Only 20 percent of the school-age population in Ethiopia have access to primary education. This study attempts to explore an alternative strategy as regards expansion of literacy and the fulfilment of educational and developmental needs. It argues that the strategy of non-formal education is in both cases a far better alternative.Contents: 1. Introduction -- 2. Non-Formal Education: What It is and What It is Not -- 3. Bilateral Donors and the Ethiopian Education System -- 4. The Profile of the Education Sector as seen by USAID and ANDP – 5. The New Ethiopian Education and Training Policy -- 6. Conclusion: Let the Formal Education Sector Defend Itself. Invest in the Non-Formal Education </p