Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report March 2019 Commissioned by the Ministry of Education of the Federal Democratic Republic of Ethiopia, with funding from the UK’s Department for International Development (DFID) and support from the British Council
Acknowledgements 2 Acknowledgements This report was commissioned by the Ethiopian Federal Ministry of Education with funding from the UK Department for International Development and support from the British Council. We wish to acknowledge with much appreciation His Excellency the Minister of Education Dr. Tilaye Gete, who took the time to read earlier drafts of this report and provide detailed comments, suggestions and insights. We also wish to acknowledge His Excellency, State Minister Dr. Hasen Yusuf Mohammed, for his guidance and chairing the Process Council meeting where the findings from this study were first presented. We also wish to extend sincere thanks to Ato Solomon Shiferaw, Advisor to the Minister, who read the draft report in detail and provided insightful feedback and suggestions. We are particularly grateful to colleagues at the Ministry of Education’s Planning and Resource Mobilization Directorate. We extend our sincere thanks to Director Ato Elias Wakjira and his colleagues Ato Setotaw Yimam and Ato Getahun Desalegn, for their outstanding guidance, oversight and invaluable inputs into the development of this report. This study would not have been possible without the support provided by the team at the British Council, including Team Leader and Director of Education Ato Netsanet Demewoz and team members Ato Tizazu Asare and Ato Sileshi Getahun. They provided project management and logistical support, as well as insightful feedback on several early drafts of this report. We thank you for your support. We would like to express our deep gratitude to Ato Bahru Shikur, who facilitated the key informant interviews in Amhara, Oromia, SNNPR, Somali, and Tigray, as well as providing extensive support to the project team and providing input into the drafting and finalization of the report. He showed exceptional dedication to this project born from a tireless commitment to improving education in Ethiopia. Finally, we would like to thank the 62 respondents who willingly gave their time and spoke openly during the key respondent interviews. Their views, knowledge and experience form the basis of the qualitative research for this study.
Table of Contents 3 Table of Contents Executive Summary 4 Methodology 6 Section 1: Ethiopian Context and Background 8 1.1 Country Context 8 1.2 Public-Private Partnerships receive increased attention 8 1.3 Overview of the challenges in implementing social sector PPPs 9 1.4 Learning from the success of PPPs in the health sector 9 1.5 Overview of Ethiopia’s Education System 10 1.6 Key priorities for the Ministry of Education 11 1.7 What the Education Sector Plan and draft Education Roadmap say about PPPs 13 Section 2: The Purpose of PPPs in Education 14 2.1 What is a PPP in education? 14 2.2 Can the MoE establish their own definition of PPPs in education? 14 2.3 What are the most common types of PPP in education and how might they help achieve key 15 sector priorities? 2.4 What are the arguments for and against PPPs in education? 16 2.5 What does the evidence say about PPPs in education? 17 2.6 What enabling conditions are required for successful PPPs in education? 18 Section 3: Key Findings from the Study 20 3.1 Finding 1 20 3.2 Finding 2 22 3.2 Finding 3 23 Bibliography 27 Annex A: Interview Respondent List and Affiliation 28 Annex B: Education PPPs in Developing Countries – Case Studies 29 Annex C: Case Studies of Education PPPs Happening in Ethiopia 33 Annex D: How might education PPPs help the Ethiopian government 35 address challenges? Annex E: The 4 Main Types of PPPs 38
Executive Summary 4 Executive Summary Ethiopia is Africa’s oldest independent country and the second largest, with a population of just over 100 million people. The country is a federal democratic republic where power is decentralized through the 1994 Federal Constitution, empowering the nine regional states and two city administrations to design systems of local government appropriate to their unique circumstances. In line with the government’s vision of Ethiopia as a middle-income country by 2030, a series of new policies designed to accelerate economic growth are being introduced, including the expansion of private sector investment in several sectors – most notably in aviation, telecommunications and engineering. Against this backdrop, public-private partnerships (PPPs) have begun to receive increased attention. In February 2018, the government published a PPP Proclamation which established a legal framework for PPPs, primarily in reference to infrastructure projects. While the Proclamation does not specifically refer to the social sectors, the legal framework provides a mechanism for the Ministry of Finance (MoF) to develop specific guidelines. The Ministry of Health (MoH) has a long and well documented history of using PPPs to engage non- state actors to offer high-quality, affordable health services to all Ethiopians. The Ministry of Education (MoE) has articulated a specific desire to learn more from the MoH’s experience to better inform whether PPPs in education could meet the nation’s general education goals from Kindergarten to Grade 12 (K-12). This report was commissioned by the Ministry of Education in December 2018. Its purpose is to explore the existing PPPs in education both globally and in Ethiopia and to better understand the potential of PPPs to meet the Ministry’s key objectives. The report is based on a study comprised of a literature review and 62 in-person interviews with national and regional stakeholders, selected in consultation with the MoE. The consultations took place between December 2018 and January 2019 in 5 regions (Amhara, Oromia, SNNPR, Somali and Tigray) as well as in Addis Ababa.1 The findings from the study have been used to design a set of strategic options for the MoE to consider as it explores the use of PPPs in the sector. The scope of the research was limited to pre-primary and general education, excluding TVET and Higher Education. This study was commissioned in parallel with a study on resource mobilization, being undertaken with funding from GIZ. The purpose of the study on resource mobilization is to explore how the MoE can raise funds from the private sector.This report complements but is distinct from that work and explores the potential of PPPs to meet the MoE’s goals. This report is broken into three key sections, followed by a conclusion – • The first section explores the Ethiopian context in further detail, looking at the increased attention turning to PPPs across economic and social sectors; providing an overview of the challenges in implementing social sector PPPs with a specific focus on learning from the successful implementation of PPPs in the health sector; and providing an overview of the Ethiopian education sector and key national priorities as outlined in the 5th Education Sector Development Plan (EDSP V) as well as the draft Education Roadmap. • The second section looks at the purpose of PPPs in education in more detail (acknowledging the need for the MoE to be comfortable with a contextually appropriate definition of PPPs); considers examples of internationally-accepted types of PPPs and how they might help achieve key sector priorities; explores the arguments for and against PPPs; looks at what the international evidence says, as well as what enabling conditions are required to implement a successful PPP. This section also includes how PPPs can aid cost savings and leverage international funding. 1 Appendix A lists the affiliations of all respondents. Documents included in the Literature Review are listed in the Bibliography.
Executive Summary 5 • The final section explores the three main findings of the study, namely: • Finding 1: The non-state education sector is relatively small, and information on its potential to partner with government is not currently available. • Finding 2: Accountability mechanisms exist but need to be strengthened. • Finding 3: Regional Education Bureaus (REBs) are already forging informal partnerships with the non-state sector but would benefit from more formal arrangements. The natural question to ask at the end of this report is what the Ministry of Education should do next. The findings of this study offer reasons for caution and for optimism. Finding 1 suggests there is vital information about the non-state sector in Ethiopia that is still unknown. To enter into any effective partnership, the government first needs to better understand the landscape of potential partners. Finding 2 suggests that there are important enabling conditions for any successful PPP that are not yet in place. PPPs are complex policy tools, and when these conditions are not met, PPPs can have limited or even adverse impacts. The strength of the MoE’s accountability system, and the ability of particular regulatory processes to hold schools accountable for the outcomes they produce, is the most important of these preconditions. Finding 3 suggests reasons for optimism. At the regional level, Regional Education Bureaus (REBs) are already forging informal partnerships with non-state schools. These partnerships point to the potential of government to leverage the non-state sector to achieve the MoE’s stated education objectives. They also provide a strong foundation for future pilots, which can help the MoE test education PPPs at a small scale and rigorously determine if and how they can be adapted to the particular context of the Ethiopian education system. Taken together, these findings suggest clear ways that the Ministry of Education could take action to further develop and test the potential of PPPs in the sector. In a companion document to this one, ‘Strategic Recommendations for Education Public Private Partnerships in Ethiopia’, we address what practical next steps the MoE could take. Each finding from this study directly informs one strategic recommendation for the MoE to consider. Education PPPs are new to Ethiopia, and they should remain at a small scale in the near future as the MoE continues to gather the information and experience it needs to determine if, and in what way, it should invest in PPPs in the education sector.
Methodology 6 Methodology This scoping study set out to explore the following research questions: • What is the evidence behind PPPs in education? • What are some innovative education PPP arrangements and practices happening in other countries, especially in developing countries? • What is the current status of PPPs in Ethiopia, and more specifically in education? (e.g. Where do PPPs sit within the current legal and policy environment? How does government currently engage with PPPs?) • What are the opportunities for PPPs in education, if any, at the federal and regional level? What potential barriers exist? The study design included qualitative interviews with key stakeholders, a targeted literature review that focused on the contemporary Ethiopian general education sub-sector and drew on a previously published global evidence review on education PPPs with a focus on developing countries.2 We designed a semi-structured interview tool to guide interviews with key stakeholders to help answer these questions. The use of a semi-structured tool gave us the flexibility to focus on key themes while allowing the discussion to follow emergent topics if appropriate. The interview tool adapted questions from the World Bank SABER Engaging the Private Sector tool3 , and from a proprietary diagnostic tool designed by EPG to help government understand the current strengths and challenges associated with implementing education PPPs. The survey was divided into the following four themed sections: 1. Basic information on the non-government sector 2. Existing accountability systems 3. Current relationship between the government and non-government sector 4. Opportunities and challenges around the future relationship between the government and non-government sector. The interview guide was adapted for relevance for different stakeholder groups, meaning that the same questions were not always asked of every participant. We spoke with 62 respondents selected in consultation with the MoE. The respondents were divided across key stakeholder groups: 9 from the federal MoE, 23 from the REBs, 18 from the non-government education sector, 10 from various development partners, and two from academia. The geographic coverage of the study was discussed and agreed with the MoE, and spread across regional capitals in five regions - Amhara, Oromia, SNNPR, Somali, and Tigray - and the city of Addis Ababa. Regional level government officials have more experience and day-to-day engagement with the non-government sector than federal level officials which is why the study disproportionately focused its resources on interviews at the regional or city level. These regions were also selected for their population size, and the anticipated presence of non-state sector schools in their urban areas. The Somali region was included to provide complementary data on the particular contextual challenges education PPPs may face in emerging regions, and because of the growing presence of non-government schools in the Somali capital Jijiga. 2 Aslam, M., Rawal, S., & Saeed, S. (2017) Public-Private Partnerships in Education in Developing Countries: A Rigorous Review of the Evidence. Education Partnerships Group. 3 Baum, D., Lewis, L., Lusk-Stover, O., Patrinos, H. (2014) What Matters Most for Engaging the Private Sector in Education: A Framework Paper, SABER Working Paper Series.
Methodology 7 The interviews were conducted over 6 weeks between December 2018 and January 2019. Interviews were conducted by an EPG Programme Manager, and a national consultant with extensive experience in the Ethiopian education sector as a teacher, civil servant in a REB, and consultant. There were significant limitations to this study. Chief among these was the compressed time frame for data collection and analysis. This meant that the study could only speak with a limited number of respondents, and this sample was not representative. For example, the study could only visit regional capitals and a single emerging region, and would benefit from additional perspectives from other contexts. The study could also only speak with a limited section of the non-state sector, and because the sector is fragmented between individual schools, there were many perspectives and types of schools the study could not include. The findings from this report should not be considered exhaustive and would undoubtedly benefit from additional consultations at all levels of government and the non-state sector. They can, however, be viewed as a considered summary of the current landscape of education PPPs in Ethiopia, and their potential in the future.
Section 1: Ethiopian Context and Background 8 Section 1: Ethiopian Context and Background 1.1. Country Context Ethiopia is Africa’s oldest independent country and the second appropriate to their unique circumstances. Each region is divided largest, with a population of just over 100 million people. into zones, woredas/urban administrations, and kebeles, creating a The country is a federal democratic republic. Chief of State is four-tier system of government. the president, head of government is the Prime Minister. The federal structure consists of nine regional states (Afar, Amhara, In line with the government’s vision to ensure that Ethiopia Benishangul-Gumuz, Gambela, Harari, Oromia, Somali, Southern becomes a middle-income country by 2030 (as articulated in Nations Nationalities and Peoples’ Region (SNNPR) and Tigray) the 2nd Growth and Transformation Plan – GTP II) a series and two city administrations (Addis Ababa and Dire Dawa). The of new policies designed to accelerate economic growth are 1994 Federal Constitution is the basic document that outlines the being introduced. In April 2018, a new Prime Minister came legal and institutional framework for decentralization in Ethiopia, to power and has since overseen a series of significant reforms, articulating the respective spheres of authority and responsibilities including the introduction of major economic policies of the Federal Government. It empowers regional states to liberalising private sector involvement in a number of sectors– use their constitutions to design systems of local government most notably aviation, telecommunications and engineering. 1.2. Public-Private Partnerships receive increased attention Against this backdrop, public-private partnerships (PPPs) meet minimum standards. The Directorate General plays an have begun to receive increased attention. In February advisory and recommendatory role to the Board. 2018, the government published a PPP Proclamation which established a legal framework for PPPs, recognising that the The Proclamation defines a PPP as a long-term contractual private sector can be an essential partner ‘to improve the agreement between a public body or public enterprise quality of public service activity.’4 It states that partnering (‘Contracting Authority’) and a private party whereby: with the private sector is an essential strategy to realize the • The private party agrees to perform a public service activity country’s development objectives, particularly in the realm that would otherwise be carried out by government; of infrastructure projects5. The Proclamation’s objectives indicate the potential of PPPs ‘to support Ethiopian economic • The private party receives compensation, either from the growth… enhance transparency, fairness, value for money, contracting authority and/or from charging fees to service efficiency and long-term sustainability… improve quality of users; public service activity and reduce growth in public debt.’6 • The private party takes liability for risks of implementing/ The Proclamation also lays out a governance framework running the service.8 for PPPs, with the associated roles and responsibilities of all Ministries, bodies and authorities involved. The overarching In the Proclamation, ‘public service activities’ are broadly mechanism for governance is the PPP Board (comprising defined as ‘any activity the government has decided to representation from multiple Ministries and corporations)7 perform’ and the scope of the proclamation applies generally as well as a PPP Directorate General, housed within the to ‘public private partnership projects of Public Bodies and Ministry of Finance (MoF). The Board has a broad mandate Public Enterprise.’9 However, the forms of PPPs referenced to promote private sector participation in the financing, in the Proclamation are all infrastructure-related.10 Whilst construction, maintenance and operation of public services the Proclamation does not specifically refer to PPPs in the across all sectors. It is directly responsible for the approval and social sector, the legal framework provides a springboard to oversight of PPP projects, including approving project design, draft PPP guidelines for the social sectors. overseeing contracting arrangements and ensuring PPPs 4 Federal Democratic Republic of Ethiopia (2018) ‘Proclamation No. 1076/2018: A Proclamation to Provide for the Public Private Partnership’, Clause 3.3, Addis Ababa, Ethiopia. Henceforth ‘Proclamation No. 1076/2018’ 5 Ibid., ’Introduction’ 6 Ibid., Clause 3 7 Federal Democratic Republic of Ethiopia (2018) ‘Proclamation No. 1076/2018: A Proclamation to Provide for the Public Private Partnership’, Clause 3.3, Addis Ababa, Ethiopia. Henceforth ‘Proclamation No. 1076/2018’ 8 Proclamation No. 1076/2018, Clause 2.12 9 Proclamation No. 1076/2018, Clause 4.1 10 Proclamation No. 1076/2018, Clause 5
Section 1: Ethiopian Context and Background 9 1.3. Overview of the challenges in implementing social sector PPPs PPPs have been applied in many countries to develop user fees and tuition payments. Consequently, governments projects in key economic sectors such as transportation, either need to provide domestic budget support for these telecommunications, energy and waste water management. projects, or partner with international institutions to raise the In these cases, the impetus has been the government’s search capital required to invest in social sector PPPs. for greater efficiencies and value for money in the delivery of public services. Increasingly, the PPP model has been used for Another unique challenge for PPPs in the social sectors is projects in the social sectors – such as health and education. measuring performance, which can be more difficult than in It is widely understood that the social sectors present a the economic sector, due to the complexities of establishing unique set of challenges for PPPs that distinguish them from clear benchmarks and key performance indicators. Finally, conventional PPPs in the economic sectors. whilst economic regulation is an integral part of the PPP process within the economic sector (where the public sector One key challenge of social sector PPPs is that public services focuses on supervision of the private sector operating facilities (such as health and education) disproportionately serve low- through strong regulatory frameworks), equivalent regulatory and middle-income groups. Unlike PPPs in the economic frameworks and a strong accountability system are essential in sector, the necessity of social sector PPPs to reach the most providing the appropriate regulatory oversight required for disadvantaged segments of the population imposes limitations successful PPPs in the social sectors. on the ability of PPP projects to cover all project costs with 1.4. Learning from the success of PPPs in the health sector The Ethiopian Ministry of Health (MoH) has a long Under service contracts to private for-profit organizations, documented history of using PPPs to engage non-state actors the primary aim of the MoH has been to expand access to to offer high-quality, affordable health services to all Ethiopians. HIV/AIDs, TB and malaria diagnosis and treatment services. The three main reasons the MoH has decided to partner with These contracts were piloted in 2006 under the Public- non-state sector providers are that their services: meet public Private Mix (PPM) programme and are now operating at need; improve the quality of existing services; and are more scale. As of 2017, TB treatment under the PPM programme cost-effective.11 The MoH has pursued these goals through a was being implemented in more than 200 private health number of different PPP contracts with both non-profit and facilities in five regions and two city administrations, covering for-profit organizations to deliver a range of services. 14% of TB cases nationally.13 Under this type of contract, the government provides regulatory standards, medical supplies, Under service contracts to non-profit organizations, the and training, while private providers use their space and government issues a management contract (in the majority of human resources to do service delivery.14 instances, to a faith-based organization such as the Ethiopian Catholic Church) to assume the management of a public health institution (such as a hospital or clinic). Under this type of contract, the government provides regulatory standards, medical supplies and training. Patients pay low-cost fees for clinical services, with other funds provided by external donors. There is only one known instance of government providing direct financing to a non-profit hospital, which is the St. Luke Catholic Primary Hospital and School of Nursing, which gets around one quarter of its budget from government. 12 11 Ministry of Health, Federal Democratic Republic of Ethiopia & Harvard T.H. Chan School of Public Health (2015) Strengthening Public Private Partnerships for More and Better Health Outcomes in Ethiopia: Expert Reviews and Case Studies.’ 12 Ibid 13 Ministry of Health, Federal Democratic Republic of Ethiopia (2017) Draft Public-Private Partnerships in Health: Implementation Guidelines, pp. 35-37. 14 Ministry of Health & Harvard T.H. Chan School of Public Health (2015) Strengthening Public Private Partnerships for More and Better Health Outcomes in Ethiopia. 15 Ministry of Health, Federal Democratic Republic of Ethiopia (2017) Draft Public-Private Partnerships in Health: Implementation Guidelines, pp. 39-41.
Section 1: Ethiopian Context and Background 10 Many government hospitals also have contracting partnerships Building on the different types of PPPs in the health with private for-profit institutions for the provision of specific sector, the MoH created a dedicated PPP Unit within its services. These include clinical and diagnostic services (such Partnership and Cooperation Directorate, and prior to the as advanced laboratory services) and non-clinical services PPP Proclamation had drafted its own PPP framework. The (such as patient registration). According to the MoH, these MoH has been advised to wait for broader social sector PPP ongoing PPPs have ‘contributed a great deal in terms of guidelines to be issued by the MoF. The MoE has articulated reducing cost of service provision, raising the efficiency a specific desire to learn more from the MoH’s experience and quality of service delivery, drawing on private sector with PPPs to better inform whether PPPs in Education expertise.’15 Some PPP arrangements allow private providers could be considered to meet key education sector goals, to purchase equipment to provide specialized services like understanding the opportunities and risks associated with dialysis or eye care within government hospitals. This has designing, implementing and measuring success of social provided affordable and conveniently located services for sector PPPs. patients who would otherwise be forced to travel over 500 kilometres to access these services16. The MoH is currently considering outsourcing more high-tech diagnostic and imaging services in areas where the private sector has more expert human resources, and ability to operate and maintain specialised equipment. 1.5. Overview of Ethiopia’s Education System Ethiopia’s education system has four levels: pre-primary, Between 1996 and 2015, the number of primary schools primary, secondary, higher education and technical and almost tripled. Although near universal primary education has vocational training. Pre-primary education is for children aged been achieved, expanding access to pre-primary and secondary 4 to 6 and covers 1-year, government-run ‘O’ class; 3-year education remains a government priority. Enrolment in pre- Kindergarten (where the majority of provision is non-state); primary and secondary education remains low, with 40% and Accelerated School Readiness Programmes (150 hours of 31% enrolment respectively17. In 2017/18 there were 36,366 accelerated instruction for children who have not attended ‘O’ primary schools, compared to just 3,597 secondary schools18. class) as well as Child-to-Child School Readiness programmes According to MoE data the total school-age population (engaging older children to conduct early learning activities in 2017/18 - covering pre-primary, primary and secondary with pre-school children in their home villages to support their school-aged children (aged 4-18) - was just over 36 million, successful transition into Grade 1.) General education covers with almost 27 million enrolled in school (74%).19 the twelve grades of primary and secondary school. Primary school is split into two cycles from age 7 to 10 years (Grades 1 Unfortunately, despite increased access to education, quality to 4) and from age 11 to 14 years (Grades 5 to 8). Secondary remains a significant challenge. A 2014 EGRA benchmarking education is also split into two cycles from age 15 to 16 years exercise establishing baselines for oral reading fluency in 7 (Grades 9 and 10) and from age 17 to 19 years (Grades 11 and languages at Grade 2 found ‘non-reader’ levels to be above 12). Secondary school is followed by Technical and Vocational 50% for 4 of the 7 languages.20 2012/2014 National Learning Education and Training (TVET) and Higher Education. Assessments for Grades 4, 8, 10 and 12 found that across all four grades tested, the percentage of students scoring 50% Although access has improved at all levels from pre-primary or above was very low, for example just 7.5% of students for to higher education, the increased enrolment is driven by Grade 8 and 23% for Grade 10.21 primary education, with a Gross Enrolment Ratio (GER) of over 100% and a school-age population of 19 million. 16 Harvard report - Strengthening Public Private Partnerships for More and Better Health Outcomes in Ethiopia: Expert Reviews and Case Studies. 17 Ministry of Education, Federal Democratic Republic of Ethiopia (2018) Education Statistics Annual Abstract 2010 E.C. (2017/18) First Draft. Henceforth: MOE (2018) Education Statistics Annual Abstract. Percentages here were calculated from the total number of enrolled children recorded in the Abstract, against the number of school-age children. 18 Ibid 19 Ibid 20 Ministry of Education, Federal Democratic Republic of Ethiopia & USAID (2014) Early Grade Reading Assess- ment: Report of Findings. 21 Ministry of Education, Federal Democratic Republic of Ethiopia (2015) Education Sector Development Pro- gramme V (ESDP V) 2008-2012 E.C. (2015/16-2019/20), p. 18. Henceforth: MOE (2015) ESDP V.
Section 1: Ethiopian Context and Background 11 1.6. Key priorities for the Ministry of Education Education is understood as playing an instrumental role A) Cross-cutting Priority 1: Resource in attaining national development goals, featuring in both Mobilization Growth and Transformation Plans (GTP I and GTP II)22. Achieving the visions of GTP II is understood to ‘require Commitment to improving the education system has been further expansion of access to high-quality basic, general and matched by substantial increases in the education budget. tertiary education’.23 Since 1996/7, Ethiopia has developed Public spending on education has been stable at 4.4% of five, medium-term strategic Education Sector Development GDP and 24.2% of total national expenditure in 2015/16.26 Plans (ESDPs). Each of these five-year plans has guided the Donors have played a key role in supporting Ethiopia’s national authorities and international partners in their efforts education reforms by providing aid to education, through to support the MoE’s development of the education system. effective partnerships with government. However, now The latest of these five-year plans, ESDP V, covers the period guided by ESDP V, projected costs are estimated to reach 108 from 2015-16 to 2019-2020.The MoE is also in the process of billion birr in 2019/20, leading to a total estimated financing developing an education Roadmap which takes a longer-term gap of 70 billion birr (USD $2.4 billion) over the 5-year view ‘to reform the education sector in accordance with the period covered by ESDP V.27 A more recent estimate in the national vision and national development goals.’24 At the time General Education Quality Improvement Program for Equity of writing, a draft Education Roadmap has been prepared, (GEQIP-E) documents put the financing gap at over USD containing several proposed reforms, following extensive $300 million for the period 2017-2022, after government and consultations and research spanning five performance areas: donor commitments.28 This gap demonstrates the challenge access, equity, quality, relevance and efficiency.25 the Ministry faces in delivering efficient, high-quality, equitable education to all children, using public resources. Over the past twenty years, Ethiopia has seen unprecedented To address these serious and pressing issues around resource expansion of its education system. The government’s mobilization, the MoE has commissioned a separate study, prioritisation of education has translated into a number funding by GIZ and concluding in early 2019.This study will of policies aimed at increasing access to schooling for all lay out strategies for mobilizing resources for the education Ethiopians, particularly amongst marginalised groups such sector, with an explicit focus on closing the resource gap by as girls, the rural poor and pastoral communities. Examining raising private funds. ESDP V and the draft Education Roadmap together, several cross-cutting priorities for the education sector emerge. Given that the scope of this report covers general education, this list is not inclusive of priorities that fall outside this remit. 22 Ministry of Education, Federal Democratic Republic of Ethiopia (2018) Draft Ethiopian Education Development Roadmap (2018-30): An Integrated Executive Summary, p. 3. Henceforth: MOE (2018) Draft Education Roadmap. 23 Ibid., p. 4 24 Ibid., p. 3 25 Ibid. p. 5 26 UNICEF (2017) National Education Sector Budget Brief: 2006-2016. 27 MOE (2015) ESDP V, p. 133 28 World Bank (2017) Program Appraisal Document for the General Education Quality Improvement Program for Equity, p.21. Henceforth: World Bank (2017) GEQIP-E Program Appraisal Document. GEQIP-E is the main donor vehicle for financing to the education sector, and accounts for both government and development partner funding commitments.
Section 1: Ethiopian Context and Background 12 B) Cross-cutting Priority 2: Improving Access, C) Cross-cutting Priority 3: Improving Quality Equity and Internal Efficiency Under ESDP V, improving education quality across all levels The draft Roadmap and ESDPV emphasize the government’s of general education is a key cross-cutting priority. ESDP V intent to improve access, equity and internal efficiency across recognises low levels of learning at primary and secondary pre-primary and general education. Ambitious targets for levels through the 2014 EGRA benchmarking exercise, as expanding access to pre-primary education have been set, well as the National Learning Assessments for Grades 4, 8, aiming for 80% Gross Enrolment Ratio (GER) (from 35% at 10 and 12. the beginning of ESDP V) by 2020. The key challenge faced The draft Roadmap recognises that rapid expansion to access by the Ministry of Education in meeting this ambitious target at the primary level has led to concerns regarding declining through state-run provision is the absence and inadequacy quality, as well as the importance of quality pre-primary of current facilities – a problem which is exacerbated in education as foundational to success in the primary grades. rural regions. Whilst government aims to provide 50% of all ESDP V recognises that traditionally, education quality has kindergarten provision by the end of ESDP V (2020), there been understood as counting inputs, for example – number remains a significant gap in overall provision. of teachers trained, number of schools built, and number Similarly ambitious targets for expanding access to secondary of teaching and learning materials distributed, rather than education have also been set. Current enrolment stands at a focus on the quality of learning – with a focus on the 39% in lower secondary, with just 10% enrolment in senior acquisition of foundational skills. secondary grades 11 and 12.29 Enrolment varies considerably across regions, with less than 10% overall enrolment in secondary school in Afar. In ESDP V, government is aiming for 74% GER by 2020. The key challenges faced by the government is the supply of schools, particularly in rural areas. Equity is closely linked to access in the draft Roadmap and ESDP V. ECCE provision is seen as a tool for increasing equity at the point of entry into the system. Consequently, government is focusing ECCE expansion in disadvantaged and rural areas with low education attainment. At the primary level, the priority for equity is to improve access among disadvantaged communities, such as pastoralists and girls in rural areas. For secondary, the draft Roadmap cites closing the large disparity between urban and rural enrolment as a key equity priority. The government’s focus on inefficiency wishes to address low retention and completion rates in primary education. ESDP V cites a Grade 8 completion rate of only 47% and the draft Roadmap highlights that 19% of pupils enrolled in grade 1 in 2013/14 had left school before reaching grade 2. 29 MOE (2018) Draft Education Roadmap.
Section 1: Ethiopian Context and Background 13 1.7. What the Education Sector Plan and draft Education Roadmap say about PPPs The ESDP V envisions an expanded role for the non-state The draft Roadmap foresees an expanded role for the non- sector in providing pre-primary education provision where state sector across pre-primary, primary and secondary the government is unable to do so stating that, under the sector education, specifically referencing the need to ‘diversify plan, ‘encouragement for increased private sector provision sources of funding, including significant participation of the ECCE services to communities in which low-fee options private sector; and introducing Public-Private Partnerships’ are realistic, will continue’.30 The ESDP V acknowledges that at secondary level.32 It suggests that there is a role for government must consider what incentives will be needed government to play in encouraging and supporting this for the private sector, with particular attention to factors private sector investment. At secondary, where access is a helping to ensure disadvantaged children are represented. significant issue, there is a specific call for government support ESDP V also recognises the supply gap of state-run secondary to the private sector by ‘introducing incentives systems such education, particularly in rural areas, but without explicitly as tax exemption, and provision and government subsidy for exploring the potential role for the non-state sector to expand encouraging participation of the private sector to invest in access to those unable to access government provision.Whilst secondary education.’33 It is suggested that ‘if the government the ESDP V makes reference to ‘developing a framework that supports the private sector by providing inputs (textbooks, enables public and private institutions to establish mutual land free from lease etc), the fees they demand from the partnerships’31 this is in specific reference to partnerships students can be lower and the government will have the between Technical and Vocational Education and Training leverage to control fee raises.’34 (TVET), Higher Education Institutions and private sector industry. 30 MOE (2018) Draft Education Roadmap. 31 MOE (2015) ESDP V, p. 77 32 MOE (2015) ESDP V, p. 103 33 MOE (2018) Draft Education Roadmap., p. 23 34 Ibid., p. 34
Section 2: The Purpose of PPPs in Education 14 Section 2: The Purpose of PPPs in Education 2.1. What is a PPP in education? In both developed and developing country contexts, PPPs in education usually refer to long-term contractual mechanisms by which the government commissions and funds the non-state sector to deliver elements of the education system, including the operation of schools. Some examples of typical internationally-accepted types of PPP include: contract management, subsidies, vouchers and contracting services, although depending on the environment, other definitions of PPPs in education also exist. 2.2. Can the MoE establish their own definition of PPPs in education? It is important to acknowledge that PPPs are highly a way to leveraging private finance or in-kind support from contextualised and context-specific. In this regard, it is private companies for the government education sector – such important that PPPs are explored and defined within the as corporate donations from private companies, an education situation in which they are being considered, allowing tax or regional development associations building schools. government to tailor their own definition and understanding Further research and scoping into the potential to leverage of what a PPP means in their context.Any PPP in education in private finance for the education sector in Ethiopia will be Ethiopia would have to be reviewed and considered in light of published with support from GIZ in early 2019. This report the regional and national context, ensuring a broad definition complements but is distinct from that work, and explores the of PPP to meet the key priorities of the Ministry of Education. potential of PPPs to meet the MoE’s goals and priorities. As a starting point, the PPP Proclamation mentioned above Whatever the type of PPP, it is important that legal frameworks provides a definition of PPPs as a private party performing bring the public and non-state sectors together to complement a public service in return for compensation, either from the each other’s strengths in the financing and provision of contracting authority (government) or from charging fees services. Effective PPPs should allow the government to to service users.35 Although this definition has not yet been maintain strategic, financial and regulatory control over applied to the social sectors, it provides a foundation for the education, but permit them to step back from the day-to-day MoE to draft a definition of PPPs that makes sense for the delivery or management of services, in situations where their sector. In addition to the typical internationally-accepted resources or expertise are limited. The contractual nature of examples of PPPs listed above, the MoE is interested in the relationship allows for both sectors to share risk and tends exploring other forms of partnership between non-state and to specify performance targets and sanctions for non- or poor government schools. performance. The MoE is particularly interested in exploring PPPs that For the purposes of this report, the ‘non-state sector’ refers to facilitate the transfer of knowledge and expertise from any non-governmental organisation or company, for-profit or the non-state sector, specifically in areas such as school not-for-profit. management. This might be through best-practice networks, working groups, or advisory committees, to name a few options. Additionally, the MoE is keen to consider PPPs as 35 Proclamation No. 1076/2018, Clause 2.12
Section 2: The Purpose of PPPs in Education 15 2.3. What are the most common types of PPP in education and how might they help achieve key sector priorities? There are a range of different PPP models that can be designed to meet the key objectives of the MoE. In this section, we focus on explaining the four most common PPP models in education, followed by a brief exploration of how PPPs may be used to pursue key sector objectives such as improving access, equity and quality. Annex E offers a table explaining the government and the non-state sector’s respective roles in each of these 4 types of PPPs. The four most common types of PPP in education are: PPP Type Description Contract Management Governments fund non-state organisations (for- or non-profit) to manage government schools while holding them accountable for learning outcomes Subsidies Government partially or fully funds student places in non-government schools Vouchers Government provides parents with a “voucher” per child worth a certain amount of money which they can spend at any non-government school Contracting Services Government contracts non-state providers for specific services, like ICT or teacher training PPPs have been used by Ministries of Education around the Finally, PPPs have the potential to improve quality in failing world as means of pursuing fundamental education goals, or underperforming government schools. This may be the such as improving quality, access, and equity. PPPs may case where non-state organisations have strong management be used to increase access, for example, by incentivizing capacity or expertise, and if they are given freedom to manage non-state schools to educate additional students through schools to achieve higher learning outcomes. government funding. This means government doesn’t have to build new schools, but instead pays for children to attend Annex D explores how PPPs might theoretically help meet existing schools, or helps new non-sate providers enter the the MoE’s specific education goals. It takes a sample of market and open schools. This is potentially cost-effective the key challenges outlined in the draft Education Roadmap for government since it reduces school building costs and and describes the potential ways in which the government the cost to educate a student may also be lower in non-state might make use of the non-state sector to respond to those schools than government schools (if they use resources more challenges. efficiently). This only works if there is an adequate supply of places in non-state schools to meet government’s needs. PPPs have the potential to increase equity if they are targeted to disadvantaged students. PPP schools can be run in communities that the government wants to help, or government-funded places in non-state schools can be reserved for students of a specific background. All PPPs can also protect equity if PPP schools use fair ways to select students. For example, PPP schools usually are not allowed to select students by using entrance exams – the current practice in most existing non-government schools - since this denies access to low-performing students. PPP schools are also often not allowed to charge school fees, or if they are, they must be ‘low-cost’, which makes them more accessible for poorer students.
Section 2: The Purpose of PPPs in Education 16 2.4. What are the arguments for and against PPPs in education? Proponents argue that PPPs can combine the theoretical Opponents of PPPs, on the other hand, argue that as profit benefits offered by the non-state sector, combined with becomes a motive for the provision of education, PPPs may government financing, in a manner that improves choice, result in providers avoiding the ‘non profitable’ students, innovation and efficiency. They highlight the following key particularly those who are most disadvantaged and served arguments to promote such arrangements: firstly, that non- only by government schools. This can lead to the non-state state organizations offer a potential flexibility that means they sector enrolling more capable students, which can exacerbate are able to customise their services more specifically to the existing inequalities in education access and quality. In target population being served. For example, government addition, opponents argue that PPP arrangements can be schools typically have less autonomy in the recruitment and subject to cost-cutting measures that can undermine the effective management of teachers compared to the non- quality of education provided. For example, if PPP providers state sector. Secondly, PPP proponents argue that non-state are not held to account against specific criteria, they may entities can operate in a more efficient manner than their allocate sub-optimal resources, particularly with regards to government counterparts.Thirdly, certain types of PPPs offer resources aimed at improving student achievement. Where the government and the non-state sector the ability to share PPP arrangements include schools that follow a foreign risk, which is likely to encourage non-state providers who curriculum (rather than the national curriculum) critics may otherwise be reluctant to bear the full financial burden argue that non-state providers’ curriculums do not necessarily (or other risks) of operating schools. For the government, reflect the social goals of education. There is also the risk this means that partnering with existing non-state schools that such PPP arrangements can create opportunities for may be a more cost-effective way of increasing access than corruption, particularly if sufficient accountability structures building new schools and hiring more teachers. Finally, are not in place. PPP proponents argue that entry of non-state schools into the education sector can stimulate competition between PPPs are by no means ‘silver bullets’ for solving the complex government and non-state schools, with the threat of losing challenges facing many educations systems around the world. students acting as an incentive for them to provide services They are public policies that are complicated to design offering high quality and value for money. and implement, require the coordination and shared vision of multiple stakeholders, and rely on routine and reliable monitoring by the government. And yet, despite these challenges, many governments around the world continue to be interested in understanding how they might be deployed to strengthen the public sector delivery of education.
Section 2: The Purpose of PPPs in Education 17 2.5. What does the evidence say about PPPs in education? In recent years, Ministries of Education around the world have experimented with different types of PPPs. However, the evidence on the impact of PPPs is largely lacking – particularly for developing country contexts – but even in countries where PPPs have existed for several years or are being widely adopted.36 What is clear is that high levels of accountability of schools to government are necessary to ensure quality whatever the type of PPP, and additional research is urgently required. The table below summarises the evidence from developing countries on three main types of PPPs in education. PPPs highlighted in blue in the “Examples” column are included as in-depth case studies in Annex B, and offer potential lessons or key considerations for the Ethiopian context. Type Evidence Examples Contract • Evidence from developing countries is very Developing Countries: management limited and experiments with contract • Collaboration Schools, Western Cape management PPPs have been small scale. South Africa • Evidence is mixed but tentatively suggests • Partnership Schools Liberia that some contract management PPPs • Bogota Concession Schools can have a positive impact on: student learning, increasing enrolment and better Developed countries: school management practices, with a strong • UK Academies accountability framework. • US Charter Schools Subsidies • Several examples of developing countries • Uganda Secondary Subsidy PPP experimenting with subsidy schemes, some at • Côte d’Ivoire Secondary School Subsidies large scale. • Foundation Assisted Schools, Punjab, Pakistan • Some limited evidence from developing • Promoting Low-Cost Private Schooling in countries that subsidy schemes can improve Rural Sindh, Pakistan access to schooling and may improve student learning outcomes. Vouchers • Voucher schemes have been tested at scale in • Andhra Pradesh School Choice Project, some developing countries. India • Larger amount of better-quality evidence • Education Voucher Scheme, Punjab, Pakistan available from developing countries than other • Chilean universal voucher programme PPP models but results are mixed. • Some indications that voucher schemes can have small positive impacts on student test scores, but these are balanced with concerns about the potential of vouchers to increase inequality, if the better or more motivated students use vouchers to go to non-government schools, while the worse or less-motivated students stay behind in worsening government schools. 36 Patrinos, H.A., Barrera-Osorio, F. & Guaqueta, J. (2009) The Role and Impact of Public-Private Partnerships in Education, Washington, DC; LaRoque, N. (2008) Literature Review: Public-Private Partnerships in Basic Education: An International Review; and Aslam, M., Rawal, S., & Saeed, S. (2017) Public-Private Partnerships in Education in Develop- ing Countries: A Rigorous Review of the Evidence. Education Partnerships Group.
Section 2: The Purpose of PPPs in Education 18 2.6. What enabling conditions are required for successful PPPs in education Based on the limited available evidence and close examination of a number of case studies from PPPs implemented globally, it has become increasingly clear that in order for a PPP to succeed, the right enabling environment has to be created, taking into consideration the country context. Conditions for a successful education PPP Shared target outcome PPPs are complex policies to implement. It is essential that there is shared understanding of the aims and intended outcomes of the PPP across the Ministry, and between government and non-state sector. Persistent government champions Champions at all levels of government that share the vision and support the implementation and management of the PPP. Clear policy and implementation Strong governance and oversight of PPPs, including clear roles and framework responsibilities of key stakeholders and delegated authorities, that facilitates implementation and performance management. Stable and transparent public In order to incentivize engagement from the non-state sector, there must be financing a sustained financial commitment from government, conditional on provider performance. Strong non-state education sector A pool of high quality, non-state, education providers must already exist, or an attractive operating environment created to bring them forward. Good data Data must be high quality and regularly collected in order to accurately monitor progress and performance. Underscoring all these enabling conditions is the most In the case of PPPs, accountability is important to make sure important foundation of all: a strong accountability the government gets what it expects from the arrangement. framework. To achieve its goals, the government needs to In return for funding, government lays out standards and know how well all schools are performing and in order to do expectations for recipients of public financing. School that, the government must have clear standards for schools, performance is judged against these standards and there are processes to monitor and understand if schools are meeting consequences for failing to meet them. those standards, and a way to respond if schools are not meeting the standards. Establishing a strong accountability system can lead to improvements in both government and non-government schools alike.
Section 2: The Purpose of PPPs in Education 19 A) When are PPPs cost-effective? C) Leveraging International Financing The main way that PPPs can save the government money is if PPPs have the potential to attract additional funding. the non-state sector can provide a service at a lower price, or Internationally, a number of education PPPs do not simply at a higher quality for the same price, than government can involve the government and non-state sector but include achieve by itself. Assume, for example, that the government a third supporting partner in the form of global donors wants to procure and use more ICT equipment in classrooms. (whether an NGO, foundation, bilateral aid agency, or The private sector may have special logistical and technical multilateral development bank). Many global donors hold a expertise to both deliver the ICT equipment to schools and belief that closer relationships between the public and private train government teachers how to use it more efficiently – at sectors are necessary to reach some development aims. This lower cost - than government can do alone. To take another belief can lead donors to fund government investments in example, assume government wants to increase access and PPPs. provide a rural student a place in school. If there is an existing non-state school nearby, it may cost the government The possibility for PPPs to leverage international funding less to pay the non-state school to educate that student than is demonstrated through a number of examples. USAID to build an entirely new government school. Finally, if the has a specific platform for funding PPPs called the Global government wants to raise scores on the National Learning Development Alliance, which had supported over 1,600 Assessment by 10 percentage points at a low performing PPPs across multiple sectors as of 2016.37 A recent assessment school, the non-state sector may be able to offer new ideas, by the Asian Development Bank found that nearly 40% innovative school leadership, and flexible school management of its education programs could be categorized as PPPs.38 that allow it to raise student learning outcomes at a lower A particular example comes from Ghana. Because PPPs cost than government. In all three examples, the cost of the directly address the World Bank’s education goals for non-state sector achieving the goal must be compared to the increasing learning and school accountability, it has indicated cost of the government achieving the goal alone. Spending an interest in funding the Ghana Partnership Schools Pilot money on a PPP should not be compared to spending no Programme, a new contract management PPP that will money at all. transfer management of low-performing schools to the non- state sector. The government has requested over $3 million B) Cost sharing in PPPs from the World Bank for the pilot over the next three years. We explore two possible kinds of cost sharing and the Annex B offers a relevant case study from Tanzania. It consequences of each below. describes an innovative pre-primary PPP which combines in-kind contributions from the government, in-kind • Cost sharing with families: If PPP schools are allowed contributions from communities (the non-state actors in this to charge fees, therefore sharing the cost of the school example), and donor financing from UK Aid. with students’ families, then this greatly reduces equity. Only students who can afford the fee will be able to go to the school. • Cost sharing with non-state schools: If the PPP school must pay for some of its costs, and the school is not allowed to charge student fees, then fewer non-state schools will participate in the PPP. This kind of PPP may still attract some non-profit schools with their own external funding (i.e. Catholic schools or NGO schools) but will stop many for-profit providers from joining the PPP. If PPP schools are not adequately funded by the government, they are sometimes also allowed to raise extra money through private fundraising. This will also reduce the size and sustainability of the PPP. PPP schools will only operate in places with private fundraising (reducing size) and may close or lose quality if the private funding ends (reducing sustainability). 37 USAID (2016) Global Development Alliances: Achieving Goals by Working Together, https://www.usaid.gov/ sites/default/files/documents/15396/2016-10-11%20GDA%20Private%20Sector_Branded_final.pdf 38 Gustafsson-Wright, E., Smith, K., & Gardiner, S. (2017) Public-Private Partnerships in Early Childhood Develop- ment: The Role of Publicly Funded Private Provision, Working Paper, Center for Universal Education, Brookings.
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