Education Sector Development Program - VLIR-UOS

Education Sector Development Program IV
Financing of ESDP IV
Government budget and financing gap
Projected costs for ESDP IV are estimated to
increase significantly, from an annual 22 billion
in 2010/11 to 29 billion in 2014/15. The costs will
be covered by domestic and external financing
sources. Government, through Federal and
Regional budgets is expected to be the main
source of funding.
Table 5.7 Estimated financing gap for ESDP IV (in
million Birr)
Projecting government budgets forward (see
Annex 1 for assumptions), the government
education budget is around 18 billion birr in
2010/11, climbing to nearly 27 billion by 2014/15.
The difference with the projected costs leads to
a financing gap. Table 5.7 presents the indicative
financing plan, with a financing gap for each of
the five years of ESDP IV, totaling nearly 30 billion
birr.
2010/11 2011/12 2012/13 2013/14 2014/15 Total
a. Estimated Education budget 18 286 19 748 21 802 24 113 26 742 110 691
b. Projected costs 20 547 28 230 28 638 31 794 31 418 140 627
Gap (a-b) -2 261 -8 482 -6 836 -7 681 -4 676 -29 936
The decrease in the gap in the final year of the
program is due to the expansion in the available
budget, the expected strong economic growth (at
nearly 11% in 2014/15), and a slight decrease in
program costs.
Table 5.8 examines the financing gap to be
expected for primary education, assuming
that the share of primary education within the
regional education budget will remain at the
three-year average of 62.5%. It is projected that
there will be an annual gap of 2-4.5 billion birr.
It is more difficult to make similar projections
for other levels of education where there is less
clarity about expected spending patterns.
Table 5.8 Estimated financing gap for ESDP IV for
primary education (in million Birr) 5
2010/11 2011/12 2012/13 2013/14 2014/15 Total
a. Estimated Primary
Education budget
6 582 7 267 8 037 8 913 9 884 40 683
b. Projected Primary
Education costs
9 122 12 534 12 715 14 117 13 950 62 438
Gap (a-b) -2 540 -5 267 -4 678 -5 204 -4 066 -21 755
The financing gap is estimated on the basis of the
assumptions, identified above, on the shares of
education in the budget. It therefore can be filled
by an increase in the share of education in the
national budget and/or an increase in support
from development partners. From 1996-2000,
education represented an average of 19.8% of
the National Budget. As, the FTI recommended
benchmark is 20%, it would seem that there is
limited scope to further increase the national
budget devoted to education. However, with
GEQIP becoming effective in 2009/10 and to last
for the entire life of ESDPIV, on-budget resources
for education are expected to increase.
5 The costs for primary education in this table are higher
than those in table 5.3, as they include administrative costs
and some teacher training, which in Table 5.3 were included
under other categories.
Additional financing
Donor Financing
Total donor financing to education is currently
(2009/10) estimated at around $340m:
❚
❚
Education’s national share of the
Protection of Basic Services (PBS)
scheme - $167m
On-budget support to the education
sector (e.g. GEQIP) – approx. $100m
❚ Off-budget support to the education
sector – approx. $73m
As off-budget support may not be in line with
government priorities, it is estimated that
currently the current donor contribution to ESDP
is around $310m.
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