Sustainable Financing of Education in Africa: Beyond Peak Aid?

• In Event: Sustainability/development

Proposal

Sustainable Financing of Education in Africa:
Beyond Peak Aid?

Keith M Lewin
Emeritus Professor of Development and International Development in Education
University of Sussex

As the second decade of the 21st century draws to a close longstanding beliefs about the role of aid in accelerating educational development are under close scrutiny. Doubts about the efficacy of aid to education have led to a stagnation of disbursements at around USD12 billion a year since 2010. This aid represents about 7% of aid to all sectors and compares to nearly 10% in the years leading up to 2010. Basic education (pre-primary, primary and literacy) accounts for about 40% of the total disbursement, aid to secondary 20%, and to post-secondary a surprisingly large 40% suggesting basic education may not be the highest priority. Declines in commitments by DAC countries have been partially offset by increases in multi-lateral funding and aid from non-DAC sources e.g. sovereign wealth funds but these commitments may or may not continue. Notably the share of aid to education reaching the poorest countries in Sub-Saharan Africa has been falling. Most of the demand for new finance to achieve the SDGs is now from low-middle income countries that have not traditionally qualified for grants or concessional lending. The replenishment of the Global Partnership for Education (GPE) fell short of expectations indicating a softening of the global appetite to finance more aid to basic education. The question is has “Peak aid” occurred and, if it has, is this a good or a bad thing?

Over the last three decades well over half a trillion dollars has been disbursed as aid to education through bilateral and multilateral agencies much if it to Africa. Despite this, the numbers of children failing to complete school successfully remain stubbornly high at around 250 million globally. Recently a “learning crisis” has been declared by the World Bank with very large numbers of young people failing to achieve minimum learning standards. Marginal groups – e.g. the poorest, those with disability, some ethnic minorities – remain excluded and often benefit less from increases in access and progression than those enrolled in the core of national education systems. Progress in closing the educational gaps between Sub-Saharan Africa (SSA) and the rest of the world, and between countries in SSA, has been disappointingly slow.

It is true that external assistance has helped some countries transform their education systems. But in other countries including many of the poorest, progress has been disappointing with a long way to go to create universal, inclusive and sustainable systems with high levels of learning achievement. New global campaigns including those by the Education Commission, seek to massively elevate levels of aid to education and double or triple its volume and expand its range to target low-middle income countries. This would increase concessional lending that would generate new interest payments and debt with risks of default.


The purpose of aid to education is to accelerate development but it is also possible that aid can trap countries in a recurrent cycle of external financing and dependence. About 30 countries have received as much as half their national budgets in external assistance for over 30 years. There is a paradox. If aid is working and it is effective in catalysing endogenous development then the need for aid should reduce over time. If there are persistent needs for more and more aid over 30 years this seems to signal the limited impact of previous aid. This research uses dependency theory to explore why some aid is not working and explain why aid may be leading to persistent dependence and exogenously led development strategies dislocated from national needs.

At some point in the near future the global system for external assistance to education will reach “Peak Aid” and start to decline. Peak Aid may have already happened. If this peak was a result of the impact of past aid making more aid unnecessary it should be celebrated. But if it reflects disillusionment with the impact of previous aid to achieve sustainable educational development strategies, it suggests something different to conventional aid is needed.

This research asks four questions about sustainable development in SSA:

• First, what are recent patterns of educational aid to Africa and are they sustainable?
• Second, under what circumstances should significant increases in aid to education be encouraged?
• Third, is “Peak Aid” to education approaching and if so why?
• Fourth, if aid declines over the next decade what are the implications for achieving the Sustainable Development Goals in education?

The research analyses large scale date sets used in recent studies with the African Development Bank and by the UNESCO Institute of Statistics to profile patterns of educational financing. This can identify the gaps that exist between government resources and projected demand. It then explores different options for meeting these demands using insights from participant observation in the aid policy process.

The findings indicate that there are clear limits to growth for external assistance to education if aid is not to undermine ambitions for financial sustainability. If Peak Aid becomes a reality this creates a new focus on promoting efficiency and effectiveness, and on fiscal reforms, that make it possible to finance mass education systems from domestic revenue. The “learning crisis” may be more a result of problems with aid effectiveness over the last three decades rather than a symptom of the need for more aid of the same kind. This research highlights the risk that substantial new commitments of external financing to SSA will generate new dependencies. This original research provides a counterpoint to dominant assumptions that more aid is needed and demonstrates that the way forward depends on fiscal reforms that provide sustainable educational financing from domestic revenue. This is the only way to promote endogenously driven educational development owned by its beneficiaries.

Author

• Keith Malcolm Lewin, University of Sussex