Report No. ----------

Eritrea HEALTH AND EDUCATION SECTORS:PUBLIC EXPENDITURE REVIEW

2008

5 March 2008 Poverty Reduction and Economic Management 2 Country Department for Comoros, Eritrea, Kenya, Rwanda, Seychelles and Somalia Africa Region

The World Bank Africa Region

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CURRENCY EQUIVALENTS (Exchange Rate Effective January 1, 2008)

Currency Unit = Eritrean Nakfa (ERN)

US$1.00 = ERN 15

FISCAL YEAR January 1 – December 31

WEIGHTS AND MEASURES

Metric system

Vice President: Obiageli Ezekwesili Acting Country Director: C. Sanjivi Rajasingham

Sector Director: Sudhir Shetty Sector Manager: Kathie Krumm

Task Team Leaders: Sumana Dhar Tracey Lane

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ABBREVIATIONS AND ACRONYMS

AfDB African Development Bank ASA Asmara School of Arts ASM Asmara School of Music ATS Asmara Technical School ATTI Asmara Teacher Training Institute BMI Body Mass Index BPPD Budget Planning and Processing Department COA College of Agriculture COBE College of Business and Economics COMSAT College of Marine Science CPR Couple-year Protection Rate DBTS Don Bosco Technical School ECD Early Childhood Development EFA Education for All EIT Eritrea Institute of Technology ERN Eritrean Nakfa ESDP Education Sector Development Program GDP Gross Domestic Product GER Gross Enrollment Ratio GOE Government of Eritrea HATS Hargaz Agro-Technical School HIPCs Highly Indebted Poor Countries IMR Infant Mortality Rate LEO Local Education Office MDG Millennium Development Goals MF Ministry of Fisheries MHTS Mai Habar Technical School MLA Monitoring Learning Achievement MML Minimum Mastery Level MMR Maternal Mortality Ratio MoA Ministry of Agriculture MOE Ministry of Education MOF Ministry of Finance MoH Ministry of Health MOLG Ministry of Local Government MOLHW Ministry of Labor and Human Welfare MOND Ministry of National Development NGO Non-Governmental Organization NHA National Health Account NRS Northern Red Sea ORT Oral Rehydration Therapy PE Personal Emolument

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PMU Project Management Unit PPS Pupils Per Section PRC Pedagogical Resource Centers SRS Southern Red Sea SSA Sub-Saharan Africa TB Tuberculosis TFR Total Fertility Rate TTI Teacher Training Institutes UNCTAD United Nations Conference on Trade and Development UOA University of Asmara VCT Voluntary Counseling and Testing WB World Bank WHO World Health Organization WTS Winna Technical School ZEO Zobas Education Office

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PUBLIC EXPENDITURE REVIEW – HEALTH AND EDUCATION SECTORS FOR ERITREA

Table of Contents

ABBREVIATIONS AND ACRONYMS...................................................................... III

ACKNOWLEDGEMENTS...............................................................................................I

BACKGROUND AND EXECUTIVE SUMMARY...................................................... II

1. EDUCATION SECTOR ANALYSIS ........................................................................................................ 1 A. Background and Sector Structure .................................................................................................... 1

Background .......................................................................................................................................................1 Sector Structure .................................................................................................................................................3

C. Sector Performance ......................................................................................................................... 6 Trends in Education Outcomes..........................................................................................................................6 Enrollment and Coverage ..................................................................................................................................7 Regional and Gender Disparities .....................................................................................................................10 Education Quality............................................................................................................................................12 Internal Efficiency and Grade Survival ...........................................................................................................16 Non-Formal Education Coverage ....................................................................................................................17

D. Education Sector Expenditure Analysis......................................................................................... 19 Total Public Spending On Education...............................................................................................................19 Intra-Sector Allocations...................................................................................................................................21 Unit Spending per Pupil ..................................................................................................................................23 Equity Issues....................................................................................................................................................32

E. Planning, Budgeting, and Budget Execution ................................................................................. 34 F. Options to Improve Sector Performance........................................................................................ 36

Ensuring Adequate Resources for Education...................................................................................................36 Improving Resource Allocations for Improved Outcomes ..............................................................................36 Potential for Efficiency Improvements............................................................................................................37 Ensuring Adequate Attention to Quality..........................................................................................................39 Improving Organizational Effectiveness .........................................................................................................39

2. HEALTH SECTOR ANALYSIS.......................................................................................................... 44 A. Introduction ................................................................................................................................... 44 B. Background And Sector Structure.................................................................................................. 44

Background .....................................................................................................................................................44 Sector Structure ...............................................................................................................................................45

C. Sector Performance ....................................................................................................................... 46 Trends in Burden of Diseases and Health Outcomes.......................................................................................46 Regional and Income Group Disparities..........................................................................................................50 Trends in Health Interventions and Access .....................................................................................................52 Disparities in Health Interventions and Access ...............................................................................................57 Utilization of Health Facilities.........................................................................................................................59

D. Health Sector Expenditure Analysis .............................................................................................. 61 Total Public Spending on Health.....................................................................................................................61 Intra-Sector Allocations of Government Spending..........................................................................................64 Allocation of External Assistance....................................................................................................................67 Efficiency of Health Service Delivery.............................................................................................................69

E. Revenue, User Fees And Out-Of-Pocket Payments ....................................................................... 70 F. Budget And Expenditure Management........................................................................................... 74 G. Options for Improved Sector Performance.................................................................................... 76

Ensuring Adequate Resources for Health ........................................................................................................76 Improving Intra-Sectoral Allocations for Better Health Outcomes .................................................................76 Improving Efficiency of Expenditures ............................................................................................................77

REFERENCES................................................................................................................ 85

MAP OF ERITREA........................................................................................................ 87

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List of Figures, Tables and Boxes

FIGURES: Figure 1.1: Number of Pupils in School 1999/00 to 2003/4 ........................................................... 7 Figure 1.2: Total Number of Tertiary–level Graduates ................................................................... 9 Figure 1.3: Total Enrollment of Intermediate Level TVET and Percent of Female Students ......... 9 Figure 1.4: Elementary, Middle, and Secondary School GER 2003/4 .......................................... 11 Figure 1.5: Proportion of Female Students 2003/4........................................................................ 11 Figure 1.6: Pupil-Teacher Ratios in Government and Non-Government Schools, 2004/5 .......... 13 Figure 1.7: Pupil Teacher Ratios by Zoba, 2004/05 ...................................................................... 14 Figure 1.8: Evolution of PTR (2000-2005).................................................................................... 14 Figure 1.9: Correlation of Teachers and Pupils by Zoba ............................................................... 15 Figure 1.10: Access and Grade Survival ....................................................................................... 17 Figure 1.11: Elementary (Primary) School Completion Rates: Selected SSA Countries.............. 17 Figure 1.12: Public Education Spending as percent of GDP (selected SSA countries)................. 20 Figure 1.13: Total Public Spending on Education (Domestic and External)................................. 21 Figure 1.14: Total Capital Spending (Domestic and External)...................................................... 21 Figure 1.15: Regional Comparison of Total Public Spending on Elementary Education, 2005 ... 21 Figure 1.16: Recurrent Spending (ERN current prices)................................................................. 22 Figure 1.17: Capital Spending (ERN current prices) (domestic and foreign) ............................... 22 Figure 1.18: Intra-sectoral Allocation of Education Resources (percent of total). ........................ 22 Figure 1.19: Recurrent Spending (percent of total) ....................................................................... 22 Figure 1.20: Capital Expenditures (domestic and external), ERN million ................................... 23 Figure 1.21: Unit Costs in Proportion to GDP per Capita ............................................................. 25 Figure 1.22: International Comparison of Unit Costs (percent of GDP per capita) ...................... 25 Figure 1.23: Basic Education Unit Spending Disaggregated, ERN 2005..................................... 26 Figure 1.24: Unit Spending by Type of School, ERN 2005 .......................................................... 28 Figure 1.25: Unit Spending at Intermediate Technical Schools, ERN .......................................... 28 Figure 1.26: Tertiary Institutions: Disaggregated Recurrent Expenditures, 2005 ......................... 30 Figure 1.27: Tertiary Education Unit Costs, Multiples of GDP Per Capita................................... 32 Figure 1.28: Basic Education Unit Sending Per Pupil (ERN 2002 constant prices)...................... 33 Figure 1.29: MOE Budget Request, Allocation and Actual Spend, 2005 ..................................... 35 Figure 2.1: Trend in malaria morbidity and mortality rates in Eritrea per 1000............................ 47 Figure 2.2: HIV Prevalence, 1994-2005........................................................................................ 47 Figure 2.3: Trends in Infant Mortality and Under-5 Mortality Rates per 1,000 live births ........... 48 Figure 2.4: Low BMI Among Women .......................................................................................... 49 Figure 2.5: Percent of Rural and Urban Children Underweight .................................................... 51 Figure 2.6: Regional disparities in Health Outcome Indicators..................................................... 52 Figure 2.7: Disparities in Health Outcomes by Economic Status.................................................. 52 Figure 2.8: Comparison of DPT3 Vaccination, 2004 .................................................................... 53 Figure 2.9: Number of VCT Visitors, 1999-2005.......................................................................... 53 Figure 2.10: Regional Comparison of Population to Doctor Ratios, 2005.................................... 55 Figure 2.11: Distribution of Health Staff, 2005............................................................................. 55 Figure 2.12: Assisted Delivery Coverage in Selected Africa Countries, 2005.............................. 56 Figure 2.13: Disparities in Health Services between Rural and Urban Areas ............................... 59 Figure 2.14: Disparities in Health Service Coverage by Zoba ...................................................... 59 Figure 2.15: Disparities in Health Service Coverage by Economic Status (Percent) .................... 60 Figure 2.16: Distribution of Outpatient Visit, 2005....................................................................... 61 Figure 2.17: Health Expenditure Per Capita ................................................................................. 63 Figure 2.18: Public Health Expenditures, 2002-2005 US$............................................................ 64

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Figure 2.19: Composition of the Recurrent Expenditure, 2000-2005............................................ 65 Figure 2.20: Share of Salary Expenditure by Categories, 2000-2005 ........................................... 66 Figure 2.21: Share of Drug Expenditure by Hospitals and Lower-Level Facilities....................... 66 Figure 2.22: Share of Government Health Expenditure by Categories, 2000-2005 ...................... 67 Figure 2.23: Composition of External Support, 2002-2005 .......................................................... 68 Figure 2.24: Channel of External Assistance................................................................................. 68 Figure 2.25: Share of Program Support, 2002-2005...................................................................... 70 Figure 2.26: Average Unit Cost of Hospital Care in Eritrea (in Nakfa) ........................................ 70 Figure 2.27: Ratio of Revenue to Recurrent Expenditure.............................................................. 72 Figure 2.28: Ratio of Revenue to Recurrent Expenditures for Hospitals ...................................... 72 Figure 2.29: Ratio of Revenue to Recurrent Expenditure for PHC Facilities................................ 72 Figure 2.30: Percentage of Women Reporting Financial Problems When They Are Sick............ 74

TABLES: Table 1.1: Progress in Primary School Enrollment Rates, 1991 and 1999-2005............................. 1 Table 1.2: Key Policy Indicators for EFA on-track SSA countries and Eritrea .............................. 3 Table 1.3: Structure of the Formal Education System in Eritrea..................................................... 4 Table 1.4: Number of Schools 1999/2000 and 2004/5 .................................................................... 5 Table 1.5: Evolution of Primary (or Elementary) Education GER (1991-2004)............................. 6 Table 1.6: Education Enrollment Rates 1999/2000 to 2004/5......................................................... 7 Table 1.7: Tertiary, Teacher-Training College, and TVET Enrollment, 1999/00 – 2004/05 .......... 8 Table 1.8: International Comparison of Education System Coverage, 2004/5.............................. 10 Table 1.9: Gender Disparities in Net Enrollment Rates, 1991 and 2000 to 2004.......................... 11 Table 1.10: Gross School Enrollment Ratios by Household Wealth Index and Location............. 12 Table 1.11: Pupil Teacher Ratios and Pupils Per Section, 2004/05............................................... 14 Table 1.12: Key Internal Efficiency Indicators (2003/04)............................................................. 16 Table 1.13: Unit Spending in Selected Boarding Schools 2004.................................................... 27 Table 1.14: Tertiary Sector Unit Spending.................................................................................... 29 Table 1.15: ATTI Monthly Unit Spending 2003/04 ..................................................................... 30 Table 1.16: Unit Costs in Higher Education Institutions............................................................... 31 Table 2.1: Number of Health Facilities 1991 to 2005 ................................................................... 45 Table 2.2: Health Facilities by Type and Ownership, 2005 .......................................................... 46 Table 2.3: Leading Cause of Death in Hospitals and Health Centers, 2005.................................. 50 Table 2.4: Numbers of Health Facilities and Staffing ................................................................... 54 Table 2.5: Required Numbers of Health Facilities Based on MOH Standards.............................. 54 Table 2.6: Health Facilities and Staff by Zoba 2005 ..................................................................... 58 Table 2.7: Outpatient Visits and Inpatient Admission by Zoba, 2005........................................... 60 Table 2.8: Total Health Expenditures ............................................................................................ 62 Table 2.9: Government Expenditure in the Health Sector, 2000-2005 (US$ 000) ........................ 64 Table 2.10: Expenditure Summary Table, MOH, 2000-2005 US$ 000 ........................................ 65 Table 2.11: Level and Structure of Health User Fees (ERN) ........................................................ 71 Table 2.12: MoH Revenue from Health Service Fees (US$), 2000-20005 ................................... 71

BOXES: Box 1.1: Data Limitations............................................................................................................... 2 Box 1.2: Returns to Schooling...................................................................................................... 24 Box 1.3: Unit Cost Corroboration................................................................................................. 30 Box 1.4: The Challenge of Increasing Girls Attendance at School .............................................. 41 Box 2.1: Survey of External Assistance ....................................................................................... 69 Box 2.2: Developing a Range of Cost Effective and Targeted Health Interventions ................... 78

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Acknowledgements

This is the first Public Expenditure Review (PER) for Eritrea, sponsored by Colin Bruce (Country Director) and Chris Lovelace (Country Manager) and directed by Kathie Krumm (Sector Manager, AFTP2). The report was prepared by a World Bank team led by Sumana Dhar (Country Economist and Task Manager). Chapter 1 on the education sector was written by Dandan Chen (Senior Education Economist) and Chapter 2 on the health sector was written by Feng Zhao (Senior Health Specialist). Fred Kilby (Lead Economist) provided continuous support and guidance to the team and drafted the executive summary. Andrea Purdekova and Tesfa Mariam Tekie provided valuable research assistance. Tracey Lane produced the final version of the report in consultation with the Government of Eritrea and the World Bank country team. The report is the product of close cooperation with the government, who not only provided direction and data but were also active in developing the analysis and conclusions during several workshops over the course of January to June 2007. The report would not have been possible without the generous support and guidance of the Ministers and staff of the Ministries of National Development, Education and Health and the World Bank would like to thank the following individuals in particular: Dr. Woldai Futur Minister of National Development, and advisers Dr. Mathewos Woldu, Prof. Abraham Kidane and Dr. Girmai Abraham; the former Minister of Education, Osman Saleh and his team including Dr. Ato Mussa Naib, and Messrs Ato Petros Hailemariam, Ato Ghebrehannes Hagos, Ato Ghebrezghi Dimam, and Ato Haddish Tesfamariam, and the Minister of Health and his team Messrs Ghermai Tesfaselasie, Eyob Tekle, Asemehay Yebio, Leteyesus Nega, and Shashu Gebreselassie. The information shared by the international donors was critical in providing a more complete picture of resources allocated to the health and education sectors. The team would like to thank representatives of the United Nations, European Union and African Development Bank (AfDB) as well as from the Chinese, French, Italian, Netherlands, Norwegian, Russian, South African, United Kingdom and United States governments. The team would also like to thank Christopher Lovelace (Country Manager), Samuel Iyasu Zerom, Efrem Fitwi, Saba Solomon Tekle, and Sofia Woldu in the Asmara Resident Mission for their comments and guidance in completing the draft and their help in facilitating the cooperation throughout. This report was edited and finalized with the assistance of Caroline Kidiavayi and Mary Carneiro in the Nairobi office of the World Bank.

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BACKGROUND AND EXECUTIVE SUMMARY

1. Eritrea is one of the poorest countries in the world, with an average annual per capita income of US$ 200 in 2006, and ranks 157th out of 177 countries in the 2005 Human Development Index. The population is estimated to be about 4 million of who two thirds normally live in rural areas – although there has been no recent census. The population is relatively young, 43 percent is under 15 years old. The fertility rate is still high at 4.8 births per woman and the population is projected to increase by 50 percent by 2020.

2. Rain-fed agriculture, the predominant economic activity for more than half the population, is a very risky enterprise and food security remains one of the government’s main concerns. The climate of Eritrea is mostly arid or semi-arid, with large fluctuations in rainfall which lead to dramatic swings in agricultural output and domestic food availability. Even in years characterized by exceptionally good rainfall, food production is unlikely to fulfill the population’s food-grain requirements. Favorable rains and rehabilitation of rural infrastructure, however, have led to improved agricultural performance and food security in the last three years, following the droughts witnessed in 2002 and 2003.

3. Eritrea is a young nation state. After a 30 year war with Ethiopia, Eritrea attained de facto independence in May 1991 and de jure independence two years later. The initial years of independence were marked by impressive progress in rehabilitating basic economic and social infrastructure, improving social indicators, macroeconomic stability and economic growth. During 1993-97, the economy grew at an average annual rate of 10.9 percent. These development gains were interrupted when a border dispute with Ethiopia erupted into renewed conflict in May 1998. Despite a Peace Agreement signed in 2000, and the establishment of a Temporary Security Zone (TSZ) monitored by a U.N peace-keeping force, physical border demarcation has stalled and the border is demarcated according to gridlines only.

4. Most essential infrastructure has since been restored with government and donor financed programs. But the economic fallout from the war still impacts on the country’s economy. Not only did the physical, economic and social infrastructure inherited at independence require extensive rehabilitation, the subsequent border war caused immense damage requiring reconstruction. Remittances from the Eritrean diaspora in the US, Europe and the Middle East are helping considerably. Eritrea has made progress in reducing the current account deficit from a high of 41 percent of GDP

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in 2002 (before grants) to 30 percent of GDP by 2005. However, exports remain low and foreign exchange reserves are less than two weeks of imports. In January 2005, the parallel foreign exchange market was suppressed and the exchange rate unified at ERN 15 per US$1.00 (below the then prevailing parallel market rate of around ERN 25 to US$1). There are large fines and possible imprisonment for trading in the parallel market and hence estimates of the informal rate are not available. In addition to the adverse implications for private sector activity, the absence of a market clearing exchange rate also distorts the national and fiscal accounts by undervaluing tradeables. The calculations of public expenditure used in this report have not, however, been adjusted to reflect any implicit dollar undervaluation. This will need to be carefully considered in managing a future transition to a market–based exchange rate system.

5. In a situation that has been described as "no war, no peace", Eritrea’s government has remained in a state of heightened mobilization. In this climate of instability, with labor shortages (as a result of mobilization) and reduced trade, the economy has been under strain. The government has responded through increased state intervention in the economy and the introduction of price controls. Estimates suggest real GDP growth averaged 1.0 percent between 2005 and 2007. The economic performance has suffered from the lack of security and resolution of the border conflict. However, there has been considerable success in fiscal consolidation bringing deficits down from around 45 percent of GDP in 2000 to about 10 percent of GDP in 2006. The outturn for the first three quarters of 2007 suggests that the deficit will continue to diminish. Public spending has been brought down by lower goods and services spending and reduced spending on capital projects, particularly those financed externally. However, further fiscal consolidation will be required for sustainability. This review of public spending should be seen in the light of this fiscal consolidation and constraints on both domestic revenue mobilization and availability of external grants. Furthermore, the exchange rate regime and low export base have led to foreign exchange shortages which impact on spending priorities and challenge policy makers in the health and education sectors. 6. Although much improved, fiscal deficits remain unsustainable over the long term and imbalances result in a risk of macroeconomic instability and debt distress. High fiscal deficits during and after the border conflict led to a rapid accumulation of public debt. Eritrea’s public sector debt is estimated at US$2.06 billion as of end 2007, corresponding to 157 percent of GDP. External debt is estimated at US$850 million with a Net Present Value (NPV) of 38 percent of GDP. Borrowing has been predominantly on concessional terms, with about 60 percent of Eritrea’s external debt stock as of end-2007 owed to multilateral creditors and about 30 percent to non-Paris Club creditors. Most external debt burden indicators indicate a risk of debt distress and are projected to remain above their thresholds. During the war, large budget deficits and limited access to foreign financing led the government to rely largely on domestic financing. Eritrea’s domestic debt is about 92 percent of GDP as of end-2007. Presently, domestic debt is shared approximately equally between the central bank and the two commercial banks. Despite the large size of the debt, annual interest on domestic debt amounted to only about 2.7 percent of GDP owing to the administratively controlled treasury bill rate of 3 percent.

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7. Given the security situation the government is concerned about fiscal transparency for national security reasons, but has provided access to fiscal data for a review of the education and health sectors. Hence, fiscal transparency, which is an accepted part of the governance structure for accountability, competitive resource allocation and participatory decision making, is far more limited than in other countries. The Government has agreed that a Health and Education Sectors Public Expenditure Review (PER) would be useful to provide an assessment of the effectiveness of government spending and donor assistance to ensure resources are being put to good use, and to develop a basis for a dialogue on possible improvements in the efficiency or equity of service delivery in these important human development sectors. This Review is based on a terms of reference agreed with the government in 2006. It aims to provide insights into the management of public resources in two key human development sectors. The PER draws on the findings of the 2006 IMF article IV consultation in order to provide some basic information on the macroeconomic setting which are important for understanding the broader fiscal environment for these sectors, but intentionally does not provide any new analysis. The government has provided information to the IMF on the composition of broad expenditure aggregates and more detailed sectoral information to the World Bank and other donors in the context of sector policy discussions and project preparation activities. It has also been willing to provide audited statements and other information to supervision missions in accordance with project agreements. However, the lack of certainty and predictability of information flow remains of concern to donors, who are ultimately accountable to their own taxpayers. The government has not agreed to the public disclosure of the PER. 8. There have been significant improvements in access to education since independence, and improving the skills of the labor force remains critical for Eritrea’s long term development. At independence the population was largely illiterate (80 percent) with a backlog of children and adults who had no formal schooling. The government has readily taken on the challenge of getting children back into school and increasing adult literacy rates with great success. However, the challenge of improving access to basic education without compromising quality remains. A five year Education Sector Development Program (ESDP) was developed in 2003 which prioritized basic education, expanding access and improving quality. At higher levels of education, the objectives were improved quality and efficiency, and promoting better national and international partnerships in service provision. 9. Eritrea’s public resource allocation to education has increased rapidly and at 6.7 percent of GDP in 2005 (including external assistance) is slightly higher than many countries in the Africa Region. This review suggests there may be significant returns from raising the relative share of basic education spending in total education spending. The increased share will not only enable the expansion of access but also improve the quality of basic education. Currently, for those in elementary school, the government spends about 9 percent of GDP per capita per student on average, which is lower than 12 percent that is recommended by the Education for All policy indicative framework. The low unit spending raises concerns on the quality of education service

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delivery across the system, as it commonly links to a systemic shortfall in resources to pay for essential inputs, particularly in terms of the number of teachers, and the availability of teaching and learning materials.

10. Access has expanded at all levels. The biggest improvements in gross enrollment rates have been in pre-primary, elementary and tertiary education. At elementary level, the total number of pupils increased by nearly 30 percent between school years 1999/2000 and 2004/05. Despite expanding schooling opportunities, Eritrea faces significant challenges in enrollment and completion of elementary school. The elementary school Gross Enrollment Ratio (GER) is only 72 percent, twenty percentage points lower than the low-income countries and the Sub-Saharan African (SSA) averages of 92 percent. There is also concern with respect to gender equity in school enrollment. In 2003/04, only 44 percent of the enrollees at elementary level were girls. Gender disparities are largest in Deb-Keih-Bahri or South Red Sea Zoba (region) which had the lowest proportion of girls at school, only 30 percent at elementary level, and 26 percent at middle school. Additional challenges lies in the high repetition and dropout rates, which result in low elementary completion rates of 50 percent on average. 11. There has been a rapid expansion in tertiary education following investments in 2005 to provide an additional five colleges. In 2005, spending on tertiary education reached 48 percent of the total recurrent expenditures on education. This is much higher than the level of 15-20 percent recommended in a recent Bank study on "building knowledge economies". Although this may partly reflect the high start-up costs and investment in these institutions, policy makers need to be aware of the challenges ahead with regard to the potential impact on the availability of resources to expand education coverage and improve quality at the lower levels of education.

12. The general health status of Eritrea has greatly improved since independence. Many health outcome indicators compare favorably with SSA neighbors. Based on the Demographic and Health Surveys of 1995 and 2002, life expectancy increased from 45 years to 51 years, the infant mortality rate decreased from 72 deaths per 1,000, the under-five mortality rate dropped from 136 to 93 deaths per 1000, and the Total Fertility Rate (TFR) decreased from 6.1 to 4.8 births. Success in some disease control programs is particularly impressive. The Ministry of Health has focused on infectious disease control, particularly malaria and HIV/AIDS, as health sector priorities. About half of all households in malaria areas have at least two insecticide-treated bed nets. Malaria morbidity and mortality has dropped over 80 percent since 1999, making Eritrea one of only a few countries in SSA to meet the Abuja "Roll Back Malaria" targets. Eritrea has also achieved a rapid increase in access to Voluntary Counseling and Testing (VCT) services for HIV/AIDS. Childhood immunization coverage in Eritrea is also higher than the world average. 13. Nevertheless, important health challenges remain. Rural households suffer worse health outcomes than urban areas since access to services is more limited. Malnutrition remains a significant problem, with an estimated 38 percent of Eritrean children stunted (with height-for-age under 2 standard deviations) and 40 percent

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underweight (with weight-for-age under 2 standard deviations); and 37 percent of women with a low Body Mass Index. The poor nutrition status of children and women leaves them vulnerable to health problems. Although it has declined sharply in the past 10 years, the Maternal Mortality Ratio (MMR) in Eritrea is still relatively high at an estimated 752 deaths per 100,000 live births. Nationally, only 28 percent of births were attended by skilled health professionals, and low assisted delivery in rural areas is believed to be one of the main reasons for high maternal mortality rates. For children aged under five, the two leading causes for outpatient visits to hospitals and health centers are Acute Respiratory Infection (45 percent) and diarrhea (24 percent). 14. Improvements in health outcomes have been achieved with relatively low per capita health expenditures (including both public and private expenditures). The World Health Organization (WHO) estimates that the total health expenditure in Eritrea is about US$8 per capita. A World Bank survey of donors suggests that spending may be higher as a result of poor reporting of external assistance to the health sector. Altogether, total spending in the health sector is estimated by the Bank to have reached US$ 43.4 million in 2005, or about US$10 per capita. This is still well below the 1993 World Development Report calculation that US$12 per capita is needed to deliver a minimum service package in low income countries. Given the remaining challenges and Eritrea’s success to date in improving health outcomes, there is scope for putting additional health spending to good use.

15. The number of health facilities has increased substantially since independence, by 70 percent between 1994 and 2005. Comparing the number of facilities with the Minitry of Health’s service standards, Eritrea has met the target for the number of hospitals, but there is a shortage of health centers and health stations across all regions. There has been a rapid increase in private clinics to fill the gap, but more than half of these clinics are located in the comparatively wealthier areas of Asmara and Maakel Zoba. The number of health staff has increased from 327 in 1991 to 6,033 in 2005, with the largest increases attributed to "non-professional" staff. Despite this, there is an overall shortage of health professionals, based on the WHO standards of doctor to population ratio of 1:10,000, and nurse to population ratio of 1:5,000. On average there is one doctor for 20,000 people in Eritrea, although better than Uganda and Tanzania and only slightly behind Kenya, it is short of the needs. Health staffing is skewed toward the national referral hospitals which contribute to the shortage of health staff at lower levels.

16. Government’s spending represents a priority for hospital based care given a heavy investment in emergency health care, to allow for the tense border situation and possibilities of conflict. Although hospital spending has been on the decline recently, from a peak of 64 percent of its health spending, it still accounted for just under half of all health spending in 2005. Expenditure on health centers and health stations on the other hand, which are critical to rural primary health care, fell from 21 percent in 2003 to 15 percent in 2005. Most drug spending is for hospitals (73 percent), while lower level facilities receive only 18 percent of total drug expenditures. The allocation of health facilities, health staff and health spending consistently favors urban areas and central regions. As a result, there is a shortage of primary health care facilities and staff,

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particularly in rural areas. Eritrea has experience of using community-based interventions and these alternative service delivery approaches should be considered to reach out to the disadvantaged households. Following the development of public health technology, many effective services can be delivered at the community level outside of health facilities. Alternative service delivery methods should complement primary health facilities and strengthen the link between the community and the health network. 17. Approximately three quarters of government health spending is recurrent, mainly for salaries, and external assistance is relied upon for capital investment and program support. External assistance can fluctuate considerably. In 2003 external support was US$21.9 million and in 2004 it was US$ 35.6 million. The difference of US$13.6 million dollars is more than the combined 2003 and 2004 annual budget of the Ministry of Health. The variation of support and lack of predictability creates difficulties in ensuring national priorities are funded and an updated sector-wide strategy is needed to align resources toward results. 18. Private health expenditures are estimated around 3 percent of GDP. User fees were introduced in 1996 and accounted for 20percent of recurrent expenditures in 2005. Although fees support the running of hospitals in particular, there are concerns that they have become a barrier for utilization of services among the poor. Poorer households (consumption below the median) spend 12 percent of household consumption on health services; while richer households (consumption above the median) spend only 4 percent for health. 19. This PER provides insights into the human resources spending and policy challenges for the Government of the State of Eritrea under the current political and economic circumstances. Despite the unfavorable external environment, health and education indicators show the government has had considerable success with improving access to public services and improving human capital, since independence. However, considerable challenges remain to improve access to and completion of basic education and to ensure primary health care is accessible to the poor and rural households. The health and education chapters which follow provide some suggestions for intra-sectoral policy and spending priorities going forward to address these challenges.

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Education Sector Analysis A. BACKGROUND AND SECTOR STRUCTURE

Background

1.1 At independence the Eritrean public education system was barely covering one third of the population. Many facilities had been destroyed by the war. Adult illiteracy rates were estimated to be about 80 percent. Since then impressive gains have been made in improving access to schools, especially at the primary level. Table 0.1 below shows that primary school enrollment rates have increased rapidly since the early 1990s, tripling in about ten years. While uneven, progress has been made in both male and female enrollment rates. This has largely been through an expansion in public school provision, with the proportion in private schools falling from one third of students in 1991 to 8 percent in 2005. Given such low-levels of access to education 16 years ago the government’s success in meeting the challenge of improving access cannot be underestimated. There are now an additional 270,000 students and 5,000 teachers in primary schools alone.

Table 0.1: Progress in Primary School Enrollment Rates, 1991 and 1999-2005

Year School enrollment, primary (% gross)

School enrollment, primary (% net)

School enrollment, primary, female

(% net)

School enrollment, primary, male

(% net) 1991 20.6 15.5 15.4 15.6 1999 56.8 36.2 33.5 38.8 2000 62.1 40.9 37.9 43.9 2001 60.3 41.6 38.4 44.7 2002 64.0 45.0 41.2 48.7 2003 66.6 47.5 43.7 51.4 2004 66.5 47.8 43.8 51.7 2005 64.1 47.0 43.3 50.7 Source: World Development Indicators, 2007.

1.2 Following gains made in basic education in the 1990s, the sector underwent structural changes between 2001 and 2005 (the period of focus of this report) . The Government of Eritrea’s (GOE) 2002 “Concept Paper for the Rapid Transformation of the Eritrean Educational System” set the vision for the education and training required for a labor force to enable Eritrea to become a “viable and vivacious nation”. The platform aimed to: (i) abolish waste of resources; (ii) open opportunities to Eritreans of all ages to develop their full potential both professionally and personally; (iii) ensure education is employment-oriented; and (iv) ensure internationally-accepted quality standards. In 2003, the Ministry of Education (MOE) developed a five year plan: the Education Sector Development Program (ESDP), which prioritized expanding primary education and improving quality towards the goal of universal elementary education. At higher levels of education, the objective was to focus on improving quality and efficiency, and promoting national and international partnerships in service provision.

2

Box 0.1 Data Limitations A few data limitations need to be noted. Ideally, the review should provide a complete picture of financing from all domestic resources such as: (1) central government revenue; (2) local government revenue; (3) private sector financiers; (4) parents/households, together with external resources from (5) bilateral and multilateral institutions; and (6) non-governmental organizations (NGOs). Given the available data, the chapter predominantly relies on (1) and (5) above, which constitutes the bulk of the resources in the sector.

Second, “education and training” responsibilities in Eritrea go beyond the mandate of the Ministry of Education (MOE). For example, the Ministry of Labor and Social Welfare and the Ministry of Defense also spend public resources on training activities. The review only covers the activities carried out under the MOE, which currently represents the largest share of spending on education and training activities in the country.

The third limitation is with regard to the accuracies of the data. MOE’s annual publication of “Essential Education Indicators” and “Basic Education Statistics” are the main data sources. The Unit of Budgeting and Planning in MOE provided detailed data on tertiary institutions, and the University of Asmara (UOA) provided data on the University’s expenditures. According to some MOE officials, data discrepancies still exist, even in MOE published data due to delayed reporting of spending data and low data collection and corroboration capacities in the Ministry. World Development Indicators are used for cross-country comparisons. During the preparation of this chapter, data corroborations have been done to the extent possible to ensure reliability. The aggregated discrepancies of public expenditure data are generally found to be small.

There are some specific data concerns. The first is with respect to school-age populations which affect the calculations of enrollment ratios. The current school-age population data in “Essential Education Indicators” is based on the population projections provided by the Central Bureau of Statistics, and extrapolated from the population census in the early-1990’s and subsequent household surveys. It is found that the enrollment ratio estimates in “Essential Education Indicators” are much lower than those based on data provided by the household Demography and Health Survey (DHS) in 2002. This chapter uses the former to track sector performance. DHS data is used only for information that MOE statistics do not cover, such as enrollment disparities by household wealth and residence.

Second, the categorization of expenditures, such as recurrent and capital, salaries and non-salaries, follows the MOE records. In general, the recording of the expenditure items appears to follow the Ministry of Finance’s (MOF) issued guidelines. However, a complete assessment to corroborate the data accuracy regarding the categorization of spending items has not been done. In addition, almost all external funding is now in the form of project-finance and categorized as capital spending, even though a proportion of external financing is also for recurrent items such as textbooks and expatriate teacher’s remunerations. This leads to an underestimate of unit (or recurrent) spending. Wherever possible, comparisons excluding and including these items are presented in the analysis.

Last, it should be emphasized that the PER covers the period 2001 to 2005, a period characterized by a number of new capital investments and transformation of the education system in Eritrea. This includes the addition of grade 12, the shift of grade 8 to the middle level, and the expansion of the tertiary level. This transformation is further reflected in the changes of public spending patterns and has yet to reach a steady state. This chapter emphasizes the transitional nature of the sector, and projects the “steady-state” when necessary.

3

1.3 Raising public expenditure on education has been the prime policy instrument for implementing reforms to improve education outcomes. The public expenditure patterns and other sectoral indications show that Eritrea has some way to go to achieve the goal of universal primary education. Table 0.2 presents the comparison of Eritrea with the World Bank’s Education For All (EFA) on-track countries using the framework developed by the World Bank. The last column of the table shows the recommended parameters for Eritrea to reach the Education Sector Development Plan targets. More information on the ESDP targets is given in Annex 0.2.

Table 0.2: Key Policy Indicators for EFA on-track SSA countries and Eritrea

EFA on-track SSA countries average

Eritrea 2001-2003

average spending

Eritrea 2004-2005

average spending

Projection based on ESDP targets

(2015) Public spending on education, percent of GDP 3.8 2.6 4.7 4.4

Public spending on elementary education, percent of total public education spending 48 39 22 28

Primary education unit cost as percent of GDP per capita 12

9.3 8.3 12

Non-salary (percent of total) 25 3.7 4.4 25

Salary (percent of total) 75 96.3 95.6 75

Average teacher pay, multiple of GDP per capita 3.3 ... 2.8 3.5

Pupil-teacher ratio 39:1 45.3:1 47.5:1 40:1

Average repetition rate (percent) 9.5 20 16 2

Primary completion rate (percent) 85 53 51 90

Source: EFA Indicative Framework, WB.

Sector Structure

1.4 As shown in Table 0.3 Eritrea’s formal basic education system consists of a four-tier structure comprising elementary, middle, secondary, and tertiary levels. In 2002/3, the 5-2-4 structure (five years of elementary, two of middle, and four years of secondary education) became a 5-3-4 structure with a grade added to middle-school. In 2003, 12th grade schooling was introduced at one site located in Ghash Barka Zoba which has capacity for 17,000 students.

4

Table 0.3: Structure of the Formal Education System in Eritrea

Age Years of

Schooling Education TVET

22 16 21 15 20 14

19 13

University, Colleges, Teacher training institutes Degree: 4 years Diploma: 2-3 years Certificate: 1 year

Pass Eritrea Secondary Education Certificate Examination (ESECE)

Advanced TVET

18 12 12th grade at Sawa 17 11

16 10

Intermediate level

TVET

15 9

Secondary

pass Grade 8 national examination

14 8 13 7 12 6

Middle

Skills Development Centers

11 5 10 4 9 38 27 1

Elementary

65

Pre-school

1.5 In addition to elementary, middle and secondary school there is a program of Technical and Vocational Education Training (TVET) which is mostly school-based in the form of “technical schools” at the secondary and post-secondary level. There are seven intermediate level technical schools: the Asmara Technical School (ATS) was established in the 1950s and the Winna Technical School (WTS) was established during the freedom struggle. The Mai Habar Technical School (MHTS), Don Bosco Technical School (DBTS), Hamelmalo Agriculture School (HAS) and Hargaz Agro-technical School (HATS) all started in the late 1990s, while the Massawa Commercial and Technical school started in 2005. Other TVET institutions include Asmara School of Arts (ASA) and the Asmara School of Music (ASM). “Advanced” or post-secondary level TVET institutions include Asmara Commercial College and Asmara Technical Institute. They are two-year institutions that grant certificates in various fields.

1.6 Tertiary-level education is provided by the UOA, teacher training colleges and five new institutions that opened in 2003/4. These are the Eritrea Institute of Technology (EIT) in 2002/3, and the College of Marine Science (COMSAT), College of Agriculture (COA), College of Business and Economics (COBE), and College of Health Science the following year. The university, colleges, and advanced-level technical and vocational (TVET) institutions require entrants to pass national

5

examination after grade 12. There are also basic and intermediate TVET institutions for those that complete middle school at grade 9.

1.7 There are also several publicly-provided non-formal education programs. These include literacy and adult education; special programs targeting out-of-school children; and radio programs providing life-skills education; and supporting formal education through pedagogy support to teachers and English-language programs for students. Mass media has been effectively used in the delivery of adult literacy classes. The Media Unit complements literacy lessons through 22 hours of radio lessons per week. This is limited to two indigenous languages, Tigrinya and Tigre.

1.8 To accommodate the increasing number of students the total number of public schools has increased significantly (see Table 0.4) with an average annual increase in middle, secondary and technical schools of between 8–11 percent. There are few non-governmental schools. Only eight percent of enrolled elementary school students, seven percent of middle school students, and four percent of secondary school students are enrolled in non-governmental schools. This includes foreign and locally-run private schools. The proportion of enrollments in non-government schools is the highest in Zoba Maekel and Zoba Debub, at lower grades of elementary education.

Table 0.4: Number of Schools 1999/2000 and 2004/5

1999/2000 2004/5

Average annual increase during the 5-year span

Pre school 90 359 59.8% Elementary schools 655 764 3.3%

Middle schools 131 205 11.3% Secondary schools 38 58 10.5% Special schools 3 3 0.0% Technical schools 5 7 8.0% Teacher training school 1 1 0.0% Literacy program centers 796 1,117 8.1%

Source: MOE

1.9 The transition from a centralized education system to a decentralized one is on-going. The Decentralization Act 1996, and subsequent regulations adopted by MOE, provide for the devolution of education service delivery. At Zoba level, the MOE has six Zobas’ Education Offices (ZEOs) which are responsible for local education service delivery. ZEOs handle personnel and finance administration and pedagogical activities according to MOE regulations and standards. Pedagogical Resource Centers (PRC) and Local Education Offices (LEO) provide support to all levels of schools. Important steps have been taken to establish, organize, and staff the key units of ZEOs, such as the education management information system unit and new organizational requirements introduced in 2005 are being implemented gradually. For some key functional units, such as planning and project implementation unit, lack of staff remains a major concern.

1.10 The role of the community and parents in school management is evolving. At community and school level, local community and Zoba councils are

6

responsible for preschool and elementary school development, administration, and maintenance. Parent Teacher Associations (PTAs) are also involved in overseeing school management. School directors are responsible for day to day administration. The local community and Zoba councils are being established progressively and their capacity still needs strengthening for effective service delivery. While PTAs do exist, many of them are not functioning.

1.11 The central ministry retains responsibility for policy and standards formulation, research and human resource development, sector development planning, and monitoring and evaluation. Specifically, MOE is responsible for curriculum specification, textbooks and other teaching and learning materials development, national examinations administration, teacher development, and education quality assurance. The central ministry also oversees service delivery in the TVET sub-sector and tertiary institutions directly. While elementary, middle, and secondary schools report to the Zoba education officers, MOE’s TVET institutions report directly to the Department of Technical Education in the central ministry.

C. SECTOR PERFORMANCE

Trends in Education Outcomes

1.12 There is a declining proportion of males and females without any formal education in successively younger age groups. According to the Demography and Health Survey (DHS) data the proportion of women with no education decreased from 95 percent at age 65 and above, to 21 percent for those aged 10 to14 years. In 1995, the proportions of boys and girls aged 10 to14 years who had never attended school were 32 percent and 40 percent respectively, compared with 15 percent and 21 percent in 2002. Compared with other states in the region particularly those with low GERs in the 1990s, Eritrea has successfully sustained the expansion of basic education coverage over the past decade (see Table 0.5).

Table 0.5: Evolution of Primary (or Elementary) Education GER (1991-2004)

0

20

40

60

80

100

120

140

160

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Angola

Burundi

Central African Republic

Congo, Dem. Rep.

Eritrea

Ghana

Kenya

Mozambique

Rw anda

Sierra Leone

Sudan

Tanzania

7

Source: MOE, Edstats.

Enrollment and Coverage

1.13 School enrollment at all levels of formal education has continued to increase from very low levels at independence. As Figure 0.1 shows, the number of students enrolled in basic education increased by 42 percent over the period 2000 to 2005. At pre-school level, total enrollment almost tripled since 1999/2000. At elementary level, the total number of pupils increased by 28 percent from 1999/2000 to 2004/5. The change in structure (with the addition of an extra year of middle school in 2003/4) affected middle-school enrollment which increased by around 40 percent during the year of introduction. This jump was in addition to average annual growth in enrollment of 5 percent per annum. At secondary level enrollment increased by 33 percent between 1999/2000 and 2004/5.

Figure 0.1: Number of Pupils in School 1999/00 to 2003/4

377,512

139,029

76,051

11,885 12,436 12,747 14,958 18,54031,244

295,941298,691

330,278359,423

374,997

74,317 76,564 80,882 87,019122,966

57,334 63,951 70,183 72,818 69,401

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

Pupils: elementary Pupils: middle Pupils high pre-school

Source: MOE

1.14 Enrollment rates have improved the most in primary, elementary and tertiary levels. Measured by the numbers enrolled in school relative to the relevant population size, the pre-school, elementary and tertiary level enrollment rates have increased the most, while middle and secondary level enrollment rates have increased much more gradually over the period as shown in Table 0.6.

Table 0.6: Education Enrollment Rates 1999/2000 to 2004/5 1999/2000 2000/1 2001/2 2002/3 2003/4 2004/5 Pre-school GER 6.1 6.17 6.11 7.07 9.11 16.3Elementary GER 62.9 61.4 65.5 70.3 71.7 71.7Middle level GER 45.3 45.1 46.0 48.8 44.9 48.4Secondary GER 21.9 22.7 24.0 24.6 23.4 24.0

8

Tertiary students per 100,000 156 35 35 69 135 262Source: MOE

1.15 In line with government policy to improve the skills of the labor force there has been a notable expansion of enrollment in new tertiary level institutions.Total number of tertiary-level students increased from 6,300 to 15,500 in the period 2000 to 2005 as five new tertiary-level institutions were established enrolling a total of 11, 515 students (see Table 0.7). While the number of students at the new institutions increased, the pre-existing UOA and the Asmara Teacher Training Institute (ATTI) have had lower numbers of students as the new institutions have become principal teacher training institutions in an effort to improve the numbers of teachers (elementary, middle and secondary school) trained to diploma level.

1.16 However, evidence points to the difficulty of keeping higher educated workers in the country. Care should be paid to the demand-side of the labor market as these tertiary programs are developed. Skills need to be relevant for the local labor market if they are to add directly to long-term growth prospects. Recent evidence shows that around 46 percent of tertiary educated adults out-migrated from Eritrea in 2000 and the average for low-income countries was 21 percent.1

1.17 Furthermore, enrollment at the pre-existing tertiary institutions declined substantially. This was for two main reasons: (1) The addition of a grade 12 at the end of secondary education in 2003/04; and (2) the decision to channel all secondary students to the newly established colleges at tertiary level for the first year of post secondary education. Therefore there have been no incoming students for two years.

Table 0.7: Tertiary, Teacher-Training College, and TVET Enrollment, 1999/00 – 2004/05 1999/00 2000/1 2001/2 2002/3 2003/4 2004/5 est

Eritrea Institute of Technology .. .. .. 1,655 3,672 8,227 College of Marine Science .. .. .. .. 140 608 College of Agriculture .. .. .. .. 474 1,032 College of Business and Economics .. .. .. .. 782 1,648 University of Asmara 4,713 5,507 4,836 3,980 2,724 2,123 Teacher Training Colleges 606 961 1,022 874 474 .. TVET total 1,018 1,866 1,992 1,965 1,917 .. Advanced level TVET 306 359 330 281 160 .. Basic and intermediate level TVET 712 1,507 1,662 1,684 1,757 1,827

Total 6,337 8,334 7,850 8,474 10,183 15,465 Source: MOE

1.18 The average number of graduates from the UOA had been around 1,000 per year, a quarter of whom were graduates of the Faculty of Education, who went on to become middle or secondary school teachers (see Annex 1.1)2. The new tertiary

1 United Nations Conference on Trade and Development (UNCTAD) 2007. 2 Another key post-secondary training institution that exists is the College of Nursing and Health Technology currently under the MOH. It produces 200-300 nurses, pharmacists, and other medical technicians per year.

9

institutions started to produce diploma graduates in 2005. Once these institutions are at their full capacities, over 3,000 graduates are expected to enter the labor market a year.

1.19 Albeit increasing, enrollment at intermediate level TVET schools is low compared with general secondary schools. Enrollment at advanced-level TVET institutions actually declined. Although TVET enrollment almost doubled between 1999/2000 and 2004/5 as a result of expanding enrollment in basic and intermediate level it is still low compared to secondary school. Intermediate level

enrollment accounted for less than 5 percent of enrollment in grades 10 and 12 in 2003/4. Enrollment at advanced level TVET actually declined and this is potentially due to the absorption of secondary school graduates into the newly established tertiary institutions.

Figure 0.3: Total Enrollment of Intermediate Level TVET and Percent of Female Students

0%

5%

10%

15%

20%

25%

30%

1999/00 2000/01 2001/02 2002/03 2003/04

0

200

400

600

800

1000

1200

1400

1600

1800

2000

total enrollment % of female enrollment

Source: MOE .

1.20 Despite the increases in enrollment rates across the education spectrum, Eritrea continues to lag SSA and low-income country averages at elementary level. However, secondary school enrollment rates are higher and tertiary levels on a par with the SSA average. Eritrea’s elementary gross enrollment rate of 72 percent is 20 percentage points lower than both the average for low income countries and SSA

Figure 0.2: Total Number of Tertiary–level Graduates

713

928

1,1111,233

909

1,072

180

0

200

400

600

800

1,000

1,200

1,400

2000 2001 2002 2003 2004 2005

new Ins.

UoA

Source: MOE Note: new ins. Refers to the recently established technical institutions

10

countries (92 percent). By comparison, middle and secondary level enrollment rates are slightly higher.3 At tertiary level, the rapid increase in enrollment now places Eritrea close to the SSA average (see Table 0.8). Thus with less than a third of the average GDP per capita of the SSA region, Eritrea has relatively good education system coverage at secondary and tertiary levels, but the proportion receiving elementary education is still low.

Table 0.8: International Comparison of Education System Coverage, 2004/5

Gross Enrollment Rates

Elementary /Primary

Secondary (middle and secondary)

Tertiary (students per

100,000 population)

Eritrea 71.7 37.3 262Low income countries average 92.1 32.9 ..SSA countries average 92.4 28.1 286Source: Edstats, WB.

Regional and Gender Disparities

1.21 Albeit greatly improved since independence, regional disparities in enrollment rates at all education levels persist and remain a policy concern. In 2003/4, Sem-Keih-Bahri (North Red Sea) and Deb-Keih-Bahri (South Red Sea) had the lowest elementary gross enrollment rates at 33 percent and 44 percent respectively. This compared to Debub where the GER was 100 percent. The GER disparities widen at higher levels of education and the secondary school. GER is only 7 percent in Sem-Keih-Bahri – one seventh of that in Maekel. These regions are characterized by low population density, nomadic populations and few schools. The challenge of improving enrollment rates is affected by both demand and supply factors. To tackle these issues, the government has been investing in boarding schools and providing financial incentives for disadvantaged groups. At the other end of the spectrum, Debub’s elementary school GER has reached 100 percent and Maekel (the central Zoba where the capital city Asmara is located) has even middle school enrollment rates of 88 percent and almost 50 percent at secondary level (see Figure 0.4).

3 Many countries categorize as “lower/junior” and “upper/senior” secondary education.

11

1.22 Gender differences appear to be increasing. While net enrollment rates have increased for both male and female students, the rate of increase has been higher for boys reflecting a widening of gender disparities as shown in Table 0.9. Net enrollment rates for girls are 8 and 10 percentage points lower than boys at primary and secondary school respectively. In 2003/4, only 44 percent of the state-wide enrollees at elementary level, 40 percent at middle level, and 33 percent at secondary level were girls. Female students constitute only 28 percent of total TVET enrollment and comprise a small proportion of students at the post-secondary (advanced) technical level, having fallen from 31 percent to just 20 percent from 2000 to

2003.

1.23 Gender disparities have significant regional variations. They are largest in Deb-Keih-Bahri where girls are only 30 percent and 26 percent of students at elementary and middle school respectively. It is likely that cultural factors play a role and potentially less value is placed on a girl’s education in these areas. In Maekel by comparison, gender disparity is less pronounced but even here the proportion of girls enrolled is still lower than 50 percent at all levels (see Figure 0.5). Recognizing gender disparities in school enrollments, the Government strengthened incentive schemes to provide financial support to girls and other disadvantaged children. It is still too early to assess the impact, which will be seen once these schemes are scaled up.

Table 0.9: Gender Disparities in Net Enrollment Rates, 1991 and 2000 to 2004

School enrollment,

primary, female School enrollment,

primary, male School enrollment, secondary, female

School enrollment, secondary, male

1991 15.4 15.6 .. ..1999 33.5 38.8 17.1 21.42000 37.9 43.9 19.4 24.32001 38.4 44.7 19.2 24.32002 41.2 48.7 18.9 25.72003 43.7 51.4 19.0 26.02004 43.8 51.7 18.5 29.4

Figure 0.4: Elementary, Middle, and Secondary School GER 2003/4

0 20 40 60 80 100 120

Sem-Keih-Bahri

Deb-Keih-Bahri

Gash Barka

Anseba

Maekel

Debub

elem. mid. sec.

Figure 0.5: Proportion of Female Students 2003/4

0.00 0.10 0.20 0.30 0.40 0.50

Anseba

Deb-Keih-Bahri

Debub

Gash-Barka

Maekel

Sem-Keih-Bahri

Saw a

elementary middle secondary

Source: MOE

12

Source: WDI 2007.

1.24 Enrollment rates also vary by wealth with the better off much more likely to access basic education. Table 0.10 below shows the deviations in gross school enrollment ratios among households of different wealth conditions and location. These disparities in access by wealth widen as children move up the levels of education.

Table 0.10: Gross School Enrollment Ratios by Household Wealth Index and Location Elementary

school GER (%)

Middle school GER

(%)

Secondary school GER

(%) Wealth Index: Lowest 79.4 27.6 10.7 Second 88.4 44.3 15.2 Middle 109.6 61.6 26.7 Fourth 120.6 101.2 69.4 Highest 117.0 126.6 81.6 Total urban 116.6 111.0 73.6 Asmara 116.9 127.7 83.2 Other towns 116.5 99.5 65.9 Rural 92.9 45.9 20.9

Source: Eritrea Demographic and Health Survey 2002. Notes: The GER estimates from the DHS household survey data and those from national education statistics have significant differentials. While DHS has the actual school-age population for the sample, the national statistics rely on the population projections based on the latest population census in the early 1990s.

Education Quality

1.25 Eritrea’s education quality assessment system is still nascent, relying largely on public examinations at grades 8 and 12. Education quality is best measured by assessing learning achievements, which show what children have learned in the classroom, how effective schools are, whether children are passing external (public) examinations for promotion and how children compare educationally with others at national and international levels. Mostly, public examinations are used to select students for higher levels of education. Unfortunately, these examinations do not serve well as a tool to measure quality. Often, the existence of the exam leads teachers to teach to pass the test, covering only what will be on the examinations, rather than a more comprehensive and quality education.

1.26 Eritrea has made significant efforts to develop national and international assessments of learning achievement in order to evaluate the effectiveness of the education system. Eritrea has participated in the Monitoring Learning Achievement (MLA) activities in eastern and southern Africa developed by UNICEF in areas of literacy, numeracy and life-skills. In 2001 only 42 percent of grade 3 learners and 14 percent of grade 5 learners attained the Minimum Mastery Level on the tests. The second round of MLA testing is due to be conducted in 2007. UNICEF will provide technical assistance in the development of the test instruments and the framework for analyzing the results. This will provide an opportunity to assess any improvements in

13

quality of education since the 2001 results. In the meantime, much effort has been made to strengthen continuous assessment at school level with intensified teacher training in this area.

1.27 There is a need to ensure that quality is given adequate attention in the tertiary sector where there has been such a rapid increase in enrollments. Also the institutions are located far from Asmara which might make it more difficult to attract teaching personnel. It will be important to address the staffing needs, curriculum development and links to the skills needed in the labor market.

Addressing the Teacher Shortage

1.28 The expansion in enrollment has caused pupil teacher ratios to increase. At government schools, the pupil teacher ratio (PTR) was 48:1, 56:1 and 45:1 on average for elementary, middle, and secondary schools in 2004/5. The PTR has increased markedly since the early 1990s when the national pupil teacher ratio for primary schools was around 37:1. The high PTR at middle and secondary level compares to an international norm of around 25:1 and 30:1 respectively. For the few enrolled in non-government schools however, the PTRs are closer to SSA averages (see Figure 0.6).

Figure 0.6: Pupil-Teacher Ratios in Government and Non-Government Schools, 2004/5

48

56

45

3740

27

0

10

20

30

40

50

60

elementary middle secondary

Gov non-gov

Source: MOE 1.29 The high PTRs themselves reflect a teacher shortage in Eritrea and a need to maintain reasonable teaching loads. Table 0.11 shows the numbers of pupils per “section” (PPS) and PTRs. In practice, elementary school teachers do not attach to specific sections, but teach both morning and afternoon hours, on any subject. At elementary and middle school, PTR is very close to PPS, which implies that average teaching load is close to the hours of instruction hours pupils receive. At secondary level, teaching loads are two thirds total instruction hours by pupils. These parameters are close to the SSA regional average.

14

1.30 Teacher shortages persist at each level of education and vary by Zoba (Figure 0.7 and Figure 0.8). The pupil-teacher ratios are high and have not fallen over the last few years. Debub has the most severe teacher shortage and PTRs are

as high as 55:1, 67:1 and 61:1 at elementary, middle, and secondary school respectively. Given the lower enrollment rates in disadvantaged areas the PTRs are generally better in these Zobas. The need for teachers has also been further elevated by the added grade at the middle level in 2003/04.

Figure 0.7: Pupil Teacher Ratios by Zoba, 2004/05

Figure 0.8: Evolution of PTR (2000-2005)

0

10

20

30

40

50

60

70

Anseba Deb KeihBahri

Debub GashBarka

Maekel Sem KeihBahri

Saw a

elementary middle secondary

48

57

4845 4747

44

57 5653

54 55

42

55 54

49

57

47

30

35

40

45

50

55

60

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

elementary middle secondary

Source: MOE

1.31 Although there may be some scope for redeploying teachers to Zobas with high PTRs, within Zobas teacher distribution is highly correlated with school enrollment. At elementary level, the correlation coefficient is as high as 0.88 at national level, and greater than 0.99 for three out of six Zobas. However, if enrollment rates are to improve this will require a regional focus and a need to redeploy/recruit new teachers in these regions.(Figure 0.9).

Table 0.11: Pupil Teacher Ratios and Pupils Per Section, 2004/05

elementary middle secondary PTR 48 56 43 PPS 51 62 63 Source: MOE

15

Figure 0.9: Correlation of Teachers and Pupils by Zoba

Source: WB Staff calculations. Notes: The outlier in Maekel Zoba is Buonarroti elementary school, which registered 552 pupils and 42 teachers. 1.32 The expansion of the tertiary sector is designed to improve the supply of local teachers. Until 2003/04, elementary school teachers were mostly trained at ATTI, which enrolled approximately 600 students per year in a one-year post-secondary pre-service training program. In addition the Mai-Nefhi Teacher Training Center used to enroll 300 trainees per year in a short training course for mother-tongue education. To be considered technically qualified at the middle school level, teachers require a higher education diploma or some equivalent higher education qualification. The UOA, through the Faculty of Education, was the only institution where such a qualification was available, providing about 200 graduates a year to serve as teachers.

1.33 In 2003/2004, a new policy was introduced which required all teachers to have a diploma level qualification and all graduates to spend some time as a teacher. The new tertiary colleges were established, in part to increase the supply of new teachers, particularly the College of Education at EIT. As a transition measure, it is proposed that all graduates from higher education will be required to serve as teachers for a period of a few years. This policy could alleviate the teacher shortage if there are 5,000 to 7,000 graduates from diploma and degree courses per year. It is expected that dedicated teacher training programs will be expanded in the future to meet the demand for teachers. Additionally contracting expatriate teachers is a method used to address the shortage –especially of maths and science teachers.

010

0020

0030

000

1000

2000

3000

0 20 40 60 0 20 40 60 0 20 40 60

Anseba Deb-Keih-B Debub

Gash-Barka Maekel Sem-Keih-B

pupi

ls

teachersGraphs by zoba

16

Internal Efficiency and Grade Survival

1.34 The education system has room to improve internal efficiency as it is characterized by high repetition and dropout rates, and low completion rates at each level (see Table 0.12). At elementary level, nearly 18 percent of enrollees are repeaters. Although improved since the post-independence period when repetition rates were 23 percent and 33 percent for boys and girls respectively, they remain high at 15 percent for middle school and 20 percent for secondary level. Dropout rates have also improved but still only 77 percent of elementary school entrants survive to grade five, 81 percent of middle school entrants survive to grade eight, and 76 percent of secondary school entrants survive to grade 12. The transition rates between levels, however, are better than most SSA countries as a result of the narrow enrollment base at elementary level, and the selection through dropout that occurs at lower grades. However, it takes 543 student-years of instruction to produce 77 graduates, or 7 student-years each, compared to five years with perfect efficiency. The rate of inefficiency is therefore 71 percent.

1.35 Completion rates are comparable to elsewhere in SSA at middle and secondary level, but are significantly lower than average at elementary school. The elementary school completion rate is only 51 percent in Eritrea, significantly lower than the low-income countries’ average of 71 percent, and SSA countries’ average of 57 percent (Figure 0.10 and Table 0.13). (Primary/ elementary school completion rates are one of the key indicators of progress toward meeting the education MDGs).

Table 0.12: Key Internal Efficiency Indicators (2003/04) Level Indicator Percent elementary Access rate 66.6

Survival rate 76.7 Repetition rate 17.8 Completion rate 51.1 middle Transition rate 81.4 Survival rate 80.8 Repetition rate 14.8 Completion rate 33.6 secondary Transition rate 74.6 survival rate 75.5 Repetition rate 20.3 Completion rate 18.9 Source: MOE

17

Figure 0.10: Access and Grade Survival

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

acce

ss

grad

e1 2 3 4 5 6 7 8 9 10 11 12

Source: MOE

Figure 0.11: Elementary (Primary) School Completion Rates: Selected SSA Countries

0 20 40 60 80

NigeriaT ogo

GabonKenya

Uganda Malawi

Low incomeCameroon

ZambiaT he Gambia

LesothoGhana

SSAT anzania

S ierra Leone Mozambique

BeninCote Ivoire

Eritrea Madagascar

BurundiBukina Faso

Source: WDI 2006, WB 2003. Note: Latest year available is 2005 for Eritrea and between 2000 and 2005 for others.

Non-Formal Education Coverage

1.36 There has been a remarkable increase in the number benefiting from adult literacy programs. Following independence, adult literacy programs were provided through small and fragmented projects carried out by the MOE and NGOs such as the National Union of Eritrean Women. In 1998/99, the MOE launched a national adult literacy program in eight local languages, and the number of literacy centers grew by 8 percent per year between 1999/00 and 2004/5. Enrollment almost doubled from 11,577 in 1998 to 20,873 the following year. Since then, enrollment has continued to rise and reached 60,000 in 2004. Altogether, a total of 298,341 adult learners have participated in the literacy program since 1998. As in the post-independence era the vast majority (91 percent) of the literacy learners are women. A total of 182,013 (91 percent of whom were women) have completed the program.

18

1.37 The programs show a large degree of success in raising the adult literacy level to the equivalent of elementary education completion. Adult literacy programs cover three phases, each lasting six months. At the end of the first phase, participants are expected to attain a basic level of reading, writing and numeracy. The main thrust of literacy at the remaining two phases (post-literacy level), is the consolidation of previously acquired literacy skills, including basic science and social studies. In the provision of adult literacy, at least 60 percent of each cohort was expected to complete the second and third phases (post-literacy stage). In 2006, total enrollment in the adult education program reached over 100,000, with an 88 percent completion rate of phase III – which is the equivalent of elementary education completion.

1.38 Literacy facilitators are currently recruited from the national service (51 percent), elementary school teachers (31 percent), and the community (18 percent). The majority (65 percent) are female. Grade wise, 66 percent possess at least a grade eight certificate (10 percent are below grade eight). Apart from a few weeks of orientation, no formal training is given to the national service and community recruits. A monthly honorarium is paid to each facilitator. New instructional literacy materials for the first phase have been in use since 1999. However, no systematic impact assessment has been done to determine the effectiveness of these materials. In the meantime, new post-literacy materials will be produced in accordance with the proposed transformation of adult literacy.

1.39 Literacy sites range from school premises (30 percent), shacks (25 percent), homes (12 percent), and tree shades (11 percent). The rest (22 percent) include churches, mosques, tents, and community halls. Using school premises for literacy classes is cost effective for the MOE. School premises seem generally comfortable and as such conducive to learning. In contrast, the conduciveness to learning of the other sites is relatively unknown and as such, needs to be further assessed. In addition, mass media has been effectively used in the delivery of adult literacy classes. Other mass media techniques such as newspapers, television broadcasts and computer-based information technologies have not featured much in the delivery of adult literacy lessons.

1.40 There are also special programs targeting out-of-school children. These children are out of formal education mostly because of: (i) scattered settlements and thus far distance from formal schools; (ii) nomadic groups moving seasonally with their children dropping out of school frequently; (iii) high opportunity cost in terms of labor for these children to go to school; and (iv) low value put on education by parents in some cases.

1.41 There have been programs to support Early Childhood Development (ECD) which in the past relied on external finance and will require government’s own resources if they are to be sustained. ECD is recognized as an important investment to level the ground for children’s development in disadvantaged areas and improve children’s school entry, grade retention and promotion. By 2004/05, there were 213 ECD centers owned by GoE (about 70 percent of the total number of ECD centers in the country) and supported by the Integrated Early Childhood Development Project

19

funded by the WB and implemented by a central policy committee including members from the Ministry of Local Government (MOLG) with support from MOE, Ministry of Health (MOH), Ministry of Labor and Human Welfare (MOLHW), Ministry of Agriculture (MOA) and Ministry of Fisheries (MF). 116 village ECD centers have been established in rural areas under the project during the past few years. Since the project closed at the end of 2006 sustainability of the ECD program will require a government’s own resources.

1.42 To conclude, the education system has expanded to cope with a growing number of students at all levels. Gross enrollment rates have also increased with a greater proportion of the population attending school at all levels. The increases in enrollment rates have largely been at pre-primary, elementary and tertiary level – with much more gradual increases in enrollment rates at middle and secondary school. The improvements in enrollment rates have not been even across the Zobas – with the northern and southern red sea regions lagging behind. While female enrollment rates have improved they have not caught up with the higher enrollment rates for males – and in fact the gap seems to be widening. There are efficiency gains to be made by reducing repetition and improving completion rates. While not dissimilar to SSA averages at middle secondary and higher education levels, completion rates at primary level are significantly below regional averages.

D. EDUCATION SECTOR EXPENDITURE ANALYSIS

Total Public Spending On Education

1.43 Given limited public resources and a fragile fiscal and macroeconomic environment the government has impressively increased funding for the education sector from only 2.9 percent of GDP in 2000 to 5.7 percent of GDP in 2005. In 2000, the MOE budget was only 2.7 percent of GDP. By 2005 this had doubled to 5.4 percent of GDP. Including resources spent by the UOA total domestic education spending was estimated to be 5.7 percent of GDP in 2005 (see Figure 0.13).4 External financial assistance for the education sector is relatively stable at 1 percent of GDP and hence the combined public resources for education sum to around 6.7 percent of GDP per annum.

1.44 The focus is on central government expenditures and external finance since there is little information regarding education spending from the Zoba admin-istration budget and out-of-pocket expenses incurred by households directly. From time to time, the Zoba administration does allocate funding for certain school events. It was estimated by the central MOE officials that there had been significant contributions from Zoba administration on education service delivery during the most recent two years. Further investigation would be needed to assess the extent of the spending. There is no official school fee requirement by MOE. Some schools do charge fees at the level agreed by the PTA. Although the school census does not collect school fee information, from

4 The MOE expenditures do not include (i) the expenditures of the University of Asmara which spends an additional 0.3 to 0.4 percent of GDP per annum, nor (ii) the College of Medicine under the MOH, of which the public budget is less than 0.05 percent of GDP.

20

various discussions with the Zoba education officers and head teachers, it seems that the required fee amount per pupil is usually very low. For example, at St. George Secondary School in Zoba Debub, the school fee is below ERN 100 per pupil per year. However, as in almost all countries, Eritrean parents do spend money out-of-pocket to support children to go to school. An informal survey by MOE in 2006 indicated that parents contributed a significant amount to support school operations either in cash or in kind.

1.45 The increased envelope means that public resources for education are higher than many other SSA countries5. In proportion to GDP spending is higher than the low – and middle – income countries’ average of 4.1 percent, and the EFA on-track countries’ average of 3.8 percent of GDP (Figure 0.12), and is in fact on a par with high income countries’ average of 5.6 percent of GDP.

Figure 0.12: Public Education Spending as percent of GDP (selected SSA countries)

0 2 4 6 8 10

Niger Zambia

Congo, RepBenin

Madagascar Cameron

EFA on track countries Senegal

low and middle income Burundi Uganda Eritrea

high income Malaw i EthiopiaKenya

Lesotho

Source: MOE, WDI, 2006 and WB 2003.

1.46 Most of the increase in government spending has been on capital investments which doubled in proportion to GDP between 2002 and 2003 (Figure 0.14). The increase in spending accompanies the implementation of the ESDP and the expansion of tertiary education. Nearly two-thirds of the domestic capital spending in 2003 was at secondary level including for the construction of classrooms and facilities for a new 12th grade secondary school provided at one school site in Sawa. This school was due to enroll around 17,000 students in 2007. A further twenty percent of the capital investment was for the construction of new tertiary level colleges.

5 Note some discrepancies arise depending on source of data and other chapters refer to education expenditures of 5.4 percent of GDP.

21

Figure 0.13: Total Public Spending on Education (Domestic and External)

Figure 0.14: Total Capital Spending (Domestic and External)

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%

2000 2001 2002 2003 2004 2005

as%

of

GD

P

toal domestic total foreign

0.0%0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2000 2001 2002 2003 2004 2005

as

%o

fG

DP

Domestic capital Foreign capital

Source: MOE

Intra-Sector Allocations

1.47 Much of the increase in spending has been to the tertiary and secondary level. In proportion to GDP, spending on elementary education is lower than most SSA countries. Public spending on elementary education remained at around one percent of GDP between 2001 and 2005. This is lower than many neighboring countries and the average of the EFA on track countries’ which spend around 1.7 percent of GDP (Figure 0.15).

Figure 0.15: Regional Comparison of Total Public Spending on Elementary Education, 2005 Percent of GDP

1.0

1.2

1.4

1.7

1.7

2.7

2.8

3.6

3.9

0.0 1.0 2.0 3.0 4.0

Eritrea

Zambia

Burundi

EFA on track countries

Benin

Uganda

Malaw i

Kenya

Lesotho

Source: "A Chance for Every child: Achieving Universal Primary Education by 2015”, WB, 2003. Eritrea data is from MOE (2005).

1.48 The share of spending for tertiary level has increased as both capital and recurrent expenditures have risen since 2000, causing the share to elementary to fall. In terms of recurrent expenditures, the share for elementary education fell from 38 percent in 2001 to 18 percent of education resources in 2005. For capital spending, external finance is largely used to finance elementary level while domestic sources have financed the tertiary sector expansion (Figure 0.20) hence, both recurrent and capital

22

spending have increased for tertiary education over the 2003 to 2005 period (see Figure 0.16, Figure 0.17). The allocation of education expenditure to the TVET sub-sector however declined from 4.8 percent in 2003 to only 2.4 percent of public spending in 2005.

Figure 0.16: Recurrent Spending (ERN current prices)

Figure 0.17: Capital Spending (ERN current prices) (domestic and foreign)

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

2001 2002 2003 2004 2005

Elementary Middle Secondary Tertiary education (incl. UoA)

0

50,000,000

100,000,000

150,000,000

200,000,000

2002 2003 2004 2005

Elementary Middle

Secondary Tertiary education (incl. UoA)

Administration/capacity

Source: MOE 1.49 Given the expansion, currently tertiary education is afforded a higher share of education resources than many SSA countries. While this reflects in part temporary start up costs, recurrent costs are also high and maintaining the investment in tertiary-level will inevitably limit the share of resources available for future investments in basic levels of education (Figure 0.18).

Figure 0.18: Intra-sectoral Allocation of Education Resources (percent of total).

Figure 0.19: Recurrent Spending (percent of total)

0%

20%

40%

60%

80%

100%

Eritrea Ghana Kenya Uganda

Primary education (% of totalpublic educationexpenditure)

Secondary education (% oftotal public educationexpenditure)

T ertiary education (% of totaleducation expenditure)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005

warsay-Y kaelo Sawa

Adminis tration

Z oba Sudan

School for blind

Comm. College

T ertiary education

Adult education

T T Is

T echnical schls

B oarding schls

Secondary

Middle

Elementary

Source: WDI 2007 Note: Data is for 2004 for Kenya and Uganda and 2005 for Eritrea and Ghana.

Source: MOE

23

Figure 0.20: Capital Expenditures (domestic and external), ERN million

-

50.00

100.00

150.00

200.00

250.00

300.00

Domestic External Domestic External Domestic External Domestic

2002 2003 2004 2005

Admin/capacity

Tertiary education (incl. UoA)

Adult education

Technical schls

Boarding schls

Secondary

Middle

Elementary

Source: MOE Note: Disaggregated external spending is not available for 2005.

1.50 The proportion of spending on adult and media education is relatively small at 1–2 percent of total MOE budget but has been expanding. Since 2002, literacy has been solely funded by the state. It is difficult to quantify annual expenditures but it is estimated that more than ERN 60 million has been spent on adult literacy since 19996. Most of this money has been spent on teachers’ salaries, stationery, materials production, orientation training, and awareness raising seminars and workshops.7

1.51 The intra-sectoral allocation shows that the increase in education resources has largely been to the upper end of the education spectrum as part of the government’s policy to improve skills for the labor market, yet returns from primary level schooling should also be taken into consideration. While no research has been undertaken on the returns to education in Eritrea specifically, we can draw upon many studies which have shown: (i) there are relatively high rates of return to investments in primary education; and (ii) social returns exceed private returns at lower levels of education.8 Recent research also shows that the knowledge and skills acquired at elementary education make a difference in personal economic mobility and national economic growth.9 While enrollment in primary education is important, it is the learning outcomes that really count and attention to the quality of schooling at this level will also require resources.

Unit Spending per Pupil

1.52 The trend in unit spending as a proportion of GDP per capita between 2001 and 2005 shows a recent recovery in declining elementary school costs, a fall in middle school costs and an increase in secondary and tertiary school level.10 This

6 See MOE “National Policy on Adult Education” (August, 2005). 7 From its inception at independence to the year 2002, literacy education run by the MOE was jointly funded by the state and partners, which included UNESCO, UNICEF, UNDP, WVI and SIDA. 8 Psacharopoulos (2002). 9 Glewwe 2002, Coulombe Tremblay and Marchand 2004, Hanuschek and Kimko 2000 10 Unit costs are defined as recurrent costs per student.

24

largely reflects the structural adjustment in 2003/4 when grade eight shifted from secondary to the middle level (see Figure 0.21) and the addition of grade 12 at secondary level. It appears that resource allocations did not fully adjust to the shift in grades and hence the unit spending fell at middle level, and increased at secondary. The unit spending at elementary school also fell from 10.7 to 7.6 percent of GDP per capita between 2001 and 2004. This could have resulted from a lag in resource allocations as enrollment increased. In 2005, the unit spending increased again and almost reached 2001 levels which are on a par with several SSA countries (Figure 0.22).

Box 0.2 Returns to Schooling

Overall researchers find an additional year of schooling has a return of 10 percent – or adds 10 percent to an individual’s earnings (Psacharopoulos 2002). Within this average there is a great deal of country variation and the greatest returns are in the Latin America and Caribbean and SSA regions. Also average returns to schooling investments are higher for women on average. In general, returns to education fall as the level of development and the level of education rise. This would indicate significant returns in elementary education in Eritrea are possible. There is also variation according to the type of economy that’s providing jobs. Evidence from China, Vietnam and Eastern Europe typically found that returns to schooling under planned economies were typically low (In 1980s China returns were between 1 and 5 percent; in Vietnam in1993 returns were 5 percent. This is not surprising since large parts of the economy were agrarian and/or informal, and the formal labor market was characterized by rigidities such as assigning graduates to public sector jobs or using Party networks to allocate workers to jobs. The research also finds that differences in educational attainment had limited impact on individual variations in earnings. However returns tend to increase as market reforms take place (returns to schooling increased in Hungary from about 5.6 percent to 11 percent between 1986 and 2002 and in Russia from 2.8 percent to 7.4 percent between 1991 and 2002), and during transition returns to schooling increase as newer cohorts enter the labor market.11 These private returns in terms of an individual’s increased earnings do not capture any externalities from an educated population. Some attempts have also been made to capture the “social rate of return” but the empirical evidence is scarce and inconclusive implying not very strong support for externalities i.e. social returns greater than private returns.

1.53 Compared to the SSA average, elementary and secondary (comprising middle and secondary or lower and upper secondary) education unit spending per pupil in proportion to GDP per capita is lower. Between 2001 and 2005 average unit spending per pupil was 8.9 percent of GDP per capita at elementary level, 12.3 percent of GDP per capita at middle level, and 13.3 percent of GDP per capita at secondary level. By comparison, the EFA on-track countries’ average spending per elementary school pupil’s was 12 percent of GDP per capita, and SSA countries’ average unit spending at secondary level, including both lower and upper secondary education (middle and secondary level in Eritrea), is 22 percent of GDP per capita. In the absence of comparable indicators on the effectiveness of the schooling system, this difference in unit costs can be interpreted in two ways. First Eritrea could be much more efficient, and second Eritrea is not spending enough at this level for comparable outcomes. Neither

11 China see Jamison and van der Gaag, 1987, Eastern Europe see Flabbi, Paternostro and Tiongson 2007, Vietnam see Moock, Patrinos and Venkataraman.

25

conclusion can be drawn without paying closer attention to the differences in education and learning outcomes.

Figure 0.21: Unit Costs in Proportion to GDP per Capita

10.7%

9.3%

8.0% 7.6%

9.0%

13.9%

15.4%

13.2%

9.5% 9.8%

12.5%13.1%

11.8%

14.1%15.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

2001 2002 2003 2004 2005

as%

ofG

DP

per

cap

ita

elementary middle secondary

Source: MOE Note: Salary costs at elementary to secondary level are adjusted based on the total salaries of teachers teaching at each level. Secondary unit costs exclude 12th grade at Sawa.

Figure 0.22: International Comparison of Unit Costs (percent of GDP per capita)

01020304050607080

Zam

bia

Erit

rea

Uga

nda

Ben

inm

iddl

ein

com

eM

alaw

i

Nig

erhi

ghin

com

eB

urun

di

Leso

tho

Ken

ya

primary

secondary

Source: MOE, WDI Note: Eritrea data includes spending on textbooks and expatriate teachers under ESIP 2003-05.

1.54 One of the reasons for the low unit spending is the low non-salary spending at elementary, middle and secondary level. In the 1990s the ratio of textbooks per pupil was 1:68 –in effect most children did not have access to a textbook. Despite this less than ERN 20 (a little over US$ 1) is spent per elementary and middle school pupil per year for non-salary items. At secondary level, excluding boarding schools and the 12th grade school at Sawa, ERN 31 (about US$2) were spent on non-salary items for each secondary student.12 In addition, spending on textbooks by donors

12 This calculation has only included the items under recurrent spending. The MOE also provides teaching and learning materials and equipments to schools under capital budget. Estimates of the value of these items are difficult to obtain due to lack of detailed breakdowns of capital spending on record.

26

under ESIP added about ERN 9 or ERN 0.50 cents per year on average. Community contributions in cash or in kind add some additional resources. According to informal MOE data, there is evidence that communities and parents contributed significantly to the provision of necessary inputs at school level. It would be important to examine the extent of household contributions and whether government’s own contributions need to target the poorest to ensure that this is not a barrier to access.

Figure 0.23: Basic Education Unit Spending Disaggregated, ERN 2005

-

100

200

300

400

500

600

Primary Middle Secondary

ESIP spending onexpatriate teachers

ESIP textbooksspending

Non-PE

PE

Source: MOE Notes: PE is personal emoluments.

1.55 The personal emolument (PE) expenditure is also relatively low at middle and secondary level reflecting high pupil-teacher ratios (PTR) and the use of national service teachers at each level (Figure 0.23). The starting monthly salaries for an elementary, middle or secondary school teacher are ERN 910, ERN 1,200 and ERN 1,320 respectively, which is approximately 3.3, 4.3, and 4.7 times per capita GDP respectively and comparable with SSA averages. However, actual salary spending per teacher is ERN 800, and ERN 1,000, or 2.8 and 3.5 times of GDP per capita for elementary, and middle and secondary school teachers respectively. This is a result of the use of national service teachers to supplement the regular staff, and these receive much lower PEs.

1.56 Hiring expatriate teachers to address the teacher shortage, however, is a relatively expensive option. There are around 300 expatriate teachers per year costing an average US$10,000 per annum, including base salaries and other benefits. This is more than 10 times the cost of an Eritrean secondary school teacher. In 2004, the total PE spending for Eritrean teachers at secondary level was close to ERN 20 million compared to over ERN 60 million for the expatriate teachers.

1.57 Although boarding schools in Eritrea account for a small proportion of total enrollment, unit spending in these schools is very high. Table 0.13 shows the enrollment versus recurrent resource allocation to a number of boarding schools. The unit spending can be as high as 18 times that of a regular day school. In addition, the unit spending varies largely from one boarding school to another, which may reflect their

27

different geographic and transportation conditions, different infrastructure conditions (i.e. need to maintain generators), and local market prices such as that of food. In addition to recognizing the different needs of these schools, a clear funding formula would be helpful to encourage better resource utilization at these schools.

1.58 High boarding-school expenditures are driven by spending on food. Providing food to all students at boarding schools is Government policy. While food provision may be necessary in some cases for ensuring the quality of learning particularly for students from poor households, and food can also act as an incentive for school retention, a more targeted approach would be worth considering. This could potentially free resource for intra-sectoral reallocation given the needs for increased resources in many other areas for education sector development. An MOE task force has been established to look into the opportunities of cost-savings in boarding schools.

Table 0.13: Unit Spending in Selected Boarding Schools 2004

School Zoba Level

No. of students enrolled

Total Recurrent spending (ERN)

Per student Unit

spending (ERN)

Agordet Garsh-Barka

Middle and

Secondary 2,104 1,912,931 909 Forto Garsh-Barka Elem 614 806,283 1,313 Gogne Garsh-Barka Elem 433 2,004,171 4,629 Assab Deb-Keih-B Elem Tio Deb-Keih-B Elem 419 1,470,293 3,509 Affambo Deb-Keih-B Elem 254 1,186,623 4,672 Wegret Sem-Keih-B Elem 364 2,697,441 7,411 Tsabra Sem-Keih-B Elem Asmat Anseba Elem 991 2,672,198 2,696 Dekemhare Debub Elem 738 5,213,586 7,064

Source: MOE.

1.59 The unit spending at Sawa (grade 12) has also been high largely due to the extent of boarding required. The unit cost of providing a residential 12th grade school is 70–100 percent of GDP per capita compared to regular secondary schools with a unit cost of 15 percent of GDP per capita. Spending per 12th grade student at Sawa is 8 times that of an elementary school student, and over 4 times that of a regular secondary school student (see Figure 0.24), largely a result of the additional resources required to board 17,000 students. Like other boarding schools, food is a major item in total expenditure. Even though unit spending per pupil at Sawa is much lower than that of the boarding schools or technical schools on average, it should be noted that the costs are not sustainable for future expansion of secondary education up to grade 12. Day school options could provide secondary education at 20–30 percent of the costs.

28

Figure 0.24: Unit Spending by Type of School, ERN 2005

2,163

314

3,036

4,170

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

12th grade at Saw a Regular sec. school Boarding school Technical school

Source: MOE.

1.60 The unit spending at technical schools is high on average, and varies across schools. These technical schools can generally be divided into three groups: the first group is private schools with Government subsidies, including DBTS and HATS; the second group is public day schools, such as ATS; and MHTS, WTS, and HAS are public boarding technical schools. The cost of running technical schools is in general higher than general secondary schools as additional resources are needed for running and maintaining specialized workshops. For example, the day school ATS’s unit spending is over ERN 2,000 per pupil, around 7 times that of a regular day secondary school. In boarding technical schools, it is also the case that food is a significant share of spending – and can be as high as two-thirds of the total expenditure (Figure 0.25). On average, ERN 4,500 (US$300 or 200 percent of GDP per capita) was spent on a technical school trainee in 2003/04. WTS has the highest unit costs at ERN 9,578 per trainee. Interestingly, the lowest unit costs are recorded in technical schools which are (i) also financed by the private sector; and (ii) predominantly day-schools.

Figure 0.25: Unit Spending at Intermediate Technical Schools, ERN

6,611

9,578

5,540

4,2533,205

3,829

-

2,000

4,000

6,000

8,000

10,000

12,000

MHTS WTS HAS

unit cost Food spending

Source: MOE.

29

1.61 The unit spending on teacher training is also high, and transferring the training to tertiary institutions will in the short term exacerbate costs. It is estimated that ATTI spent around ERN 9,000 (US$ 600) per trainee per year; and this will more than double at the new tertiary institutions. For example, in 2003/04, there were 3,672 students at Eritrea Institute of Technology, where nearly ERN 73 million was spent. This resulted in nearly ERN 20,000 (US$1,300) per enrollee. The extent to which this unit spending can be reduced can be benchmarked by the UOA’s unit spending at its full capacity, which amounts to around ERN 3,000, or around US$200 per student per year. A large proportion of the unit spending is on food provision.

1.62 Unit spending at the tertiary level is 5–7 times GDP per capita (Table 0.14). These high unit costs are as a result of: (i) falling student numbers at the UOA and ATTI without a corresponding fall in spending and (ii) the high start-up costs for five new institutions. These proportions are similar to that of the tertiary sector in Ghana and Kenya in the 1970s which have since brought spending down to 2–3 times GDP per capita – the same as UOA and ATTI pre-transition and about the same as the technical schools. Enrollment at UOA has fallen while its resource allocation has not yet decreased accordingly. UOA has not enrolled any freshmen for the past 3 years and many UOA staff members were deployed to the new colleges in 2006. In the meantime, the relatively stable resource allocation to UOA has resulted in an increase in the unit costs of UOA between 2003 and 2005.

Table 0.14: Tertiary Sector Unit Spending 2001 2002 2003 2004 2005

Multiple of GDP per capita Technical schools 1.5 1.6 1.6 1.5 .. ATTI 3.0 2.0 2.0 2.9 .. Tertiary institutions under MOE .. .. .. .. 7.3 UOA 1.5 1.6 2.0 3.8 4.8 Sawa (Grade 12) .. .. .. 1.0 0.7 Multiple of Elementary Level Unit Spending Elementary 1.0 1.0 1.0 1.0 1.0 Middle 1.3 1.7 1.7 1.2 1.1 Secondary 1.2 1.4 1.5 1.8 1.7 Technical schools 13.5 17.3 20.6 19.9 .. TTIs 27.9 21.6 25.0 37.8 .. Tertiary institutions under MOE .. .. .. .. 81.3 UOA 13.8 17.1 25.6 49.6 52.9 Sawa (Grade 12) .. .. .. 12.5 7.8

Source: MOE Note: Unit spending at elementary and secondary levels excludes boarding schools.

30

Box 0.3. Unit Cost Corroboration

Given the potential for expenditure data to reflect problems of classification at the level of the institution, data corroboration was undertaken for ATTI. Table 0.15 shows ATTI’s own record of recurrent spending and provides a useful example of the unit cost composition. Reassuringly, the difference from the unit-cost estimates using MOE data is less then two percent.

1.63 The high unit costs also reflect the fact that new colleges are at a start-up stage, and are not yet at full capacity. The Colleges of Marine Science and Agriculture have unit costs which are about 30 percent higher than the UOA back in 2001 at full capacity, while in 2005 the unit cost of the Eritrean Institute of Technology was more than ten times that of the UOA in 2001. Furthermore, unit costs have not yet started to fall: at EIT unit cost rose from ERN 19,853 (US$ 1,323) to 33,548 (US$ 2,236) between 2003/04 and in 2004/05.13 (See Table 0.16).

Figure 0.26: Tertiary Institutions: Disaggregated Recurrent Expenditures, 2005

0%

20%

40%

60%

80%

100%

EIT COBE COA COMSAT

salaries utilities and rentalsfood stuff educational suppliespurchase of equipments

Source: MOE

13 EIT is far larger than the other new colleges. The high cost of EIT is also in part a result of the cost of 200 expatriate lecturers and professors, with base salaries from US$900 to US$1,600 per month. Although salaries account for less than 20 percent of all recurrent costs.

Table 0.15: ATTI Monthly Unit Spending 2003/04

ERN Salary of teachers 213 Lodging 338 Education materials 59 Medical expense 10 Utilities 8 Physical ed. 6 Sanitation 4 Transport 4 Total per month 731 Source: MOE.

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1.64 Disaggregating the recurrent costs we find that recruitment of expatriate staff, high compensation benefits including housing, and food and accommodation for all students raises the unit costs. Since the establishment of these higher education institutions, ERN 500 per student has been the spending norm for food, and it is expected that based on market prices this could increase to ERN 700 per year per student during 2007. The variation in the composition of recurrent costs across the institutions also shows that there is scope for improving benchmarking and classification so that the institutions can be more easily compared in terms of efficiency and improvements. While EIT spent over 50 percent of recurrent expenditures on educational materials, the other institutions spent less than 1 percent on average. Once operations are stabilized and lessons shared, the unit cost should be brought down and benchmarked to improve efficiency. (See Figure 0.26)

Table 0.16: Unit Costs in Higher Education Institutions 2001 2002 2003 2004 2005

Enrollment University of Asmara 5,507 4,836 3,980 2,724 2,123 Eritrea Institute of Technology - - 1,655 3,672 8,227 College of Marine Science - - - 140 608 College of Agriculture - - - 474 1,032 College of Business and Economics - - - 782 1,648

Expenditure ERN

University of Asmara 16,294,177 17,464,734 20,768,278 31,188,449 33,899,991 Eritrea Institute of Technology - - - 72,899,876 276,002,924 College of Marine Science - - - - 2,435,062 College of Agriculture - - - - 3,808,745 College of Business and Economics - - - - 115,580 Unit Costs ERN: University of Asmara 2,959 3,611 5,218 11,450 15,968 Eritrea Institute of Technology - - - 19,853 33,548 College of Marine Science - - - - 4,005 College of Agriculture - - - - 3,691 College of Business and Economics - - - - 70

Source: MOE. Note: In 2004/5, the budget for COMSAT, COA, and COBE was allocated to EIT, as EIT took the students from these 3 colleges on its campus.

1.65 Unit spending is higher than many SSA countries. Measured as multiple of GDP per capita, Eritrea’s unit public spending on tertiary education is high compared to others in the region (Figure 0.27). It is also high compared to high and middle income country averages which reflect the fact that a larger proportion of the costs are shared by students and the private sector. The extent of cost-sharing could also be explored in Eritrea, with public financing mainly targeting the neediest. This would be in line with the Concept Paper for a Rapid Transformation of the Eritrean Educational System which noted: “…tertiary level education in Eritrea should not be free as a general rule. A student can attend tertiary level education for free only if the student earns a scholarship of some type. The scholarships offered by universities would be assessed on scholarship

32

funds associated with the universities from grants, endowments, aids, etc and they would be based on and intended to encourage academic excellence.”

Figure 0.27: Tertiary Education Unit Costs, Multiples of GDP Per Capita

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

high

incom

e

midd

leinc

ome

Ugand

aBen

in

Congo

, RepNiger

Kenya

Leso

tho

Eritre

a20

04

Burun

di

Source: WDI 2006

Equity Issues

1.66 Both intra-sectoral allocations and within sub-sectoral allocations have important and potentially adverse equity impacts. First the education unit spending per pupil has been converging over time. Previously unit costs had been higher in regions of low enrollments reflecting the difficulty of increasing enrollment in these regions. In 2002, per pupil spending in Deb-Keih-Bahri and Sem-Keih-Bahri was much higher than the national average, reflecting the spending priority given to, and the challenge of, education delivery in these Zobas. Since then unit costs have converged to the national average. In 2005, unit spending in Deb-Keih-Bahri was only slightly higher than the national average, and unit spending in Sem-Keih-Bahri had fallen below the national average (Figure 0.28).

1.67 The fall in unit costs in disadvantaged areas could reflect increased efficiency in these areas from higher student enrollment or it could be that resources have not kept pace with increased enrollments in these areas. It is possible that the unit spending will rise again after further scaling up the demand-side interventions such as the provision of financial incentives for school enrollment and retention in disadvantaged areas. In the meantime, it should also be noted that Maekel, which is the most advanced Zoba socio-economically, continued to exceed national average in per pupil spending. Higher unit costs might result from the smaller proportions of national service teachers resulting in a higher salary bill and higher school running costs in the capital city.

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Figure 0.28: Basic Education Unit Sending Per Pupil (ERN 2002 constant prices)

-

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

500.00

2002 2003 2004 2005

Ansba

Debubaw i Keih Bahri

Debub

Gash-Barka

Ma’ekel

Semienaw i Keih Bahri

national

Source: MOE. Note: Basic education here comprises spending on elementary, middle and secondary school. It does not include Sawa, TVET or tertiary education. 1.68 Second, given regional, gender and wealth related disparities in enrollment appear to widen at higher levels of education, the increased resources to the tertiary level has important equity implications. Only 15 percent of students finish grade 12 and these are more likely to be from the wealthier families, are less likely to be female and less likely to come from the low-density regions. Without addressing the disparities in access at lower levels of education the increased resources at the tertiary level will likely widen these disparities in education attainment further. The 2002 DHS showed that the children from the households with the lowest wealth index are much less likely to be even attending secondary education (10.7 percent) than those from the households with the highest wealth index (78.3 percent). There are also rural urban distinctions: around 8.1 percent of the urban population participated in certain levels of post-secondary education, compared with only 0.8 percent of the rural population. Therefore, the large amount of public spending at the tertiary level will likely benefit the better-off more than the disadvantaged. It is also likely that the majority of tertiary level students will come from secondary school graduates in urban areas that will then need to travel and board at the tertiary institutions based in rural areas.

1.69 To conclude, the extent of public resources for education in proportion to GDP is relatively high at 5.7 percent of GDP and compares favorably with comparators. The sub-sectoral resource allocation in the last three years has shown a substantial increase in the resources dedicated to expanding 12th grade and tertiary-level education. As a result, for elementary-education in particular the amount of resources in proportion to GDP is lower than many other SSA and low-income countries. Much of the historic increase in resources to tertiary education has been for capital spending as new institutions are established. That said, recurrent costs have also increased substantially and this therefore raises concerns that the government will need to continue to allocate resources to tertiary institutions in order to maintain the expansion of the tertiary education sector. The corollary is that the scope to redistribute resources for primary, middle and secondary school in the future is limited.

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1.70 At basic education levels the unit costs of provision in proportion to GDP per capita are below comparators which suggest the system has little scope for improving efficiency. Using national service teachers in particular lowers the national teacher wage bill. Unit costs are relatively high though at boarding schools and tertiary institutions as a result of the cost of boarding/residing on site. There is potential for the government to examine efficiency gains by encouraging day-schools, and a mix of residential and on-the-job vocational training as alternatives.

E. PLANNING , BUDGETING, AND BUDGET EXECUTION

1.71 The format of MOE’s budget is relatively well aligned to the sector strategic plan. Nevertheless, clearer line-item categorization could be achieved with more accurate budget analysis and planning. For example, the teachers’ salary bill has largely been a confusing item. The fact that a teacher’s salary is paid out of the “salaries at elementary school level” budget line does not indicate that the teacher is teaching at elementary schools, but that she or he is only qualified to teach at elementary school level. In fact, it is estimated that 66 percent of the teachers who are teaching at middle schools are categorized as “elementary school teachers” by the budget head. Without correction for this, the total spending at elementary school would be over-estimated, while that at middle level will be underestimated. This certainly creates difficulties for sector planning. Another caveat of the current budget categorization is that sometimes recurrent and investment spending items are mis-categorized. Textbooks, for example, are sometimes put under capital budget, which would underestimate the recurrent cost of adequate service delivery. In the meantime, some investment items, such as IT equipment acquisitions, are under recurrent budget, and thus inflate the recurrent cost. This is arguably the case for the new colleges.

1.72 The budgeting process has been formalized in recent years with newly established Planning Unit coordinating the overall budgeting process for MOE. The MOE compiles budgets annually for the headquarter departments and institutions directly managed by the central MOE. Zoba offices submit budget estimates for the central ministry to approve and consolidate in the overall education sector budget. GoE’s budget cycle coincides with the calendar year.14 Before the final submission of the consolidated budget to MOF, several iterations take place:

1. July: Planning unit discusses and agrees with Zoba and MOE headquarter departments on the budget, with emphasis on prioritization;

2. August: Planning unit starts discussion with MOF;15

14 Budgeting for each fiscal year covers the last 6 months of the on-going school year and the first 6 months of the following school year starting in September. 15 Before 2004, MOF is responsible for both recurrent and capital budget. From 2004 to 2006, MOF was responsible for recurrent budget, while MOND was responsible for development budget. From 2004 to 2006, no capital budget was allocated to MOE due to increased donor support from the WB, EC, and African Development Bank. Starting in 2007, recurrent and capital budget is consolidated again under MOF.

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3. September: Modification is submitted by MOE to MOF;

4. September to November: Feedback is received from MOF, Planning Unit starts to discuss with DGs, directors, and Zoba officers, and revises and resubmits budget; and

5. January: MOE receives approved budget.

1.73 Eritrea’s budget system is still cash-based. With the cash-based system, the MOE usually gets allocation of around 50 percent of the total budget at the beginning of the fiscal year. Supplementary allocations are applied by MOE throughout the year. For the past a few years, the actual total spending in the education sector is very close to the original requested budgets at the beginning of the year (Figure 0.29).

Figure 0.29: MOE Budget Request, Allocation and Actual Spend, 2005

854

419

795

0 200 400 600 800 1000

requested

approved

spent

Nakfa (million)

Source: MOE

1.74 The cash-based budgeting makes it difficult to integrate the processes of budgeting and strategic planning for the education sector. The current budgeting by departments and Zobas are largely incremental, while the preparation and implementation of ESDP is not fully integrated into the forward-looking budgeting process. The ESDP cost estimates have largely been treated as development costs, and such a holistic sector program is mainly financed as a stand-alone project.

1.75 Due to the fact that various foreign aid is in the form of projects, the overall sector finance is somewhat fragmented. This fragmented situation is also one of the key factors contributing to the data gap. A consolidated approach started in 2005 has to some extent rectified this but the system would need to be further strengthened in the future with key procedures clarified.

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F. OPTIONS TO IMPROVE SECTOR PERFORMANCE

Ensuring Adequate Resources for Education

1.76 The total amount of public resources devoted to education in proportion to GDP is relatively high and maintaining this level of government resourcesgiven the fragile fiscal and macroeconomic situation will be important to address the continuing challenge of improving education outcomes. Education spending is unlikely to increase significantly beyond the current level given tight macroeconomic and fiscal constraints.

1.77 There is potential for harnessing greater funds for education from the donor sectorand communities. Over time, engaging with non-governmental and private sector agencies to increase access. Flow-of-funds disruptions have limited donor disbursements in recent years and investigating slow disbursement problems could release additional funds that are already committed for expanding the basic school infrastructure. More detailed work on the extent of community participation in raising resources for education will need to be done. It may be the case that communities and/or partnerships with the diaspora could increase the resources available for education. Given the relatively small proportion of the non-governmental and private sectors it is possible that over the medium term with a more stable political and external environment there is potential for facilitating the non-governmental and private sector provision of schooling to assist in expanding access for those willing and able to invest in their own human capital and future productive capabilities.

Improving Resource Allocations for Improved Outcomes

1.78 To address both equity concerns and the potential to realize returns to public investments, consideration should be given to reorienting resources to expand elementary schooling. Achieving higher enrollment and completion rates at elementary school are unlikely to be realized without a reallocation of sectoral resources toward elementary level – at least not without seriously compromising the quality of education. To expand access and ensure adequate quality, Eritrea will have to secure resources for this sub-sector to be able to increase unit spending especially for (i) teaching supplies; and (ii) teachers. This should lower PTR, and improve teacher compensation to attract more locally trained teachers. This will also ensure sufficient teaching and learning materials. Given the already high PTRs and relatively low teacher salaries the sector is unlikely to be able to increase access without (i) attracting more teachers which will require additional funds for salaries; (ii) investing in physical expansion; and (iii) requiring additional non-salary inputs in the form of textbooks and teaching aids. While donors have committed to expand resources for new schools the government too will need to reallocate resources particularly for teachers if expansion of access at this level is to take place.

1.79 Given the expansion of tertiary education there is a need to ensure that courses on offer are relevant for Eritrea’s labor market and skills shortages. In addition

37

to improving availability of teachers there are a number of other skills required in the public sector that will improve the outcomes for other areas of public spending. The health chapter of this review for example highlights the shortages of doctors, nurses and midwives. Involving the private sector in design of course will also ensure that skills for the private sector are also addressed. The fact that the tertiary level institutions are based around the country could also be an advantage by requiring trainees to undertake on-the-job training in rural facilities to improve both health and education outcomes in the most disadvantaged regions.

1.80 Reallocate capital spendingto increase the physical space not only for an expansion of elementary school enrollment but also to alleviate classroom over-crowding at middle and secondary levels. To go from 72–100 percent GER at elementary level, more classrooms will be required particularly taking into consideration the school-age population growth. At middle to secondary level, the most urgent issue is the large average class size as a result of the severe shortage of classrooms. In addition, a majority of schools are operating two-shifts currently, which in many cases lead to shortened learning hours. Improving the availability of school infrastructural is thus essential for improving both school access and education quality. With the capital expansion for tertiary and 12th grade complete, the government has the scope to reorient its own resources to address as well as to partner with donors who have traditionally financed capital spending at these levels to increase the resources available for elementary, middle and secondary school expansion.

Potential for Efficiency Improvements

1.81 Improving the efficiency with which government’s resources are used should improve outcomes within a given resource allocation. The first step is to improve the efficiency of the sector’s performance by improving the high repetition and drop-out rates so that more students are able to enroll, stay-in and complete their education first time around. To improve internal efficiency, there is need to improve school-level management, particularly to support teachers to help them better facilitate effective learning and grade promotion. Theoretically pupils repeat to learn better. Empirical studies show that simply repeating an already failed process will not do any good. The key is to pay special attention and provide additional support to those pupils who lag behind in learning. In addition, there is need to improve school-level management, particularly to support teachers to help them better facilitate effective learning and grade promotion.

1.82 The relatively high recurrent costs of the tertiary sector should be brought down over time. While some of the cost of supplies may in fact be one-off expenditures, a large proportion of recurrent costs (as with the boarding schools) are associated with board and lodging. As in the case of the boarding schools the government could introduce standard per capita costs for boarding which takes into account possibilities for students to bear some part of the costs and for full cost to be borne by the state in the case of the neediest or disadvantaged students only. Efforts should be made to ensure maximum use of the existing tertiary facilities at UOA and ATTI. The facilities are currently operating at less than full capacity. Several options

38

might be explored including leasing the premises to the private sector to run technical training schools. If not, then the recurrent cost allocation should also be brought down in line with the reduced enrollments in these institutions.

1.83 There is potential toimprove the cost-effectiveness of teacher training(and other vocational training) by reducing the amount of training that is provided in residential training courses and improving on-the-job training elements of vocational training courses. This might be a particularly good option for teacher training as it would also have an immediate impact on reducing the teacher shortage with the addition of “trainee” teachers who are part-time working as part of their training. The current plan of training teachers through the newly established colleges needs to be carefully evaluated. Without bringing down the high unit spending at this level, the financial sustainability of providing a stable supply of teachers in the long run may not be achievable.

1.84 Unit spending will also need to increase at middle to secondary levelif class sizes and high PTR’s are to be reduced. Current unit spending at this level is quite low for both salary and non-salary components. For example, only 10 percent and 15 percent of GDP per capita is spent on a middle school and secondary school Eritrean student respectively, much lower than the recommended minimal level of 20 percent at these levels. The low salary spending per pupil is largely due to the extremely high pupil-teacher ratio of 56:1 and 45:1 at middle and secondary level, compared with the international norm of between 25 and 30:1. More teachers should be hired to bring the class size and PTR down. In addition, average teacher’s salary is also low, averaging 3.5 times of GDP per capita as compared with 4.5 times of the regional norm. The low non-salary unit spending is also low, averaging less than USD 2 per pupil per year. This level of spending can hardly cover the essential teaching and learning materials. Similar to the situation at basic education level, the project fund from external resources has been an important source for financing teaching and learning materials. There is need for the Government to plan for increasing the non-salary spending in the regular budgetary system in the near future. In addition, the temporary measure of using expatriate teachers needs to be phased out with a feasible exit strategy.

1.85 There are potential cost-saving opportunities at boardingschools and 12th grade education at Sawa. The current resource utilization at boarding schools and particularly that for the 12th grade students at Sawa shows a considerable amount of education resources is spent on food and lodging at these areas. The government should consider providing a standard per-capita based financing for food and lodging expenses to encourage all schools to provide standard, low-cost board. This per capita based cost might also be shared with students attending the school with only full-cost being borne by the state for the least wealthy.

1.86 The success with adult literacy programs and non-formal schooling can also be explored as alternatives for children who remain out of school.These relatively low-cost programs have shown considerable success with adult literacy and lessons could be used from these programs to develop additional educational programs that target out-of-school children and those who are not able to attend full time schooling.

39

Further, community-level schooling has had success in improving enrollment and reducing drop-out rates.

Ensuring Financial Sustainability of Expansion

1.87 Financial sustainability should also be taken into consideration while upgrading teachers’ minimum qualification. The current plan of upgrading of the minimum teacher qualification to diploma level is an important step taken by the government towards ensuring standards and improving teaching quality. However, the fiscal impact needs to be investigated as there will be a large increase of payment to teachers following the higher qualification, together with increased number of teachers.

1.88 Expansion of 12th grade schooling in single site schools is neither cost-effective nor sustainable for mass enrollment at this grade. Consideration should be given to rolling out 12th grade schooling at all secondary schools, using existing school facilities – with site facilities expansion or additional shifting where necessary. There could be pooling of resources so that 12th grade is shared across schools if necessary. However, given that grade eight has moved to middle school provision most secondary schools should have the capacity to deliver four years of education.

Ensuring Adequate Attention to Quality

1.89 The high PTRs as a result of enrollment expansion have focused attention on the need to expand teacher training capacity in the short term and to stabilize teacher supply in the long term. It is clear that the total number of teachers in Eritrea is far below the level that is adequate to provide adequate service delivery. Deployment of teachers based on the need at Zoba and school level will be key to ensuring that teaching force is efficiently utilized. The current teacher deployment in Eritrea is relatively even, highly correlated with school enrollment and giving priorities to disadvantaged areas.

1.90 Increased enrollment should not be at the expense of lowered quality or learning outcomes. The new MLA results will be critical in determining the extent to which this has been an issue in Eritrea. Improving quality might also be accomplished by partnering with organizations outside of Eritrea especially those with a track-record for credibility that will also help to ensure the quality of provision and assurances in the credibility of the private sector provider.

Improving Organizational Effectiveness

1.91 Strengthening Zoba Education Office’s capacity is key to improving service delivery. As the management of basic and secondary education has mostly been de-concentrated to the MOE Zoba offices, Zoba education officers are taking increased responsibilities not only in supporting school operations and service delivery, but also in budgeting and planning, and monitoring and evaluation including school data collection.

40

Increased investment will be needed to regularly train the Zoba education staff, better equip the offices, and employ more professionals at Zoba level.

1.92 Support to schools need to be strengthened and direct funding to schools could be piloted. Currently the Government support to schools includes providing teachers and some teaching and learning materials. In many SSA countries, direct flow of funds to schools to support service delivery has been proved effective in improving the accountability and quality of service delivery. This may be worth piloting in selected Zobas. One additional benefit of this direct fund flow would be a potentially strengthened financial management system, which is a prerequisite for the accountability and transparency of public funds.

1.93 The leadership of the MOE and its close collaborations with other ministries is critical to the success of education sector reforms towards achieving sector goals. In the immediate term, MOE can begin measures aimed at reducing repetition and dropout, which are the most straightforward and under the direct control of the education sector. Improving management at the tertiary institutions so as to improve the efficiency of resources can also start. The most costly investment in the sector will be the training of teachers. Additional assistance in mobilizing resources will be needed from the MOF and the Ministry of National Development (MOND).

Improving Equity of Access

1.94 There is greater scope for targeting public resources at the most needy.In the case of boarding schools, resources to assist with the full cost of boarding could become targeted at the most needy while ensuring a minimum provision for all. MOE has already piloted some demand-side interventions such as scholarships and other incentives for education participation. These interventions appear to have been successful and after a more complete evaluation could be scaled-up. There is evidence from around the world –especially Latin America and parts of Asia that targeted scholarship programs and conditional cash transfer programs can be successful in getting target groups into school. See for example Schultz 2004, Behrman Sengupta and Todd 2005 Filmer and Schady 2006 for evidence from Mexico and Cambodia.

1.95 Resource allocations should take into account the considerable Zoba-level variation in access to education and increase per pupil resources to the disadvantagedZobasto meet the special needs in these areas.

1.96 Several grant and capitation schemes around the world have shown success with getting girls into school, see Box 0.4. The Government should continue to monitor closely the experience with the trials of this scheme in Eritrea with a view to scaling-up once the design is optimal and most cost-effective.

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Box 0.4: The Challenge of Increasing Girls Attendance at School

Increasing the schooling attainment of girls is a challenge in many countries and grant schemes have been introduced to great success in several of them. In Cambodia a program giving scholarships to girls making the transition between the last year of primary school and the first year of secondary school is estimated to have increased the enrollment and attendance at program schools by 30–43 percentage points; scholarship recipients were also more likely to be enrolled at any school (not just program schools) by a margin of 22–33 percentage points. The program also shows a favorable equity impact since the impact of the program appears to have been largest among girls from the lowest socioeconomic backgrounds. The scholarship program was funded by the Japan Fund for Poverty Reduction. Forty-five girls were awarded scholarships of $45 each from 93 lower-secondary (middle) schools. The girls families received cash transfers (rather than fee payments) provided their daughter was enrolled in school, maintained a passing grade and was “absent without good reasons” for fewer than 10 days per year. While scholarship recipients agree to use funds for education, no attempt was made to enforce this agreement. Conditional cash transfer programs have been sued in a number of countries in Latin America and the Caribbean to target the poor and provide incentives for them to invest in regular school attendance (and improved health care too). The key policy issues to address are determine who is eligible, set sustainable benefit levels, develop a payments system, develop a system to ensure compliance with conditionality’s and to monitor and evaluate program success. In Bangladesh, stipends have been used to encourage girls to school. As a result enrollment Female enrollment, as a percentage of total enrollments, increased from 33 percent in 1991 to 48 percent in 1997 and about 56 percent in 2005. Secondary School Certificate pass rates for girls in project areas increased from 39 percent in 2001 to 58 percent in 2006.

Country/Program Number of Beneficiaries Cost (% of GDP)

Year of estimate

Brazil Bolsa Familia 8 million families 32 million people

0.36 2005

Mexico Oportunidades 5 million families 0.35 2003 Colombia Familias en Accion 400,000 families 0.2 2005 Chile Solidario 214,518 families 0.08 2003

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Annex 0.1: Tertiary Sector Additional Data Proportion of UOA Graduates by discipline (2000-2005 total)

Agriculture7%

Business & Economics10%

Education24%

Engineering9%

Science9%

Social Science11%

Certif icate College of Business and Economics

16%

Health Science5%

Law Faculty 3%

Arts 3%

Advanced Diploma 3%

Source: MOE.

Budget Allocation to Intermediate and Advanced Level TVET institutions, 2005 Intermediate Advanced

Descriptions

ATS DBTS MHTS WTS HAS HATS Asm Com.

College

Asm. Tech. Inst/

698,602 - 345,120 365,103 196,660 - 34,080 100,922 Civil Salaries 636,232 - 312,540 365,103 196,225 - 34,080 100,922 Civil Allowances 62,370 - 32,580 - 435 - - - 96,714 - 220,936 419,011 143,991 - 5,907 18,772 Public Utilities Service 64,641 - 186,267 9,462 51,771 - 5,907 14,544 Traveling subsistence 480 - 9,453 87,414 29,894 - - 2,527 Printing & Advertising 779 - 4,469 4,175 - - - 1,702 Repairs & Maintenance of Premises

8,338 - 3,630 4,233 9,568 - - -

Repairs & Maintenance of motors 3,405 - 12,832 279,856 46,773 - - - tax and duties - - - 570 - - - - Miscellaneous Contractual Service 19,070 - 4,284 33,301 5,985 - - - 243,229 - 1,701,571 1,436,063 1,121,848 494,400 - 37,669 Food Stuffs - - 1,458,701 750,022 1,010,909 494,400 - - Medical Supplies 791 - 7,235 10,496 - - - 5,793 Educational Supplies 191,866 - 174,887 450,809 44,830 - - 25,001 Uniform ,Clothing, bedding 26,224 - 20,000 1,482 - - - 6,000 Petrol & Lubricants 8,774 - 18,000 212,396 50,000 - - - Office Supplies 13,375 - 22,749 3,408 - - - - Other materials & supplies 2,200 - - 7,450 16,110 - - 876 - 815,400 - - - - - - Grants to Institutions - 815,400 - - - - - - Contributions to international org - - - - - - - - - - - 21,030 - - - - Purchase of Equipments - - - 21,030 - - - - Total spending 1,038,545 815,400 2,267,627 2,241,207 1,462,499 494,400 39,987 157,364 Total enrollment 460 184 343 234 264 344 113 47

Unit spending 2,258 664 6,611 9,578 5,540 1,437 354 3,348

percent food Stuff n.a. n.a 64

percent 33

percent 69 percent 100

percent 0 0

Source: MOE

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Annex 0.2: ESDP targets and policy assumptions for expenditure projections to 2015

Elementary level Middle and secondary level

Teacher training Tertiary education

Goal ESDP goals:

90 percent completion rate by 2015, with

• 100 percent access rate

• 2 percent dropout rate each grade by 2015

ESDP goals:

Middle:

68 percent completion rate by 2015, with

• 96 percent primary to lower- secondary transition rate by 2015

• 3 to 6 percent dropout rate by 2015

Secondary:

56 percent completion rate by 2015, with

• 89 percent primary to lower- secondary transition rate by 2015

• 4 percent dropout rate by 2015

Supply of teachers to ensure PTR 40:1, 30:1 at elementary, and middle and secondary level

Public enrollment 10,000

Policy assumptions

Reduce repetition to 1 percent per grade by 2015 Increase average teacher salary to 3.5 times the GDP p.c. by 2015 Increase non-salary spending to 25 percent, starting in 2007, to support quality teaching and learning. Decrease PTR to 40:1

Reduce repetition to 2-4 percent at middle level, and 8-10 percent at secondary level by 2015 Increase average teacher salary to 4.5 times the GDP p.c. by 2015 Increase non salary spending to 30 percent, starting in 2007 to support quality teaching and learning. Decrease PTR to 30:1

Teacher training unit cost decrease to the level of GDP p.c.

Unit cost reduction to 5 times of GDP p.c. Targeted scholarships

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HEALTH Sector analysIs

A. INTRODUCTION

1.97 Better health and nutrition will improve the population’s well-being and also bring significant benefits in terms of a healthy work-force, a greater capacity for learning and increased productivity. This chapter analyzes the linkages between public resource investments and results in the health sector. While there have been lower resources dedicated to health than in many SSA countries, there have also been impressive improvements in health outcomes. This chapter looks at the remaining health challenges and reviews sector strategy and resource prioritization decisions in order to develop options for future reforms and resource allocation decisions. The chapter looks at issues of efficiency and equity and provides options to better use the resources available to improve health outcomes for all.

1.98 As in the case of chapter 1, the health chapter is limited by the data. Acomplete picture of expenditures that improve health would require: (i) health expenditure by the government (health sector); (ii) health expenditure by the government (non-health sector); (iii) external assistance; (iv) private health expenditure for utilizing public facilities; and (v) private health expenditure for using private facilities. As Eritrea has not yet established National Health Accounts (NHA), comprehensive expenditure data is not available. In particular, no systematic and complete data is available to capture the non-health sectors’ health expenditure and private health expenditures for private facilities. This chapter therefore focuses on analyzing the government expenditure in the health sector and external assistance as well as user fee revenues in public facilities.

B. BACKGROUND AND SECTOR STRUCTURE

Background

1.99 At independence health and nutrition levels were low even compared to the SSA region and further exacerbated by the 1998-2000 conflict which damaged health facilities and disrupted health service delivery. Life expectancy in 1995 was only 46 years compared to 50 years for SSA. Malnourishment of children was widespread and immunization programs covered about 25 percent of the population only. Only five percent of deliveries were attended by trained personnel and only 13 percent of pregnant women received antenatal care. Following independence the government’s immediate priorities were to improve preventative and primary health care, particularly in rural areas. They quickly set about rehabilitating damaged and poorly-maintained facilities, expanding the provision of basic supplies and extending service to those areas not adequately covered by health care providers.

1.100 Significant progress has been achieved in expanding health facilities and programs with a limited domestic health budget and substantial external assistance.

45

These interventions have borne results in terms of improved life expectancy and health outcomes. The total number of health facilities grew rapidly. In 2005, there are an additional nine hospitals, 47 health centers, 72 health stations and over 100 clinics since 1991 (see Table 0.1). While hospitals, health centers and health stations are predominantly publicly provided, two thirds of clinics are private operators. Life expectancy currently increased from 46 to 51 years between 1995 and 2002. The health outcome results can be seen particularly in the areas of communicable disease incidence and child mortality. About half of all households in malaria areas have at least two insecticide-treated bed nets and malaria mortality and morbidity have decreased by 80 percent, and HIV prevalence remains low. With access to immunization increased substantially child mortality rates have fallen faster than SSA averages.

Table 0.1: Number of Health Facilities 1991 to 2005

1991 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

2005

Hospital 16 20 20 20 20 23 23 23 23 24 24 25 25

Health Center 4 36 40 44 50 49 49 52 51 49 49 50 51

Health Station 106 122 130 139 139 149 154 170 179 169 176 177 178

Clinic 0 29 31 31 40 40 37 29 33 73 85 107 104

Total 126 207 221 234 249 261 263 274 315 315 334 359 358

Source: MOH.

1.101 Significant health challenges remain particularly in the areas of reproductive health, malnutrition and diarrheal disease. The country’s overall burden of disease arises mainly from children and women of child-bearing age, which accounts for 63 percent of the total population. Communicable and preventable diseases are the main health problems in the country, comprising about 71 percent of the Burden of Disease (BoD). Furthermore prenatal and maternal health-related problems, together with diarrhea and acute respiratory infection (ARI) constitute 50 percent of the BoD.

Sector Structure

1.102 The health delivery system comprises three tiers—primary, secondary and tertiary. Primary health care is provided by health centers, health stations, community health services and community hospitals; secondary care is delivered by Zoba hospitals; and tertiary care is mainly delivered by national referral hospitals. Based on MOH policy, health stations, normally with a catchment area of 5 km, are designed to be the first contact point between the health system and patients particularly in the rural areas. A health station is designed to serve a population of about 5,000 to 10,000; a health center should be capable of providing services from 50,000 to 100,000 people; and acommunity hospital should cover a population of 100,000 to 150,000. Zoba and national referral hospitals ought to serve the whole Zoba and national population respectively.

1.103 There are a total of 358 health facilities in Eritrea—the majority (70 percent) are in the public sector. Table 0.2 shows the number of health facilities and ownership. While the private sector comprises a very small percentage of the secondary

46

and tertiary level care, almost two thirds of clinics are private-for-profit institutions. NGOs do not play a large role in health care provision. While there are twenty five hospitals in the country there are startlingly few –only 7– maternal and child health (MCH) clinics.

Table 0.2: Health Facilities by Type and Ownership, 2005

Hospital Health Center

Health Station

MCH Clinic Clinic Total

MOH 23 40 151 6 0 220 Other public facilities 0 4 3 0 29 36 NGO 1 1 0 0 4 6Mission 0 5 24 1 0 30 Private for profit 1 1 0 0 64 66

Total 25 51 178 7 97 358 Source: Annual Health Service Activity Report, MOH, 2005.

1.104 The MOH’s functions include health policy development, management and supervision of health services, research and human resource development, and regulation. The MOH underwent a restructuring in 2003 in order to align functions and improve the efficiency and effectiveness of its units. The MoH now comprises three principal departments: Health Services, Regulatory Services, and Research and Human Resources (see Annex 2.4 for the organization chart). There is no separate planning department in the MoH. The planning function and the Finance Unit are directly under the Health Minister’s office.

1.105 Health service delivery is partly deconcentrated to the Zoba level. The Zoba Health Management Office is spearheaded by a Zonal Medical Officer, who is appointed by the Minister of Health. The Zoba Health Management Office is planned to comprise a public health division, medical service and resource planning and management. However, in reality, many Zoba offices have not reached their full establishment. Before 2005, planning and budgeting were done centrally by the MOH, and expenditure for each Zoba was not disaggregated. Now the government is decentralizing and the budgeting responsibility has passed to the Zoba level.

C. SECTOR PERFORMANCE

Trends in Burden of Diseases and Health Outcomes

1.106 Health status and life expectancy of men and women have generally improved since the 1990s. Based on the DHS in 1995 and 2002 life expectancy increased from 45 to 51 years – above the 2002 SSA average of 47 years. WDI estimates that in 2005 life expectancy had continued to increase reaching 55 years on average – 57 for women and 53 for men, with men and women being 10 and seven years above the SSA average respectively. While health indicators were among the worst in the world in the 1990s there has been an improvement in health status reflected not only in the

47

increased life expectancy but also in mortality rate reductions, improvements in immunization coverage and access to a health professional.

1.107 The prevalence of malaria has fallen by 80 percent since 1998. Malaria is endemic in the coastal and lowland areas. Prevention of malaria has been a priority for the government and backed by international donors. As a result malaria morbidity and mortality have both dropped by over 80 percent since 1998. This makes Eritrea one of only a few countries in SSA to meet the Abuja Roll Back Malaria target (Figure 0.1).16 While malaria contributes nine percent of deaths in SSA, on average it is less than 2 percent of deaths in Eritrea (Table 0.3). While it is still the leading cause of hospital admissions (10 percent of cases), malaria has fallen off the top 10 list of causes of death. This is impressive since in 1998 malaria was the cause of 30 percent of deaths and 62 percent of hospital cases.

1.108 While many SSA countries face increasing HIV prevalence, the rate of HIV is low and under control at only 2.4 percent in Eritrea. Like malaria, controlling the spread of HIV has been a government priority. The current rate is significantly below the SSA average of seven percent (Figure 0.2) and even lower than Uganda where successful HIV control programs brought prevalence down to five percent. That said, HIV/AIDS is still a leading cause of mortality and accounted for 10 percent of adult deaths in 2005.

Figure 0.1: Trend in malaria morbidity and mortality rates in Eritrea per 1000

Figure 0.2: HIV Prevalence, 1994-2005

0

10

20

30

40

50

60

1998 1999 2000 2001 2002 2003

Y ear

0

0.05

0.1

0.15

0.2

0.25

Morbidity rate

Mortality rate

Source: MOH.

1.109 The incidence of TB is relatively low. In 2005 the incidence of TB was 282 cases per 100,000. TB is the third largest disease responsible for six percent in of deaths in the population over aged five. Incidence is lower than the SSA average of 348 per 100,000.

16 The African Summit on Roll Back Malaria was held in Abuja, Nigeria on the 25th of April 2000. It reflected a convergence of political momentum, institutional synergy and technical consensus on malaria (and, to some extent, other infectious diseases issues).

ANC HIV SS prevalence trend over the years

3%

4.20%

2.80%2.40% 2.38%

0%1%1%2%2%3%3%4%4%5%

1994 1999 2001 2003 2005

48

1.110 Despite the better life expectancy for women than the SSA average, MMR ratios remain persistently high. The MMR was estimated at 998 deaths per 100,000 live birth between 1984 and 1994, and 752 deaths per 100,000 according to the latest estimate.17 Forty-eight percent of maternal deaths are estimated to occur during delivery and 36 percent after.18 In fact obstetric and abortion cases combined account for almost 12 percent of hospital and health center admissions – more than admissions as a result of malaria. During this period the TFR decreased from 6.1 births per woman in 1995 to 4.8 in 2002. This compares with the SSA average of 5.4 in the same year. The adolescent fertility rate has fallen from 96 to 92 births per 1000 women aged 15 to 19 years between 1997 and 2005 and is on a par with the low-income countries average and below SSA averages (131 births in 2005).

1.111 There have been rapid reductions in infant and under-5 mortality rates - faster than the average for SSA. The infant mortality rate (IMR) fell from 72 to 48 deaths per 1,000 live births between 1995 and 2002. Similarly, the under-five mortality rate (U5MR) dropped from 136 to 93 deaths per 1,000 live births. While both IMR and U5MR were similar to SSA averages before 1985, they fell much faster in Eritrea and by 2004 both were around half the SSA average (see Figure 0.3). Neo-natal mortality also fell slightly between the DHS survey years from 25 to 24 deaths per 1000 births. While only a gradual decline the rate compares favorably with the low-income countries average of 33 per 1,000 live births and is remarkably better than many post-conflict countries such as Ethiopia, Liberia and Sierra Leone where rates exceed 50 per 1,000 live births.

Figure 0.3: Trends in Infant Mortality and Under-5 Mortality Rates per 1,000 live births

IMR

0

2040

6080

100

120140

160

1970 1975 1980 1985 1990 1995 2000 2004

Per

1,0

00

live

bir

ths

Eritrea

Sub-Saharan Africa

U5MR

0

50

100

150

200

250

300

1970 1975 1980 1985 1990 1995 2000 2004

Per

1,0

00

live

bir

ths

Eritrea

Sub-Saharan Africa

Source: World Development Indicators, WB, 2006.

1.112 Malnutrition continues to adversely affect women and children’s health and is a leading cause of morbidity. In 2002, 40 percent of children were underweight for age and 38 percent were stunted.19 This shows small improvements since the 1990s,

17 Ghebrehiwet, 2005. 18 Direct causes of maternal mortality in Eritrea are likely to be similar to elsewhere in Africa: which include haemorrhage, sepsis, obstructed labour and abortion. 19 Children are classified as stunted if height-for-age is under 2 standard deviations, and classified as underweight if weight-for-age is under 2 standard deviations.

49

particularly in terms of chronic undernourishment. A UNICEF survey in 1993 found 40 percent of children under five were underweight and that stunting affected two thirds of children. Malnutrition is the second most important cause of mortality in under 5s accounting for 28 percent of deaths, and also accounts for two percent of adult deaths. Thirty-seven percent of women were found to have a low Body Mass Index (BMI) in 2002. Worryingly the prevalence of low BMI in women remained unchanged in the rural areas between 1995 and 2002, and actually increased in urban areas Figure 0.4. There is little information on micronutrient deficiencies. Vitamin A deficiency is possible given the incidence of diarrhea and the composition of local diets which often lack green leafy vegetables, as is iron deficiency given the prevalence of anemia and malnutrition as a cause of out-patient and admissions in children under five.

Figure 0.4: Low BMI Among Women

Women Low BMI

0

10

20

30

40

50

1995 2002 % change

%

Urban

Asmara

Rural

Source: DHS 1995 and 2002.

1.113 For children under five, 43 percent of deaths are from acute respiratory infection (ARI). This is also the single biggest reason - accounting for almost half of all cases - for outpatient visits and hospital and health center admissions. While deaths from diarrhea are falling world wide, it still accounts for 9.3 percent of child deaths in Eritrea.

1.114 Finally non-communicable diseases are an increasing health care problem: hypertension, diabetes and heart failure, are all increasing health issues in Eritrea and rising up the chart of causes of outpatient and admissions at hospitals and health centers. See Annex 0.1).

50

Table 0.3: Leading Cause of Death in Hospitals and Health Centers, 2005

2000 2001 2002 2003 2004 2005 2005 % of deaths

Children aged under 5 ARI 1 1 1 1 1 1 42.7 Malnutrition 3 3 3 2 3 2 27.9 Diarrhea 2 2 2 3 2 3 9.3 Septicemia 4 4 4 4 4 4 3.9 HIV/AIDS 7 6 6 6 5 5 3.5 Prenatal respiratory problem - 9 7 - - 6 1.5 Intrauterine hypoxia and birth asphexia - 10 - - - 7 1Haemolytic disease of fetus & newborn - - 10 - - 8 0.9 Malaria 5 5 5 5 7 9 0.8 Heart disease 8 8 8 7 6 10 0.8 TB 6 7 9 - 8 -

Total 93.8 Population aged over 5 HIV/AIDS 1 1 1 1 1 1 10.1 ARI 2 3 3 3 2 2 7.1 TB 3 2 2 2 3 3 6.1 Other liver disease 8 5 6 6 10 4 5.8 OB Emergency 9 10 10 9 8 5 4.3 Hypertension 4 5 5 4 4 6 3.5 Diabetes Mellitus 11 7 8 10 7 7 2.8 Malnutrition 7 11 9 7 9 8 2.3 Septicemia - - 10 11 6 9 1.8 Heart Failure 10 9 7 5 5 10 1.7 Malaria 6 4 11 9 15 11 Total 45.5

Source: Annual Health Service Activity Report, MOH, 2005.

Regional and Income Group Disparities

1.115 Health indicators vary considerably, particularly by region: health status is generally worse for those living in rural areas – where the majority live. Differences between the 1995 and 2002 DHS surveys provide some indication that these regional disparities are widening. In 2002 the IMR was 62 in rural and 48 in urban areas; U5MR was 117 deaths compared to 86 deaths per 1,000 live births in urban areas. The DHS surveys show that child mortality rates improved by 40 percent in the urban areas but only 20 percent in rural areas. The same is also true for child nutrition indicators. The percentage of underweight children in rural households was more than twice that in Asmara in both 1995 and 2002, and improvements have largely been in Asmara (see Figure 0.5). In the case of low BMI in women on the other hand, there has been no deterioration in the rural areas, but it is the urban and especially Asmara indicators that have worsened (Figure 0.4).

51

Figure 0.5: Percent of Rural and Urban Children Underweight

-30

-20

-10

0

10

20

30

40

50

60

1995 2002 % change%

Urban

Asmara

Rural

Source: DHS 1995 and 2002. 1.116 Disaggregated by Zoba-level also shows health outcomes are worse in the more remote regions – which may in part be a result of climatic differences between the highlands and the lowlands. In 1993 child mortality was estimated to be 318 deaths per thousand in Dankalia (currently Deb-Keih Bahri) compared to a national average of 203 and the rate in Hamasien (currently Maekel) province of only 97. Although child mortality has improved across the board it is still higher in those Zobas further from the center of the country, including Deb-Keih-Bahri, Sem-Keih-Bahri and Gash-Barka. Sem-Keih-Bahri, Anseba, and Gash-Barka also register the poorest nutrition. While infant mortality and malnutrition improved in most Zobas between 1995 and 2002, in Deb-Keih-Bahri infant mortality rates deteriorated and the proportion of underweight children did not improve. In Maekel on the other hand health outcomes are better than the national average, and also significantly improved between the DHS survey years (see Figure 0.6). The MMR in 2002 varied from 46 per 100,000 births in Maekel to 1,261 per 100,000 births in Deb-Keih-Bahri and with both Anseba and Gash Barka also reporting MMRs above 1,00020.

20 Ghebrehiwet, M. (2005).

52

Figure 0.6: Regional disparities in Health Outcome Indicators

IMR Per 1,000 Live Births for Children Under One

-60

-40

-20

0

20

40

60

80

100

120

140

SRS NRS Gash-Barka

%

1995

2002

% change

Underweight Children Under Five

-40

-20

0

20

40

60

SRS NRS GB

%

1995

2002

% change

Source: DHS 2002.

1.117 It is likely that differences in household incomes by region also explain some part of health outcome variations, as not surprisingly the poorer quintiles have worse health outcomes nationally. Households from the poorest quintiles compare unfavorably in almost all health outcome indicators. The percentage of underweight children in the poorest quintile was more than two times that in the wealthiest quintile. Similarly, 25 percent of children in the poorest group suffered from ARI compared to 13 percent in the top quintile (Figure 0.7).

Figure 0.7: Disparities in Health Outcomes by Economic Status

Source: DHS 2002.

Trends in Health Interventions and Access

1.118 The general improvement in health outcomes over the last decade can, at least in part, be attributed to the roll out of several cost-effective communicative disease interventions. There has been notable success from the malaria and HIV control

Underweight

0

10

20

30

40

50

60

Poorest

Second

Middle

Fourth

Richest

%

% with ARI

0

5

10

15

20

25

30

Poorest

Second

Middle

Fourth

Richest

53

activities. About half of all households in malaria areas have at least two insecticide-treated bed nets (ITNs) and 84 HIV VCT centers have been opened. With improved awareness campaigns the number of visitors increased thirty fold from 2,227 in 2001 to 68,083 in 2005, one of the fastest scale-ups in Africa. (See Figure 0.9). For child health, DPT3 immunization coverage was as low as 11 percent for the child population in 1993. In 2004, immunization coverage for DPT3 was 80 percent reaching international targets and exceeding both the SSA and world averages (See Figure 0.8). Similarly measles immunization covers 84 percent of 12-23 month olds – some 20 percentage points above the SSA average.

Figure 0.8: Comparison of DPT3 Vaccination, 2004

DPT3

0102030405060708090

Angola

Burun

di

Congo

, Rep.

Eritre

a

Ethiop

ia

Gha

na

Kenya

Moz

ambi

que

Niger

ia

Sudan

Sub-S

ahar

anAfri

caW

orld

%

Source: World Development Indicators, WB, 2006.

Figure 0.9: Number of VCT Visitors, 1999-2005

Source: MOH. 1.119 Access to health facilities and health personnel also increased substantially after independence. In the decade preceding 2005, the total number of health facilities increased by 70 percent with the private sector leading the way with an expansion of health clinics (Table 0.4). The number of hospitals increased by over 50 percent from 16 in 1991 to 25 in 2005. The total number of health staff also increased and the number of doctors increased from only 58 in 1991 to 217 in 2005.

VCT given from 1999 to 2005

1510 2010 2227

10659

33292

47663

68892

0

10000

20000

30000

40000

50000

60000

70000

80000

1999 2000 2001 2002 2003 2004 2005

54

Table 0.4: Numbers of Health Facilities and Staffing

1991 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

2005

Hospital 16 20 20 20 20 23 23 23 23 24 24 25 25

Health Center 4 36 40 44 50 49 49 52 51 49 49 50 51

Health Station 106 122 130 139 139 149 154 170 179 169 176 177 178

Clinic 0 29 31 31 40 40 37 29 33 73 85 107 104

Total 126 207 221 234 249 261 263 274 315 315 334 359 358

Doctor 58 .. .. .. .. .. 176 170 163 211 212 214 217

Nurse 228 .. .. .. .. .. 756 810 803 846 993 954 1012

Assistant. Nurse .. .. .. .. .. .. 1292 1332 1373 1488 1576 1520 1691

Other HP 41 .. .. .. .. .. 464 430 404 411 589 550 580

Adm. Staff NA .. .. .. .. .. 1776 2122 2119 731 2591 2582 2533

Total 327 .. .. .. .. .. 4464 4864 4862 3687 5961 5820 6033 Source: Annual Health Service Activity Report, MOH, 2005. Notes: a partial data reported for administrative staff in 2002 renders an incomplete total in 2002.

1.120 However, shortages particularly of primary health care facilities remain. We find that if we compare the government’s target ratios for population served by a health center, station or hospital with the actual number of facilities; there is an overall shortage of health centers and health stations. (There are more than enough hospitals on the other hand). For the MoH standards to be reached an additional 15 health centers and 150 health stations would be needed (see Table 0.5).

Table 0.5: Required Numbers of Health Facilities Based on MOH Standards

SRS NRS Anseba Gash Barka

Debub Maakel Total Actual

Hospital 1 3 3 3 4 3 17 25

Health Center 2 11 11 13 17 12 66 51

Health Station 8 53 53 65 87 62 328 178 Source: Annual Health Service Activity Report, MOH, 2005.

1.121 International standards would also imply there is a shortage of health professionals for the population. WHO recommends a doctor to population ratio of 1:10,000, and a nurse to population ratio of 1:5,000. On this basis Eritrea is short of both doctors and nurses. On average one doctor serves more than 20,000 people in Eritrea implying an additional 70 doctors are needed to meet WHO standards. As Figure 0.10 shows compared with other African countries, the population to doctor ratio is toward the lower end of the spectrum but by no means the worst.

55

Figure 0.10: Regional Comparison of Population to Doctor Ratios, 2005

0 20000 40000 60000 80000

Egypt

South Africa

Nigeria

Kenya

Eritrea

T anzania

Uganda

Ethiopia

Ghana

Persons per doctor

Source: WDI. 1.122 And the distribution of health staff also exacerbates the shortage at the primary level. Referral hospitals employ 41 percent of the country’s doctors, 33 percent of nurses, and 21 percent of associate nurses (Figure 0.11). Including district and community hospitals, three fourths of all doctors are employed by hospitals along with 55 percent of nurses, and close to half of associate nurses. As a result 25 percent of doctors and half of nurses are spread across the 51 health centers and 178 health stations. In fact almost half of the associate nurses, who are desperately needed by health stations and health centers, are stationed in Asmara.

Figure 0.11: Distribution of Health Staff, 2005

0.0 10.0 20.0 30.0 40.0 50.0

SR S

NR S

Anseba

Gash-B arka

Debub

Maakel

National R eferral Hospital

MOH Headquarters

%

Total

Ass.Nurse

Nurse

Doctor

Source: Annual Health Service Activity Report, MOH, 2005. Note: Ass. Nurse is assistant nurse.

56

1.123 The challenges of bringing down maternal mortality and morbidity (recall obstetric and abortion cases combined account for almost 12 percent of hospital and health centre admissions – more than admissions as a result of malaria) could be attributed to low access to a range of interventions from family planning, pre-natal care, assisted delivery and post-natal health care. While fertility rates have fallen, family planning services are still rare with the couple-year protection rate (CPR) stable at eight percent (according to DHS 1995 and 2002), making it one of the lowest in Africa.21 Contraceptive prevalence in women aged between 15 and 49 is similarly low at eight percent and did not change between 1995 and 2002. Compare this with the low-income country average of 40 and SSA average of 23 percent in 2005. In most SSA countries the access to family planning has been increasing over the last decade. Assistance during delivery is also low, with only 28 percent of births attended by skilled health professionals compared to the SSA average of over 40 percent (Figure 0.12). And the unmet need for emergency obstetric care is estimated to be above 80 percent. There is also low postnatal care: less than 36 percent of births receive skilled postnatal care. Furthermore these national averages mask huge regional and income related disparities as discussed in the next section.

Figure 0.12: Assisted Delivery Coverage in Selected Africa Countries, 2005

Source: World Development Indicators, WB, 2006.

1.124 Similarly, access to health professionals is one of a number of factors affecting relatively high diarrhea-related mortality and morbidity in children. World-wide there has been a steady decline in diarrheal mortality despite the lack of significant changes in incidence and this is likely a result of improved case management and advice on breastfeeding, hygiene, and rehydration treatment. There are other important factors. While the percentage of the population with access to an improved water source has increased from 39 percent in 1990 to 57 percent in 2004 in the rural areas, and for the urban population from 62 percent to 74 percent, improved sanitation lags far behind the average for SSA and low income countries. According to WDI only nine percent of the population (three percent of the rural population, 32 percent of the

21 The couple-year protection rate is the total number of years of contraceptive protection provided by a method. For each method, the rate is calculated by taking the number of units distributed and dividing that number by a factor representing the number of units needed to protect a couple for one year.

%

Percent of births attended by a professional

57

urban population) had access to improved sanitation compared to LIC and SSA averages of 37 and 38 percent. This also shows that sanitation in rural areas has not improved since 1993 when an estimated four percent of the total are had access to latrines.22 On many other interventions Eritrea fares relatively well compared to SSA and there is scope for scaling up these activities. Diarrhea treatment in the form of oral re-hydration and continued feeding reached about fifty four percent of under five year old children in 2002. Exclusive breast-feeding in the first six months was 52 percent in Eritrea compared to the 2005 average in SSA of just 29 percent.23 Childhood vitamin A supplementation on the other hand has fallen from 90 percent coverage of six to 59 month olds in 1999 to only 50 percent in 2005. Vitamin A deficiency is a common cause of preventable blindness in children and supplementation can also decrease the severity of diarrhea.

1.125 The simplification and systemization of case management for early diagnosis and treatment of ARIs have enabled significant reductions in mortality in developing countries where access to pediatricians is limited. Thus primary care workers can use simple diagnostic techniques to identify and treat pneumonia.

Disparities in Health Interventions and Access

1.126 Sparsely populated Deb-Kei-Bahri and Zoba Maekel have relatively better ratios of health facilities and professionals per population, ratios in the other four Zobas are relatively even. Maakel has the highest number of health care facilities (100) and 28 percent of the national total. When taking the population size in each Zoba into account, Deb-Kei-Bahri has the highest ratio of health facility per 10,000 people due to its small population size (see Table 0.6). The remaining facilities are distributed reasonably equitably across Zobas to allow, on average, one facility per 15,000 people and one health professional per 1,500 people.

22 WB (1994). 23 The high rate of measles immunization is also important. In addition to preventing 44 to 64 percent of measles cases, 6 to 36 percent of diarrheal deaths among children under five would be prevented. Feachem and Koblinsky (1983).

58

Table 0.6: Health Facilities and Staff by Zoba 2005

Deb-Keih- Bahri

Sem-Keih-Bahri Anseba

Gash-Barka Debub Maakel

National Referral Hospital

MOH HQ Others Total

Hospital 2 4 1 3 5 4 6 .. .. 25 Health Center 2 11 8 11 10 9 0 .. .. 51 Health Station 13 26 22 47 44 26 0 .. .. 178 Clinic 2 9 11 11 10 61 0 .. .. 104 Total 19 50 42 72 69 100 6 .. .. 358 Facilities per 10,000 people 2.5 0.9 0.8 1.1 0.8 1.6 .. .. .. 1.1

Doctor 11 14 16 20 25 15 89 18 8 216 Nurse 38 75 74 89 137 156 330 76 37 1012 Associate.Nurse 89 189 181 261 313 222 351 17 68 1691 Other Health Professionals 28 56 53 70 90 65 127 86 6 581 Total 166 334 324 440 565 458 897 197 119 3500 Staff per 1,000 people 2.2 0.6 0.6 0.7 0.6 0.7 .. .. .. 1.1

Source: Annual Health Service Activity Report, MOH, 2005. 1.127 Despite this, there is evidence that the rural population generally has less access to health care. Disparities in health service provision are substantial in some cases. Contrast the high coverage (over 90 percent) of antenatal care for women living in Asmara and other urban settings, with rural women where 40 percent did not receive professional antenatal care during their pregnancy. The disparity is even more pronounced for assisted deliveries where only 10 percent of rural mothers had their delivery assisted professionally compared to almost 90 percent of women in Asmara. The low assisted delivery in rural areas is believed to be one of the main reasons for the persistent high maternal mortality rates (see Figure 0.13). There are also differences at Zoba level where outcomes in Maekel are better than the rest of the country. For example, 87 percent of households used Oral Rehydration Therapy (ORT) to treat child diarrhea in 2002; while only 59 percent of households did so in Deb-Keih-Bahri. (See Figure 0.14).

59

Figure 0.13: Disparities in Health Services between Rural and Urban Areas

Antenatal Care

91.2 93.4

59.3

0

20

40

60

80

100

Ur ban Asmar a Rur al

%

Figure 0.14: Disparities in Health Service Coverage by Zoba OR T U se

0

20

40

60

80

100

S RS Maekel NRS Anseba GB Debub

%

Ant enat al Car e

0

20

40

60

80

100

S RS Maekel NRS Anseba GB Debub

%Source: DHS 2002. 1.128 There are also differences in access by economic status. For assisted delivery, only seven percent of women in the poorest quintile benefited from the service, compared to the wealthiest quintile in which 81 percent of women received delivery assistance from health professionals. For the childhood immunization program, efforts to reach the most disadvantaged show that although there is a gap of almost 20 percentage points between the poorest and richest quintiles –in fact the gap is wider for the second and middle quintiles (Figure 0.15).

Utilization of Health Facilities

1.129 In 2005, about 100,000 patients were admitted and a further 1.6 million patients visited the outpatient departments of public health facilities in Eritrea. Children under five account for a significant share of total inpatient admissions (31 percent) and outpatient visits (28 percent). Most child inpatient admissions occurred at the national referral hospitals in Debub and Gash-Barka (Table 0.7).

%

60

Figure 0.15: Disparities in Health Service Coverage by Economic Status (Percent)

Source: DHS 2002. Table 0.7: Outpatient Visits and Inpatient Admission by Zoba, 2005

Anseba Debub SRS G.

Barka Maakel NRS

National Referral Hospital Total

Total Population Outpatient visits (000s) 228 286 61 321 433 496 59 1,571 Outpatient visits per capita 0.43 0.33 0.79 0.49 0.70 0.94 .. 0.48

Inpatient admissions (000s) 12.7 18.4 2.0 18.0 10.4 8.5 31.9 102.0 Inpatient admissions per 1,000 population 24.1 21.1 26.3 27.7 16.8 16.0 .. 31.1

Children Under 5

Outpatient visits (000s)

61.1

90.2

14.1

101.3

95.1

57.7 21.9 441.2

Outpatient visits per capita 0.77 0.69 1.23 1.04 1.02 0.73 .. 0.90

Inpatient admissions (000s) 3,434 5,404 525 4,835 1,212 2,557 13,977 31,944 Inpatient admissions per 1,000 population 43.5 41.3 45.8 49.5 13.0 32.2 .. 65.0

Source: Annual Health Service Activity Report, MOH, 2005. Notes: Inpatient data is for hospitals and health centers only. 1.130 For outpatient care, health stations play an important role in meeting the demand for health services especially in remote areas. In 2005, the national average was 45percent of outpatient visits were treated at health stations. The percentage was even higher for Northern Rea Sea (NRS) and Southern Red Sea (SRS) at 79 percent and 70 percent respectively. For children under five, the share of outpatient visits treated at health stations is even higher, with half of outpatient visits at health stations in 2005. SRS has the highest share for health stations at 75 percent. This indicates the remote Zobas, such as SRS, rely more on primary health facilities to provide services.

Immunization

74.465.5 64.2

84.590.9

0

20

40

60

80

100

Poorest

Second

Middle

Fourth

Richest

%

Assisted Delivery

6.7 9.7 12.9

43.9

81

0

20

40

60

80

100

Poorest

Second

Middle

Fourth

Richest

%

61

Figure 0.16: Distribution of Outpatient Visit, 2005 Total Population

45%53%

30%

45%

62%

21%

54%

55%47%

70%55%

38%

79%

46%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Anseba Debub SRS G. Barka Maakel NRS Total

HS

HO+HC

Children under 5

39%47%

25%

43%55% 59%

50%

61%53%

75%

57%45% 41%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Anseba Debub SRS G. Barka Maakel NRS Total

HS

HO+HC

Source: MOH. Notes: HS is Health Station, HO is Hospital and HC is Health Center. 1.131 There is Zoba-level variation in the per capita outpatient visits and inpatient admissions reflecting a different pattern of health service utilization. While per capita outpatient visits are twice as high than the national average in Sem-Keih Bahri (0.94 visits per person) inpatient admissions are almost half.

D. HEALTH SECTOR EXPENDITURE ANALYSIS

Total Public Spending on Health

1.132 Total public spending on health was estimated to be approximately 4.6 percent of GDP this includes estimated external assistance of 3.3 percent of GDP. Government spending on health in proportion to GDP has remained around two percent, falling slightly in 2005 to 1.3 percent of GDP. In contrast to education, external assistance to health is much more significant at around two–three times government’s own resources and this has largely driven any annual fluctuations in health spending.

62

Table 0.8: Total Health Expenditures 2002 2003 2004 2005

US $ 000 Government expenditure 11,794.9 11,794.9 13,473.2 12,352.5 External assistance 26,557.5 21,944.9 35,569.8 31,034.5 Total Public Sector 38,352.3 33,739.8 49,043.0 43,387.0 Total health spending per capita US$ /a 7 9 10 .. Total health spending per capita US$ /b 7 9 10 8 Percent of GDP

Total 6 6 7.5 4.6 Government expenditure 2 2 2 1.3 External assistance 4 4 5.5 3.3 Total Health Expenditures /b 4.6 4.7 4.5 3.7 Private health spending (% of total) 50.8 42.6 39.2 45.1 Private health spending (% of total) 49.2 57.4 60.8 54.9 Source: MOH, Bank Staff calculations. Notes: (a) estimate from WDI 2007; (b) estimate from WHO.

1.133 Private spending on health could also be an additional three percent of GDP. According to WDI estimates the out-of-pocket expenditures on health care in Eritrea add a further three percent of GDP of health spending. WHO national health account estimates suggest that the private sector could account for as much as 60 percent of total health expenditures.

1.134 Despite this Eritrea is among the countries with the lowest health expenditures in the world. In terms of per capita health spending (public and private) and in proportion to GDP, Eritrea is far below SSA averages (see Figure 0.17).24 In per capita terms, not only does Eritrea fall below the SSA average (US$ 36 per capita) it also places spending at the low of the estimated per capita cost of a basic health care package - which varies from US$9 to US$35.25

24 Since Eritrea has not established its NHA the data are WHO and WDI estimates. 25 The World Development Report of 1993 recommended an amount of US$12 per capita for low-income countries to deliver a minimum service package. Other cost estimates include a US$9.24 standard under the “Better Health in Africa” (WB, 1994); and US$35 prescribed by WHO’s Commission on Macroeconomics and Health (WHO, 2002) to meet basic health needs towards the year 2007.

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Figure 0.17: Health Expenditure Per Capita

587

522

295

232

196

172

145

107

96

78

40

37

36

34

31

29

28

26

22

22

21

21

21

20

20

19

19

18

17

16

16

16

16

13

12

12

12

11

9

9

8

8

7

7

6

5

4

3

0 100 200 300 400 500 600 700

World

Seychelles

S outh Africa

B otswana

Gabon

Mauritius

Namibia

S waziland

Equatorial Guinea

Cape Verde

Z imbabwe

Cameroon

Sub-Saharan Africa

Sao T ome and Principe

Lesotho

Senegal

Cote d’Ivoire

Angola

Guinea

Nigeria

Gambia, T he

S udan

Zambia

B enin

Kenya

B urkina Faso

Congo, R ep.

Uganda

Mauritania

Chad

Ghana

Mali

T ogo

Malawi

Central African R epublic

Mozambique

T anzania

Comoros

Guinea-B is sau

Niger

Eritrea

Madagascar

R wanda

S ierra Leone

Liberia

Ethiopia

Congo, Dem. R ep.

B urundi

Cur r ent U S $

Source: WHO estimates, WDI 2006.

1.135 Unlike experience elsewhere in SSA health expenditures have not increased in proportion to GDP. Total government expenditures in the health sector show a small increase in nominal terms from 2000 to 2005. However, government’s nominal health spending is unlikely to have kept pace with estimated inflation and is barely keeping pace with population growth. Table 0.8 and Figure 0.18 show the fluctuations in the government’s own resources and more importantly, that of donors. The increase in government’s health spending in 2004 for example, was due to US$ 2.6 million dollars capital investment in the Keren Pharmaceutical Factory (see Table 0.9) and the start of external assistance from the Global Fund for Aids, TB and Malaria (GAFTM) increased donor funds. The variation of partner support and lack of predictability create difficulties in the planning process and in ensuring resources are

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allocated to national priorities. This requires attention from both the government and partners sides. Figure 0.18.

Table 0.9: Government Expenditure in the Health Sector, 2000-2005 (US$ 000) 2000 2001 2002 2003 2004 2005 Recurrent 10,209 9,813 10,768 10,173 10,055 10,862 Capital 589 884 1,175 951 3,418 1,491 Total 10,798 10,697 11,943 11,124 13,473 12,353 Source: MOH, Finance Unit. Figure 0.18: Public Health Expenditures, 2002-2005 US$

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

2002 2003 2004 2005

External assistance

Government expenditure

Total government+external

Source: MOH.

Intra-Sector Allocations of Government Spending

1.136 A look at the intra-sectoral allocations show government’s spending is largely on recurrent costs and hospitals. From 2000 to 2005 total government spending on hospitals averaged US$5.8 million a year and was almost 50 percent of total spending in 2005. Spending on Administration and Finance (which includes administrative related expenditure and salaries for administrative staff as well as the taxes and duties associated with in-kind health donations), is the next largest share which accounted for 25 percent of health expenditures on average. (See Table 0.10).

1.137 In fact government spending on primary level health centers and health stations has fallen in recent years. This is both as a share of spending: from 21 percent in 2003 to 15 percent in 2005; and in nominal cash terms from a peak of US$2.3 million in 2003 to US$1.9 million in 2005.

65

Table 0.10: Expenditure Summary Table, MOH, 2000-2005 US$ 000 2000 2001 2002 2003 2004 2005 Administration and Finance /b 1799.7 2809.3 3168.6 3203.2 2836.6 3108.6 Training institution 60.9 181.7 184.1 202.4 145.9 430.0 Hospital Administration 6956.0 5606.0 6239.7 5126.5 5548.2 5757.8 Health Center & Health Station 1898.1 2002.4 2265.7 2339.3 1975.8 1887.7 Central Laboratory 83.7 98.0 84.8 252.5 313.5 183.9 Blood Bank .. .. .. .. .. 110.4 Contribution to state Capital financial Agency /a .. .. .. .. 2653.3 874.0 Total 10798.4 10697.3 11943.0 11123.8 13473.2 12352.5

Source: MOH, Finance Unit. Notes: a Funds were allocated and spent by the Government Treasury for the construction and start-up of the Keren Pharmaceutical Factory; b expenditures include tax and duties on in-kind external assistance that are repaid to the MOF from MOH budgets. 1.138 Eritrea’s history and continuing tension over the border has resulted in government’s policy to invest in emergency-based hospital services. Not only was there a lack of health infrastructure inherited at independence, the “no peace, no war” situation brings with it the concern to have adequate emergency-health care preparation. Several hospitals have been contracted since 1991 to provide clinical services and treatments for acute injuries. Community hospitals on the other hand also provide primary health care.

1.139 Another cause of fluctuation in health spending is the proportion spent on drugs which has resulted in a fall in salary expenditures on average. Drug spending fluctuated from only 10 percent of spending in 2000 and 2001 to around 40 percent in 2002 and 2004. With a static overall envelope there is a resulting fluctuation too in the resource allocated for salaries, which is on average 40 percent since 2002 compared to 60 percent at the beginning of the decade. This may be a response to fluctuations in in-kind drug contributions or a result of stock management. (Figure 0.19).

Figure 0.19: Composition of the Recurrent Expenditure, 2000-2005

65 61

38 43 38 44

10 1039 29 43

16

26 29 23 2820

40

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005

% of others

%of drug

% of salary

Source: MOH, Finance Unit. Note: Recurrent expenditures include salaries, drugs, and other operating costs.

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1.140 Most of the drug spending was used for hospital consumption and over half of salaries are for hospital staff. In 2000, hospital drug spending accounted for more that 85 percent of government’s drug expenditures. The share going to lower levels of the health system increased over the following three years but the trend has since been reversed. As a result three fourths of drugs were for hospital care. Fifty percent of salary spending was for hospital based staff and around 30 percent staff working at health centers and health stations. Figure 0.20 shows the allocation of salary expenditures by sub-sector.

Figure 0.20: Share of Salary Expenditure by Categories, 2000-2005 Salary share

-

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005

%

Administration and Finance

Central facilities

Hospital Administration

Health Center & Health Station

Source: MOH. Figure 0.21: Share of Drug Expenditure by Hospitals and Lower-Level Facilities

Drug share

-

10

20

30

40

50

60

70

80

90

2000 2001 2002 2003 2004 2005

%

Hospital Administration

Health Center & Health Station

Source: MOH. 1.141 Also reflecting the predominance of spending on tertiary-care, health spending in Asmara accounted for 51 percent of total government expenditures. From 2000 to 2005, expenditure on the national referral hospitals, central administration, training institutes in Asmara, and other central facilities is estimated to be 51 percent of the total health spending. The share for the six Zobas totaled only 49 percent.

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Figure 0.22: Share of Government Health Expenditure by Categories, 2000-2005

1726 27 29

21 25

6452 52 46

41

47

18 19 19 21

15

15

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005

Central Laboratory, BloodBank etc.

Health Center & Health Station

Hospital Administration

Training institution

Administration and Finance

Source: MOH. 1.142 Health spending allocations have shifted to accommodate spending in new areas such as the Central Laboratory and Blood Bank which has in effect pulled resources away from the primary level. After 2003, the government began to finance the operation of the National Blood Bank, previously supported by a WB project. In the following year, there was the capital investment project in the Keren Pharmaceutical Factory, to which the MOH contributed from its budget. Since the total spending for the health sector has not significantly increased, the new activities have meant that government’s resources have shifted away from primary and secondary health facilities.

1.143 Health spending in Asmara, the country’s capital, accounted for 51 percent of the total government expenditure on the health sector. A significant amount of resources were spent in Asmara. From 2000 to 2005, expenditure on the national referral hospitals, central administration, training institutes in Asmara, and other central facilities is estimated to be 51 percent of the total health spending. The share for the six Zobas totaled only 49 percent in 2005.

Allocation of External Assistance

1.144 Around 45 percent of external assistance for health is in-kind contributions including pharmaceuticals (31 percent) and equipment and supplies (14 percent). The remaining 55 percent of external assistance is in cash, although not all goes through the government budget. About 39 percent of external assistance supported capacity building, 39 percent financed hardware, and 22 percent supported civil work. The 90 percent of external assistance to health went to the MoH, while 5 percent helped other line ministries and 5 percent went through NGOs (See Figure 0.24).

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Figure 0.23: Composition of External Support, 2002-2005

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

2002 2003 2004 2005

$External assistance (equipment andsupplies)

External assistance forpharmaceuticals

External assistance (in cash)

Source: MOH.

Figure 0.24: Channel of External Assistance

90%

5%5%

Through MOH

Through other line ministries

Through NGOs

Source: Bank Staff calculations based on survey data.

1.145 From 2002 to 2005, support through the Project Management Unit (PMU) accounted for 70 percent of the total external assistance. During the period, the PMU was managing two WB Projects (Health and HAMSET) as well as the Global Fund grant (started in 2004). The total amount from these projects took a 70 percent share of the total external assistance. However, due to lack of data sharing between the PMU and the Finance Unit, the PMU portion of external support was not fully integrated in the regular budgeting and planning process.

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Box 0.1 Survey of External Assistance

Since the MOH’s expenditure data only captures part of external assistance and it also lacks allocation information, a survey was conducted for this review with donor partners to better understand the level and allocation of support from 2000 to 2005. Data from the WB, GFATM, WHO, UNICEF, UNFPA, European Union, Italian Corporation, and UNHCR was received. Although data from other bilateral partners was not available, it is estimated that these organizations account for more than 90 percent of the external support during the period. During 2000 to 2005, the surveyed

organizations provided a total of US$ 125 million of aid to the health sector. The WB was the leading contributor during the period contributing about US$ 63 million through its two projects. UN agencies, including WHO, UNICEF, UNFPA, and EU were also major contributors. On the bilateral side, Italian Corporation was the leading donor. The amount provided by the UN agencies may include contributions from bilateral partners, which channeled their resources through UN agencies. The survey identified that about 19 percent of the external assistance was spent by partners themselves, which was not captured in the MoHs records.

1.146 The highest external partner expenditure categories are hospitals, HIV/AIDS, and malaria programs. From 2002 to 2005, hospitals (both construction and operation) received 25 percent of the externally-funded health assistance, followed by HIV/AIDS (18 percent) and malaria programs (17 percent). While maternal health is amajor challenge facing the country, support to reproductive health only shared eight percent of the partner support. Meanwhile, support to strengthening system inputs accounted for only four percent of external assistance (Figure 0.25).

Efficiency of Health Service Delivery

1.147 Without reasonable cost and disease-specific expenditure data, it is difficult to evaluate the efficiency of service delivery in Eritrea. Qualitative assessment and secondary data were used to provide a rough assessment. At the micro level, with the limited amount of health spending, Eritrea was efficient to achieve the current health status, particularly in reducing child mortality and controlling malaria and HIV/AIDS. A large proportion of government resources were spent on hospitals, so it is important to assess the efficiency of hospital care. An early study26 calculated the average costs per inpatient day ranging from $4.5 to $11.8 based on data from three

26 Abt Associates Inc. Working Paper; Improving Hospital Management Skills in Eritrea, November, 2003.

Total External Support by Organization 2000 to 2005

Organization Total amount (US$)

WB 62,607,049 WHO /a 17,209,729 UNICEF 13,991,223 GFATM 10,931,017 UNFPA 7,763,995 EU 5,724,961 Italian Corporation 4,545,130 UNHCR 2,217,337 Source: Staff calculations based on survey data, 2006 Notes: a WHO support includes the PHARPE program, to which Italian Cooperation contributed about �6.4 million during 2000 and 2005.

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hospitals, which is slightly lower than the cost for Tanzania district hospitals (ranging from US9.2 to US$15.9) and for Kenya district hospitals (ranging from US$8.3 to US$10).27 This indicates that, without taking quality of care into consideration, Eritrea is more technically efficient in delivery hospital care. However, the differences may not be statistically significant due to the small sample. Noticeably, the large variations in unit costs across the three hospitals indicate inefficiency in the service delivery system. For example, the average outpatient cost in Dekemhare hospital is more than doubled than that in Keren hospital (See Figure 0.26).

Figure 0.25: Share of Program Support, 2002-2005

9%

18%

17%

10%

25%

10%

8%

4%

0% 5% 10% 15% 20% 25% 30%

Others

HIV/AIDS

Malaria

Tuberculosis

Hospital

Child health

Reproductive health

System inputs (drugs, HR, etc.)

Source: PER team calculations based on the PER survey of external assistance. Figure 0.26: Average Unit Cost of Hospital Care in Eritrea (in Nakfa)

46.5 44.6

77.691.3

67.4

177.0

0

20

40

60

80

100

120

140

160

180

200

Pediatrichospital

Kerenhospital

Dekemharehospital

Outpatient visit

Inpatient day

E. REVENUE, USER FEES AND OUT-OF-POCKET PAYMENTS

1.148 The MOH introduced a service charge scheme at all public health facilities in 1996. The purpose of the scheme is to recover a proportion of the increasing costs of health services and to encourage patients to use primary care facilities (except in

27 Disease Control Priorities in Developing Countries (2nd edition).

71

emergencies). The scheme was designed to charge a below-the-cost flat registration fee at health stations and health centers, and a set of service fees for hospital registration and inpatient care. The registration fee for hospital outpatients and the room charge for inpatients are lower for patients who are referred from primary care facilities. In addition, in all health facilities, emergency services were made free for the first 24 hours. Exemptions are made for certain chronic illnesses and some primary health care services. Table 0.11 below lists the 1996 user fees for registration and inpatient costs which are still being used as a national reference point. The MOH proposed to increase the service charge in 1998 and 2003, but the proposals were not implemented.

Table 0.11: Level and Structure of Health User Fees (ERN) Source:MOH, Health Care

Financing Policy, 1996. 1.149 Revenues from user-fees are significant and the amounts were equivalent to 20 percent of government recurrent spending in 2005. Table 0.12 below shows fee income by type of health facility. Hospital revenue is the largest source of income, followed by health centers and health stations, and administrative income (mainly license fees). There was a significant increase in revenue in 2005 as a result of a fee increase for hospital services. The revenues cover a significant proportion of health care costs. As a percentage of recurrent spending, fee income has increased from 13–20percent between 2000 and 2005. In 2005, revenue from hospitals was about 40 percent of the non-salary recurrent expenditure and 28 percent of the total recurrent expenditure.

Table 0.12: MoH Revenue from Health Service Fees (US$), 2000-20005 2000 2001 2002 2003 2004 2005 Administration and Finance (license-new & renewal) 218.224 310,694 200,228 249,411 112,166 30,121

Training 180 107 78 31 - -

Hospital Administration 1,052,078 1,141,975 932,906 1,065,389 908,250 1,628,115 Health Center & Health Station 356,598 369,244 227,481 431,505 325,603 305,136

Central Laboratory 14,515 32,654 23,776 26,763 27,417 122,455

Total 1,641,596 1,854,673 1,384,468 1,773,099 1,373,435 2,085, 826 Source: MOH, Finance Unit.

Description of charge HS HC Sub-zone HO

Zone HO

Tertiary HO

Registration and consultation 3 5 10 11 16 Registration/consultation with referral 3 5 5 6 7Inpatient hotel cost/day (without referral) 0 2 19 19 19 Inpatient hotel cost/day (with referral) 0 2 9.5 9.5 9.5 Private wing, hotel cost/day - - - 33 33

72

Figure 0.27: Ratio of Revenue to Recurrent Expenditure

-

10.0

20.0

30.0

40.0

50.0

60.0

2000 2001 2002 2003 2004 2005

%Revenue as % of totalrecurrent expenditure

Revenue as % of non-salaryrecurrent expenditure

Figure 0.28: Ratio of Revenue to Recurrent Expenditures for Hospitals

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

2000 2001 2002 2003 2004 2005

%

Hospital revenue as % of hospitalrecurrent expenditure

Hospital revenue as % of hospital non-salary recurrent expenditure

Source: MOH. 1.150 Health centers and health stations show a high non-salary recurrent expenditure recovery rate and a relatively low total recurrent recovery rate. It is clear that the registration fees at health centers and stations provide a substantial subsidy for curative care at those facilities. But the main issues is that the cost of the fee collector salary may be about the same as the revenue collected from the registration fee at some primary care facilities, especially health stations.

Figure 0.29: Ratio of Revenue to Recurrent Expenditure for PHC Facilities

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

2002 2003 2004 2005

%

PHC revenue as % of PHC recurrentexpenditure

PHC revenue as % of PHC non-salaryrecurrent expenditure

Source: DHS 2002.

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1.151 An initial evaluation conducted by USAID at the early stage of the cost-sharing scheme showed a decrease in hospital utilization after the cost-sharing scheme was introduced. Most of the decrease was among patients with less severe illnesses. The decrease in utilization reduced crowding at health facilities and allowed health workers to spend more time with patients with severe illness. Some respondents noted that people who decreased their utilization of care could include a small number of patients with severe illnesses who were unable to pay for care.

1.152 Utilization at the primary care units showed a relative increase after the fee policy, indicating a shift of demand from relatively expensive hospital care.Comparing data on the first months of 1994 to the first six months of 1997, the total number (new and repeat) of visits for growth monitoring and antenatal increased substantially at health centers and stations, but not at hospitals. Further, the respondents to the qualitative interviews reported that the registration fees have had a positive effect on patients’ attitude towards care. For example, patients are more likely to adhere to taking the full course of drugs when they pay registration fees. Patients are aware that the registration fees at health centers and stations are less than they would spend for drugs at pharmacies or rural drug vendors. At the sampled health center, patients’ willingness and ability to pay was found to be higher than the current fee level. However, for the hospital’s services, the willingness to pay for the current quality of services was lower than what is currently charged. After the initial price shock, utilization of health care was gradually stabilized. No in-depth and scientific studies on user fees were conducted recently.

1.153 The high revenue indicates high out-of-pocket payment. As the poor and the rural areas are the main concerns of the health sector, concerns should be raised on whether the user fees become a financial barrier for utilization of health services especially for the poor. A USAID study shows that utilization of health care was consistently higher for households with higher economic status. When the transportation cost is taken into consideration, the user fee scheme is regressive—the poor spend more. Poor households (consumption below the median) spent 12 percent of household consumption on health; rich households (consumption above the median) used four percent for health. The fee waiver policy was not frequently used by the poor due to its lengthy process. DHS 2002 data indicates that more women in the lower wealth quintiles cited financial reasons as a problem to access health care when they are sick (see Figure 0.30). In addition, health insurance and pre-paid risk-sharing scheme are nonexistent in Eritrea, patients with catastrophic health problems have no financial protection, which may sink their households into poverty.

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Figure 0.30: Percentage of Women Reporting Financial Problems When They Are Sick

Problem in getting money for treatment

62 6056

41

26

0

10

20

30

40

50

60

70

Poorest Second Middle Fourth Richest

%

Source: DHS 2002.

F. BUDGET AND EXPENDITURE MANAGEMENT

1.154 Given the country’s difficult macro-economic situation, the budget process is basically cash management. The MOF, specifically its Budget Planning and Processing Department (BPPD), is responsible for reviewing the performance of the economy based on a set of macro-economic parameters (such as GDP, economic sector performance, etc.); implementing the budgeting process based on a budget calendar; consolidating the budget proposals from all budget units; proposing a national budget for budget hearing; and disbursing budget to each budget unit. The “no war, no peace” situation with Ethiopia and uncertainty over the future economic performance force the country to have tight control over the budget, particularly on the social sector. One of the primary aims of the budgeting process is to balance revenue and expenditure and ensure spending in each sector under the income envelope. This cash management approach can only allow planning to be done on a short-term basis (e.g. annually) and leaves little room for each sector to finance its medium and long–term strategies.

1.155 The budget calendar coincides with the calendar year. The MoH follows the country’s budget calendar to prepare its budget. The budget calendar includes the following steps:

• May Calls for Budget to all Budget Units (including sectors/sub-sectors including Zobas)

• August Submission of budget proposals by Budget Units • September-November Budget negotiations including Budget Hearing • End of December Approval of Budget

1.156 The recurrent budget is rigid and sectors have little power to make changes. The recurrent budget is mainly based on past experience. Priority is given to cover salary. Other recurrent items, such as utilities (water, telephone, electricity, etc.), transport and logistics, and office equipment and supplies are non-negotiable and based on MOF’s standardized and fixed calculations. The allocation of the recurrent budget is merely to maintain the operation of the existing structure, and it is difficult for the MOH to receive a budget increase or make any major change even for the purpose of supporting its sector priorities and strategies.

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1.157 The capital budget is normally not included in the regular MOH budget, and it is based on special request. The MOH regular budget proposal only includes recurrent budget and some small capital budget. The recurrent and capital budget was processed separately. For major capital investment or big projects, the MOH needs to send a separate special request to the MOND. Even if granted, they normally are not captured by the regular budget. In addition, there is no formal long-term investment plan for the health sector.

1.158 The budget preparation is a process for justifying the recurrent costs and not for strategically planning health activities. Since the regular MOH budget is mainly a recurrent budget, the main task for the MOH during the budget preparation is to justify the requested amount of salary, utility and other operating cost based on the guidelines provided by MOF. During budget preparation, an ad-hoc committee was established comprising main departments of the MOH to compile and calculate the requested amount for each category. For example, for calculating the salary amount, the committee needs to attach a list of employees and their posts as well as whether they are in national service. During this process, there is little room to factor in program strategies and targets.

1.159 The budgeting process was a centralized process. But starting from 2006, decentralization has been taking place. Before 2005, Zobas’ health budget was compiled and aggregated by the MOH and submitted to the MOF. Since 2005, the budgeting responsibility has been decentralized and each Zoba now prepares its own recurrent and capital budget for all health facilities located in the Zoba including health centers, health stations and regional hospitals. Zoba capital budget only consists of small rural development projects such as clean drinking water supply, etc. The Zoba health budget is compiled into the overall Zoba budget and sent directly to the MOF. Meanwhile, a copy of the Zoba health budget will be also sent to the MOH. It is unclear how the MOH will continue to have an influence on the Zoba’s budgeting process and coordinate regional efforts to achieve the national health targets.

1.160 External assistance is not part of the regular budgeting process. Most of external assistance to the health sector is not direct budget support through the MOF. Even with the health sector, partners’ support tends to be program and short–term based, which provide poor predictability and sustainability to finance key service programs. This is a major concern particularly in the health sector as partners provide significant support. In addition, as there is no systematic sector-wide coordinating mechanism in the health sector, partners tend to negotiate directly with their preferred programs and channel money directly to those programs. This raises concerns on how to ensure national priorities and cost-effective services. Gladly, the health sector, with the help from development partners, has started an annual joint review process to improve coordination and harmonization between the government and partners.

1.161 Furthermore external assistance provided to the MoH is managed by two separate offices which complicates developing a comprehensive picture of external finance. The Finance Unit of the MoH keeps a record of external support from all development partners except the WB and the Global Fund for Aids, TB and Malaria

76

(GFATM). The PMU is responsible for coordinating the implementation of the WB projects and GFATM activities. Since the Finance Unit is also responsible for putting together annual budget and producing annual expenditure summaries, the support from the WB and GFATM has not been included in its record due to lack of data sharing between the two units. External assistance data from 2002 to 2004 was compiled for this report from both offices in order to determine total external support to the MOH.

1.162 Expenditure normally exceeds budgeted amounts. Once the budget is approved, the MOF disburses the funds on a monthly basis. Since the budget does not include the additional funding from the special requests during the fiscal year, the expenditure amount is often more than the budget amount. In this case, it is difficult to measure a meaningful budget execution rate.

G. OPTIONS FOR IMPROVED SECTOR PERFORMANCE

Ensuring Adequate Resources for Health

1.163 While resources are constrained a number of actors are spending in the health sector requiring strong coordination of efforts. While government’s own resources for health are limited there are substantial contributions to the health sector from external donors, and considerable sums being spent on health by individuals themselves. Given the scope of additional resources to the sector the government has a lot to gain from coordinating the inputs from the donors and channeling them to priority areas to complement and not duplicate government’s own resources.

1.164 The country has been effective in collecting user fees. Early evidence shows some positive results such as increased use of primary health care and a correcting effect on moral hazard by crowding out unnecessary treatments. However, concerns have been raised about whether it has become a financial barrier for the poor to access health services and on financial protections to those who have suffered catastrophic health events given the absence of health insurance.

Improving Intra-Sectoral Allocations for Better Health Outcomes

1.165 To achieve further improvement in health, Eritrea, together with development partners, not only needs more resources but also to maximize the impact of the existing resources. An updated sector-wide strategy is needed to align resources toward results. Eritrea, with the partners’ help, has made a right move to increase the resources for reproductive health, e.g. reproductive health was made a component of the HAMSET II project financed by the WB. As the country has had many meaningful and detailed program strategies, such as HIV/AIDS strategy and malaria strategy, a comprehensive and updated sector-wide strategy needs to be developed to (i) link resources toward main health problems and their leading causes; (ii) ensure resources to support sector-wide priorities and not to focus on only a few programs; and (iii) serve as a blueprint to harmonize external support.

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1.166 Sector-wide planning to coordinate efforts from different programs need to be strengthened to avoid duplication of efforts. This will improve alignment of resources –government and donor resources– to sector objectives. Strengthened capacity may be needed at the MOH to take the lead in coordinating external support and leading annual budgeting and review processes. At the same time external support needs to be synchronized with the budgeting process and financial interventions should not just be fully disclosed to MOH but also planned in agreement with medium term priorities. This will allow the development of medium-term resource allocations in alignment with sector.

1.167 Further improving health status for its citizens will rely on (i) tackling the problems of high maternal mortality and a small set of child diseases with a focus on the poor households, rural areas, and remote regions; and (ii) continuing to keep HIV/AIDS, malaria, and TB under control. Building on success in controlling communicable diseases such as malaria and HIV/AIDS, health policies should maintain these effective interventions but now turn to addressing other leading causes of maternal and child mortality and morbidity. The epidemiological profile and burden of disease have changed over the past years. Beside the usual problems such as ARI, HIV/AIDS and diarrhea, several diseases and problems have moved up their ranks. Malnutrition and obstetric emergency problems are two examples. Infant and maternal mortality rates are likely to be improved by increased access to a range of maternal and child health interventions such as access to family planning counseling, assisted delivery and access to obstetric emergency care especially in those regions where access is very low. Other leading causes such as poor nutrition in women and children require more comprehensive policies that include (but also go beyond) the health sector to address them. It is recommended that Eritrea implement and scale up a comprehensive package of health interventions listed in Annex 2.3, which are internationally proven to be highly effective in addressing the leading caused of health problems in Eritrea.

Improving Efficiency of Expenditures

1.168 To further improve health in Eritrea and reach the MDGs, the country as well as development partners need to address both allocative and technical efficiency. Particularly on the allocative front, international experience has proven that resources are a necessary but not sufficient solution to better health outcomes. Health is such a complex field with multiple outcomes, outputs and inputs. To align resources to results, further investigation into the following is needed:

• Whether resources are spent toward solving the main health problems? • Whether resources are spent on services that not only are cost-effective but also

have an impact on the main health problems? • Whether resources are spent on an efficient and integrated service delivery system

to deliver the services? • Whether resources are spent on inputs that are key to the service delivery system? • Whether resources are spent on effective service delivery arrangements?

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On the technical efficiency front, it is suggested that Eritrea conduct an in-depth and comprehensive review on the costing and efficiency across service delivery units (hospitals and primary health units) and use it as inputs to identify the efficiency gaps and formulate policies or regulations to address them. Box 0.2: Developing a Range of Cost Effective and Targeted Health Interventions

Diarrheal disease is one of the top five preventable killers of children under five in developing countries. Persistent diarrhea associated with malnutrition is three time more likely to be fatal. Together with childhood immunization, better and more hygienic feeding practices, improved water and sanitation and better case management are the major interventions for preventing and treating diarrhea-related disease. This can include promoting exclusive breast-feeding the first 6 months of life, and vitamin A and zinc supplementation. Clean water and sanitation are important as are food and hand hygiene which are the principal determinants of endemic diarrheal disease. Promotion of hand washing reduces diarrhea incidence by one third on average, and if soap is not available ash or mud with clean water can be used. (Better water and hygiene will also reduce the incidence of skin and eye infections). For watery diarrhea ORT can be used when prevention fails. It is inexpensive and together with the above promotional activities can cost as little as US$5 per DALY averted. The median cost per child in SSA is $5.5 (US$ 2001). For bloody diarrhea antimicrobial drug treatment should cost around 10 US cents for a three day course. Recent research emphasizes the importance of care during a child’s first 28 days of life for reducing infant mortality. In general, neonatal deaths account for 40 percent of all deaths of children under five, that the first week of life is when 75 percent of these neonatal deaths occur and 50 percent of maternal deaths occur in the first week after childbirth. In Eritrea 36 percent of maternal deaths take place during delivery. Improving access to a skilled birth attendant who continues to be on hand to advise during the first weeks of birth could improve maternal and child health considerably. Simple advice on how to breast-feed, keeping the baby warm and cord-stump clean can make all the difference. Family planning programs can be cost effective. Including the maternal and infant mortality and morbidity associated with unwanted pregnancies they can cost between US$ 30 and US$60 per DALY averted. Annex 0.3 provides a list of interventions can be delivered by different service delivery arrangements, including community-based, population-based outreach, and facility-based delivery. The alternative service delivery methods will complement primary health facilities by strengthening the link between community and health network. The alternative service delivery methods will require the country to make community health workers an integral part of the health system and use innovative arrangements to sustain their support such as contracting.

1.169 Evidence on disparities in health outcomes suggest a more differentiated health sector policy could improve health care access in rural and remote regions which suffer worse health outcomes and benefit less from essential health services. The pace of improvement in health outcomes and health service coverage has also been in these regions and hence the gaps are widening. Focusing on channeling additional resources to the regions with the worst health outcomes would significantly raise the health indicators for the country as a whole. It is likely that more preventative care through primary health interventions will also reduce the need for more expensive treatment at hospitals.

1.170 There is scope to improve targeting of public spending on cost-effective interventions that have their biggest impact on a large number of people and especially disadvantaged people and areas. International experience indicates that

79

preventive and promotive interventions, which normally do not require facility-based services, are generally pro-poor. For example, there are effective preventive measures for ARI and diarrhea—two leading causes of child morbidity—by promoting clean indoor air and safe drinking water. Eritrea needs to formulate and invest in an essential service package that will benefit the poor.

1.171 It is likely that to improve health status, improving access to health stations and clinics will be required. Many of the leading causes of mortality and morbidity rely on prevention and case management if they are to be reduced. This would argue for strengthening the first line of health care to better reach affected populations and to be well equipped with the health promotional materials and low-cost interventions to improve outcomes. Achieving low maternal and infant mortality rates requires an integrated and well functioning health care delivery system that reaches communities with education and counseling, helps people avoid unwanted pregnancies, promotes good nutrition, screens for risks, assists healthy births and responds to obstetric emergencies effectively. For example, there are estimates that family planning could prevent between 20 and 40 percent of all infant deaths by preventing births among adolescents and older women and permitting intervals of three to five years between pregnancies. Strategies for meeting unmet demand for contraceptive services include education and outreach, subsidies and/or free distribution and social marketing to improve social acceptance of contraception options.

1.172 There is limited scope to shift government’s own resources toward primary health care where there is a: (i) a shortage of facilities as well as sufficient and qualified health professionals for primary health care; and (ii) an unmet need for obstetric emergency care for the poor and rural settings.

1.173 There is a need to align staff and inputs to the primary health care providers. There is a need to retain more health staff – not just doctors, but nurses, associate nurses, staff with training in reproductive health and child illnesses – and the shortages are worst at the primary-health care level. To strengthen primary health facilities, more associate nurses and nurses with reproductive health skills need to be recruited and or/trained. One option is to develop courses at the new tertiary institutions to ensure appropriate specific-skill related needs are covered and new graduates and trainees can be deployed effectively. An example from Indonesia shows that a new three-year nursing qualification followed by a one year midwifery training course, in-service training, peer review and continuing education increased the proportion of births assisted by a skilled attendant from 37 percent to 59 percent within six years of the training course being introduced. For the health centers and health stations to be the front line providers of health systems they will also need to have adequate supplies. A regular inventory of stocks at lower level facilities will be necessary to ensure that resource allocation decisions made at the center can be done so on the basis of full-knowledge of lower level inventories as well as hospital based stocks.

1.174 There is also potential to make better use of alternative service delivery options. It seems the facility-based service delivery approach in Eritrea has not been

80

very successful in helping the poor, rural areas and the remote regions to get timely and needed care and treatments. Alternative service delivery approaches should be considered by the country. Community-based and population-based outreach delivery arrangements have been proved to be successful to reach out to the poor. Eritrea has in-country experience of using community-based interventions to control infectious diseases as in the case of the very successful malaria and HIV control programs. Following the development of public health technology, many effective services can be delivered outside of health facilities and at the community level. As with adult education programs, the government could make better use of mass media to improve coverage of health promotion campaigns, particularly in the remote regions where health status is worse.

81

Annex 0.1: Health Expenditure as Share of GDP

9.3

8.6

8.4

8.1

7.9

7.3

6.7

6.5

5.9

5.9

5.8

5.6

5.6

5.6

5.6

5.4

5.4

5.2

5.1

5.0

4.8

4.7

4.7

4.7

4.6

4.5

4.4

4.4

4.4

4.3

4.3

4.3

4.2

4.2

4.0

4.0

3.7

3.7

3.6

3.5

3.1

2.8

2.7

2.7

2.0

1.5

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

Malawi

S ao T ome and Pr incipe

S outh Af r ica

Gambia, T he

Zimbabwe

Uganda

Namibia

Chad

Ethiopia

S eychelles

S waz i land

Botswana

B urkina Faso

Guinea-B issau

T ogo

Guinea

Zambia

Lesotho

S enegal

Niger ia

Mali

L iber ia

Moz ambique

Niger

Cape Verde

Ghana

Benin

Er itrea

Gabon

Kenya

S udan

T anz ania

Cameroon

Maur itania

Central Af r ican Republic

Congo, Dem. Rep.

Maur it ius

Rwanda

Cote d’Ivoire

S ier ra Leone

Burundi

Angola

Comoros

Madagascar

Congo, Rep.

Equator ial Guinea

H ealt h E xpendit ure as % of GD P

82

Annex 0.2 Leading Causes of Outpatient Visits and Admissions, 2005 Children under 5 years

Outpatient Visits Hospital and Health Center Admission Rank Cause % Cause %

1 ARI 45.4 ARI 42.7

2 Diarrhea 24.4 Diarrhea 27.9

3 Skin infection 5.4 Anemia & Malnutrition 9.3

4 Ear infection 3.9 Septicemia 3.9

5 Anemia & Malnutrition 3.6 Malaria 3.5

6 Eye infection including trachoma 3.5 PUO 1.5

7 Malaria 1.7 Slow fetal growth 1

8 PUO 1.3 Asthma 0.9

9 ST injury 1.1 Skin infection 0.8

10 Oro-dental 0.8 Other UTI 0.8

Total 91.2 Total 92.2 Population over 5 years

Outpatient Visits Hospital and Health Center Admission

Rank Cause % Cause % 1 ARI 16.2 Malaria 10.1

2 Oro-dental infection 7.2 ARI 7.1

3 Diarrhea 6 OB without abortion 6.1

4 Gastritis/ulcer 5.8 Abortion 5.8

5 Skin infection 5.8 Diarrhea 4.3

6 Other UTI 4.6 Cataract 3.5

7 Eye Infection 3.8 Other UTI 2.8

8 STINJURY 3.7 Gastritis/ulcer 2.3

9 Rheumatoid arthritis 2.5 Asthma 1.8

10 Anemia and Malnutrition 2.2 Malnutrition 1.7

Total 57.8 % of top 10 45.4 Source: Annual Health Service Activity Report, MOH, 2005.

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Annex 0.3: High impact health interventions by service delivery level Service Delivery Arrangements

Child Health Maternal Health

Malaria Environmental Health

HIV / AIDS TB

1. Family Community based health interventions

¾�Breastfeeding promotion ¾�Safe Water Handling and Storage promotion (including Chlorine) ¾�Hand-Washing promotion ¾�ITNs use promotion children less than 5 ¾�ORT ¾�Zinc treatment in association with ORT ¾�Advise on Complementary and supplementary Feeding ¾�Clean Delivery ¾�Temperature Management and Kangaroo care

¾�Clean Delivery ¾�Condom Promotion ¾�Oral Contraceptive ¾�Promotion Supplementary feeding for malnourished pregnant women

¾�ITNs promotion general population ¾�Anti-malarials (chloroquine) for children less than 5 and adults

¾�Latrines ¾�Safe Water Storage ¾�Handling promotion (including Chlorine) ¾�Hand-Washing promotion ¾�Solid and Liquid Waste management promotion

¾�Awareness raising through peer based education ¾�Safe Sex Promotion ¾�Condoms marketing ¾�Condom Promotion ¾�Mass media campaigns ¾�Support to orphans

-

2. Population based outreach services

¾�Supervision of Health Promoters ¾�Family Planning ¾�Iron and Foliate supplementation ¾�Tetanus Toxoid ¾�BCG, Measles, DPT3 ¾�Vitamin A supplementation ¾�HIB vaccine ¾�ACT anti-malarials for children less than 5 ¾�Supervised ORS ¾�Surveys/HMIS

¾�Supervision of Health Promoters ¾�Family Planning (Depo-Provera, ) ¾�Iron and Foliate acid supplementation to pregnant women ¾�Births planning and complications readiness ¾�ITNs pregnant women ¾�Prenatal care, postnatal care ¾�Surveys/HMIS

¾�Supervision of Health Promoters ¾�Indoor Insecticide spraying ¾�Surveys/HMIS

¾�Healthy homes environment promotion ¾�Identification Management of mosquito breeding places ¾�Indoor Insecticide spraying. ¾�Control of insects, rodents etc ¾�Food safety measures ¾�Education on prevention of accidents and illnesses ¾�Surveys/HMIS

¾�Supervision of Health Promoters ¾�Management ¾�Support and care ¾�First Aid ¾�Universal Precautions

¾�TB awareness raising ¾�Case identification ¾�TB DOTS follow-up

3. Clinical services a. primary clinical care

¾�Assisted deliveries ¾�Antibiotics for pneumonia (ARI tt) ¾�Antibiotic treatment for dysentery ¾�Resuscitation ¾�Treatment of Severe Anemia ¾�Vitamin A treatment ¾�Treatment of neonatal sepsis ¾�PMTCT ¾�Severe malaria

¾�Assisted deliveries ¾�Antibiotics for premature rapture of membrane (PRM) ¾�Tt of STI ¾�Basic to comprehensive EOC ¾�Post-abortion care ¾�Norplant ¾�IUD insertion

¾�ACT ¾�UP ¾�TT of STI ¾�HAART follow up ¾�PMTCT ¾�Treatment of Opportunistic infections ¾�UP

¾�TB identification and DOTS initiation

b. referral clinical care

¾�Management of severe prematurity/LBW and neonatal sepsis ¾�Management of complicated Malaria

¾�CEOC ¾�Blood Safety

¾�Management of complicated Malaria

¾� ¾�Management of resistant AIDS

¾�Management of Multi drug Resistant TB

84

Minister’s Support

Technical Advisor

Legal Advisor

Special Secretary

National Health Laboratory

Audit

Gov.& PrivateEnter

Health Promotion

Minister’s Support Unit

Planning Office

Public Relation

Info.Tech. ServiceAdministration & FinanceDivision

Dept. of Health Service Dept. of R& HRD Dept. of Regulatory Service

DiseasePrevention& Control D

MalariaControl

Non –Com.Disease

IDSR

Medical ServiceD

HealthSystems Mgt

Lab & ImagingService

Nursing Service

Medical Supply

National.Blood Bank

Minister’s Office

Family & Com.Health Div.

HIV/AIDS &TB.Div

Family &Rep. Health

Child &AdolescenceHealth

EPI

Nutrition

EnvironmentalHealth

Prevention &Counseling

HIV/AIDS &STI

Na.TB Co.P

Epidemiology& Monitoring

Research D

HMIS

HealthLibrary

ResearchUnit

H.RTrain.Di

CollegeofNursing &H/Tech.

ContinuesEducation

Zonal Schools

HR Planning& Mgmt Di

HRPlanning

HRMgmt.

ServiceControl (QtyAssurance)D

Licensing &Accreditation

MedicalEngineering

Inspection

Monitoring &EvaluationDiv

ProgramM & E

PortHealth

LogisticMgt.Information

MedicineControlDiv.

ProductRegistration

Narcotic& Phycho

PharmaceuticalInform

MedicineQualityControl

ZONAL MANAGEMENT OFFICE

Public Health Division Medical Service ResourcePlanning & Mgmt

MOH Organization Structure

Nat.ReferHospitalsCo.Off.D

Annex 2.4: Ministry of HealthOrganizational Structure

85

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MAP OF ERITREA

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