Financing for equity in primary and secondary education
1. Education resources to subnational governments
2. Education resources to schools
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
In Ethiopia, the education sector operates within a decentralised system of government, encompassing both governance and financing. The Federal Ministry of Education (MoE) is responsible for formulating policy and establishing guidelines, while regional governments oversee service delivery.
Mandates for primary and secondary education are distributed across the MoE, Regional Education Bureaus (REBs), and Woreda Education Offices (WEOs). The MoE develops and executes sector development programmes and sets national education standards. REBs administer and implement general education within their regions. WEOs manage primary education, including teacher recruitment and budget allocation.
Regional governments exercise substantial control over spending and hiring; however, they remain reliant on the federal government for major policy decisions and significant portions of funding. Funding is channelled from the federal level to REBs, which in turn allocate resources to WEOs. WEOs are fully dependent on the REB budgets for operational costs and service delivery. See here for an example of the regional funding flow once allocated from the central government.
A reform of education spending is underway to shift resources from tertiary to general education, expand pre-primary provision, and strengthen targeted investments. Universities will gain greater autonomy and reduced reliance on government budgets, while new financing mechanisms, including community contributions, an education tax, and user fees for those able to pay, aim to sustain quality education and promote equity.
1. Education resources to subnational governments
Since 1991, public financing in Ethiopia has followed the principles of fiscal federalism. The federal government allocates grants to subnational governments to support the provision of basic social services, including education. These grants are transferred through the House of Federation, based on a formula that considers population, metrics of need, revenue-raising capacity, infrastructure development, and expenditure assessments for basic services. Regional governments determine how much of their budget is allocated to education, how much is retained at the regional level, and how much is transferred to woredas as block grants, without federal interference. Woreda administrative councils are responsible for allocating school budgets using both block grants and their own resources.
Regions also receive additional earmarked block grants, known as ‘pro-poor grants’, for capital expenditures in selected sectors, including education, water, sanitation, health, transportation, and agriculture. As a result, the share of public resources dedicated to education and the balance between capital and recurrent expenditures varies across regions.
The block grant formula includes eight expenditure categories, with education as a key sector. Recurrent education expenditure is calculated using the size of the school-age population and the number of languages used as the medium of instruction. Capital expenditure needs are estimated based on student-class ratios, the number of out-of-school children, and population density. Regions with larger numbers of out-of-school children receive higher allocations to support classroom construction and enrolment.
The House of Federation periodically revises the grant allocation formula. Since 1995, the formula has undergone eight revisions. While the variables varied until 2007, revenue-raising capacity and expenditure needs have been the main factors determining grant shares. In 2017, the formula was revised to reflect changes in population, development levels, revenue collection, employment, and poverty across regions, although some concerns raised by regional governments, such as variation in public service quality and efficiency, remain unaddressed.
2. Education resources to schools
School Grants and Block Grants
The main sources of school funding are general-purpose block grants, launched in 2002, and school grants, introduced under the donor-funded General Education Quality Improvement Project (GEQIP) in 2009. Both types of grants are distributed to all public primary and secondary schools, as well as alternative basic education centres. Block grants flow from the federal government to regions, woreda administrative councils, and then to schools. They are allocated based on student population, number of teachers, and class size, with the aim of covering salaries and school running costs. School grants follow a similar flow but are allocated based on student enrolment, with additional top-ups for schools with fewer than 200 students, typically in rural and disadvantaged areas, and for schools serving children with special educational needs. The grants support non-salary recurrent expenditure to improve the quality of education. Under GEQIP-E, additional school grants are provided to schools in emerging regions, based on the enrolment of girls in primary education.
The federal government primarily covers school capital expenses, including the construction of schools in conflict-affected areas and the rebuilding of schools destroyed in northern Ethiopia in 2022/23. Regional governments allocate general-purpose block grants for recurrent spending according to their own priorities, without interference from the federal government. In response to conflict-related damage, regional governments are responsible for repairing and reopening partially damaged schools, while the Federal Ministry of Education manages the rebuilding of schools that have been destroyed.
General Education Quality Improvement Programme for Equity (GEQIP-E)
The World Bank’s Ethiopia General Education Quality Improvement Programme for Equity (GEQIP-E), implemented by the Federal Ministry of Education from 2017 to 2025, is the third phase of GEQIP, launched in 2009 to support national education policy and the Education Sector Development Programs. Largely financed through an IDA grant, a multi-donor trust fund, and additional 2021 funding from the Global Partnership for Education and Denmark, with some government contributions, the programme has provided school grants, improved girls-to-boys ratios in Grade 8 in Afar, Somali, and Benishangul-Gumuz, strengthened inclusive resource centres for students with special needs, constructed classrooms in conflict-affected areas, supported emerging regions and pastoralist communities, and advanced refugee education through learning materials, grants, teacher training, and the integration of six refugee secondary schools into the national system.
Alternative Education in Pastoral and Semi-Pastoral Areas
Alternative education in pastoral and semi-pastoral areas has been prioritised in all of Ethiopia’s Education Sector Development Programmesv since the first programme in 1997/98–2001/02. A Pastoralist Education Strategy was developed in 2008 and revised in 2016. The 2020/21–2024/25 Education Sector Development Programme (ESDP) VI includes two relevant components under separately financed programmes. The first, under Programme 4: Access to general education, equity and internal efficiency, focuses on special support to pastoral and semi-pastoral areas, promoting alternative education modalities for out-of-school and hard-to-reach children, providing school improvement grants, and targeting pastoralist areas in Afar, Somali, Gambella, Benishangul-Gumuz, and selected areas in SNNP and Oromia with relatively low levels of development. The second component, under Programme 5: Youth and adult non-formal education, addresses alternative basic education for out-of-school children and is financed separately, although only the total programme costs are provided, without separate financing details for each component.
Regional Equity Initiatives
At the regional level, education bureaus implement measures to promote equity. In Oromia, resources are allocated to narrow the gender gap across all education levels and to expand access in rural areas. In Amhara, special needs education accounted for less than 1% of education expenditure by level in 2021, while 73% of the regional allocation was directed towards promoting universal access to primary education through interventions targeting gender and urban-rural disparities. In Afar, a region with one of the lowest school enrolment rates in the country, the government prioritises education development in pastoral areas, including the launch of Alternative Basic Education in 2006 to increase enrolment and make education more accessible to the specific needs and constraints of the pastoralist way of life.
3. Education resources to students and families
Scholarships for Girls and Hard-to-Reach Children
Education Sector Development Programmes (ESDPs), led by the Federal Ministry of Education, include objectives for providing scholarships to girls and hard-to-reach children. The 2020/21–2024/25 ESDP VI, under Programme 4: General education access, equity and internal efficiency, sets out objectives to provide targeted scholarships and cash transfers to children from economically and socially disadvantaged families to complete primary and secondary education. This includes scholarships and financial support for girls, the establishment of a girls’ education fund, scholarships for educational materials and boarding for hard-to-reach children, particularly in pastoral and semi-pastoral areas, and cash transfers to targeted households to cover education costs. The ESDP VI provides only the total programme cost and does not disaggregate the cost of scholarships or cash transfers at the primary or secondary level.
Provision of scholarships for at-risk and disadvantaged children, including indigenous children, children from low-income families, and girls, has been included in previous ESDPs. ESDP V (2015/16–2019/20) and ESDP IV (2010/11–2014/15) included similar objectives. The first ESDP to mention scholarships for girls from poor family backgrounds was ESDP III (2005/06–2010/11, for the year 2004/05). According to ESDP IV, an average of 2,000 ETB was allocated to scholarships for 2% of Grade 9 and 10 students. ESDP III reported that scholarship support was provided to 1,380 female students from poor families with high academic performance.
4. Social policies and family support programmes
Budgets and expenditures related to social protection are spread across multiple budget lines of various ministries and agencies, with no centralised management information system for social protection. No social protection programme includes a dedicated education component.
The Productivity Safety Net Programme, launched in 2005, provides cash transfers to food-insecure households and has been reported to support children’s enrolment in school, although there is no education requirement or condition for receiving transfers. Similarly, the Integrated Basic Social Services and Social Cash Transfer pilot programme (launched in 2015) improved school attendance, but with no specific education component.
At the regional level, the Tigray Social Cash Transfer Pilot Programme (2011–2014) aimed to increase school enrolment, but this was not a condition of the programme.
Ethiopia has a long history of providing food assistance to the most insecure and vulnerable populations, particularly through humanitarian and emergency channels prior to the 2000s. Currently, a range of programmes exist for different population groups, as detailed in the 2012 National Social Protection Policy. These include food transfer programmes through school feeding or public works, support to vulnerable children, assistance for people with disabilities, food security initiatives, and urban housing programmes.
5. School meal programmes
The national school feeding programme, which provides daily school meals to children in pre-primary to grade 8 (covering 25% of schoolchildren across all regions), operates through three different modalities depending on the context: home-grown school feeding (the largest programme), the traditional (in-kind modality) and the emergency programme (based on need).
Schools are targeted based on grade levels (pre-primary to grade 8) as well as geography, school type, and school characteristics (targeting communities and schools that are food insecure, affected by drought or conflict, and/or have high rates of school dropout and low rates of girls’ school enrolment). The government eventually aims to reach all schoolchildren with school feeding, with a target to make the programme universal by 2030.
School feeding is mostly (65%) financed by the government (both federal and regional budgets), with 35% financed by international donors (but not as part of GEQIP-E). For all school meal programmes in Ethiopia, the Federal Ministry of Education generates policy, standards, and manuals; being responsible for budget allocation, monitoring and evaluation, and coordinating efforts of both government and implementing partners.
Home-Grown School Feeding Programme
The World Food Programme-sponsored school feeding programme began in 1994 in chronically food-insecure and low-performing education areas. The government-owned Home-Grown School Feeding Programme was initiated in Addis Ababa in 2019, fully funded by local sources, and subsequently adopted by all other regional states and the Dire Dawa city administration. In 2021, the Federal Ministry of Education published the national school feeding policy and strategy, embedding school feeding in government policy and supporting the transition to a nationally owned programme. The Federal Ministry of Education serves as the lead implementer, while regional governments manage the programme and procure the food.
As of 2023, National Home-Grown School Feeding Programme Guidelines and Standards exist, although no established standards have been set for the food served or sold on school premises.
This profile has been reviewed by Dr Dawit Tibebu Tiruneh, Professor Pauline Rose and Professor Ricardo Sabates Aysa of the REAL Centre, Faculty of Education, University of Cambridge.
