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Next week, finance ministers are being convened by the United Nations Secretary-General to look at financing in the era of COVID-19 and beyond. It is critical that they see education as key to the recovery from the effects of the pandemic. The costs associated with school closures, the GEM Report has found in a new policy paper released today, risk increasing the funding gap for SDG 4 by up to one-third. But acting now and investing in remedial and re-enrolment programmes is far cheaper than rolling out second-chance education in the long-term. Immediate action could reduce the additional cost of COVID-19 on SDG 4 by 75%.
Even before COVID-19, the total annual cost of universal pre-primary, primary and secondary education for low- and lower-middle-income countries is US$504 billion a year. Of that amount, US$356 billion is projected to be covered by domestic resources, under plausible assumptions on growth, tax revenues, and the priority assigned to education. This means there is an annual funding gap of US$148 billion between now and 2030 to achieve SDG 4.
This gap is higher than the $39 billion annual finance gap originally calculated by the GEM Report in 2015 because of five factors. For starters, enrolment and completion rates have only slightly increased since 2015, meaning that the same SDG 4 targets now need to be achieved not over 15 years, but in a compressed 10-year timeframe. Secondly, in 2015, we assumed that GDP would grow by 5%, while it only grew at 3.7% in low-income countries. Thirdly, the projected numbers of students have slightly increased. Fourth, the same is true of costs of classroom construction, which now include investments for water, sanitation and hygiene. Finally, better data on pupil/teacher ratios mean that more precise calculations were made on the unit cost of providing quality education.
While international aid to education in 2018 hit an all-time high, it was nowhere near close to the six-fold increase called for by the GEM Report in 2015, a target that could have been reached if all OECD and selected non-OECD donors spent 0.7% of their income on aid and 10% of that on primary and secondary education. And, although aid might have been at an all-time high, still less than half (47%) of aid to basic and secondary education was allocated to low and lower-middle income countries.
Adding the impact of COVID-19 to these analyses deepens the financial challenge. There are significant costs that fall out of school closures related to remediation and re-enrolment programmes. For a few, second chance programmes will be required. Also driving higher costs is the need to ensure children are safe in school by allowing for additional spaces and proper hygiene facilities. Only 24% of schools in low income countries have basic handwashing facilities.
In total, the new policy paper shows that COVID-19 could increase the annual funding gap for education in the poorest countries by up to a third, to as much as US$200 billion a year.
The paper calls for preventative measures now, rather than trying to cure the problem in the long-term, which comes at a far higher price. For those not convinced by the need to ensure we do not risk losing a generation of learners, perhaps they will be by the price tag associated with trying to fix the problem at a later stage: second chance education is assumed to be twice the cost of general education, for instance. Similarly, mitigating dropout and learning losses now can reduce repetition rates in school and the costs associated with longer durations of schooling per student.
There are obviously many unknowns, still, both when working on projections of this kind, but also as regards COVID-19. The longer the school closures, the higher the cost. Lockdowns and related constraints on economic activity also affect the context. The figures in this blog reflect what we see to be the most likely scenario of around 20 weeks of school closures with a return to previous rates of economic growth after a slump in 2020. Our new policy paper contains more pessimistic scenarios as well; scenarios that are tough to swallow.
No matter the timeframes we are facing, however, the fact is that immediate urgent action is essential to avert the worst possible damage of COVID-19 on education. Governments must urgently prioritize re-enrolment, remediation and infrastructure investment for safe classrooms.
There are three main implications of these findings.
Firstly, now is not the time for governments to cut their education budget in response to the economic downturn. Governments and international donors must maintain, if not increase, investments in education. This health crisis has exacerbated the effect of intersecting inequalities on education opportunities. Countries will need additional funding for COVID-19 responses that were previously not programmed. Donors must ensure flexibility so that existing programmes can be restructured and realigned to help countries ensure that COVID-19 is only a temporary setback.
Secondly, as we hope the 2020 GEM Report on inclusion and education showed, schools must be more inclusive on their return if we are to ensure the most marginalised do not disengage and drop out of education altogether. Governments must direct a significant part of their education budget to the most marginalized – groups, schools and regions. It is positive that the preparatory paper for the meeting of finance ministers, which paves the way for the Heads of State deliberations on September 29, has included this as an investment priority: ‘inclusive education systems that can respond flexibly and quickly to shocks; supporting all children to return to school and catch-up’. International donors must also deliver equitable funding to countries and regions most in need.
Thirdly, re-enrolment programmes mean ministries of education and social protection must work together. Social assistance, such as conditional cash transfers and child grants with an education component and gender dimension, are particularly important to address the barriers of intersecting disadvantages stopping many from accessing education.