In recent decades the access of the school-age population to education has been expanded significantly. However, the quality of education remains low at the majority of schools, and the education system focuses predominantly on providing good quality education to the most able students, who are channelled towards university and work in the formal sector. As a result, the most binding human capital shortages are at the middle and low end of the labour market. Despite this, resources continue to be skewed towards the “high end”. Although it was originally conceptualised as a merit-based system, the way the system works favours students from higher-income families with more resources and this raises efficiency and equity concerns. This chapter documents these problems and discusses the fundamental challenge of reorienting the key focus of the education system and the changes to the allocation of funding and school governance that this will require.