Primary education (46%); Secondary education (26%); Public administration- Education (16%); Tertiary education (12%) Project ID

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Project Name PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB5401 General Education Quality Improvement Program (GEQIP) - EFA FTI CF Grant 2 Region AFRICA Sector Primary education (46%); Secondary education (26%); Public administration- Education (16%); Tertiary education (12%) Project ID P Borrower(s) FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA Implementing Agency Ministry of Finance and Economic Development P. O. Box 1905 Ethiopia Tel: Fax: Ministry of Education P. O. Box 1367 Ethiopia Ethiopia Tel: Fax: Environment Category [ ] A [ ] B [X] C [ ] FI [ ] TBD (to be determined) Date PID Prepared February 16, 2010 Date of Appraisal February 18, 2010 Authorization Date of Board Approval May 14, Country and Sector Background Country Background. Ethiopia is the second most populous country in Africa (estimated around 80 million, of which approximately 12 million are pastoralists and 80 percent of the population live in rural areas), and has a decentralized government structure. Despite recent growth and an abundance of natural resources, it is one of the poorest countries in the world with per capita income of less than US$180 in 2007 and 39 percent of the population estimated to live below the poverty line in 2004/05. 1 Ethiopia is ranked 169 out of 177 countries on the United Nations Development Program s Human Development Index. Education Sector In Ethiopia, general education comprises grades 1 to 12. The provision of education is the concurrent responsibility of federal, regional and local (e.g., woreda) governments. The Federal Government plays the dominant role in the provision of postsecondary education, while also setting standards and providing overall policy guidance and monitoring and evaluation for the entire sector. Regional governments are responsible for the oversight of the training of primary school teachers, for providing primary textbooks and for adapting the primary syllabus to local conditions. Woredas are responsible for paying and recruiting primary and secondary teachers, and for supervision and training of primary and 1 The Ministry of Finance and Economic Development (MOFED) (2006). The Plan for Accelerated and Sustained Development to End Poverty (PASDEP) ( ).

2 secondary teachers. The recent expansion of the education system has left a considerable financing gap between available funds and the anticipated cost of investments needed to improve and maintain quality. the GoE is committed to continued expansion of funding for decentralized service delivery. The medium term expenditure framework commits the government to increasing spending for regional and woreda budgets by around US$400 million between 2008/09 and 2010/11. However, demands on the budget will continue to be driven by expansion in student population, particularly at secondary level, which will require more teachers being employed. The General Education Quality Improvement Program (GEQIP) is a national program supported by multiple donors that aims to improve the quality of general education in Ethiopia through the provision of a set of key inputs/interventions. It is implemented both at the federal level through the Ministry of Education (MOE) and in the 9 regions and 2 city administrations, which are responsible for management and financing of primary and secondary education. GEQIP is expected to be implemented in two phases over a period of eight years through an International Development (IDA) financed Adaptable Program Loan (APL). Phase 1 covers , is currently underway and is focusing on setting standards and foundations for quality improvement reforms. Phase 2, if approved, will have a duration of four years ( ) and will scale up the program to have full coverage and scope. It will also consolidate and complete reforms for quality improvement in general education based on the lessons learned under the first phase. The first phase of the GEQIP is financed through a pooled funding arrangement with the following contributions: IDA, in the form of a credit (US$50 million); FTI CF Grant (US$70 million); a Bank-administered Multi-Donor Trust Fund (MDTF) (US$137 million) 2 and the Government of Ethiopia (GOE) (approximately US$84 million). In addition to these funds, the anticipated second CF Grant in the amount of US$98 million has also been incorporated into the cost and financing plan. The Bank s PAD for the GEQIP is regarded as a key reference document not only for the Bank s APL Phase 1 financing, but also for the program as a whole, including the FTI CF Grant and the pooled funding mechanism. 2. Objectives The GEQIP is a national program that aims to improve the quality of general education in Ethiopia through the provision of a set of key inputs/interventions. 3. Background for Additional Financing for FTI CF grant of US$ 98 million In December 2007, the Government of Ethiopia (GOE) applied for an EFA FTI CF Grant in the amount of US$168 million (see Schedule E). The CF Committee approved an allocation of US$70 million. The FTI Secretariat, in a letter dated May 22, 2008 clarified the Committee s decision, stating that in addition to approving the first allocation, it was also agreed that the Country could come back to the Committee within [3 years] for a higher allocation if fully 2 Currently, four development partners (Finland, Italy, the Netherlands, and the United Kingdom) are contributing to the Multi-Donor Trust Fund.

3 documented and justified. At a minimum, the request for additional allocations should include: (i) an implementation progress report on the initial allocation; (ii) clarification on the grant implementation modality and absorptive capacity, and (iii) a more coherent evaluation of program costs in line with project results and targets. During the preparation of the GEQIP, the Government planned to submit the subsequent application for the second FTI CF Grant since the funds are needed during the first phase of the GEQIP. The anticipated US$98 million were therefore included in the Government s financing plan, as well as the GEQIP PAD, which incorporated the relevant activities into the program description, implementation plans, and project financing. Both the IDA Credit and the CF Grant became effective on June 10, 2009 following the completion of the conditions of effectiveness for the IDA Credit. Since then, a portion of the funds have been transferred and the Government put in place the necessary coordination mechanisms. Key staff have been recruited and activities laying the foundation of the project, including workshops on implementation, procurement, financial management, and monitoring and evaluation have been carried out. Similarly, the Government has also moved on carrying out the various components of the program based on the agreed annual work plans. The first Annual Review Meeting (ARM) was held in December 2009 with all development partners and federal and regional government representatives and confirmed that the achievement of the GEQIP development objective is satisfactory and overall implementation progress is moderately satisfactory mainly due to initial delays in implementation. In order to reduce the current funding gap, and based on the achievements made thus far in project implementation, the Government and the Local Donor Group (LDG) have been in discussions with the FTI Secretariat and are requesting the additional allocation in the spring of 2010 to finance the implementation of the GEQIP. As such, the LDG has endorsed the FTI CF grant application based on the description, activities, and rationale outlined in this Project Paper (see Schedule D Local Donor Group Endorsement Letter). 3. Status of Project Components The first joint annual review of the implementation status of the GEQIP was held December 14-16, 2009, with development partners and federal and regional government representatives. This involved a comprehensive review of the Program, with an Annual Progress Report confirming that achievement of the development objective and overall implementation progress are rated satisfactory and moderately satisfactory respectively - the latter rating due to initial delays in meeting the conditions of effectiveness of the Credit. In addition, a recent review of the Project s Results Framework and Annual Work Plans showed good implementation progress towards the initially agreed targets. Some of the results shown to date, based on the MoE progress report of February, 2010, are highlighted in the components below: Component 1: Curriculum, Textbooks, and Assessment. A National Curriculum Framework has been approved by the MOE. To date, the Government has awarded the contract for the first two textbook procurement packages in the amount of approximately US$19.0 million. In February, international bids will be opened for textbook contracts

4 estimated at US$62.1 million. In addition, the Bank is reviewing the Bid Evaluation Report for a subsequent contract in the amount of US$6.4 million. Bidding documents are under preparation for the final packages of textbooks worth about US$41.5 million. Component 2: Teacher Development Program: During the first six months of 2009 (and while preparations were underway to meet the conditions of effectiveness) Teacher Education Institutions (TEIs) and MOE prepared and implemented the pre-service and inservice teacher training programs based on the agreed work plans using funds from the initial allocation for TDP1, funded by bilateral partners. Results so far include: more than 21,000 primary teachers are currently being upgraded from certificate to diploma level; and all student teachers (18,000 diploma and 15,000 degree level students) were provided with supervised teaching experience in schools. In addition, over 13,000 new primary school teachers were selected and recruited through the new teachers selection guidelines and a Continuous Professional Development framework and toolkit have been developed and shared with about 4,000 teaching professionals in workshops. Component 3: School Improvement Program: Under this component, over 100,000 education professionals participated in a nation-wide training program for the implementation of the School Grant Guidelines to be used under the Program. Additionally, about US$24 million in school grants have been distributed to more than 30,000 primary schools, ABEs, and secondary schools across the country, following the implementation of the training program Component 4: Management and Administration: During the past six months, the MOE has focused on (i) the preparatory work for the selection of key consultants; (ii) the preparation of the bid documents for the procurement of both information technology (IT) and education management information systems (EMIS) equipment; and (iii) the preparation of the Educational Statistical Abstract for 2010, including the implementation of a nation-wide training program for the annual school questionnaire implementation. Additionally, to offset the lack of capacity among some administrators in management positions who are primarily subject specialists, GEQIP has enabled the training of almost 4,000 primary school principals and supervisors in management and planning. Component 5: Program Coordination, Monitoring, and Evaluation: The Government carried out a series of capacity development activities following the approval of the Project in December Despite the loss of many of the trained staff as a result of the restructuring of the MOE in July 2009, the MOE has re-launched capacity development activities at the national and regional levels to train new staff in program implementation, procurement, financial management and monitoring and evaluation. These activities are likely to be intensified during the coming months to improve implementation performance. 4. Rationale for the Second CF Grant Schedule A, which shows the program costs vis-à-vis committed funding thus fare highlights the message that the availability of resources, particularly for the textbook program is critical, as the implementation is being accelerated for completion in Therefore, the allocation from the second FTI CF will also support strengthening the capacity of the

5 curriculum and textbook units as well as the advancement of a national textbook policy. Moreover, the anticipated funds will also be used to fill gaps in the school grants subcomponent to ensure that GEQIP investments are complemented by an improved learning environment 5. Most of the proposed additional financing of US$98 million would support the expected funding gap for the procurement of textbooks and teacher guides. It is expected that procurement and delivery of 37.3 million books totaling US$58.1 million will be completed in An additional 22.4 million books totaling US$34.9 million are expected in 2011, and the remaining 21.9 million books at US$34.0 million by In addition, A rapid assessment of the implementation of the school grant program is underway and a draft report was shared in early February. The training has been conducted across the country and all schools have already received the first round of funding. 6. Financing Confirmed Sources of Funds to date (US$ million) Source Phase 1 of APL 08/09 09/10 10/11 11/12 12/13 Total Pooled Partners 1 IDA FTI CF (1) FTI CF (2) n.a. Finland 3 [ 14.9 total] Italy UK (DfID) [ 43,600 total] Netherlands Total Pool Partners Federal Government Regional Government Total Government Allocation Total confirmed GEQIP Budget Funding gap (without the second CF Grant) Implementation Arrangements The partnership arrangements would remain the same under the proposed CF additional financing as summarized in the PAD. In addition to harmonizing donor and Government efforts, the GEQIP is also effectively using the Government s existing financial management and procurement procedures to the extent possible. Similarly, the GEQIP is using a harmonized Results Framework for the Program as a whole, which will further facilitate alignment with existing systems while minimizing transaction costs. 3 Finland s contribution of 14.9 is based on the following: 3.4 contributed in 08/09 at exchange rate of 1.36 (10/15/08) ; and 11.5 contributed towards remaining years at exchange rate of 1.37 (02/10/2010)

6 The implementation arrangements under the additional financing will be the same as those for the ongoing Project. The GEQIP is implemented at the federal, regional and woreda levels as well as at participating public universities and teacher training institutions responsible for preservice and in-service teacher development programs. Activities are coordinated by the MOE with the regional and woreda governments, as well as participating institutions. At the federal level, the Planning and Policy Analysis Department 4 of the MOE continues to coordinate the implementation of the GEQIP with inputs from Financial management and disbursement arrangements of the additional financing would remain the same as described in the original PAD. There are currently no outstanding financial reports expected from the project, although the audit report for the Project Preparation Facility is expected by February 25, Funds flow and banking arrangements will continue to follow the regular government system and government rules, using the government Chart of Accounts and accounting system. Procurement arrangements also remain the same as they are currently detailed under GEQIP. A team of both national and international consultants have been recruited to address the general lack of capacity within the existing Government institutions. 5 Using the guidelines set up in the Project Implementation Manual, Procurement Plans have been prepared and updated by the Government, incorporating activities of the project as a whole (including the anticipated second CF Grant). A procurement consultant was recruited for the start up period and supported the Government in establishing the foundation for procurement procedures at the federal, regional, and woreda levels. Monitoring and Evaluation arrangements remain the same for the project. The MoE will continue to update data and facilitate accurate reporting on the key progress indicators identified in the Results Framework. Most of the data for monitoring project outcomes will still come from the Education Management Information System (EMIS) or regular project reports, supplemented by project preparatory studies and a baseline survey. 8. Safeguard Policies (including public consultation) The environmental classification of the ongoing project remains a Category C, indicating that there are no environmental issues raised by the project. No funds will be used for construction or for other activities that may have an environmental impact. Safeguard policies of the ongoing project remain the same. There are no safeguard issues that will be raised by the project. Resources will be used in existing schools and administrative offices and will be allocated on the basis of equity and implementation capacity and performance. 9. Contact point Contact: Halil Dundar Title: Sr Education Econ. 4 This Department is re-named as EMIS, Planning, and Resources Mobilization Process as a result of the reorganization of the MOE in July The MOE recruited an international procurement consultant, (a condition of effectiveness), but the consultant left the project after 3 months due to health reasons. The MOE is now in the process of recruiting a new procurement consultant.

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