Alignment of external aid for education is a strategic and structural approach in development cooperation, with the aim of strengthening national systems and accelerating education outcomes. Its underlining principle is the use of national institutions, human resources, procedures and tools to implement external aid, in close structural coordination with domestic financing under the national budget.

Aligning funding with national systems offers unique opportunities to strengthen those systems.

Despite best intentions, external financing for education in developing countries continues to be too fragmented. It is also often implemented on the margins of country systems.

This can result in heavy transaction costs, additional difficulties in the coordination of resources, limited absorption of aid and weakened overall accountability and transparency. It also results in missed opportunities for more grounded policy dialogue around critical national reforms, governance and education service delivery at scale.

Aligned funding mechanisms support system transformation and resilience

A new brief, Aligning Aid for Education with National Systems, presents GPE’s conceptual approach to the use of country systems through the experience of five partner countries (Burkina Faso, Mozambique, Nepal, Niger and Senegal).

Each partner country has developed unique financing mechanisms to support education, adapted to their different contexts but characterized by their alignment with national public financial management systems. The adaptations include measures to manage both opportunities for system transformation and capacity support for sound fiduciary management.

In some countries, such as Senegal and Nepal, development partners and governments have agreed for external funds to be fully comingled with domestic financing (i.e., using full budget support), with joint monitoring of the national budget, dialogue on critical reforms for systems transformation and results-based financing targets.

In other countries, such as Burkina Faso, Mozambique and Niger, the external funds are distinctly targeted and tracked within the national budget (i.e., using an aid-on-budget mechanism, or ring-fenced budget support), while also including joint monitoring of the whole national budget for education, dialogue on system transformation reforms and results-based financing targets.

Additional technical expertise and external audits are usually mobilized to support the objectives of the aligned financing mechanisms and reinforce trust. These examples show that alignment can be adapted to different contexts with varying degrees of capacity in country systems.

The aligned pooled fund in Burkina Faso, bringing together six donor partners including the GPE Fund, implements on average over US$30 million per year to support the education sector. The aligned pooled funds in Mozambique and Nepal—both bringing together nine donor partners—implement on average over $60 million and $100 million, respectively, per year.

The external funding that these national systems can absorb bring in important additional resources to accelerate reforms for system transformation and education results.

GPE’s approach in action

In Mozambique, the Education Sector Support Fund (Fundo de Apoio ao Sector de Educação, FASE) explicitly provides for a focus on high-priority cross-cutting reforms, including decentralization and program-based budgeting, to improve implementation and accountability across the public sector, ensuring resources are effectively channeled to local levels and schools. The support fund and its partners have made a substantial contribution to the reform process, including collaboration with the Ministry of Economy and Finance.

In Burkina Faso, the education pooled fund contributes to the implementation of cross-cutting government reforms in public administration, decentralization and public financial management. A results-based financing indicator through the GPE Fund’s contribution incentivizes a reduction of the operating costs of the central administration and concomitant increased resources to front-line education services provided by schools and decentralized Ministry of Education units. These resource allocation targets are then linked to service delivery indicators for in-service teacher training in early primary and improved learning environments in the classroom.

In Nepal, the education pooled fund brings added attention to several service delivery issues through 10 thematic areas, ranging from the rollout of the new national early grade reading program to improved governance and fiduciary management of schools and local government. This includes incentivizing local governments to reinforce their service delivery and oversight mandates, notably the effective release, accounting and reporting of conditional grants to schools to cover teacher salaries, textbooks and school operational expenditures.

These examples, taken from the brief Aligning Aid for Education with National Systems, illustrate how aligned funding mechanisms working through national systems can encourage not only system transformation but also system resilience in dealing with unforeseen events, such as the COVID-related education crisis.

GPE and its new operating model supports improvements in effective development cooperation for education through more and better alignment of aid with national systems. GPE encourages its partner countries and development partners in this transition to accelerate system transformation and education outcomes for all.