CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY JUNE 2023 Ensuring Equitable Financing of Schools in FCV Contexts The Case of Democratic Republic of Congo 1. Introduction Free education policies have vastly increased access to schooling but, if improperly financed, can reduce quality and exacerbate inequities in education systems. To support free education, countries in sub-Saharan Africa have introduced new alternative models of school funding. Abolition of tuition fees has been the key component of free education policies implemented in sub-Saharan African countries since the 1990s (Bashir, Lockheed, Ninan & Tan, 2018). However, abolishing fees, without replacing revenue for use by schools, leads to financing shortages that can severely impair education quality. These shortages impact the equity of education systems. Schools in wealthier neighborhoods may be better able to cope with financing shortages through informal voluntary contributions from communities and revenue mobilization from NGOs and other supporters. In poorer areas, these informal means of revenue mobilization are likely to be more difficult, leading to large disparities in per-student finance between schools (Chimier & Lugaz, 2019; De Grauwe & Lugaz, 2018; Ndegwa & Levy, 2004). To address this, sub-Saharan African countries have introduced school grant schemes, providing discretionary finance to schools for operating costs, the purchase of materials, and improvements to learning environments. School grants provide control to schools and their communities over day-to-day expenditure, typically while maintaining control of larger cost items—such as teachers and classrooms—at district or national level. However, the effective implementation of school grant schemes entails challenges: ensuring the appropriate use of grant finance requires functional school management systems, mechanisms to keep schools committed to national goals, and oversight and audit systems to ensure the proper use Students raise their hands to answer class questions of finance. These tasks could be particularly difficult for underdeveloped at the St. Louis Primary School in Kinshasa. Photo © Dominic Chavez/World Bank. education systems with preexisting school funding gaps and low capacity at the school level, such as those found in sub-Saharan Africa. Providing school grants is particularly challenging in countries affected by fragility, conflict, and violence (FCV) in Africa.1 The 1 The list of countries affected by FCV or fragile and conflict-affected situations (FCS) is released annually by the World Bank to inform strategic and operational decision- making. For 2023, the list included 37 countries; 20 of them were located in Africa. CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY FIGURE 1 Timeline of the school grants reform 1960 DRC declared independence from Belgium 2006 2019 1976 New constitution Further operationaIization of Introduction of first school fees Start of decentralization process education reforms after President in primary education Felix Tshisekedi is elected in 2018 Abolition of fees in primary 1996– education is fully operationalized 2003 in 2019/20 school year First and Second Congo Wars First experience with First wave of reforms Grants design program School block grants Introduction of school grants under revision These were abolished after a policy along with introduction of With support from the year given budgetary restrictions fee-free policy as part of 2010– World Bank, the grant design 2015 national education has been under an ongoing development strategy process of revision 2005 2010 2020 Source: prepared by the author. majority of FCV countries in Africa have established existing systems of funds flow, enabling a rapid rollout to decentralized education systems with fee-free primary all primary and secondary schools. One decade after its education policies, and more than half have introduced school launch, the program has been running uninterruptedly, and grants to promote education goals and address school funding grants have reduced the operational burden for schools, gaps. Nonetheless, FCV countries are characterized by weak thus supporting the free education policy and reducing school management systems deprived of basic elements for inequities in financing. However, inadequate financing and the effective implementation of school grants, such as strong implementation limitations have meant that the scheme has institutions, qualified human resources, reliable information not fully replaced the lost revenue from fees, leaving families systems, and good governance practices (IFC, 2019). facing a continued cost burden for education. Implementing school grants in FCV contexts is complex, In 2019, as part of a second wave of education reforms, the but equally, these contexts are often ones in which schools DRC embarked on a process of reforming its grant scheme. face historical funding gaps that make reliable and adequate The ongoing process of revision aims to address the main school financing particularly critical for equity and learning. shortcomings arising from the initial iteration, especially to The experience of the introduction of school grants in increase the overall allocation to schools and to adjust the the Democratic Republic of Congo (DRC) provides useful formula to take account of school enrollment and conditions. insights for the implementation of an education finance The 2019 wave has already resulted in improved access to reform to address the challenges of school funding gaps primary education, and the reforms to the grant scheme are and equity of funding in an FCV setting. To improve education expected to build on the foundation of the 2010 scheme and outcomes and rebuild the education system after two further enhance the equity of school finance. wars and following an earlier limited trial in 2005, in 2010 the DRC implemented an education reform that included the introduction of a school grants program as part of a wider effort to operationalize free education (Figure 1). The grants 2. What was the problem? aimed to reduce the burden of operating costs for public schools, compensate for the loss of revenue from fees, and In 2010, the DRC’s education sector was characterized increase spending in quality of education. In order to achieve by poor outcomes and large numbers of children out of a successful rollout in a complex FCV context, the DRC grant school. In 2010 the gross enrollment ratio (GER) in primary scheme adopted a simple allocation formula and utilized education was calculated at 95.6 percent, a vast increase ENSURING EQUITABLE FINANCING OF SCHOOLS IN FCV CONTEXTS: THE CASE OF DEMOCRATIC REPUBLIC OF CONGO from 62.7 percent in 2000, reflecting the rapid expansion of Weaknesses of the teacher management system exacerbated the education system (UIS, 2023a).2 However, with extensive these problems. Due to a regulatory constraint, only teachers under- and overage enrollment and the school-age population formally registered (or regularized teachers)5 by the Teacher increasing rapidly, this still left between five and seven million Oversight and Payroll Service—SECOPE (Service de Contrôle children out of school (UNESCO, 2011).3 An estimated et de la Paie des Enseignants)—6 and schools approved by 31 percent of children ages 6 to 14 years had never attended the Ministry of Primary, Secondary, and Technical Education school, a rate that varied among regions from 28 to 47 percent (MPSTE)7 (or mechanized schools) were able to receive public (MPSPE, 2010). Those children who did attend learned little: by funding from the public payroll. During the years of conflict, 2011, it was estimated that 68 percent of Congolese children SECOPE was unable to perform this role fully. The result could not read a simple text (UNESCO & ADEA, 2022). was that, by 2007, an estimated 30 percent of teachers, and a similar proportion of schools, did not receive payment A key driver of poor education outcomes in the DRC was from the government, placing further burdens on schools to the historical funding gaps aggravated by a long period mobilize revenue to cover these costs (World Bank, 2008). of conflict. The education system in the DRC was highly It was estimated that while households contributed with debilitated as a result of the internal and civil conflicts that 77 percent of the unit cost of primary and secondary education triggered the two Congo wars (1996–1997; 1998–2003). In in 2012 (UNESCO, 2014), two-thirds of these contributions 1960, when the DRC declared independence from Belgium, were used to pay unpaid teachers and managers or to pay public expenditure on education stood at 30 percent of total teacher bonuses to compensate their low salaries.8 public expenditure; however, this began to fall drastically and, by 2010, had fallen 4 percent of total public expenditure and By 2010, school fees reached a point where it was showing a decreasing trend (Latif & Adelman, 2021; World Bank, unaffordable for parents to send children to school, with 2004, 2008). The result was that by 2013 public education poorer households and girls bearing the brunt. In 2009, expenditure represented just 2.1 of GDP (UIS, 2023c). In 2012, it was estimated that private spending per child was three the bulk of current public spending on education was made times higher than public spending in the DRC and that the up of teachers’ salaries, which represented between 82 to main source of school financing were school fees paid by 97 percent of total public spending on education, depending households. With Congolese households facing high rates on the educational level (UNICEF & UNESCO – IIEP, 2014). The of poverty (69.7 percent of population lived on less than limited remaining resources were used to pay a small fraction US$2 a day) and large number of children per family (estimated of operating costs. at seven children per woman), school fees became a significant burden for families. In 2010, annual costs for families were School funding gaps had led to the progressive introduction estimated at US$27 per pupil in primary education and and increase of school fees paid by parents. To pay US$48 per pupil in secondary education, representing unregularized teachers, top up salaries and cover funding 20 percent and 37 percent of the annual per capita income gaps for operating costs, schools opted to progressively (US$137), respectively (MPSPE, 2010). This burden was most introduce or raise school fees to be paid by parents difficult for the poorest households—households from the (De Herdt & Poncelet, 2010; UNICEF & UNESCO – IIEP, 2014). poorest quintile spent an estimated 42 percent of their per School fees were in place in the DRC since 1976 in the form of registration fees (Minerval) but, as the situation in the country deteriorated, schools introduced fees to cover specific costs such as exams, operating costs of offices, and 5 Also referred to as mechanized teachers. To avoid confusion with mechanized schools, in this document the term mechanized is reserved staff expenses (ACCELERE!2, 2019). In 2006 the Constitution for MPSTE-approved schools alone. formally established free primary education but attempts to 6 SECOPE is a technical service for the administration of primary, operationalize the policy were not made until 2010. At that secondary, and vocational education. It operates under the supervision of the MPSTE and has nationwide coverage through one national point, school fees were used to cover a wide range of costs department, 48 provincial departments, and 670 branches or local (Table 1).4 entities. Its purview has evolved over time, and today it is a key player in the daily operation of the sector. Its main functions include: (i) distribution of salaries to the teaching and administrative staff of pre-primary, 2 The secondary GER was 38.1 percent (UIS, 2023b). primary, secondary, and vocational schools; (ii) distribution of operating 3 The DRC lacks recent nationally representative household surveys costs (frais de fonctionnement) incurred by the schools and the local (last one conducted in 2012), and the national monitoring of education and provincial education offices; and (iii) management of an updated statistics has been halted since 2014, with the onset of decentralization. database of teaching and non-teaching staff. 4 In 2012 it was estimated that two thirds of parent contributions were used 7 Formerly the Ministry of Primary, Secondary, and Profesional Education to pay for unpaid teachers or teachers’ bonuses. Teacher remuneration in of the DRC (MPSPE). the DRC was among the lowest of comparable countries in sub-Saharan 8 A comparison with other countries in sub-Saharan Africa showed that when Africa based on average wages related to GDP per capita (UNICEF & average wages were compared to GDP per capita, teacher remuneration UNESCO – IIEP, 2014). in the DRC was among the lowest of comparable countries (UNICEF, 2014). CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY TABLE 1 DRC school fees paid by parents in public schools Fee to be abolished Item* Description or objective Education level Fee participation** with 2010 reform FEES DEFINED AT THE NATIONAL OR PROVINCIAL LEVEL Minerval National school registration tax Primary to secondary Less than 1% Yes, only in primary Assurance scolaire to Insurance for students Primary to secondary Less than 1% Yes, only in primary the Société nationale d’assurances (SONAS) Imprimés Identification card Only Grade 1 Approx. 1% Yes, only in primary Students card Primary to secondary Approx. 1% Yes, only in primary Frais administratifs/de Operating costs of managing offices and schools Primary to secondary Approx. 2% No fonctionnement Frais d’examens TENAFEP Only Grade 6 Approx. 15% No State exam Only Grade 12 Approx. 33% No Promoscolaire and frais de Fees to meet expenditures of provincial gatherings Primary to secondary Less than 1% No formation of staff, travel expenses, and per diem Bibliothèque, carnet sante, Fees to cover library, computer room, and health Primary to secondary Approx. 8% No d’identification informatisée costs Construction Office construction, school rehabilitation Primary to secondary Less than 1% No FEES DEFINED AT SCHOOL LEVEL Frais d’intervention ponctuelle One-time intervention costs Primary to secondary Approx. 35% No Frais de motivation Teacher salary supplement Primary to secondary Approx. 45% No OTHER HOUSEHOLD EXPENDITURES NOT PAYABLE IN FEES Uniforms and school supplies Wearing a uniform is compulsory Approx. US$20 additional No cost per student * Extract from main fees. There are additional fees defined at the local and provincial level. ** Participation of the fee as a percentage of estimated total fees. Fees for Grades 6 and 12 are different due to national exams. Source: Prepared by the author based on ACCELERE!2 (2019); IRC (2017); Mott MacDonald (2017, 2019a); World Bank (2015). capita consumption on primary education, versus 6 percent Constitution.9 However, without a source of finance for schools for the richest quintile; and 76 percent on lower secondary to replace their heavy reliance on fees, the scheme was education, versus 11 percent for the richest quintile (World poorly operationalized. Limited finance was released by Bank, 2015). Parents’ lack of financial resources to pay school the Treasury to provinces to support schools’ operating fees were among the top reasons cited for not enrolling costs, but these releases fell far short of needs and did not their children (World Bank, 2015), with girls usually the first reliably reach schools (World Bank, 2008). In order to enable to be left behind. An estimated 35 percent of girls had never free education to become a reality and address the severe attended school in 2011, versus 31 percent for all students financing inequities and shortages in schools, there was a (UNESCO, 2011). need for a new approach to school finance. Initial attempts to abolish fees had stumbled in the absence of compensatory finance for schools. The DRC formally 9 “Primary education is compulsory and free in the public establishments.” introduced free education in 2006 in its new post-conflict (Art. 43). ENSURING EQUITABLE FINANCING OF SCHOOLS IN FCV CONTEXTS: THE CASE OF DEMOCRATIC REPUBLIC OF CONGO 3. What reforms were introduced to would then directly transfer those resources to the headmaster, who would sign an acknowledgment of tackle the problem? receipt. Headmasters were required to keep the books and report the use of funds to the MPSTE’s principal public In March 2010, the DRC government introduced operational accountants (MPSPE, 2012; World Bank, 2015). This was school grants for primary and secondary public schools. the same system used to pay teachers who lacked a bank The policy was part of the National Education Development account. In practice, the exact system used varied by Strategy (2010–16) introduced by the MPSTE, which aimed province: while in Kinshasa, the headteachers personally to address the challenges of financing the education system collected the funds at a SECOPE provincial office; in and improve enrollment and quality of education (MPSPE, Kwango province, the funds were deposited directly in a 2010). It included provisions to implement the Constitution’s bank account. commitment to free primary education by progressively • A fixed set of activities against which the grants could abolishing four of the largest formal school fees, beginning in be spent . The government provided schools with a Grade 1 in 2010/11 and continuing at a rate of one grade per management handbook and an instructions manual on year.10 To replace fee revenue and improve school financing, procedures for the use of resources based on a list of the strategy introduced monthly grants to support school priority expenditure. Prioritized items were chosen because operations. of their expected effect on improving classroom conditions School grants aimed to reduce the burden of operating for teaching. The list included blackboards, chalk, benches, costs for schools while promoting expenditures to improve teaching materials and equipment, first aid supplies, and quality of education. The grant program design was based other basic supplies. on a previous DRC experience in 2005, when the government • The grant scheme was designed to apply equally to both implemented block grants for schools. The 2005 grants were state and non-state schools. Private sector and other considered successful and popular but were suspended non-state schools, such as those operated by faith-based after one year due to budget constraints (World Bank, 2008). organizations, assumed a bigger role in the provision of The school grants’ objective was two-fold: on the one hand, education during the period of the two Congo wars. As a to reduce the burden of operating costs for schools, which result, by 2010, 70 percent of students enrolled in public represented the main source of funding gaps for schools and education were enrolled in non-state schools. The grant were the main driver of increasing school fees; and on the scheme was designed to apply the same allocation, flow other hand, to contribute with resources for improvements in of funds, and oversight principles at both state and non- education quality. More generally, school grants also sought state schools. to support the universal fee-free policy and the objective of the national strategy as a whole. The main features of the school grants introduced in 4. Why were these reforms chosen 2010 were: instead of other approaches to • One block grant per school. The grants were fixed at tackling the problem? US$45 per month (US$600 per year) per mechanized primary school and did not use any allocation formula, School grants have been widely adopted by countries such as one based on enrollment, or set any condition for in sub-Saharan Africa and other regions to provide disbursement. discretionary finance to schools, replace finance lost from • Payment of grants through the teacher salary payroll fees, and support improvements in education access, system. SECOPE provided a platform for reaching schools equity, and quality. As a means of compensating for lost directly on a monthly basis and acted as the official source income from fees, grants maintain control of spending of information about mechanized schools that were at school level, reducing the bureaucracy inherent in the subject to funding. The mechanism stated that the DRC provision of operational supplies from district or national Treasury should transfer resources to SECOPE provincial level and enabling school officials and community members branches based on calculated school entitlements, which to make informed decisions about the utilization of resources (Chimier & Harang, 2018). 10 Four fees were to be abolished: Minerval, National Insurance, cards, and The urgency of the reform and fragility of the context elicited operating costs (Table 1). the need to choose a grant design that could be easily and CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY rapidly implemented within the framework of an FCV country. preventing inequities in financing. If grant schemes aim to Years of conflict, fragility, and historical financing gaps left release more finance than governments can afford, the result the DRC with few resources to develop a functioning structure tends to be uneven delivery, with schools in remote areas— for school management. Acknowledging these challenges, which often face existing disadvantages—often those most the reform recognized the importance of deploying the policy likely to receive grants after extreme delays and for less than with a simple design that could be easily implemented and the full amount allocated, thereby exacerbating inequities lay the groundwork for a more sophisticated program in the in financing.14 In the case of the DRC, in 2008, the operating future (MPSPE, 2012). cost for a primary school of eight classes was estimated at US$1,000 per year (US$83/month). This estimation emerged • The block grant approach was intended to simplify within the framework of the Project to Support Recovery administration and avoid challenges relating to data and in the Education Sector (PARSE), under which the World measurement. School grant schemes typically employ an Bank provided resources to finance 40 percent of this cost, allocation formula, distributing finance to schools on while the government was expected to cover the remaining the basis of enrollment, often with top-ups to schools 60 percent (US$50). In order for the grant scheme to be based on their learning environments, remoteness, or affordable for government, the amount was set within this other characteristics (Chimier & Harang, 2018).11 While 60 percent (Mott MacDonald, 2019a). Although not adequate matching resources to school needs, these approaches to meet all schools’ operating costs, this amount ensured full require reliable information on enrollment numbers and and reliable government financing of the scheme, preventing school conditions, and are open to “gaming” if data are not inequities in delivery to schools. reliable. Albeit simple, the DRC’s per-school block grant ensured rapid rollout without the need to establish reliable data systems and simplified the process of monitoring receipt of funds by schools.12 5. What was the impact of the reforms • Using the existing system for teacher salaries enabled a to address challenges of school rapid rollout. The absence of a decentralized money transfer mechanism to schools and an incipient banking system funding gaps and improving equity (with most schools lacking bank accounts) represented of education funding? a challenge for the program (MPSPE, 2012).13 Deploying a new system to address these issues would require The grant scheme was rolled out by 2010 and has operated time and resources. Using SECOPE’s platform provided a since, despite rapid expansion of the school system. By the quick solution to the problem with proven results. Another time of the reform, the DRC had approximately 36,000 public example relates to the role of parents and community. In primary schools and 18,000 secondary schools (MPSPE, this case, the policy made minor adjustments to existing 2011). According to MPSTE, the grant scheme has remained school manuals, but it was not necessary to deploy a new operational since, while the DRC school system has increased procedure for control and oversight of grant resources by rapidly in size. The number of public primary and secondary parents and communities. schools has risen from 54,000 in 2010 to 92,000 in 2020; at the same time primary and secondary education enrollment The limited financing available required careful consideration numbers have grown by more than 10 million, up from 14.8 of the grant amount to fit within the government’s means, million in 2010 to 25.6 million in 2020 (MPSTE, 2021). The grants program allowed schools’ operating costs 11 In Malawi, for example, the grant scheme introduced in 2010 included to become a regular item within the national budget. a per-school block grant combined with additional per-student finance Although it is not possible to fully identify the proportion of for larger schools, and top-up finance for schools with severe shortages new resources directed toward the grants program, MPSTE of classrooms or teachers; in Ghana, Uganda, and Tanzania, the grant scheme employs a “capitation grant” approach tied entirely to enrollment. budget reports state that this is a protected budgetary item 12 In 2014–15, additional grants were provided to bolster the block grant with to which, along with salaries, the government is requested more needs-based finance. These latter grants were financed by the World to allocate annual resources. Consequently, the school Bank under the Project to Support Recovery in the Education Sector (PARSE) grants item has uninterruptedly received resources since 2010, and allocated resources based on the number of classes at a school, varying from US$386 to US$965 per school per year. However, these grants were discontinued when PARSE closed in 2015 (UNESCO-IIEP, 2018). 13 World Bank (2015) mentioned that the overall system was not prepared 14 In Malawi, for example, schools in remote areas receive their annual for decentralization given multiple education reforms that were taking School Improvement Grants 24 days later on average than schools close place at the same time and the insufficiency of resources and capacities to trading centers and are less likely to receive their full allocated amount of local entities. (Asim and Casley Gera, 2023). ENSURING EQUITABLE FINANCING OF SCHOOLS IN FCV CONTEXTS: THE CASE OF DEMOCRATIC REPUBLIC OF CONGO even during a period where other budget items have not been the reform, the policy is expected to have helped reduce this consistently financed.15 inequity in funding within the provinces independent of the region where the school is located (UNESCO-IIEP, 2018). The grants program contributed to an increase in public education expenditure. From 2010 to 2018, the DRC doubled The operational school grants have contributed regular the share of public spending allocated to education, from funding for basic functioning of schools and quality inputs 8.6 percent to 16.8  percent (Figure  2). The share of the that were severely needed. There are few statistical data budget allocated to non-salary recurring expenditure, which or data from national reports about the final usage of grant includes operating costs such as the grants, quadrupled from resources. However, it has been documented that school 3 percent in 2010 to 12 percent in 2012 and has generally grants have been used to provide educational and teaching remained above 8 percent since. materials, classroom materials, maintenance of buildings, and other minor costs—items that were not typically provided By providing reliable monthly resources for mechanized to schools through other channels (Mott MacDonald, 2020; schools, the grants program contributed to equity on UNESCO-IIEP, 2016, 2018).17 spending. Distribution of public budget resources among provinces in the DRC is highly inequitable and not linked to However, not all schools have received grants. Despite the factors related to the number of schools, students enrolled, grant scheme having originally targeted both primary and or enrollment rates (De Herdt, Marivoet & Muhigirwa, 2015; secondary schools, the scheme was not operationalized for IRC, 2017; World Bank, 2008, 2015). Resources for covering secondary schools. In addition, non-mechanized primary schools’ operating costs follow that trend. For example, in schools do not receive the grants as they fall outside the 2012, it was estimated that recurring public expenditure SECOPE system. The share of schools which are non- per primary pupil in Kinshasa was three times higher than mechanized fell from 30 percent in 2007 (World Bank, 2008) in Katanga (De Herdt, Marivoet & Muhigirwa, 2015).16 By to 21 percent in 2017 (IRC, 2017); nevertheless, this still leaves providing monthly resources that were not assured before at least ten thousand schools outside the grant system. These schools are most likely to be those with unregularized teachers who do not receive government salaries, exacerbating the 15 School operational grants are not fully trackable within the national burden on communities. In addition, despite being eligible for budget. However, the MPSPE (2015a) seems to report them in the the grants, an estimated 16 percent of mechanized schools “support to school operations” item, included in the “functioning of do not receive them (IRC, 2017). structures” item under non-operating costs. The item is considered a protected budgetary item, meaning that the government must allocate annual resources to it. 16 Katanga province was divided into Tanganyika, Haut-Lomami, Lualaba, 17 Spending on these items enabled the grants to achieve their goal of and Haut-Katanga provinces in 2015. contributing to improvements in quality. FIGURE 2 Public spending in the Democratic Republic of Congo, 2010–2021 Education expenditure as a share of total public expenditure Breakdown of public education expenditure by type of expense 100% 1 25% 23.4% 12 12 11 8 15 90% 8 22 3 80% 12 4 20% 70% 9 16.8% 20% 60% 15.6% 50% 15% 12.8% 85 87 84 40% 64 77 11.3% 59 14% 30% 10% 8.6% 12% 20% 10% 9% 9% 0% 5% 2010 2012 2014 2016 2018 2020 6% Capital expenditure as % of total expenditure in primary education 0% public institutions (%) 2010 2012 2014 2016 2018 2020 Other current expenditure as % of total expenditure in primary education public institutions (%) Total expenditure on education as % of total government expenditure Salaries expenditure as % of total expenditure in primary education Expenditure on primary education as % of total government expenditure public institutions (%) Source: Own elaboration based on annual budgetary reports from the Ministry of Budget of the DRC (2013–2020). Note: Resources on graphs relate to the allocated share of resources according to budgetary reports from the Treasury. “Other Current Expenditure” relates to operating costs and non-salary items. CASE STUDIES OF SUCCESSFUL REFORMS TO ADDRESS THE CHALLENGES OF FINANCING EDUCATION SYSTEMS EFFECTIVELY The amounts of the grants were inadequate to support the schools. In 2016 it was estimated that 9 percent to 70 percent reduction in revenues from fees paid by parents, limiting of teachers and managers’ salaries were still paid by parents, its benefits for the poorest households. The grant scheme depending on the province (Mott MacDonald, 2017). was introduced in 2010–11 when the abolition of fees was As a result, parental contributions continued to increase implemented in Grade 1. While initially the grant amount of despite the free education policy.18 Since 2010, the parent- US$45/month was adequate to cover the lost revenue from borne cost per pupil nearly from US$16 to US$29 for primary fees, as the abolition of fees progressed to other grades, the education and more than doubled from US$55 to US$112 amount of the grant per student began to be insufficient to for secondary (ACCELERE!2, 2019). Household spending on cover the revenue loss from fees for schools. Inflation and education as a percentage of total spending on education growing enrollments at schools further extended the financing fell only slightly during the first stage of implementation of gap. In one region, Katanga, for example, when the reform the grants (from 77 percent in 2010 to 73 percent in 2015). started in 2010, the grants increased the revenue of the schools by US$1.27 per student compared to a lost revenue Thus far, the grants have not supported improvements of US$0.39 per student from foregone school fees. While this in school conditions or outcomes. The primary GER left a surplus for schools of US$0.89 in 2010, by 2019, the has continued to rise, reaching 118 percent in 2020 grants amount remained unchanged while enrollment raised (UIS, 2023a), but a large share of children remain out of rapidly, creating a financing gap of US$0.36 per student school (Ministry of Planning of the DRC & UNICEF, 2019). (Figure 3). In 2014, the government committed to increasing Challenges in school conditions continue: as of 2019, surveys the operational grant from US$600 to US$750 by 2015, by found that in only 17.6 percent of DRC schools do at least US$900 by 2016, and by US$1,000 by 2017 (MPSPE, 2015b); 90 percent of Grade 4 students have a usable blackboard and however, the planned increases were not achieved. chalk (World Bank, 2020a). Challenges of poor outcomes also persist: in 2019, 18  percent of Grade 2 students achieved The grants did not address the burden of unregularized acceptable levels of reading in the Programme for the Analysis teacher salaries, exacerbating the burden on households. Even in mechanized schools which received grants, the amount provided was not adjusted to take into account unregularized 18 The National Law of Education of 2014 established the state responsibility for fixing four school fees (Minerval, boarding fees, books and others, and teachers, a particular driver of household contributions. With the insurance fee), which contradicts the mandate of abolition of the four the average monthly salary of a teacher at approximately fees of 2010. Moreover, as provinces, local governments, and schools US$80 in 2010, the grant amount of US$45 would not be were entitled to create their own fees, abolished fees represented a enough to cover the cost of even one unregularized teacher, minimal part of total payable fees (World Bank, 2015). The weakness in this regulatory framework has contributed to limited implementation notwithstanding other operating costs. This further eroded the of the fee-free policy (De Herdt & Kasongo, 2012; IRC, 2017; Mott potential of the grants to replace household contributions to MacDonald, 2017, 2019b, 2020). FIGURE 3 Grant revenue versus foregone fee revenue, 2010–2019 (Katanga region) School revenues changes with 2010 educational reform (only grants and fee-free policies) 2.00 1.64 1.36 1.38 1.42 1.50 1.27 1.29 1.04 1.00 Value per student in USD 0.61 0.89 0.44 0.50 0.24 0.17 – 0.08 – (0.50) (0.36) (0.39) (1.00) (0.68) (0.92) (1.50) (1.14) (1.33) (1.40) (1.47) (2.00) 2010 2010 2011 2012 2013 2014 2019 2020 Revenue from grant per student Revenue lost from fees per student Difference in revenue per student between with reform with reform reform and no-reform Source: author’s projection using data from IRC (2017) and Annual Statistical Books for the DRC (Ministry of Planning of DRC, 2015, 2017, 2021); Ministry of Planning of DRC & UNICEF (2019), MPSPE (2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015a, 2015b), MPSTE (2021). ENSURING EQUITABLE FINANCING OF SCHOOLS IN FCV CONTEXTS: THE CASE OF DEMOCRATIC REPUBLIC OF CONGO of Education Systems (PASEC) tests, significantly lower than reliable and timely manner. The DRC reforms adopted existing in Burundi or the Republic of Congo (UNESCO, 2022). institutions (SECOPE) and methods of transferring resources (through the salary system) that had already proved to be able to deliver money to schools on time in any location. The The second wave of reforms (2019–present) grant itself was a fixed amount per school which simplified rollout and monitoring of the flow of funds to schools. With Since September 2019, the DRC has been reforming its the grant system firmly established, the government is now grant scheme, aiming to address the main shortcomings in the process of introducing a larger grant using a more from the initial iteration. In January 2019, President Felix sophisticated formula, which has the potential to significantly Tshisekedi took office following a democratic election improve the grants’ contribution to equity of education finance process. Tshisekedi has made free primary education one of by matching resources to schools’ needs. his main policy flags and just nine months after being in office, abolished all remaining primary education fees. To support However, adopting existing systems which have weaknesses the new reform, the government, with support from the World can limit the scope and effectiveness of a grant scheme. Bank,19 is piloting a larger grant—expected to reach US$100 In the case of the DRC, adopting the SECOPE system for per month for the average school—with a more equitable distribution of grants limited the scope of the scheme to formula that takes into account school enrollment.20 The exclude a large minority of non-mechanized schools, with revised grant scheme also includes measures to increase some mechanized schools also not receiving grants reliably. participation from parents and the community in monitoring Once schemes using such system are embedded, there is and control. a need to move rapidly to fix gaps in distribution systems to ensure that no school is left behind. This new phase of the fee-free policy has already shown positive results despite multiple external challenges imposed by Setting grant amounts within the government’s means can the Ebola epidemic and COVID-19 pandemic. The new policy lead to rapid and consistent implementation, but at the has been associated with a further increase in public spending cost of reducing the benefits of the grants for schools and on education from 16.8 percent in 2018 to 23.4 percent in households. Setting of the grant amount at an estimated 2020 (Figure 2). The policy also appears to have generated 45  percent of school operating costs,21 in line with the a rapid improvement in access to school: an estimated 2.5 to government’s existing commitments, enabled the scheme to 3 million children have enrolled in the system as a result of the deliver the full allocation to schools without significant gaps policy since 2019 (Latif & Adelman, 2021), despite the Ebola or delays, reducing inequity in school finance. However, this epidemic (2018–20) and COVID-19 pandemic (2020–22). approach meant that the grant was inadequate to replace the lost revenue from fees abolished by the 2010 free education reforms, meaning that the grants failed to fully meet schools’ needs or reduce parental contributions, particularly over 6. What are the lessons learned for time. The new wave of reforms is expected to move in this other countries? direction by increasing the grant to US$100 and allocating resource mobilization toward this goal. For school grants to improve equity on spending in FCV The provision of grants is particularly unlikely to resolve settings, they need to be rolled out with a simple model school funding gaps if other weaknesses in education capable of ensuring that schools receive resources in the finance are not addressed. In the case of the DRC, the expected amount and time. Due to reduced government estimates of the unit cost of schools’ operating costs covered capacity, this goal is particularly difficult in FCV settings, basic costs of running the day-to-day activities but did not especially due to the lack of reliable mechanisms for collecting consider the cost of covering historical financing gaps or of data on schools and transferring resources to schools in a increases in per-school enrollments. At the same time, the failure to act on other areas of education financing—most notably by ensuring that all teachers were brought into the 19 The development and implementation of the new school grants program national payroll scheme—undermined the impacts of the is an activity included within a US$800 World Bank million operation, “Emergency Equity and System Strengthening in Education”, approved in grant scheme. 2020 (World Bank, 2020b). 20 Under the revised formula, grants will be allocated based on school size: schools with 1 to 11 classes received monthly allocations of CGF 200,000 (equivalent to US$87); schools with 12 to 18 classes, CGF 420,190 (equivalent to US$181); schools with 19 or more classes, CGF 620,190 (equivalent to 21 The 2010 Strategy raised the estimated cost of operations to US$100/ US$267); and prestige schools, CGF 2,450,000 (equivalent to US$1,056). month, meaning the grant provided 45 percent of the total cost. 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