Reaching the marginalized: EFA global monitoring report, 2010; 2010

EDUCATION AT RISK: THE IMPACT OF THE FINANCIAL CRISISDouble jeopardy: food prices and financial crisisspending. Two countries – Kenya and Uganda –fall into this category. Both have significantlyincreased financing for education in recent years.Here, too, crisis-related problems could hamperimplementation.Plans to increase education spending as ashare of GDP but to maintain or cut the shareof education in the national budget. The countriesconcerned are Lesotho, Rwanda and the UnitedRepublic of Tanzania. Lesotho plans to raisethe ratio of education spending to GDP whilemaintaining the budget share. Rwanda’s budgetenvisages a rise in the share of educationspending in GDP but a slight fall in the budgetpercentage because of a shift towardsagriculture and infrastructure. The UnitedRepublic of Tanzania plans to maintain the GDPshare held by education spending but to reducethe budget share, as the country’s nationalpoverty reduction strategy entails dramaticincreases in expenditure on agriculture,infrastructure and water. All these plans arehighly susceptible to economic pressure, whichcould change patterns of budget allocation tothe detriment of basic education. For example,Lesotho’s response to the threat of risingunemployment was to shift spending prioritiesfrom pre-school and primary education totechnical and vocational training.Plans to cut education spending as a shareof GDP and total expenditure. Two countries –Benin and Ghana – fall into this category. InBenin, the planned cut reflects reallocationof budget spending away from education andother social sectors. In Ghana, it is less a directresult of the economic crisis than an effect ofa domestic budget crisis inherited from theprevious government. In both cases, it is likelythat stagnant or declining economic growth willcompound the cuts, resulting in significantlyfewer resources available for educationspending. There is a danger that Benin’s strongprogress in recent years towards universalprimary education, documented in Chapter 2,will be reversed. In Ghana, efforts to addresseducation marginalization in the north couldbe undermined (see Chapter 3).This overview contains good news and bad news.The good news is that current evidence indicatesthat few governments are cutting educationspending. The bad news is that the changing picturemay look worse than that captured in currentbudget analyses. Most budgets of low-incomeAfrican countries reviewed by Development FinanceInternational were approved by parliaments at theend of 2008, before national economies registeredany significant impact of the crisis. Mid-termbudget reviews may result in marked adjustmentsin spending. Close monitoring of actual spendingon education, and of restrictions on spending, isvital. Formal revisions to 2009 budgets and publicspending plans drawn up amid changing fiscalconditions have to be carefully assessed, as dodiscrepancies between 2009 budget allocationsand actual spending. But the full impact of thedownturn is likely to be more fully revealed in 2010.There is already evidence of budget revision insome countries. For example, after copper pricescollapsed, Zambia’s government removed a windfalltax on mining companies that was to have financedan increase in education and other social spending(te Velde et al., 2009).It is important to base budget monitoring exerciseson appropriate benchmarks. Much has been madeof the fact that, to date, relatively few low-incomecountries have cut public spending in general orpriority social sector spending in particular. Asfar as it goes, this is clearly a positive outcome.However, what ultimately matters for progresson the Education for All goals and wider humandevelopment measures is whether plannedincreases in public spending have beencompromised. Governments in many low-incomecountries have drawn up medium-term expenditureplans for education, often as part of wider povertyreduction strategies supported by donors. Theplans are linked to activities such as classroomconstruction, teacher recruitment, purchases ofteaching materials and special programmes formarginalized children. These activities are in turnaimed at specific targets for getting children intoschool and raising the quality of education. To theextent that budget pressures translate into levelsof expenditure that are lower than planned, theywill compromise any prospect of acceleratedprogress towards the Dakar goals.What happens beyond the education sector isalso crucial. Progress in education is inevitablyinfluenced by developments in other key areas,including child and maternal health, and water andsanitation. The national and international responseto the economic crisis thus needs to reflect anintegrated strategy for protecting humandevelopment across a broad front.Close monitoringof actual spendingon education,and of restrictionson spending,is vital27