/ 8 June 2018

Spending on education pays big dividends

Young people are not equipped for the fourth industrial revolution and adding computers to the classroom isn’t a solution. They need to start their education at the age of three. David Harrison
David Harrison


Africa is in an education crisis. Despite pledges to improve access to education for all children by 2030, many governments are failing to fund this ambitious component of the United Nations sustainable development goals. There is still time to address the financing shortfall, but only if new investment strategies are vigorously embraced.

Today, roughly half the world’s young people, including about 400-million girls, are not being educated to succeed in the workplace of the future. This challenge is most acute in Africa. In sub-Saharan Africa, although 75% of girls start school, only 8% complete secondary education. It is also the only region where women still do not enrol in or graduate from tertiary education at the same rates as men.

These problems are well known, if not always addressed. Less understood is the contradictory effect that Africa’s future growth will have on the availability of education funding.

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By 2030, nearly 30 countries in Africa are expected to have reached lower-middle-income status, defined by the World Bank as a per capita gross national income (GNI) of between $1 026 and $4 035. As countries approach this level of development, new investments will be needed to pay for health and education upgrades, and increasing domestic tax revenue will become a critical component of budgeting strategies.

At the moment, however, estimated tax revenues in most countries will be insufficient to cover the costs associated with improving educational outcomes. As a result, an education-funding crisis threatens to dash hopes of sustained rapid growth and lasting prosperity.

Traditional forms of international aid will continue to play a role in the development of Africa’s education sector. But, owing to the projected increases in GNI, most lower-middle-income countries will no longer qualify for the grants and low or zero interest loans currently available. As a result, millions of young Africans will suffer the effects of a paradox in international development: countries will be too prosperous to qualify for the best funding options but too poor to meet the educational needs of their citizens on their own.

Fortunately, the International Commission on Financing Global Education Opportunity, where I serve as a commissioner, has helped to develop a solution. Called the International Finance Facility for Education, this innovative approach aims to help lower-middle-income countries to invest in education, especially in programmes for women and girls, in more sustainable ways.

By obtaining $2-billion in donor guarantees, we aim to deliver about $10-billion in grant and concessional education funding to countries that need it most. But there is a catch: governments seeking to access these funds must first demonstrate an interest in and capacity for long-term educational reform.

This approach is designed to improve the grants’ effectiveness and give countries the ability to strengthen their economic resilience with a better-educated workforce. Research shows that, in lower-middle-income countries, every $1 spent on education increases the earning power of graduates by $4. In other words, our long-term goal is broader than building schools or teaching maths; it is to create conditions for lasting social and economic change.

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Similar funding strategies have already proved to be successful in the healthcare sector. For example, the International Finance Facility for Immunisation was created to provide financing for Gavi, the vaccine alliance. Eventually, billions of dollars in new funding was raised to vaccinate more than 640-million children and save more than nine million lives.

The economic returns were also dramatic. One study that surveyed outcomes in 73 countries found that every $1 spent on immunisations translated into $18 in healthcare-related savings. The education finance facility has the potential to produce a similar effect.

Millions of young people around the world, and particularly girls in Africa, are failing to excel because they continue to be denied access to quality education.

With just 12 years to go before the expiration of the sustainable development goals, Africa’s education crisis must be moved to the top of the development agenda. Government leaders routinely claim that children are our future. If they truly believe it, programmes such as the International Finance Facility for Education must be given the priority they deserve. — © Project Syndicate

Graça Machel, the founder of the Graça Machel Trust, is a member of the Africa Progress Panel and The Elders


M&G Slow