CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY Case Studies of Successful Reforms to Address the Challenges of Financing Education Systems Effectively Increasing the adequacy of education finance through private sector resource mobilization: the case of Côte d’Ivoire 1. Introduction/motivation Many low- and middle-income countries in Sub-Saharan Africa face an education financing crisis. Exacerbated by the COVID-19 pandemic, rapid improvements in access place severe pressure on the adequacy of public education expenditure, with average per-student public expenditure in the region being less than one-tenth that in Europe and Central Asia (World Bank, 2022). Some countries have successfully mobilized private sector finance to support education beyond the financing provided by government. These efforts have been particularly common in technical and vocational education and training (TVET), where countries including Tanzania and Zambia have introduced skills levies on businesses, which are channeled into dedicated funds to support TVET (see Box 1). However, such efforts are much rarer in basic education, which typically relies on conventional taxation, public debt, and development assistance for funding. This case study presents the example of Côte d’Ivoire, where a partnership between the government, private foundations, and the cocoa industry has mobilized significant amounts of finance to support the provision of basic education in cocoa-growing communities. 2. What was the problem? Prior to 2015, Côte d’Ivoire’s educatio n system was growing increasingly financially constrained in the face of rapid enrollment growth. Between 2010 and 2015, public expenditure on education Students in Abobo, Cote d’Ivoire. in Côte d’Ivoire averaged 3.3 percent of GDP, in line with the norm for Photo by Nguessan Ndri. Sub-Saharan Africa though below the average for lower-middle-income countries (UIS, 2023a). Although the country’s education system had achieved improvements in access to primary schooling, with gross enrollment rates (GER) at primary level rising from 73 percent in 2008 to 91 percent in 2015 (UIS, 2023a), learning outcomes were poor, and Côte d’Ivoire had among the lowest rates of competency in math and reading in the Education System Performance in Francophone Sub- Saharan Africa (PASEC) assessment 2014 (World Bank, 2022). Partly as a result of these poor learning outcomes, the primary completion CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY BOX 1.  SKILLS LEVIES IN SUB-SAHARAN AFRICA Around the world, it is estimated that at least 100 countries have some kind of skills levy. Within sub-Saharan Africa, at least 22 countries employ a levy system to mobilize finance for skills development.* These levies differ from conventional taxation because they are hypothecated for use specifically for TVET, and the finance collected is typically managed by a dedicated quasi-governmental fund rather than forming part of the mainstream education budget. The value of such levies is typically measured as a share of each company’s total payroll (wage) bill,** with the majority of levies in the region requiring employers to pay between 0.5 percent and two percent of payroll into a skills fund. While many high-income countries outside Africa have sector-specific skills funds which support training for particular industries, such funds in Africa are generally national and industry-agnostic in scope (although most exclude public sector employees).*** Skills levies typically fund a range of training providers, including public vocational schools and colleges, as well as supporting training activities by industry itself. In some cases, the funds paid by an employer can be received back as a rebate to fund training provided to employees, though this typically accounts for less than one-third of the money raised. Complexities in the process of applying for finance from the skills funds; restrictions on the types of training supported; and low awareness of the availability of finance from the funds; have all been identified as key challenges limiting the access of employers to finance from skills levies. Industry skills councils and analytical activities such as labor market surveys are also among the activities supported by skills funds; some funds provide specific support to marginalized or disadvantaged groups, including disabled and unemployed people. For example, Cote d’Ivoire’s skills fund, the Vocational Training Development Fund (FDFP), established in 1991, although financed by a payroll levy on formal employers, has a dedicated unit for training projects from the informal sector, including the agricultural and rural sector. While levies are not technically taxation, they are in some cases perceived as such by industry and their value for workforce development is often questioned. One reason for this, and a potential disadvantage of the levy approach, is that the cost and administrative burden of collection can be substantial: administrative costs, including collection costs, range from as low as 4 percent of the total levy revenue in Zambia to as high as 40 percent in Malawi, where the levy is the main source of operating finance for the national body which oversees TVET, the Technical, Entrepreneurial and Vocational Education and Training Authority. In addition, a number of national schemes in Africa have failed to invest all of the income derived from the levy, leading to substantial surpluses, as high as 58 percent in the case of Zambia in 2018. Mauritius provides an example of a relatively typical skills levy. One of the first to be established in Africa, in 1988, the levy of 1.5 percent of payroll for private sector firms (1 percent for smaller firms) finances the National Training Fund (NTF), managed since 2004 by the Human Resource Development Council, an independent body with representation from government, industry, and trade unions, which oversees and finances workforce development; and the Workfare Programme Fund, managed by government, which provides training and support to unemployed people. The levy is connected through the tax system by the national revenue authority. An average of 38 percent of the levy is typically reimbursed to industry to cover training fees, and administrative costs are relatively low at between 1–1.5 percent in the case of the NTF. However, the NTF had annual surpluses of an average 43 percent of income in the years 2014–18, leading business to express concern that it risked becoming a form of general taxation for discretionary use by government. Tanzania, by contrast, provides an example of a nominal skills levy, which has historically acted more as a form of taxation. Introduced in 1994, the levy, payable by all companies with ten employees or more, is significantly higher than in other countries at 4.5 percent of payroll, and rather than a dedicated fund, the money raised has been primarily channelled into the national budget as well as supporting the provision of student loans for higher education. In 2018, supported by the World Bank-financed Education and Skills for Productive Jobs Programme, the country introduced its first Skills Development Fund which is intended to gradually become the main channel through which the levy’s finance is channelled. Source: Palmer, 2020 * Algeria, Benin, Botswana, Burkina Faso, Central African Republic, Chad, Côte d’Ivoire, Gambia, Malawi, Mali, Mauritania, Mauritius, Morocco, Namibia, Niger, Nigeria, Senegal, South Africa, Tanzania, Togo, Tunisia, Zambia, Zimbabwe ** Exceptions include Gambia and Botswana, which measure their levy based on company profits and turnover respectively. ***Exceptions include Malawi, whose levy includes public sector employees; and South Africa, which uses more than 20 distinct sectoral funds as well as a national fund. INCREASING THE ADEQUACY OF EDUCATION FINANCE THROUGH PRIVATE SECTOR RESOURCE MOBILIZATION: THE CASE OF CÔTE D’IVOIRE rate was 64 percent—well below the average for Sub-Saharan US$2 million public-private partnership with the International Africa (72 percent) (World Bank, 2022). Labor Organization (ILO) to combat child labor in cocoa- growing communities in Côte d’Ivoire and Ghana. The education system was failing to reach rural communities, particularly cocoa-growing communities. Rates of access to In 2014, building on its previous work, also in Côte d’Ivoire and school in rural areas were significantly lower than in urban areas Ghana, the World Cocoa Foundation launched Cocoa Action, at all levels, with preprimary access particularly inequitable at a partnership between nine major cocoa industry companies only 5 percent in rural areas versus 30 percent in urban areas intended to coordinate and catalyze efforts to make cocoa (World Bank, 2022). A high prevalence of child labor on cocoa farming more sustainable. In addition to supporting improved farms exacerbated existing supply-side challenges of access productivity for cocoa farmers, Cocoa Action sought to at primary and secondary level. Côte d’Ivoire is the world’s strengthen farming communities by, among others, ensuring leading cocoa producer, with the sector employing more than access to basic education and eliminating “the worst forms” six million people and generating around 10 percent of GDP of child labor. Participating companies would develop their (United Nations Development Program, 2022). A report by the own strategies to invest in rural communities using an aligned United States government in 2013 found that 40 percent of set of principles and monitoring and evaluation indicators. children ages 5–14 engaged in difficult physical labor, primarily Beginning in 2015, the cocoa industry’s education initiatives on cocoa farms. in Côte d’Ivoire were supported by an innovative program In 2015, the Ivorian government introduced compulsory called Transforming Education in Cocoa Communities schooling for students ages 6–16, committing to expand (TRECC). Launched by the Jacobs Foundation, a major the education system to ensure access for all school-age philanthropic organization,1 TRECC aimed to leverage funding children. In order to achieve this expansion, maintain from the cocoa industry to address lack of access to quality progress toward universal basic education, and raise learning education as one of the root causes of child labor in cocoa outcomes, there was an urgent need to mobilize finance, communities, and promote alignment with public policies. including from the cocoa industry to enable investments in The Ministry of National Education and Literacy (MNEL, then education in rural communities. known as the Ministry of Technical Education and Vocational Training) established and chaired the steering committee of the project. TRECC engaged the private sector through a grant-matching 3. What has been done to tackle approach. Companies were invited to co-fund with Jacobs the problem? Foundation activities relating to education, vocational training, and women’s empowerment. The major international cocoa Globally, efforts increased around 2007–10 to coordinate companies had already begun a process of defining and action by the cocoa industry to address and prevent implementing such activities under the Cocoa Action child labor, including supporting access to education for initiative. In all, four major companies2 agreed to participate children in cocoa-growing communities. In 2007, a Swiss in the grant-matching initiative. foundation, the International Cocoa Initiative, began working in Cote d’Ivoire and Ghana to identify and provide support to In order to ensure that the initiatives were impactful, financing children engaged in labor in cocoa farming to leave work and was tied to results. Companies would pre-finance activities re-enter schooling. In addition, the World Cocoa Foundation, and TRECC would provide matching funding toward projects established in 2001, began forming public-private partnerships only when agreed-upon outputs and outcomes were achieved. in 2009 with the United States Agency for International Independent evaluators3 were appointed to confirm the Development and Bill and Melinda Gates Foundation for achievement of targets, a similar approach to that taken by activities to address child labor and support cocoa-growing the World Bank for verification of results-based finance. These communities. In 2010, the governments of Côte d’Ivoire, initial, small-scale projects included the provision of remedial the United States, Ghana, and the National Confectioners classes for 1,250 out-of-school children to help them re-enroll Association (a US industry body) signed the Declaration of in school and the provision of preprimary education for 850 Joint Action to Support Implementation of the Harkin-Engel Protocol, supported by a US$17–20 million public-private 1 The Jacobs Foundation provided initial funding for TRECC, with two partnership with US$10 million from the United States and additional private foundations—the UBS Optimus Foundation and the US$7–10 million from industry to support efforts to remediate Bernard van Leer Foundation—providing additional finance in 2016. 2 Barry Callebaut, Mars, Mondelez, and Nestlé. children caught in the worst forms of child labor. In 2011, 3 École Nationale Supérieure de Statistique et d’Économie Appliquée eight major companies in the cocoa industry formed a (ENSEA), an educational institution in Abidjan, Côte d’Ivoire. CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY children, as well as vocational training for 3,455 young people to join. With the currently available funds, CLEF’s planned (TRECC, 2021). These projects were completed by 2020. investments include supporting the scaling of the National Program for Foundational Learning in 4,500 primary school In 2017, building on some of the lessons learned from the across six regions of the country (representing about 1/3 first round of grant matching, TRECC launched a second of the public primary schools in Côte d’Ivoire), setting-up round. This round took a two-stage approach, financing 660 bridging classes to support 19,800 out-of-school small-scale pilots at first and then supporting scaling-up for children, and building 420 classrooms to increase access interventions with proven impact. The thematic focus areas to education in remote rural areas. CLEF implementation of the interventions were quality education, early childhood started in June 2023. development, and vocational training. TRECC conducted a global mapping of potential evidence-based solutions that seemed relevant to address the challenges identified in Côte d’Ivoire in these areas. MNEL and other ministries involved were invited to select three to four potential solutions in each 4. What has been the outcome on the thematic area, for adaptation and piloting in Côte d’Ivoire. In adequacy of spending for education? all, 12 companies4 participated in the second-round scheme. Innovations for Poverty Action (IPA) was appointed to TRECC and, in particular, CLEF have mobilized a evaluate the pilots. They included providing bridge schools to substantial amount of industry finance to support support out-of-school children to catch up learning and enroll education in Côte d’Ivoire. In total, TRECC mobilized CFAF or re-enroll in conventional schools; providing preprimary 44.26 trillion (US$73.2 million) of non-governmental finance education and nutrition to young children; providing tablet- from foundations and the cocoa industry.8 So far, CLEF has based teaching in early primary multi-grades; training parents leveraged a total of CFAF 35.8 trillion (US$ 58.5 million) of and communities in childcare and support to preprimary non-governmental finance – CFAF 20.3 trillion (US$ 33.2 learning; and delivering the Teaching at the Right Level5 (TaRL) million) from philanthropic foundations and CFAF 15.5 pedagogy in lower primary. Amongst the solutions piloted by trillion (US$25.3 million) from industry, as well as investment TRECC to enhance the quality of education, IPA found that of CFAF 17.2 trillion (US$ 28.0 million) from Government. TaRL was the most promising in terms of prospects for The CFAF 35.7 trillion in private finance mobilized by CLEF integration and national scale-up, given the positive effects is approximately equivalent to 2.5 percent of annual public on learning outcomes and the decision of MNEL to introduce education expenditure. If it meets its goals for resource TaRL in the National Program for Foundational Learning.6 mobilization, CLEF will mobilize a further CFAF 25.19 In total, TRECC estimates that the projects in this round trillion (US$36.7 million) of non-governmental finance by benefited 54,884 children aged 0–5; 58,135 primary school- December 2024. The private foundation and private sector age children; 140,000 secondary school children; and 2,820 contributions made to CLEF so far were used to mobilize young people (TRECC, 2021). CFAF 7.9 trillion (US$13.0 million) in support from the Global Partnership for Education Multiplier, a fund which provides Building on the TRECC program, in 2021 the Government matching finance to extend private and development partner of Côte d’Ivoire and the Jacobs Foundation launched investments in education in low-income countries. the Child Learning and Education Facility (CLEF), with the objective to support the national scaling of TaRL as However, despite substantial growth, industry contributions part of the National Program for Foundational Learning, still represent a minority of TRECC/CLEF financing. Of the build school infrastructure, and support out-of-school non-governmental finance mobilized for TRECC, only CFAF children. CLEF takes the form of a pooled finance facility 3.0  trillion (US$4.9 million)—7 percent—came from cocoa with contributions from the Government of Côte d’Ivoire, industry partners. For CLEF, the share is CFAF 15.5 trillion Jacobs Foundation, UBS Optimus Foundation, and 16 cocoa (US$25.3 million)—29 percent—demonstrating the growth and chocolate companies.7 CLEF is open to other donors in industry contributions, but also the continuing need for support from philanthropic sources (Figure 1). 4 Barry Callebaut, Blommer, Caboz, Cémoi, Cargill, Hershey’s, Mars, Mondelez, Nestlé, Olam, Tony’s Chocolonely, and Touton. 5 Teaching at the Right Level (TaRL) is a learning approach that adapts to each student’s skill level, regardless of age or class. The aim is to help children rapidly acquire basic reading and math skills, through interactive and fun activities. The TaRL approach was developed by the Indian NGO Lindt & Sprungli, Mars Wrigley, Mondelez International, Nestlé, Olam Pratham and has been tested and evaluated in several African countries. Cocoa, Sucden, Tony’s Chocoloney, and Touton. 6 Programme National d’Appui aux Premiers Apprentissages Scolaires. 8 Along with a coinvestment of CFAF 4.8 trillion (US$7.8 million) by the 7 Barry Callebaut, Blommer, Cargill, ECOM, ETG, Ferrero, Guittard, Hershey, Government of Cote d’Ivoire. INCREASING THE ADEQUACY OF EDUCATION FINANCE THROUGH PRIVATE SECTOR RESOURCE MOBILIZATION: THE CASE OF CÔTE D’IVOIRE FIGURE 1 TRECC and CLEF resource mobilization (to date) 5. What are the lessons learned for other countries? 70.0 Philanthropic investment can catalyze private sector 60.0 7.9 investment in education. While efforts such as Cocoa Action began the process of mobilizing industry resources 50.0 for education in Côte d’Ivoire, large-scale industry investment 20.3 was not forthcoming until catalyzed by philanthropic 40.0 partnerships. The Jacobs Foundation positioned itself as an CFA trillion appealing partner for the industry: they mobilized significant 30.0 matching funding, provided expertise and technical support 41.26 15.5 to identify and invest in evidence-based and contextually 20.0 relevant solutions, and facilitated relationship building and understanding with Government. 10.0 17.2 Public-private partnerships require the government to play – 3.0 a leading role to ensure alignment with national priorities. TRECC CLEF Public-private partnerships such as Cocoa Action, with Government Industry Private Others industry and government acting as equal participants, may foundations experience challenges in respect of alignment with national Source: Jacobs Foundation priorities. TRECC adopted a public-first model where the MNEL played a lead role in oversight, selecting interventions to be piloted and helping to ensure that the interventions The TRECC investments have contributed to continued contributed to national goals and had the potential to be improvement in access and learning, although at limited scaled to national level. The commitment by the Government scale and therefore insufficient to move the needle at national of Côte d’Ivoire to contribute financially to CLEF acted as level. The primary GER has continued to increase, reaching a powerful incentive for the cocoa industry to invest in the 100 percent in 2020 and, despite the COVID-19 pandemic, pooled facility. remaining at 99 percent in 2022 (UIS, 2023a). Primary Grant matching can boost investment, but rigorous completion has risen to 78.4 percent, now above the average evaluation of initiatives is required to ensure impact at for Sub-Saharan Africa. These gains in access are primarily scale. In its initial phase, TRECC’s grant-matching approach the result of the introduction of compulsory schooling, which helped accelerate the implementation of existing industry- has been associated with the opening of more than 1,000 new developed strategies. Its second phase supported newer preschools and more than 2,500 new primary schools across interventions with rigorous, independent evaluation. Only 3 the public and private sectors (Oxford Business Group, 2022). These investments have been supported by a slight increase of 12 pilots supported by the second round were approved in public education expenditure, from 3.3 percent in 2010–15 for scaling-up, demonstrating the importance of a prudent to 3.6 percent in 2016–20. and evidence-based approach to all innovative interventions, including those financed by the private sector. The improvement in access has not yet been associated with gains in learning outcomes. In fact, outcomes have declined in response to the influx of new students. In the PASEC 2019 assessment, only 13 percent of students reached a proficient Acknowledgements level in mathematics, down from 27 percent in 2014 (World Bank, 2022).9 The COVID-19 pandemic, which led to the This study was authored by Ravinder Casley Gera and Bismah closure of schools for two months in 2020, is likely to have Tahir with financial support from the World Bank Education placed further pressure on learning outcomes. In addition, the Finance and Reform global team. The authors would like COVID-19 pandemic is believed to have reversed progress in to thank the World Bank team in Cote d’Ivoire, including Ali Côte d’Ivoire in reducing child labor (Wyss and Robinson, 2021) Coulibaly and Yves Jantzem, for their guidance and inputs; and Samer Al-Samarrai and Pedro Cerdan-Infantes for 9 A three-month teacher strike during the 2018/19 school year may have leadership and oversight. accelerated the decline observed in the PASEC testing. CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY References UNESCO Institute for Statistics (UIS). 2023a. School enrollment, primary (% gross) - Cote d’Ivoire.” UIS.Stat Bulk Data Download Service (accessed June 23, 2023), https://data.worldbank.org/ Oxford Business Group. 2022. The Report: Cote d’Ivoire 2022 (accessed indicator/SE.PRM.ENRR?locations=CI. June 26, 2023), https://oxfordbusinessgroup.com/reports/cote- World Bank. 2022a. Education Finance Watch 2022. Washington, D.C.: divoire/2022-report. World Bank. Palmer, R. 2020. “A Review of Skills Levy Systems in Countries of the World Bank. 2022b. International Development Association Program Southern African Development Community.” Geneva, Switzerland: Appraisal Document on a Proposed Credit in the Amount of International Labour Office. EUR 352.4 Million (US$350.0 Million Equivalent) and a Grant in TRECC. 2021. “Transforming Education in Cote d’Ivoire” (accessed the Amount of US$14.7 Million from the Global Partnership for June 26, 2023), https://jacobsfoundation.org/wp-content/uploads/ Education to the Republic of Côte D’Ivoire for the Strengthening 2021/12/TRECC-REPORT.pdf. Primary Education System Operation. Washington, D.C.: World United Nations Development Program. 2022. “Building a resilient Bank. cocoa culture in Côte d’Ivoire.” Available at: https://www. Wyss, M. C. and Robinson, J. P. 2021. “Improving children’s reading adaptation-undp.org/scala-building-a-resilient-cocoa-culture- and math at large scale in Côte d’Ivoire: The story of scaling PEC.” in-cote-d-ivoire. Accessed: June 26, 2022. Washington, D.C.: Brookings.