The Ethiopian education sector faces severe funding challenges due to inflation and reduced foreign aid. A proposed trust fund aims to fill these gaps through corporate and pension contributions. It seeks to improve access and infrastructure, especially in underserved areas.
Ethiopia's education system is under strain from economic pressures that have eroded public investment. Real budgets for education have fallen by one-third since the 2020/21 fiscal year, even as nominal spending has risen. Inflation has diminished the value of salaries, which consume nearly 90 percent of education funding, by 17 percent over the past five years.
One in three school-age children is still out of school, with rural and marginalized regions bearing the brunt of these disparities. The Ministry of Education is now exploring a new trust fund to counteract these trends. This fund would target financing shortfalls caused by inflation and declining foreign aid, relying on contributions from corporations and pension schemes.
The initiative promises transparent and need-based allocation of resources to tackle inequalities in school infrastructure and student access. By addressing these core issues, the trust fund could help restore stability to a sector vital for national development, though its success will depend on effective implementation and broad stakeholder support.