es

er

t

Gr

ea

t

R

if

t

V

al l

ey

O g a d e nO g a d e n

T I G R AYT I G R AY

A FA RA FA RA M H A R AA M H A R A

S O M A L IS O M A L I

O R O M I YAO R O M I YAG A M B E L AG A M B E L A

DIRE DAWADIRE DAWA

SOUTHERN NATIONS,SOUTHERN NATIONS,NATIONALITESNATIONALITESAND PEOPLESAND PEOPLES

ADDIS ABABAADDIS ABABA

BENSHANGULBENSHANGUL

HARARIHARARI

Dinder

Tekeze

Atbara

Blue Nile

Aw

ash Akobo

Genale

Dawa

Baro

Abay

Hang

er

Didesa

W

abe Shebele

Ramis

Wabe G

estro Wabe Shebele

WeldiyaWeldiyaDebraDebraTaborTabor

AxumAxum

AdigratAdigrat

SodoSodo

NegeleNegele

MegaMega

ImiImi

DoloDoloOdoOdo

Degeh BurDegeh BurAwareAware

WarderWarder

DomoDomo

MoyaleMoyale

YavelloYavello

WendoWendo

ShashemeneShashemene

NazretNazret

WelkiteWelkite

HosainaHosainaBongaBonga

GimbiGimbiAwashAwash

DodolaDodola

HumeraHumera

Kebri DeharKebri Dehar

GonderGonder

DeseDese

DebreDebreMarkosMarkos

AselaAsela

GobaGoba

GoreGore

NekemteNekemte

JimaJima

HarerHarerDire DawaDire Dawa

Bahir DarBahir Dar

MekeleMekele

GambelaGambela

AwasaAwasa

AsosaAsosa

AsayitaAsayita

JijigaJijigaADDISADDISABABAABABA

SUDANSUDAN

ERITREAERITREA

SOMALIASOMALIA

UGANDAUGANDA KENYAKENYA

DJIBDJIB

REP.REP.OFOF

YEMENYEMEN

To To KerenKeren

To To GedarefGedaref

To To MarsabitMarsabit

To To WajirWajir To To

MogadishuMogadishu

To To MogadishuMogadishu

To To HargeysaHargeysa

WeldiyaDebraTabor

Axum

Adigrat

Sodo

Negele

Mega

Imi

DoloOdo

Degeh BurAware

Warder

Domo

Ferfer

Moyale

Yavello

Wendo

Shashemene

Nazret

Welkite

HosainaBonga

GimbiAwash

Dodola

Humera

Kebri Dehar

Gonder

Dese

DebreMarkos

Asela

Goba

Gore

Nekemte

Jima

HarerDire Dawa

Bahir Dar

Mekele

Gambela

Awasa

Asosa

Asayita

JijigaADDISABABA

T I G R AY

A FA RA M H A R A

S O M A L I

O R O M I YAG A M B E L A

DIRE DAWA

SOUTHERN NATIONS,NATIONALITESAND PEOPLES

ADDIS ABABA

BENSHANGUL

HARARI

SUDAN

ERITREA

SOMALIA

UGANDA KENYA

DJIBOUTI

REP.OF

YEMEN

Dinder

Tekeze

Atbara

Blue Nile

Aw

ash Akobo

Genale

Dawa

Baro

Abay

Hang

er

Didesa

W

abe Shebele

Ramis

Wabe G

estro Wabe Shebele

INDIANOCEAN

LakeTana

LakeTurkana

R e d S e a

G u l f o f A d e n

To Keren

To Gedaref

To Marsabit

To Wajir To

Mogadishu

To Mogadishu

To Hargeysa

E t h i o p i a nP l a t e a u

De

na

ki l D

es

er

t

Gr

ea

t

R

if

t

V

al l

ey

O g a d e n

Ras DashenTerara (4620 m)

14°N

36°E 40°E 44°E

46°E 48°E

42°E32°E

34°E 36°E 38°E 40°E 44°E 46°E 48°E42°E32°E

12°N

14°N

12°N

10°N

8°N

6°N

4°N

10°N

8°N

6°N

4°N

ETHIOPIA

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 50 100 150

0 50 100 150 Miles

200 Kilometers

IBRD 33405 R1

JUN

E 2007

ETHIOPIASELECTED CITIES AND TOWNS

REGION CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

REGION BOUNDARIES

INTERNATIONAL BOUNDARIES