Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report

 
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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.
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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.
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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.
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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.
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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.
Education Public Private Partnerships in Ethiopia: Scoping and Feasibility Report
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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