PROMOTER: - GIRMA TADESSE

August, 2021
Finfinne, Ethiopia

Contents
1. Introduction..........................................................................................................................................................2
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 1.1. Background...................................................................................................................................................2
1.2. Historical Overview of the Ethiopian Education..........................................................................................4
1.2.1. Indigenous Education............................................................................................................................4
1.2 .2.Religious Education...............................................................................................................................5
1.2.3. Islamic Education in Ethiopia................................................................................................................5
1.3. The Introduction of Modern Education to Ethiopia.................................................................................6
1.3.1. During Italian Occupation...................................................................................................................7
1.3.2. Ethiopian Education During the communist Regime............................................................................7
1.4. Organization and Management Decentralization in Progress......................................................................8
1.4.1.Federal Government...............................................................................................................................8
1.4.2. Regional Government............................................................................................................................9
1.4.3. Zonal Administration.............................................................................................................................9
1.4.5. Woreda Administrations......................................................................................................................10
1.4.6. Kebele Administration.........................................................................................................................10
1.5. The Structure of the Current Educational System......................................................................................10
1.6. Access to all Levels of Education Improved..............................................................................................11
1.7. Investors Profile..........................................................................................................................................13
1.8. Location, Infrastructure and Premises Required........................................................................................13
1.9. Location map of the area............................................................................................................................14
1.10. The Economic Significance of the Project...............................................................................................14
1.10.1. Source of Employment......................................................................................................................14
1.10.2 Source of Government Revenue.........................................................................................................15
1.10.3. Contribution to the countries development plan................................................................................15
2. The Market Prospect..........................................................................................................................................15
2.1. Market Demand Potential..........................................................................................................................15
2.2. Past Supply and Present Demand...............................................................................................................16
2.3. Marketing Strategies...................................................................................................................................17
2.3. Educational Service....................................................................................................................................18
2.9. Sales Forecast.................................................................................................................................................
3. Organization and Structure................................................................................................................................18
4. Financial Requirement.......................................................................................................................................20
4.1. Fixed Investment.....................................................................................................................................20
4.1.1. Building and Construction...............................................................................................................20
4.1.2 Vehicles and Motors.............................................................................................................................21
4.1.3. Office Equipments...............................................................................................................................21
4.1.4. School equipments..............................................................................................................................21
4.2.1. Salary Expense.....................................................................................................................................22
4.2.2 Other Operating Expenses..................................................................................................................23
4.2.3. Pre- service Expenses..........................................................................................................................23
4.2.4. Summary of Financial Requirement...................................................................................................24
4.2.5. Sources of Fund and Loan Repayment Schedules...............................................................................24
4.3. Financial Statements...................................................................................................................................25
4.3.1. Balance Sheet.......................................................................................................................................25
4.3.2. Profit / Loss Statement.........................................................................................................................26
Environmental Impact of the project.....................................................................................................................27

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 I. Executive Summary

1 Project Name Kinder and Primary School

2 Project Owner Girma Tadesse

3 Nationality Ethiopian

4 Project location Adama Town

5 Premises 5,000 M2
Required

6 Startup Capital Br. 25,000,000 from this amount 30% (7,500,000) is from the
owner’s equity and 70 % (17,500,000) from bank loan.

7 Employment Total Employment job Opportunity Created 56

Opportunity On Permanent Basic :- 30 employment
On Temporary Basic :- 26 employment
8 For The region/ Provide quality lodge service at fair price, add value to the
country economy, Source of revenue, employment opportunity, save
foreign currency, benefit for the local community, stimulate
the local economy and transfer technology

9 Profitability Based on the 10 years financial projections using the income

statement, cash flow statement and financial internal rate of
return (BIRR) the financial projection is visible which
generates profit of birr 6,500,000 /year when it operates at
full capacity

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1. Introduction
1.1. Background
Human resources development constitutes the foundation upon which material development can
occur, and education represents a major form of human resources development. Besides, it is widely
believed that the expansion of educational opportunities is a keystone to the nation’s accelerated
socio-economic development. Education provides a fundamental base for all further human
development and its availability and quality are central to the human resource development of any
society. The aim of extending a basic level of education to all children, young people and adults
around the world has captured the imagination of all nations. It was a major outcome of the World
Conference on Education for All, held in Jomtien in 1990, and was reconfirmed in a series of
summits throughout the following decade.

The World Education Forum (2000) agreed on six EFA goals, which were considered to be
essential, attainable and affordable given that strong commitment are given to them by specific
governments and by international communities, The Dakar Framework for Action declared that by
2015, all children of primary-school age would participate in free schooling of acceptable quality
and that gender disparities in schooling would be eliminated. Levels of adult illiteracy would be
halved, early childhood care and education and learning opportunities for youth and adults would be
greatly increased, and all aspects of education quality would be improved. In the same year, the
Millennium Development Goals were agreed, two of which –universal primary education (UPE)
and the elimination of gender disparities in primary and secondary education –
Were defined as critical to the elimination of extreme poverty.

The goals of EFA are of enormous significance. Without constant and steady progress towards
them, development cannot be judged to be happening. At the Dakar Forum, the resolution made
plain that all parties should be accountable for their record in meeting the commitments they had
made. National governments agreed to dedicate themselves to securing the goals, while
international agencies pledged that no country thus committed would be prevented from achieving
them by a lack of resources.

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The Ethiopian Government has long recognized that the realization of basic education is both a
necessity and a fundamental human right. It was the signatory of all the regional and global
proclamations and approaches to provide basic education for all during the latter part of the 20th
century. It was the signatory of the Universal Declaration of Human Rights, adopted by the United
Nations in 1948, which, asserted that ‘everyone has a right to education’, and which is re-affirmed
by subsequent international conferences and normative texts and sought to be achieved. It took part
in al the Regional UNESCO conferences in the early 1960s; held at Addis Ababa, Karachi, Santiago
and Tripoli; the Udaipur Conference on literacy and its subsequent charter in 1983; the World
Summit for Children and the Convention on the Rights of Children in 1989; the 1990 Jomtien
Declaration on Education for All and the 1999 Sub-Saharan Conference on Education for African
Renaissance and the 2000 Dakar Declaration which are all efforts that bear witnesses in the
realization of education as a basic human right world-wide.

The Dakar goals covered the attainment of Universal Primary Education (UPE) and gender equality,
improving literacy and educational quality, and were to be achieved within 15 years. However, the
gender goal was judged to be particularly urgent –requiring the achievement of parity in enrolments
for girls at primary and secondary levels by 2005, and of full equality throughout education by
2015. According to the EFA declaration, the gender parity goal is to be achieved this year (2005)
Universal access to basic education remains an unfulfilled pledge in Ethiopia. The hopes and
aspirations to universalize basic primary education remains a matter of great concern at the dawn of
the 21st century. Millions of children in Ethiopia still fail to gain access to schooling, and even
larger numbers among those who do enroll leave prematurely, dropping out before the skills of
literacy and numeracy have been properly gained. A majority of such children are girls. As a result,
the scourge of illiteracy still affects more than 60% of adults, the majority of whom are women.
Although commendable effort has been made to improve the quality, equity and efficiency of the
system at all levels, there are indicators that they are further worsened.

Thus it is high time to critically analyze how near or far Ethiopia is in achieving EFA goals by
trying to answer the following leading questions:
1) How near or far Ethiopia is from the achievement of EFA goals
2) Is the current education policy framework adequate for achieving EFA goals
3) What are the efforts so far made by the Ethiopian Government towards the achievement of EFA
Goals
4) What are the major problems encountered in achieving the goals
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 5) What policy options can facilitate the achievement of EFA goals
The primary purpose of this study is to critically analyze the extent to which EFA goals are being
addressed and in Ethiopia and there by to recommend policy options for achieving the goals. The
paper summarizes recent progresses and the remaining challenges in the education sector and
presents policy options for improvement. The study is largely based on document analysis.

Among the six EFA goals, emphasis is given to achieving UPE, eliminating gender discrimination
and improving education quality and efficiency until 2015. The remaining two EFA goals -,(1)
Levels of adult illiteracy would be halved, and (2) early childhood care and education and learning
opportunities for youth and adults would be greatly increased- are not purposefully included in the
study for they can not be by any means achieved in the target year. The Ethiopian literacy rate is
currently below 30% and the GER for pre-school is only 2.2%. The focus is mainly on Policy
framework, educational decentralization, access, equity, quality and efficiency. The paper stats with
a brief overview of the history of educational development in Ethiopia to offer a better
understanding of the developments and challenges of education in Ethiopia,

1.2. Historical Overview of the Ethiopian Education

A detailed analysis of the origin and development of Ethiopian education may not serve our purpose
here. However, a brief glance at its general features can serve as background information to the
problems of quantitative expansion and qualitative improvement of education in Ethiopia.

1.2.1. Indigenous Education

Ethiopia has a long and rich history of educational traditions. Indigenous education was offered by
all ethnic and linguistic groups and remains an important transmitter of cultural identity from one
generation to the next. It aims at instilling in children the attitudes and skills appropriate for male
and female social roles, emphasizing the duties and privileges derived from cultural values.
Imparted through language and example at home as well as informal lessons and ritual outside the
home, indigenous education responds to the concrete problems of local communities. It prepares
political leaders and ordinary farmers in the community. Under the present situation, because still
many school age children and the majority of adults in the rural areas of Ethiopia have little access
to modern education, indigenous education plays and continues to play an important role in
preparing the young generation for their future role.

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1.2 .2.Religious Education
Ethiopia’s early Christian heritage represents a second important element of Education in the country.
Especially in the northern, North-western and central Ethiopia, Christianity has thrived for more than
1500 years. In about the 4th century, the Ethiopian Christian church established a comprehensive system
of education that provided Ethiopian cultural, spiritual, literary, scientific, and artistic life (World Bank,
1988, p. 11). The church in Ethiopia was able to provide a sophisticated and peculiar type of education
that takes as many as 30 years to complete. Like church education in other parts of Christendom, the
primary purpose of the Ethiopian church education was to prepare young men for the service of the
church as deacons and priests. Moreover, in its long history of existence, church education has served as
the main source of civil servants such as judges, governors, scribes, treasures and general administrators
(Teshome Wagaw 1979, p.11). In spite of its long literary heritage, which could have been used as a
basis on which to build an educational sphere unparalleled in Africa, church education in Ethiopia has
played a limited role in the development of the society in general and the offering of education in
particular? Unlike church education in many other regions, its access in Ethiopia was limited to only a
few people and the country basically remained “the land of the thumb print (the national literacy
campaign co-ordinating committee, 1984,p.3). Besides, this limited church education was unevenly
distributed. It flourished only in the north and north eastern part of Ethiopian (Ayalew Shibeshi ,
1989,p.31).

Moreover the Ethiopian church, which up to the end of the 19 th century had a virtual monopoly on
education, strongly opposed the introduction of modern public education in the country. The Ethiopian
church feared the undermining potential of a state school system by European teachers (Tekeste negash,
1990,p.1). The first attempt to open schools of a European type made by missionaries in the 16 th century
and in the 17 century were collapsed by a tremendous opposition from the Ethiopian church circle who
th

feared the attempt made to convert the country to Catholicism. All attempts repeatedly made after those
too were of no avail. Generally, until the end of the ninetieth century, education was totally left in the
hands of the church.

1.2.3. Islamic Education in Ethiopia

A third major element of Education in Ethiopia was the influence of the Islam in Ethiopia. Arab
culture and faith were adapted in much of the southern and South-eastern Ethiopia. Non-formal
school system was established to teach the ethics and theology of Islam. Designed to impart skills
and knowledge within the religious realm, the Islamic education system emphasized reading and
recitation in Arabic.

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Like the church, the mosques in the Moslem areas had a parallel function in running chronic schools
starting from the 7th century in Ethiopia. But unlike the church schools, the koranic schools were
maintained by the local committees themselves and received no state assistance of any kind
(Markokis, 1994). The lack of assistance from the state and the opposition from the church limited
the operation of such schools only to the centers of Islamic faith where community support was
available (Ayalew Shibeshi, 1989.p.31).

1.3. The Introduction of Modern Education to Ethiopia

The introduction of modern education to Ethiopian was not an accidental happening. Rather it was
the outcome of the objective conditions in the country. The establishment of a central state authority
and permanent urban seat of power, the arrival of foreign embassies, the development of modern
economic sector and other conditions were some of the objective conditions that called for modern
education in Ethiopia. Particularly around the end of the 19th century the practice of sending young
Ethiopian abroad for higher education, become more intensified in two directions. On the one hand,
the foreign Missionaries were convinced that young Ethiopian who were educated aboard and had
imbibed western culture would be effective instrument for spreading their religious faith in
Ethiopia. The young Ethiopian who was sent aboard by the religious institutions was expected to
spered the faith upon their return to the country. On the other hand Emperor Menelik had a very
strong desire to establish a strong government in the country. Thus having learned of the advantages
of modern education from those young Ethiopians who were sent to abroad by the missionaries for
the religious purpose and who had returned home, Menelik decided to send a considerable number
of Ethiopians to Various European countries. The Ethiopians sent aboard by the government were
trained in military science, agriculture, engineering and other similar professions (Ethiopian
observer, 1962, pp.250-260).

Some of the young Ethiopians who were sent aboard by both the government and the religious
institution come back with the desire of modernizing their country. They used the knowledge they
had gained in the course of their modern education and tried to implement it particularly for the
progress and prosperity of their country. Thus, the beginning of modern education in Ethiopia is
directly related to the advent of foreign missionaries in the country. These missionaries opened
schools and instituted modern education alongside their religious institutions in all the places where
they were accepted or come into agreement with the feudal class.

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Nevertheless, the establishment of modern schools was speeded up beginning with the turn of the
20th century owing to the efforts of Emperor Menelik and Ethiopian intellectuals who had returned
from abroad. A proclamation encouraging the people to give greater emphasis for modern education
had also been issued in 1898 (Blaten Geta Mahteme Selassie Wolde Meskel, 1962. Pp.600), which
laid down the foundation for the spread of modern education in the country. Modern education
officially commenced in 1908 with the opening of Menelik II School in Addis Ababa, marking a
significant step in the history of education in Ethiopia. Soon after, Menelik himself opened three
more schools one each in Harar, Dessie and Ankober. Following his examples, the regional
governors also opened schools in Yirgalem, Gore and Harar. Mainly because of the opposition of
the clergy, progress was very slow.

1.3.1. During Italian Occupation

During the Second World War in 1936, when Italia invaded the land, there were only 21
government schools and little other mission school with a total enrolment of 4200 students
(Teshome Wagaw, 1979). The Italian occupation (1936-1941) seriously disrupted the educational
system that had just begun to emerge. Government schools were either closed down or were used
for military purposes. To the extent that they were engaged in education, the Italians did much to
disrupt the education system they inherited by their lack of interest and by their systematic
elimination of educated Ethiopians (Richard Pankhurst, 1972 pp. 361-396). The few pre-war
educated youngsters were purposely and systematically massacred and the educational system had
to start from a scratch when the country was liberated in 1941.

1.3.2. Ethiopian Education During the communist Regime

By 1974, when the revolution erupted only 15.3 percent of the age cohort were attending primary
schools. Kenya and Tanzania had reached a stage of universal primary education in the mid 1970’s.
The other neighboring countries, Somalia, the Sudan, Zimbabwe and Zambia had 50%, 51%, 72%
and 95%, respectively, of their primary school aged children enrolled at school (UNESCO, 1981).
Thus, the participation rate in Ethiopia before the Revolution of 1974 was very low even by African
standards (Ayalew Shibeshi: 1989, p.35). Following the change of social values, faith, an
philosophy, the educational infrastructure was also changed drastically. The structure and
organization of educational activities were changed alongside the objectives of the communist
government. In the National Democratic Revolution Program of the Ethiopian Government (April,
1976), Educational Guideline was issued, which states “There will be an educational program that

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will provide free education, step by step, to the broad masses. In the program, it was stated that
education will intensify the struggle against feudalism, imperialism, and bureaucratic capitalism.
Under this new socialist state, Ethiopia's educational system was changed dramatically. One of the
changes that occurred was the governments’ aims of education in Ethiopia. The government's newly
stated goals for education were now (1) education for production, (2) education for scientific
consciousness, and (3) education for political consciousness
These educational reforms were influenced mostly by the Soviet Union which had similar systems
in their country (Britanica, 1996, 71). Soviet educational advisors entered Ethiopia soon after the
revolution to make more reforms. Poly-technical education familiarized children with the important
branches of production; including the manufacturing of machinery or food, and acquainting them
with first-hand practical experience, was one of the Soviet's reforms in Ethiopia. Along with this
Soviet influence, many Ethiopians were taken to the Soviet Union or Eastern-bloc countries for
higher education.

1.4. Organization and Management Decentralization in Progress

Since 1994, the government of Ethiopia has embarked on a decentralization process.
Decentralization has opened the way for regional and local governments, and through them, them
local communities to take greater responsibility, financial and otherwise, for managing their own
affairs, including the delivery of social services such as education. The decentralization process in
Ethiopia has a four-tier system of government. Below the federal government, are Regional
Governments? At the regional level, the country is divided into nine states and two city
administrations. These regional administrations are divided into zone (66), which is divided into
woredas (556). The woredas are considered to be the key local units of government. Below this
level, communities are further subdivided into smaller electoral units, known as Kebeles, to further
enhance community grassroots participation in the formulation and administration of policy
decisions.

1.4.1. Federal Government

The functions assigned to the Federal Government, are national in scope --- monetary policy,
foreign relations, defense, etc.- as well as designs national policies which in turn, provide guidance
to the lower levels of government. In addition to implementing policies with nation wide benefits,
central ministries are expected to support their regional counter parts by undertaking research,
collecting data, and providing technical assistance and advice.

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1.4.2. Regional Government
A series of proclamations made by the Federal Government, culminating in the 1994 Constitution, lays
the basis for devolution of decision-making power and responsibilities to the nine regional governments
and two City administrations. The constitution assigns extensive powers to the regions. Each region can
establish an administration that advances self-government and democratic rule in accordance with the
Federal Constitution, enacts the state constitution and other laws, formulates and executes economic,
social, and development policies, strategies, and plans, administer land and other natural resources
found in its territories, levies and collects certain taxes not reserved for the Federal Government, designs
standards for state civil service conditions and pay, and maintains state level security forces. The
Regional Council, elected by the citizens of the region, makes region-specific legislation and approves
budget and development strategy. All regions have sector bureaus.

1.4.3. Zonal Administration

Zones, the level of government just below the region, are mentioned in the constitution as structure to be
used for administrative convenience. The Zonal Administration consists of a set of counterparts to the
Regional Bureau. Their main task is to aggregate the information coming from the smaller communities,
which is represented by Woredas. In most regions, zonal administration is appointed by the regional
government. In the SNNPR, however, the zonal administration is an elected body. The zonal
administration usually serves as conduits for implementing the budgets that are planned at the regional
level. The current re-structuring of zones and strengthening of the capacity of the woredas is a further
step in decentralization, directed at strengthening service delivery and people’s participation in local
level development. The Zonal level will be made much smaller and responsible only for supervisory
functions.

Specific information on which line ministries would be affected by the restructuring of the zones, and
how, is not yet public information. But discussion with regional and zonal Government officials
consistently referred to the future of the zones as a coordinating body, and that service delivery would
be strengthened at wereda level. Discussion with the government officials also made it clear that only
six department level offices will be maintained at the zonal level, which include (1) Capacity Building
Branch office (consisting Education, Health and Civil Service as a desk), (2), Administration main
Office, (3) Rural Development Branch Office (consisting desks of Agriculture, Water, Mineral and Food
security as required), (4) Trade, Industry, and Urban Development Main Office (with desks of Road and
Transport and Town Development), (5) Youth, Culture and Sport Branch office, and Bureau of Finance
and Economic Development.

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1.4.5. Woreda Administrations
Constitutionally, Woredas, the lowest level of elected, full-time government are the most important unit
of sub-national government. They consist of elected council and a set of sect oral offices, which serve as
implementing agencies and contact points with the communities. Recently, the Ethiopian government
has embarked on a decentralization process, which will bring decision-making power to wereda level.
Accordingly, the woreda level will be reinforced and the staff will be increased. Of the government
budget, 85% will be directly allocated to the woreda level. Ongoing efforts which are already well
underway include the decentralization of responsibilities to woredas, the assignment of expenditure and
revenue responsibilities, the transfer of regional and zonal staff to woredas, as well as plans for
optimizing local revenues.

1.4.6. Kebele Administration

Within woredas, communities organize themselves into kebeles, peasant associations, and other
community groups. Kebeles usually have an elected leader and a small council, but these officers are not
part of the paid, full-time government structure and usually have shorter term than higher-level officials.

1.5. The Structure of the Current Educational System

The structure of the Ethiopian education system encompasses formal and non-formal education. Non-
formal education covers wide areas of training both for the primary school age children as well as adults
who have either dropped out and/or beginners. For this reason, it is viewed as open-ended in terms of
training programmer, and, to some extent, in terms of institutional arrangement. Though the Ministry of
Education is expected to play a leading role, other ministries also get involved depending on the field
of training and target of trainees. (PMO: 1994: 18) The formal program me has further been divided into
kindergarten, general, technical-vocational and tertiary education programmers’.

Prior to the Education Reform of 1994, general education was divided into primary (1-6), junior
secondary (7-8) and senior secondary (9-12) with national examinations given on completion of
each level. The current curriculum is offering 10 years of general education consisting of 8 years of
primary education and 2 years of general secondary education (9-10) with the second cycle of
secondary education (11-12) which prepares students for continuing to higher education. Primary
education is divided into two cycles comprising grades 1 through 4 of basic education and second
cycle of grades 5 through 8 of general primary education.

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 According to the New Education and training policy of 1994, there will also be a system of
technical vocational training which will be offered to the graduates of each cycle.

1.6. Access to all Levels of Education Improved

There has been dramatic growth in enrolments throughout the education system in recent years.
Aggregate enrolments in Grades 1-12 rose at a steady pace of about 9% a year between 1994/95 and
2003/04, and in grades 1-4, which is the first cycle of primary schooling , it grew even faster at an
average of 15% a year. By 2003/04, the number of primary school pupils was 9.5 million and more than
685,976 were attended general secondary schools (9-10). Enrolment in Technical and vocational
training and education grew from less than3, 000 students in 1995/96 to 87,158 students in 2003/04. In
postsecondary education, enrolment has also ballooned, from around 18,000 in 1990/91 to more than
172,111 students. These trends are remarkable achievements given the pattern of stagnation, reversal
and an even growth in the past.

The growth in enrolments has in turn increased the Gross Enrolment Ratio (GER), a common
indicator for measuring coverage, at all levels in the system. The increase in primary enrolment has
been particularly remarkable. GER for complete primary level (1-8) is increasing every year. In
2003/04, the primary school-age population of Ethiopia was estimated to be 13,950,688, among
which 9,542,638 children were enrolled in both program (regular and evening programs) of primary
school As can be seen from the table below, in the past 10 years GER has been increasing at
alarming rate in both sexes. The GER for the primary schools increased from 30.00% in 1994//95 to
68.4% in 2003/04. In 1994/95, among school age children, 70% were out of school. However, in
2003/04, this is reduced to only 31.6%, which is an encouraging achievement.

Year Primary Year 1st Cycle (1-4) Primary 2nd Cycle (5-8) Both cycles (1-8)
Male Female Total Male Female Total Male Female Total
1994/95 34.0
1999/00 88.6 61.0 75.0 31.9 19.3 25.7 60.9 40.7 51.0
2000/01 95.3 70.2 83.0 38.3 22.9 30.8 67.3 47.0 57.4
2001/02 96.2 73.3 84.9 45.4 27.4 36.5 71.7 51.2 61.6
2002/03 94.6 73.5 84.2 52.5 31.9 42.4 74.6 53.8 64.4
2003/04 95.2 78.3 86.9 57.0 36.9 47.1 77.4 59.1 68.4
Source: Education Management Information System, (EMIS), Ministry of Education. 2005, Addis Ababa

13
 Although it is clearly observable that the GER for primary education, which was only 30% in
1994/95, is nearly more than double (68.4%) in 2003/04, it is also quite clear that many children
(22.6% of male and 41.9% of female) are still out of school.

The increment for females is also encouraging. GER for female students was below 20% 1994/95
and this was raised to 59.1% in 2003/04. There is significant increase of gross Enrolment for girls at
the first cycle primary schools, which is increased from below 20% in 1994/95 to 78.3% in 2003/04.
As indicated in the table, for the last five years (1999/00-2003/04), the Gross enrolment Ratio
(GER) for the first cycle primary schools (1-4) has increased by 11.9%, while the second cycle
( grades 5-8) has increased by 21.4%. Overall the GER for the whole primary level (1-8) has
increased by 17.4 %.Although this is an encouraging sign towards the achievement of the universal
primary education by the 2015, GER is not good indicator of primary school coverage for it
includes the over- and under-aged children. One of the key criteria for UPE is the achievement of
Net Enrollment Ratio (NER) close to 100%. NER is the best way of measuring school coverage and
refined indicator of access. Only countries with high intake levels of official school age will achieve
the goal in these terms.
Gross and Net Enrollment Ratios of primary schools by Regions in
2003/04
Region Gross Enrolment Net Enrolment Ratio (NE
Ratio (GER
Male Female Total
Addis Ababa 142.6 90.3 97.6 94.0
Gambella 106.6 89.6 54.2 75.2
Harari 100.5 91.7 72.9 82.5
Ben-Gumuz 100.5 86.3 65.2 76.0
Dire Dawa 83.2 67.6 52.8 60.4
Tigray 80.6 63.6 68.7 66.1
SNNPR 74.2 74.2 52.6 63.5
Oromia 72.7 70.7 52.4 61.6
Amhara 61.8 54.6 53.1 53.9
Somalia 15.1 14.8 7.8 11.6
Afar 14.8 12.6 9.0 11.0
Notational 68.4 62.9 51.8 57.4
Source: Education Management Information System, (EMIS), Ministry of Education. 2005,
Addis Ababa

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 1.7. Investors Profile
The owner of the project has been undertaking different business activities for many years.
During his stay in business he has been accumulated diversified skills and has also adopted
working with many people. Hence, it is this accumulated experience which initiates him to
construct school in newly growing zone of Oromia Adama town.

The regional state government has been exerting his maximum effort to expand investment
opportunities in the region so as to foster the economic development of the region and subduing
the region’s big enemy that is the trap of poverty. Therefore, the government has been preparing
a viable business environment to attract many domestic and foreign investors so that the dream
of making poverty history turns to be true. Hence it is this viable investment policy which invited
owner to develop the interest and motivation of opening the envisaged school project in Adama
with the name of “Kindergarten and Primary school’’.

1.8. Location, Infrastructure and Premises Required

The envisaged school project is located in Adama. The Adama town is among the highly growing
towns in zone of Oromia. It is nearly about 24kms from Addis Ababa and found on the road of
Addis to Hawasa. The location of the town is very viable as it has well developed infrastructures for
undertaking the envisaged school project.
Therefore, for construction of this school project a total of 3,500 m2 of land is required from the
owner and it is allocated as follows.
Land utilization plan
No Description Land Requirement

1 Class Rooms 2,500

2 Foot ball field 600

3 Office 150

4 Teachers cafeteria 150

6 Library 100

Total 3,500

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1.9. Location map of the area (Adama)

1.10. The Economic Significance of the Project

The envisaged project deemed to contribute to the economic development of the region in the
following ways:

1.10.1. Source of Employment

Currently the government of Ethiopia clearly understood that the main development obstacle is
poverty which manifested it self in many things. Among this unemployment is the one. Therefore,
one of objectives of our government is working on tackling the problem of unemployment either
through creating self employment or employment in other organization. Hence, the envisaged
school project is deemed to contribute somewhat to solve the problem of unemployment. Upon
completion, the project assumed to generate employment opportunities for about 56 individuals.
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1.10.2 Source of Government Revenue
To tackle the problem of income in equalities and redistribute income, the government collects
different forms of taxes from different business undertakings and individuals as income tax. Among
the different forms of taxes, business income taxes are collected from undertaking business
activities. Therefore, the project will serve as sources of revenue for the regional state of Oromia.

1.10.3. Contribution to the countries development plan

Currently the government of Ethiopia has been exerting its maximum effort to eradicate the trap of
poverty. In this objective education plays an indispensible role. The envisaged project has the
following objective in its educational undertakings.
 expanding and improving comprehensive early childhood care and education, especially for the
most vulnerable and disadvantaged children;
 Ensuring that all children, particularly girls, children in difficult circumstances and those
belonging to ethnic minorities have access to education.
 ensuring that the learning needs of all young people and adults are met through equitable access
to appropriate learning and life skills programmers;
 achieving a 50% improvement in levels of adult literacy in Adama, especially for women, and
equitable access to basic and continuing education for all adults;
 eliminating gender disparities in primary and secondary education by 2005, and achieving
gender equality in education by 2015, with a focus on ensuring girls’ full and equal access to
and achievement in basic education of good quality; and
 Improving all aspects of the quality of education and ensuring excellence of all so that
recognized and measurable learning outcomes are achieved by all, especially in literacy,
numeracy and essential life skills.

2. The Market Prospect

2.1. Market Demand Potential
Access to primary education has been increasing from year to year. The number of governmental
and non-governmental primary schools has increased from 1049-1775 within the five years
included between 2003/04-2007/08. Consequently, GER for grade one through grade eight has
reached 106.26% for boys, 105.53% for girls and 105.9% on the average for both sexes. Similarly,
NER has grown to 93.03% for boys, 95.14 % for girls and 94.07 % on the average for both sexes.
Home to school distance has also been reduced to a range of 3.1 km in grade one to 5.06 km in
grade eight. (TREB: 2008). The progress achieved in improving access to primary education is

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primarily due to the commitment of the Federal and Regional Governments, and the other
stakeholders involved in education sector development initiative to achieve Universal Primary
Education (UPE); Goal 2 of the Millennium Development Goal (MDG).

Ethiopia is such a country. Even at the height of Ethiopia’s school expansion efforts in the 1970s
and 1980s, the gross enrollment ratio, or GER, for primary school did not surpass 36 percent,
significantly below the African norm of 70 percent.2 Both historical and recent evidence suggest
that supply-side constraints cannot alone account for the low primary school enrollment ratio in
Ethiopia. A recently completed education sector review in Ethiopia points to several factors that
could imply critically low demand for basic schooling outside urban areas, such as:
 A drop in the primary GER from 36 percent to 22 percent over the last five years;
 Underutilized capacity of schools in some rural areas;
 Parental/community expression of a lack of interest in and support of schools;
 Destruction of a large number of schools by the communities they are supposed to
Serve.
Parents, teachers, and administrators interviewed by the sector assessment team cited several
reasons to explain the low participation rate of children in primary school, most of which relate to
demand-side or household factors.

2.2. Past Supply and Present Demand

Previous studies of educational demand in Ethiopia have concentrated largely on equity issues—
including inter- and intraregional and gender disparities, e.g., Ayalew 1989; Anbesu and Junge
1988; Esmonde 1991; Seged, Abraha et al. 1991; Assefa 1991; and Gennet 1991. Ayalew Shibeshi
(1989), in a study that compared supply of primary schools by region in 1973/74 and 1986/87,
found that although there had been a substantial growth in the number of schools provided, they
were unevenly distributed by region. Distribution of missionary schools, lack of stability in the
northern regions, and economic differences between regions accounted for the disparities. Gondar
and Haraghe were the most disadvantaged regions. As supply may influence demand, such regional
disparities are noteworthy. A pilot study carried out by the Ministry of Education in Keffa Region in
southern Ethiopia in 1987 found intraregional differences in access to educational services, with
urban dwellers and males having greater access (Ministry of Education, EPRS 1987). Surprisingly,
the same study found that remote awrajas (zones) received greater access to textbooks than those
closer to urban centers in Keffa, which suggests that educational development often rides the
coattails of other economic development in rural areas.
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 The most recent studies of demand have addressed determinants related to decreased enrollment.
Although some of the decrease may be attributable to the war in the north and civil strife in the
south, lack of economic returns to schooling indicated by the high unemployment rate of rural
secondary school leavers also contributes to decreased demand. In Silti, Esmonde (1991) found that
parents were less likely to enroll their children in primary and secondary schools than previously
because they observed that youth with primary and junior secondary school certificates were often
unable to secure employment. The government during the period of the Derg was the primary
employer in Ethiopia and with the structural adjustment measures instituted by the TGE in the past
two years and the push for regionalization, the national administrative infrastructure has been
noticeably reduced.

2.3. Marketing Strategies

The demand for schooling is a function of the individuals, school cost, and others. To reach
customers the school will use different marketing vehicles. Among the different marketing
strategies and tools for promoting and controlling the market:
 Using both printed and non printed forms of advertising,
 Seasonal discounting pricing method
 Sponsorship of key government activities and public support mechanism.
 Using different marketing segmentation strategies and tactics.
 Utilizing effective and customer centric marketing strategies, that is the marketing strategies
that focuses on different groups of customers based on different segmentation tools;
2.4. Competition
There are different forms of competition that may face this project. These are price and non price
based competition. Moreover, there are different competitors that will compete with the project
either directly or indirectly. But the project under discussion has diversified marketing strategies
that could enable it cope up with the different competitors in the market. Moreover, the project will
frequently conduct competitors research which focuses on, the strength and the weaknesses, the
different competitor’s strategies, the techniques they use in rendering the service, their customer
handling methods, and others.

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2.3. Educational Service
Though the project has no direct product which is tangible it will render educational service fair cost.
Year 1 2 3-10

Kg 400 600 800

Total 400 600 800

3. Organization and Structure

The forms of ownership of this school project are private business ownership. Therefore,
organizational structure of this project is of simple type.

As clearly shown in the organizational structure, the school has three sections under the general
manager. These are the Accounting Department, The Marketing Department, and The General
Service Department. Under the Accounting Department there are Accountants and cashers that will
collect money from the customers. The marketing department is accountable for handling the
customers of the project in its different sections, and it is consist of marketing officers and the
waiters. Finally the general service consists of the purchaser, stock keeper, drivers, Janitors and the
guards. Hence the following section deals with the duties and responsibilities of each Section.

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a. .The General Manager’s Duties and Responsibilities
 He will plan, organize, direct and control the overall activities of the project.
 He will devise policies and strategies that will enable the project to be profitable.
 He will incorporate modern technological innovation that will facilitate the service delivery
of the project and increase customer’s satisfaction.
 He will plan, organize, direct and control the human and non-human resources of the project
so as to achieve the short and long run objectives of the organization.

b. Accounting Department
The Accounting Department of the project is responsible for undertaking the following
activities
 Will plan, organize direct and control the financial transaction of the project by using the
entire necessary document.
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for both the
General Manager and other concerned government body.

c. The Marketing Department

 Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.
 Will develop the marketing strategies for future project development.
 Will develop effective customer handling strategies

d. The General Service Department

The general Service of the project encompasses the following activities
 Will control the human and non human resources of the project, which include: effective
handling of the different inventories of the project, and devise strategies of controlling
against fraud and damage.
 Will provide the right material or inventory to the project with right price at the right time.

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e. Future Development and Exit Strategy
Every business undertakings be it large or small should have to have future development plan. It is a
plain fact that business activities are undertook in a dynamic and turbulent environment. Hence, to
overcome or minimize the risks of uncertain future businesses should devise effective strategies that
enable them to be successful in their operation. Likewise the envisage school project has devised
strategies to overcome the future risk of operation. The first strategy is diversification of its
activities to different other business forms. The second future development plan of the project is
expanding the branches of the project in many parts of the country. Finally, marble manufacturing
will sale its share so that the project build its financial position.

4. Financial Requirement
The financial resource is a prime resource for undertaking any activities. Hence, for implementing
this “project”, a total of 25,000,000 Eth birr is needed. From this total cost 30% 7,500,000 birr will be
covered from the owner equity and the rest 70% 17,500,000 birr will be financed from bank loan at the prevailing

interest rate.

4.1. Fixed Investment

4.1.1. Building and Construction
No Description Total cost
1 Class Rooms 3,200,000
2 Foot ball field 50,000
3 Office 200,000
4 Teachers cafeteria 250,000
5 Volley- volley field 200,000
6 Basket ball field 200,000
7 Library 500,000
8 Libratory 210,000
9 Information center 200,000
10 Staff room 240,000
11 Garden, road, buffer zone & others 100,000
12 Land lease 180,000
14 Design and supervision 100,000
15 Reserved 1,400,000
Total 7,000,000

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 4.1.2 Vehicles and Motors
No Description Meas. Qty Unit cost Total cost
1 Mini Bus no 1 450,000 350,000
2 Ambulance “ 1 350,000 350,000
3 Generator “ 1 50,000 50,000
Total 750,000

4.1.3. Office Equipments

No Description Measure Qty Unit price Total Price
1 Chairs No 16 500 8,000
2 Tables “ 8 1,000 8,000
3 Computers “ 4 6000 24,000
4 Printers “ 4 5000 20,000
5 Computer table “ 4 1,500 6,000
6 Managerial chair “ 4 1,500 6,000
7 Filing Cabinet “ 4 2000 8,000
8 Managerial Table “ 1 5,000 2,000
9 Decorations - - - 2000
10 reserved 400,000
Total 500,000

4.1.4. School equipments

No Description Measurement Qty Unit Total price
price

1 Chair no 300 1000 300,000

2 Chalk board “ 18 1000 18,000
3 White board “ 18 2000 36,000
4 Teachers’ table “ 25 2000 50,000
5 Teachers’ chairs “ 25 1000 25,000
6 shelter   10 3000 30,000
7 Library shelters   20 5000 100,000
7 Audio visual equip set     200,500
7 Libratory center equip set     700,000
8 Info techno center equip set     790,000
9 Total       2,249,500

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4.2. Operating Expense

4.2.1. Salary Expense

Sr. Position Description Req. Qualification Monthly Annual Salary
Salary
No. No. [Birr] [Birr]
1 Director 1 BA in Educ. Ad 3000 36,000
2 Unit leader 1 BA in Mgt 1800 21600
3 Finance & Administration Head 1 BA in Acct 1600 19200
4 English teacher 2 BA in English 3200 38,400
5 Math teacher 2 DiP Math teacher 3200 38,400
6 Teachers of different courses 20 Dip different course 20,000 240,000
7 Purchaser 1 Dip in purchasing 1000 12,000
8 Clerk 2 Dip in Accounting 2,700 32,400
9 Secretary 2 Dip in Secretary 2000 24,000
10 Libratory technician 1 BA in laboratory 1600 19200
11 Duplicator 3 12+2 2400 28800
12 Designer 1 BA in 800 9600
13 Library workers 8 Dip 4000 48000
 14 Mechanic 1 Dip 1000 12,000
15 Electrician 1 10th grade 700 8400
16 guards 10 4th grade 4000 48,000
17 janitors 15 4th grade 4500 54,000
18 Diver 3 8th grade 3000 36,000
Sub-Total 56 60,500 726,000
Worker’s Benefit = 25% of Basic Salary   1,500,000
Grand Total   2,500,000

N.B. Concerning the qualification of employees the teachers have diploma and above and other employees
have 12 completed only the guard, drivers and janitors are unskilled. Generally, this project deemed to
employ 56 individuals on permanent bases. From this total employment generated 28 are unskilled and 28
are skilled.

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4.2.2 Other Operating Expenses
No Description Monthly Annual Consumption
consumption
1 Electricity 1,000 00 12,000 00
2 Telephone 1,000 00 12,000 00
3 Water 6000 00 72,000 00
4 Fuel 8,640 00 103,680 00
5 Detergents 1,000 00 12,000 00
6 Stationeries 500 00 6,000 00
7 Repair and maintenance 600 00 7,200 00
9 Miscellaneous expenses 1,000 00 12,000 00
10 Insurance Building -
11 Uniform of teachers 00 20,000
12 Different stationeries 20,000
13 Insurance Vehicles& Motors 200,000

Total 00 750,000 00

4.2.3. Pre- service Expenses

No Description Cost Remark

1 Project proposal, EIA, 500,000 00

Training, and related
Total 500,000 00

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 4.2.4. Summary of Financial Requirement
No Description Cost  
1 Fixed Investment    
1.1 Land, Building and Construction 7,000,000 0.00
1.2 Machines and Equipment’s 5,500,000 0.00
1.3 Vehicles and Motors 750,000 0.00
1.4 Office Furniture and Equipment 500,000 0.00
Total Fixed Investment Cost 13,750,000 0.00
2 Operating Expense   0.00
2.1 Raw Materials Purchase and Products 5,000,000 0.00
2.2 Salary Expense 2,500,000 0.00
2.3 Other Operating Expense 750,000 0.00
2.4 Pre-operating Expense 500,000 0.00
Total Operating Expense 8,750,000 0.00
  Contingency (Lump sum) 10% 2,500,000  
Total Investment Cost 25,000,000 0.00

4.2.5. Sources of Fund and Loan Repayment Schedules

Therefore for implementing this “Kg school project”, a total of 25,000,000 Eth birr is needed, and
the costs will be covered by owner’s equity and bank loan.
No Description % share Amount(in birr)

1 Owners Share 30 7,500,000

2 Bank Loan 70 17,500,000
Total 100 25,000,000

Loan Repayment Schedule

Year Principal Interest (10%) Total Annual Remaining Balance
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 Payment Payment
0 0 0 0 17,500,000
1 1,750,000 1,750,000 3,500,000 15,750,000
2 1,750,000 1,575,000 3,325,000 14,000,000
3 1,750,000 1,400,000 3,150,000 12,250,000
4 1,750,000 1,225,000 2,975,000 10,500,000
5 1,750,000 1,050,000 2,800,000 8,750,000
6 1,750,000 875,000 2,625,000 7,000,000
7 1,750,000 700,000 2,450,000 5,250,000
8 1,750,000 525,000 2,275,000 3,500,000
9 1,750,000 350,000 2,100,000 1,750,000
10 1,750,000 175,000 1,925,000 0

Depreciation
S Original Value In Depreciation rate in Depreciation Per
Description
N Birr % year
Construction and Civil
1 7,000,000 5 350,000
Work
2 Machines & Equipment’s 5,500,000 15 825,000
3 Vehicles 750,000 20 150,000
4 Office Equipment 500,000 15 75,000
  Total 13,750,000   1,400,000

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 4.3. Financial Statements
4.3.1. Balance Sheet
Balance Sheet
Asset
Current Asset  
Cash 3,750,000
Inventory of raw materials and inputs 5,000,000
Total Current Asset 8,750,000
Fixed Asset  
Land, Building and Construction 7,000,000
Machineries and Equipment’s 5,500,000
Office Equipment 500,000
Vehicles 750,000
Total fixed Asset 13,750,000
Total Asset  
Liability  
Account payable 17,500,000
Owners Equity 7,500,000
Capital  
Total Liability & Owners’ Equity 25,000,000

Income Loss Statement

Revenue Year 1 Year 2 Year 3-10
Sales 35,623,000 39,185,300 43,103,830
Sales expenses (5%)* 1,781,150 1,959,265 2,155,192
Purchase of Raw Material 5,000,000 265,075,095 265,075,095
Gross profit 30,623,000 -225,889,795 -221,971,265
Expenses    
Salary Expense 2,500,000 2,625,000 2,756,250
Operating Expenses 750,000 787,500 826,875
Pre-operating Expense 500,000 525,000 551,250
Deprecation Building 350,000 350,000 350,000
Deprecation machine 825,000 825,000 825,000
Deprecation Vehicles 150,000 150,000 150,000
Deprecation office Equip 75,000 75,000 75,000
Lease Expense 1,000 1,000 1,000
Interest Expense 1,750,000 1,575,000 175,000
Total Expense  6,901,000 6,913,500 5,710,375
Profit Before Tax 35,623,000 39,185,300 43,103,830
Tax(30% ) 10,686,900 11,755,590 12,931,149
Net Profit 24,936,100 27,429,710 30,172,681

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Cash Flow Statement        
         
Particulars Year0 Year I Year II Year III-XI
A. Cash Inflow 0      
·  Own equity 7,500,000      
·  Bank loan 17,500,000      
·  Depreciation 0 1,400,000 1,400,000 1,400,000
·  Net profit 0 24,936,100 27,429,710 30,172,681
Total inflow 25,000,000 26,336,100 28,829,710 31,572,681
B.  Cash outflow 0      
·   Fixed capital 13,750,000      
·  Working capital 8,750,000      
. Contingency (Lump sum) 10% 2,500,000      
·  Loan repayment   1,750,000 1,575,000 175,000
Total outflow 25,000,000 1,750,000 1,575,000 175,000
Net inflow (A-B) 0 24,586,100 27,254,710 31,397,681
Cumulative balance 0 24,586,100 27,254,710 31,397,681

Assumptions
 Salary and operating expenses expense increases by 1% in year 2 and remain the same.
As clearly the cash flow statement shows the promoter of the project has sufficient amount of
money that enable him pay the bank loan with in short period of time and invests in other business
of his interest.

Environmental Impact of the project

Currently a due emphasis has been given for our environment and the environmental law policy has
enshrined in the country law so as to mitigate the different impacts that may be imposed by the
different pollutants. This project deemed to cause no impact on the environment as it only rendering
service to the local community. Hence, it has a positive contribution to economic development by
assisting human capital development.

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