Pre-empting the education sector budget for 2018 - An analysis

The Minister of Finance presents the financial plan of the government for the next year at a time when there is a global call for world leaders to Fund Education.

This global call has become necessary because it is profound that, it is only through education, that a country can shape the future for generations to come. It is also apparent that, an investment in education results in both direct and indirect benefits to the individual and society. In other words, the positive externality of education spreads from the immediate family, to the community of the person and the entire country in the short-term to the long-term.

Therefore, at a time that leaders of developing countries are being called upon to spend more than 20% of its expenditure on education, an analysis of government expenditure on education seems to suggest we are not doing bad at all. Thus, over the years the education expenditure as a percentage of GDP has ranged between 6 - 8% between 2011 and 2016, while education expenditure as a percentage of government expenditure hovers around 22% - 27%.

It is a known fact that, Ghana is one of the countries in Africa that spends higher percentage of its total budget and GDP on education.

In the 2017 budget, there was a 10% increase in the allocation to the education sector, this was in relation to the amount apportioned to the sector in 2016. This increment, even though, a normal trend, seems to have been necessitated by the government’s policies in the education sector, prime among them, was the free SHS which represented about 5% of government’s contribution to funding of the education sector budget. There was also the restoration of teacher trainees and nursing students allowance among others.

These interventions automatically upsurges government’s expenditure in education. Based on this background, I dare say, the education sector will received a considerable amount of budget allocation in the financial plan of the government for 2018, coming on the milieu that, the government want to make this economy a “Knowledge Economy”. Knowledge Economy according to the World Bank thrives where there is skilled labour availability and good educational system.

Apart from Government of Ghana’s contribution to the education sector, there are other sources of funding for the sector which ranges from 20% to 30%. These include donor support (average of 3.5% over the past 6 years), GetFund (average of 8% for the past 6 years), Annual Budget Funding Amount (ABFA) (1% average) and Internally Generated Funds (IGFs) (12% average). This implies that, government would still have to increase his expenditure in the education sector since the other sources have not brought in much over the years.

Even though the government spends a lot in the education sector, majority of the money spent in the sector goes into the payment of salaries and wages with about 5% spent on capital expenditure. It is an undeniable fact that, in some of the years, wages and salaries took almost 100% of the allocation to the education sector with virtually nothing for capital expenditure. This is the reason why, I think there is a need to have a critical look at this sector as the government set out to present its budget for 2018.

1. First of all, this budget is going to be presented at a period of the implementation of the free SHS policy. The roll out of the policy has revealed the infrastructural deficit in our secondary school system. It was obvious to our policy makers that, removing the financing barrier to education will necessarily increase enrolment.

In a country where majority of us are used to residential form of education as opposed to distance education and “day schooling” system, it was clear that, there will be congestion in our boarding schools. Unfortunately, we could not set out a criteria to indicate who qualifies to be in the boarding house. This was the basis for the overwhelming numbers admitted as boarders in most of the schools with its corresponding challenges.

2. It is expected that, about 30% of the education expenditure is marked for capital expenditure. This should focus on building dormitories for most of the schools across the length and breadth of the country and renovating already existing ones. With 2018/19 academic year in sight, there is the need to address the infrastructural problems in our secondary school system before the next batch of free SHS entrants are admitted. This, the government should show commitment in the budget for 2018.

3. Again, funds should be released for the completion of the E-Blocks started by the previous government and the current government should as a matter of urgency start the upgrading of the 42 secondary schools into model schools. These are decisions that should be treated as urgent to ensure that, the infrastructural challenges are minimized before the next academic year.

4. Increasing the capital expenditure means reducing the allocation for other areas in the education sector. However, there have been an indication from the Minister of Education that, there is going to be recruitment of over 20, 000 teachers in 2018. This is a very good news since as a country, we have not been able to meet our standard of a teacher to student ratio of 1:25 for secondary education. But, the truth is, this will come with serious budget implications. It will be interesting to see how the Minister of Finance and his team will factor this into the allocation for the education sector.

5. Again, the education sector transcends secondary education. In fact, most educationist have pushed for a more focused intervention at the Basic school level which will feed into the secondary school level. It is anticipated that, there would be an increase in the capitation grant from Ghc 9.00 to Ghc 15.00. This will be the second time this government will be increasing the capitation grant from the previous amount of Ghc 4.50 (100% increment).

It is imperative that, this is done to give meaning to the quest of ensuring that, no child is left behind in our pursuit to achieving the global target of education for all. It is time to give meaning to FCUBE.

6. The increasing numbers in the secondary schools imply that, there is the need for government to start expanding infrastructure at the various tertiary education institutions. Even though, I am of the view that, we can absorb most of these students by restructuring our distance education programmes and make it more competitive, it does not take away the fact that, currently our tertiary education institutions are overcrowded.

There is a need for government to show commitment to expand the infrastructure in these tertiary institutions and a signal to this effect should be given in the budget statement.

7. There are equally other areas in the education sector that need serious attention. We as a nation, have decided to convert our Polytechnics into Technical universities, what this means is that, we should as a matter of urgency provide the needed resources to these Technical universities to be able to deliver their core mandate, that is, produce highly technical graduates for the world of work and serve the middle manpower needs of this country.

This can be done by upgrading the teaching and learning resources in these universities and improving the quality of teaching in the various technical and vocational institutes in the country. It is expected that, a substantial amount of money will be devoted to technical and vocational education with the aim of achieving this purpose.

Economics thrives on the problem of scarcity. Scarcity implies that human wants are unappeasable but the resources to satisfy these wants are limited. This problem of scarcity leads to other terms such as choice, scale of preference and opportunity cost. It is therefore my utmost believe that, if a government set out to undertake a policy direction, with the political will and determination, it can achieve it irrespective of the cost implications.

However, it is also true that, spending more on one sector of the economy would imply forgoing other sectors or reducing the amount of money to be spent in the other sectors. That technically satisfies Pareto optimality. It will be interesting to see how the budget statement will find a fine balance between the numerous needs of the various sectors of the economy and still achieve the needed results.

If the government prepares its scale of preference, and places education at the zenith, it implies that, that is our utmost priority. Achieving a Knowledge economy should not just be a grandiloquence, it should been seen through a tangible commitment to the education sector with a substantial focus on Technical and vocational education while improving the Basic level education and strengthening our tertiary institutions and invest in research and development.

This should be evident in the budget statement to be delivered by the Minister of Finance. Without downplaying the contribution of other sectors, it is recognizable, the world over that, the most potent resource a country can ever boast of is its human resource.

An educated human capital is worth more than thousands of other material resources. Let our government spend substantial amount of money in improving the quality of education at all levels and let us change Ghana within the short-term to the long-term. The global call for world leaders is FUND EDUCATION, my call to the President and his team is FUND EDUCATION.