Funding Education in Sub-Saharan Africa: Can the Momentum be Maintained During the Current Economic Slowdown? By Birger Fredriksen

By Birger Fredriksen, Results for Development Institute.

The impact of good quality education on a country’s economic growth is now quite well understood. The inverse relationship – the impact of economic growth on education — is given less attention. This is especially so with respect to the importance of sustained high per capita income growth needed to generate both the education funding and the jobs needed to make rapid education growth financially and socially sustainable. This applies particularly to sub-Saharan Africa (SSA), given the region’s continued high population growth, massive need for education catch-up, and very slow growth in modern sector job creation.

On this background, the recent slowdown in economic growth in the region gives cause for concern. IMF’s October 2015 Economic Outlook estimates SSA’s GDP growth at 6.8% per year during the period 2004-08, 5% during the period 2009-14 and projects 4% on average for 2015 and 2016. The revised projections of early April reduce the growth estimate for 2015 to 3.4% and projects 3.1% for 2016. Thus, accounting for an annual population growth of 2.7%, annual growth per capita declined from 4.1% between 2004 and 2008 to 0.7% in 2015 and 0.4% in 2016.

The slowdown is caused by a combination of complex global, regional and national factors that have no short-term fix. They include the end of the commodity boom, poor infrastructure including chronic power shortages, and increased insecurity in many countries. Therefore, should this stagnation in per capita growth become the “new normal” for the medium term, the risk for sharply reduced growth in education budgets is very real.

A blog I posted on October 2, 2014 on this site, reflected on the massively increased funding that SSA needed, compared to other developing regions, to reach the 2015 EFA goals. The two main reasons were because of its massive needs for education catch-up and rapid population growth, both of which will continue over the 2015-30 period. Despite the progress in access since 2000, SSA’s share of the world’s out-of-school children increased from 40% in 1999 to 57% in 2013. Further, the quality is very poor and two in five children drop out prior to the end of the primary cycle. Also, the gap between SSA and other regions in enrolment ratios has increased since 2000 in both pre- and post-primary education. And the “catch-up challenge” is made much more difficult by the fact that SSA’s school-age population is projected to grow by one-third between 2015 and 2030 compared to a slight decline in all other major developing regions.

Since 1960, education progress in the region has depended closely on economic growth. This is well illustrated by the way the rise and fall in economic growth has made reaching a Gross Enrolment Ratio (GER) of 100% for primary education a moving target for most countries:

• 1960-1980:A period of strong education growth: The GER increased from about 35% to 80%. While the target of 100% by 1980 (agreed in Addis Ababa in 1961) was not attained, enrolment in 1980 exceeded the number implied by the 100% target by 24% because the population of school age grew by more than 90% between 1960 and 1980 for the countries in question instead of by 18% as expected. Up until 1975, growth in funding was facilitated by an annual 1-2% per capita economic growth as well as an increase in the share of GDP allocated to education, reaching 4.5% in 1980.
• 1980-2000: A period ofeducation stagnation: The GER declined to 73% in 1993 and only regained its 1980 value in 2000 (rather than Education for All as agree in 1990 in Jomtien). Economic decline was the main cause. GDP per capita dropped by about one-third between 1970 and 1997, and education budgets grew by only about 1% annually between 1980 and 2000 as compared to 2.7% for the school-age population. The lack of fiscal space also hampered the reforms needed to transform SSA’s education systems, designed for an elite, into mass systems. In turn, slow progress on reforms led to more performance-based aid and the promise by donors at the Dakar 2000 World Education Forum to prioritize countries that prepared good plans.
• 2000-2015: Resumption of growth: The GER reached about 100% in 2013. Although this does not imply universal primary education – the Net Enrollment Ratio was only 78% and some 30 million primary school children are still out of school — this was a major achievement. Economic growth accounted for about two-third of the rise in education budgets that made this possible. The remainder was largely due to a rise in the share of GDP spent on education and in foreign aid, both of which are expected to provide more modest contributions between now and the year 2030. On average, SSA already spends a higher share of public budgets (18%) on education than do other regions. Further,aid has stagnated globally in recent years and SSA’s share of aid for basic education has declined sharply (from 50% in 2002 to 28% in 2014).

In sum, a concerted effort must be made to prevent the economic slowdown from causing further delay in achieving the EFA dream as well as the new targets in the education SDG. This effort must include higher priority for sub-Saharan Africa in the allocation of aid. But because most funding by necessity is from domestic resources, more must be done to generate more such resources including by increasing the tax base. Also, there is still scope for increasing education’s share of public budgets in many countries. Finally, tighter budgets will make it even more important for both governments and donors to make budget trade-offs in favour of population groups who are now missing out on basic education.

This blog was first posted on the World Education Blog of the Global Education Monitoring Report on 27^th April 2016. It is released to coincide with the Global Action Week run by the Global Campaign for Education, under the theme ‘Fund the Future: Education Rights Now!”

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