Findings show a rise in government spending on education in low-income countries. But figures still fall below the international benchmark.
Findings show a rise in government spending on education in low-income countries. But figures still fall below the international benchmark.
The Education Finance Watch report by the World Bank and UNESCO reveals a nuanced picture of education financing in low-income countries. While the report indicates an upward trajectory in government investment in education, it also underscores pressing challenges that need to be urgently addressed.
Increased Educational Funding
The share of GDP devoted to education in low-income countries has increased from 3.2 percent in 2018 to 3.6 percent in 2021. This growth in funding, which occurred during the height of the COVID-19 pandemic, is certainly encouraging.
For the first time, according to the EFW report, more than half of the educational expenditures in these countries originated from the government. However, this improvement falls short of the international benchmark, which recommends spending at least 4 percent of GDP on education.
On the downside, official development assistance for education has decreased by 7 percent, currently accounting for just 13 percent of education spending in these countries. This reduction is concerning, especially as households continue to bear a significant portion – over a third – of education costs.
The EFW report emphasizes the importance of education as not only a fundamental human right but also a vital investment in human capital, which in turn significantly contributes to economic growth. It asserts that the returns on education investments are exceptionally high in low-income countries, especially at higher education levels. However, educational outcomes are generally lowest in countries that invest the least per school-age child.
There is also a demographic component to consider. Low- and lower-middle-income countries display significant variations in population growth rates, making the financing of education per capita an even more complex issue. While some countries experience population growth, requiring increased financing, others with shrinking school-age populations have the opportunity to invest more per child without significantly affecting overall budgets.
In the current economic landscape characterized by rising inflation, high debt-to-GDP ratios, and diminishing ODA, particularly to low-income countries, the report calls for a focused strategy. The immediate and crucial next step is to target educational spending towards children who are currently most underserved. Such targeted investment could offset the pandemic-induced learning losses and lay the foundation for enhancing human capital and sustainable economic growth.
