Financing Education

BY

Kenyi Kilombe

PM EU Delegation to South Sudan10/1/18Financing Education 1

Objectives

1. Understand issues and trends in education financing

2. Know the analytic tools for budget analysis

10/1/18Financing Education 2

Defining Financing Education

• Education financing refers to governmental and organisational processes by which revenues are generated distributed, and expended for the operational and capital support of formal schooling.

10/1/18Financing Education 3

• In most countries, education is predominantly financed and provided by the government. The expansion of education depends therefore primarily on domestic fiscal revenues.

• However, in many developing countries, these revenues are not sufficient to support the delivery of high-quality education across the education cycle. Additional sources of both external public and nonstate financing are needed to fill the gap.

10/1/18Financing Education 4

• Merely increasing financing will not be enough, however. Governments will need to make smart choices on how to allocate and spend scarce domestic and international concessional finance. And at least in the short to medium terms, most developing countries will not be able to publicly finance education across all education levels, even with international support. Decisions about spending allocations will need to be tailored to country contexts and informed by evidence on where this spending is likely to have the biggest impact. Data on social rates of return suggest that public investments in lower levels of education are likely to generate the largest benefit for society as a whole and to build the necessary foundations for equitable schooling throughout the education cycle.

10/1/18Financing Education 5

Key Concepts

1. Domestic Resource Mobilization - refers to the potential for increased financing from domestic sources, including taxation and remittances.

2. Results-based financing – providing funding to programs that work.…any program or intervention that provides rewards upon the credible, independent verification of an achieved result

10/1/18Financing Education 6

Concepts…

3. Cost-Effectiveness Analysis - compares the relative costs and outcomes (effects) of different courses of action; what does it cost to get a given result?

4. Cost-Benefit Analysis – do the benefits outweigh the costs (is society richer or poorer after the investment?)

10/1/18Financing Education 7

True or false

1. Under the Millennium Development Goals, there was a sharp increase in the share of financing for primary education that went to sub-Saharan Africa.

10/1/18Financing Education 8

90% of education aid actually gets spent in the recipient country.

10/1/18Financing Education 9

Domestic financing for education has increased substantially in low-income countries in recent years.

10/1/18Financing Education 10

• Government budgets in low-income countries reflect increases for education over the past decade.

10/1/18Financing Education 11

• Public spending on education is generally pro-poor

10/1/18Financing Education 12

• Increased financing is the key to improved learning outcomes.

10/1/18Financing Education 13

• The three domestic policy areas that have made the biggest difference in terms of increasing enrolments are: fee abolition, school feeding, and conditional cash transfers.

10/1/18Financing Education 14

• In most developing countries, almost half of the total education budget is taken up by teacher salaries

10/1/18Financing Education 15

Financing Education

• To finance education, each Country is obliged to allocate a portion of its national budget for education service delivery.

• The money has to be used effectively and equitably to guarantee education for all, and redress inequalities.

• International Declarations, such as the 2011 Jomtien Statement, recognize that states should spend at least 6% of their GDP and /or at least 20% of their national budgets on education in order to achieve quality education for all. In some states, the national education budget is guaranteed by the constitution or legislation, eg in South Sudan and the EA region.

10/1/18Financing Education 16

Financing models

• Models on how to finance education

• Education is expensive. There will not be any country in the world who denies that.

• Education is in fact an investment in people and supposed to be ‘paid back’ at the moment

that a graduate finds a job, start to pay taxes and can spend more money for his/her living.

• Incase this investment is not done, a country cannot develop or will develop slowly. Due to a

10/1/18Financing Education 17

Financing……

• lack of technical people and the fact that people cannot find a job and have not much money to spend.

Sources…

• Capacity building (like short courses and refresher courses) are generally paid by the learner itself.

• Sometimes from his/her own pocket, more often funded by the employer or by donors through

• scholarships.

• Government/Public- often the largest contributor to education sector in some countries.

• Income generated by school

• Households mainly parents

• Private organisations eg NGOs may fund program in schools

• Local administration/communities that manage some aspect of education at local level

• Philanthropy

10/1/18Financing Education 19

Budget

• The budget is the most important economic policy instrument of government, and as such it can be a powerful tool in transforming our country to meet the needs of the poorest. Government budgets and policies are often assumed to affect everyone more or less equally: to serve the ‘public interest’ and the needs of the ‘general person

• The budget reflects the values of a country – who it values, whose work it values and who it rewards … and who and what and whose work it doesn’t.

10/1/18Financing Education 20

Budgeting Analysis- Gender Parity Index -Rwanda

• GER – girls GER – boys GPI

• 60 100 .6

• 1101001.1

• 1101001.1

• 1101001.1

• 1101001.1

• 1001001.0

10/1/18Financing Education 21

Gini coefficient

10/1/18Financing Education 22

Opportunities

• What can we do to jointly finance education?

• Venture into Public Private Partnership

• Strong coordination between the private sector and the key education stakeholders eg Ministry of Education, Donors, NGOs

• Others….

10/1/18Financing Education 23

Conclusions

• Conclusion

• There is a need for shared responsibilities among the key stakeholders to contribute to financing education.

10/1/18Financing Education 24