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This report presents a background study of the state of Technical and Vocational Education and Training in Ethiopia. We discuss the state of TVET in Ethiopia, as well as the contextual information on education system and economic indicators in Ethiopia as they relate to the TVET implementation and policy. We argue that given the supply-driven nature of the TVET system in Ethiopia, it is important to improve its efficiency, and we propose two ways to doing this: (1) Improve efficiency and equity of the centrallydriven allocation mechanism drawing on the recent advances in matching algorithms and their application to the school choice; (2) Impact evaluation of the final labour market outcomes of the graduates has to be integral part of the TVET system, and we discuss various ways such evaluation could be conducted.