Financing and FTI Trust Funds
[Last update: December 2009]
How much Official Development Assistance (ODA) goes to basic education?
Since the World Education Forum in Dakar, Senegal, in 2000, total aid commitments to education increased by 58% from US$7.6 billion in 2000 to US$12 billion in 2004 (in constant 2007 prices). However, this significant increase was followed by a decrease in 2005 (US$9.9 billion). Aid commitment started to increase again in 2006 but stagnated around US$12 billion between 2006 and 2007 Aid commitments to basic education amounted to US$4.3 billion in 2007. In 2007 low-income countries received over 60% of the total aid donors committed to basic education (US$2.6 billion). Despite the priority given to low-income countries, the level of aid committed to basic education in these countries remains low compared to the external financing needs of US$11 billion per year required to achieve the goals for Universal Primary Education (UPE), early childhood care and education and literacy for all low-income countries
What is the FTI Resource mobilization and replenishment strategy?
The EFA FTI Partnership has stressed repeatedly over the last couple of years the importance of more sustainable and predictable financing for basic education in low-income countries. The Task Team on FTI Replenishment emphasized the need to establish more long-term and additional financing for endorsed FTI partner countries than currently the case. In their 2009 summit communiqué, G8 leaders singled out the replenishment of EFA FTI as a priority investment for sustainable development and economic growth. The FTI Task Team in its report defined two phases of a resource mobilization for the EFA FTI:
- The first phase filling the immediate US$1.2 billion financing shortfall for the FTI trust funds covering the 18-months period from June 2009 to December 2010.
- The second phase covering the overall financing needs of FTI endorsed and candidate countries in the period 2011 until the ‘deadline’ of the MDGs in 2015.
Consequently, the resource mobilization for EFA FTI was announced at the FTI Steering Committee in April 2009 in Copenhagen. This was followed by a formal launch at a Ministerial breakfast meeting hosted by Danish Minister Ms. Ulla Tørnaes and World Bank Managing Director Graeme Wheeler on April 25, 2009 in Washington DC.
Has FTI leveraged domestic financing for Education
EFA FTI was established in 2002 as a “global compact” between low-income countries and donor partners. This compact includes that donors help mobilize resources and make them more predictable while beneficiaries need to demonstrate their commitment through adequate and sustainable domestic financing for education. EFA FTI uses an internationally endorsed policy framework which focuses on results, local ownership and burden sharing. These goals include: ensuring all children are in school, achieving gender parity, and committing 20% of a government’s national budget to education – of which 50% should be allocated to primary education.
In its effort to establish benchmarks and monitor financial flows into the education sectors in FTI developing partner countries the FTI Secretariat compiled a set of three indicators across the current 40 countries with an endorsed sector plan. For all three indicators, there is a positive trend over the period of 2000 to 2008. On average, current developing countries partners: (i) increased the share of domestic product to education by about half a point to reach 4.5%; (ii) increased the share of education expenditures in the national budget by close to one point to approach the FTI benchmark of 20%; and (iii) maintained the share of resources devoted to the primary/basic sub-sector at about 47%, in spite of the current economic and financial crisis.
FTI focuses on Sub-Saharan Africa, where close to 60% of partner countries are located. Africa is also the region where, on average, the resources flows into the education sector increased the most during the period of analysis. In 2008, for instance, education expenditures claimed 4.3% of GDP; 20.3% of government budget; and 51.1% of these resources went to the primary/basic sub-sector. The large number of missing data in this preliminary analysis highlights the considerable challenges FTI faces with regard to collecting and analyzing financial across developing countries. This, in turn, underpins the FTI Secretariat’s priority for 2010 in establish performance benchmarks for accountability and results.
What is the Catalytic Fund?
The Catalytic Fund (CF) was established in November 2003 by the FTI donors. Its goal is to provide transitional funding to help close the financing gap for countries with too few donors, while aiming to leverage more sustainable support through regular bilateral and multilateral channels. Given its transitional role, the CF is expected to remain small relative to support provided by the development partner community directly to the countries as a whole. However, the CF provides important backing to the FTI commitment that realistic financing needs in all qualifying countries will be met.
Donor contributions to the Catalytic Fund:
Catalytic Fund pledges and receipts total US $1.6 billion over 2003-2013, with US $683 million disbursed to date. The following 18 donors finance the Catalytic Fund: Australia, Belgium, Canada, Denmark, the European Commission, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, Romania, Russia, Spain, Sweden, Switzerland and the United Kingdom.
How does a country access the Catalytic Fund?
First, local donors at the country level need to endorse a country’s education sector plan. Therefore, if a country is interested in FTI, its government should contact the local Coordinating Agency for education in country. Each year, the CF Committee (composed of representatives of donors to the fund, The World Bank, UNESCO and UNICEF) makes decisions on which countries, among those with endorsed sector plans, will receive a grant from the CF, and in what amount. The CF Committee decisions are based on their assessment of the countries most in need and where the CF resources would be used best.
How many countries receive funding from the Catalytic Fund?
To date, 32 countries have received or are receiving funding from the Catalytic Fund. They are: Benin, Burkina Faso, Cambodia, Cameroon, Central Africa Republic (CAR), Djibouti, Ethiopia, the Gambia, Ghana, Guinea, Guyana, Haiti, Kenya, Kyrgyzstan, Lesotho, Madagascar, Mali, Mauritania, Moldova, Mongolia, Mozambique, Nepal, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Tajikistan, Timor Leste, Yemen and Zambia.
What is the Education Program Development Fund (EPDF)?
The multi-donor Education Program Development Fund (EPDF) was established by FTI in November 2004 to enable more low-income countries to access the FTI and accelerate progress towards universal primary education.
For those countries without education plans and weak capacity, the Education Program Development Fund (EPDF) can provide technical support and build the capacity required to prepare a sound education plan.
How does a country access the Education Program Development Fund?
If a country is interested in accessing the EPDF, the government should contact the World Bank Task Team leader or the local Coordinating Agency. The EPDF is intended for those countries without existing education programs and weak planning capacity. It can also support all low-income countries in sharing their knowledge and experience on education and how to reach the goal of UPC.
Who are the donors for the EPDF?
EPDF commitments total about US $115 million for the period 2005-2013, with pledges from the following donors: Australia, Canada, France, Ireland, Japan, Luxembourg, the Netherlands, Norway, Russia, Spain, Sweden, and the United Kingdom.
Which activities can be supported by the EPDF?
Eligible activities under the EPDF are as follows:
Technical and analytical assistance for development of education policies, strategies and a national education sector plan in countries with insufficient capacity and donor support, including but not limited to strategic analyses of the status of the sector, the costing of national education plans, assessment of their fiscal impact, and support to consensus building around difficult policy issues and expenditure allocations.
Selective technical, analytical support to generate knowledge derived from country experience that can be shared within and across countries, related to the preparation and implementation of national policies and education sector plans to achieve the MDGs for education, particularly around difficult policy and expenditure allocation decisions and how to scale up reforms.
Technical and analytical services for strategic planning for levels of education other than primary as long as it is a part of the preparation of a sector wide program that supports Universal Primary School Completion (UPC) as a primary goal. This is in recognition of the impact of poor policies at other levels of education on the ability of countries to achieve the MDGs. The EPDF should not be used to finance plan development exclusively for other levels of education.
How are the two funds managed?
The Catalytic Fund and the EPDF are administered by the World Bank, under the direction of CF and EPDF Committees. In general, meetings of the Committees take place twice a year. The FTI Secretariat reports regularly to the FTI Partners on the Funds’ activities.
Does EFA-FTI support new aid instruments?
FTI supports increasing donor countries investment in primary education and it is likely that full financing of universal primary education will require substantial funds from all aid channels. The EFA-FTI partnership supports all new aid modalities that could help finance the education gap and allow for scaling up in countries with FTI endorsed education plans in the immediate future.
Last Modified: December 22, 2009
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