Gov’t to introduce performance-based budgeting for public universities

Addis Abeba – Professor Birhanu Nega, the Minister of Education, warned that universities face an uncertain future if they fail to deliver effective outcomes. He made this remark during the signing ceremony for performance contracts between the Ministry and 47 higher education institutions on 25 December, 2024.

During the event, the Minister highlighted that future university budgets will be performance-based, adding that institutions failing to meet expectations could be downgraded into Technical and Vocational Education and Training (TVET) centers. He described the performance contracts as part of broader education sector reforms.

Professor Birhanu also explained that budget allocation will no longer depend on the number of instructors at a university.

“Instead, we will assess how effectively each university operates according to three key criteria: its contributions to research, the quality of students it produces, and its overall performance,” he said.

He criticized the previous practice of allocating budgets equally among universities based solely on student and faculty numbers, noting that it is no longer adequate. “Future budget allocations will also consider factors such as integrity and institutional effectiveness,” he added. AS