Sustainable Education Financing


From an analysis made by SWANCEFA on education financing in Eswatini in 2017, it was observed that financing arrangements in the education sector favours some levels of education while leaving others neglected. It was also observed that the imbalance in the financing of education comes in the form of neglect for some vulnerable groups such as children with special education needs and those that are at the pre-primary schooling levels who are supposed to be enrolled at the Early Childhood Care and Development level. In terms of funding from the public purse for this particular group for instance, their share is just around 1% of all the education budget for all the years reviewed. Furthermore, there is an observation that while donor funding for all the sectors is dwindling, the education sector share of such funding has also suffered as it is among the lowest ranking the forth lowest.

While the concept of innovative financing is not necessarily new around the globe, initiatives targeting the education sector have not been very much of a success when compared to sectors such as health. In this sector, initiatives such as the Global Fund for HIV and AIDS, TB and Malaria have been a success story. The most critical observation with such funds is that those that have been successful are those that have not been subjected to too much and unnecessary bureaucratic processes as this renders them ineffective and non-responsive while leaving out deserving groups and nations.   

Following the above noted observations, a number of recommendations have been made in this report to facilitate the adaptation of the presented models as well as the design of new yet effective ones for implementation towards meeting the SDGs education sector outcomes. The recommendations are structured into two parts. The first part of these recommendations seeks to create an enabling environment towards ensuring that all education financing efforts are effective and responsive to the country’s education financing needs. The second part of it is the actual set of the recommended education financing models that could be appropriate for the country

Part I: Recommendations for an Enabling Environment

The following is a presentation of the recommendations for an enabling environment and context within which Innovative Education Financing Models are likely to thrive.

ü  Budget Restructuring

Since the budget allocations within the education sector are not balanced as some parts of the education system, groups and levels receive a disproportionate share of the budget, it is recommended that a restructuring of the public budgetary allocations be made within the education sector and between sectors to give more resources to the lower levels of education, the vulnerable groups and other deserving parts of the education system. This will free some resources to cover the neglected groups and areas. This is more so because at the post-secondary education level for instance, there could be other potential funding arrangements that could be pursued such as student loans, graduate plans and others. 

ü  Evidence-Based Planning and Budgeting for Education

As the efforts for innovative education financing intensify, there is a need to establish appropriate and clearly articulated evidence-based, integrated and decentralised planning and budgeting systems for the education sector. All necessary information to inform policy, strategy and programming in the sector should be in place to improve targeting and reporting. This will further help in the monitoring and evaluation of the interventions within the education sector in the country. Even interested sponsors can be in a position to evidently decide on the areas of interest where they can put their money in. For this purpose it will be necessary to generate sufficient timely statistics to inform decision making and financing in the sector. In addition to this, there is need for this sector to have clearly articulated education sector collaboration and coordination mechanism that will compel all education stakeholders to share their information, plans, strategies, targets and budgets.

ü  Efficiency in the Use of Education Funds

The issue of education financing is not necessarily an issue of inadequate financial resources but a combination of inadequacy and inefficiencies in the use of education resources. Adopting and applying efficient methods of education sector management is critical not only to avail more resources but to also create credibility and trust from those providing such funds to the sector.   Overall it is recommended that the principles of good governance be applied to promote efficiencies within the innovative financing for education as it enhances accountability and transparency between education financiers and education workers on the use of resources.

ü  Strengthen Finance and Accounting Systems

The country’s schools have a history of misappropriation of school funds which is usually linked to lack of finance and accounting systems and personnel in schools. Head teachers are usually expected to understand and carry out proper accounting yet it is not their job and they are not even trained on this. If innovative education financing is to be a success, it remains critical to establish in all schools strong finance and accounting systems with the requisite staff for such a function. 

ü  Improve the Transition Rates from Primary to secondary

According to the 2014 Multiple Indicator Cluster Survey (MICS) the country’s transition rates from primary to secondary school is 85.1% while the percentage of children of secondary school age who are currently attending secondary school or higher sits at 50.4% in the country. The initiative for innovative financing of education should also be targeted at enhancing both this transition rate and the percentage of children of secondary school going age to much higher levels. This is especially because if more resources are made available without improving these indicators, it would defeat the efforts and compromise the attainment of education outcomes. As a first step it would be necessary to identify the challenges associated with these indicators for these children and invest in addressing the areas that would have been identified. 

Part II: Recommendations for an Innovative Financing Models

The following recommendations are actually the recommended models that the country may have to consider going forward to enhance the attainment of education outcomes. They are based on the Innovative Funding Models that have been discussed in the report as applied in different countries around the globe. 

ü  Higher   Education Revolving Loan Scheme

Once the budget restructuring discussed above has been done, it would be necessary to establish a revolving fund for Education where the government will inject a once off amount into any fund manager of her choice who will manage and disburse the funds in the form of student loans payable over an agreed period of time. This fund will mainly support the financing of tertiary education level easing the burden from government of financing tertiary education which usually receives a bigger share of the education sector budget. In this way, the savings from the current arrangements will be used to finance primary and secondary education levels. A similar arrangement is already practiced by the government under the Housing and Car Schemes where government has injected some amounts of money into the private banks for disbursement and management.

ü  Education Basket Fund

Given the numerous uncoordinated efforts from different partners in the education sector that finance education, the establishment it would be advisable to establish a basket fund into which all such contributions shall be pooled for targeted distribution to the targeted groups or projects selected from the use of evidence of need for improving the education sector in specifically identified critical areas.

ü  Compulsory Graduate Fund

Given the fact that the country’s primary education is currently state funded, it would be advisable to have parents make savings in graduate plans towards the financing of their post-secondary education. This is particularly because government does not sponsor all children who enrol at tertiary institutions. This should be properly managed under credible fund managers who will also make sound investments of such funds until they are required by the beneficiaries for their education. In terms of those parents who cannot afford to make such a contribution because of their socio-economic situations, their part of the funding for tertiary education would be through the current Government Scholarship. This means there are two windows for funding, with one taking care of those children whose parents can afford to contribute to the Graduate Fund and the other being that of those that cannot afford to contribute to the fund. 

ü  Voluntary Contributions from Migrants’ Remittances

Migrants’ remittances, which amounted to $397 billion in 2008 according to official World Bank figures, constitute a significant and stable source of external development funding. They rank a little behind Foreign Direct Investment in terms of economic contribution to the GDP of low-income countries. In the case of Swaziland, these can be used as a special source of funding where migrants would send more money towards educating a group of vulnerable children. This could be managed under the Young Heroes’ Programme which has successfully mobilized resources for the education and general upkeep of orphaned and vulnerable children in the country.

ü  Student Loans Programme

As recommended by several observers including the World Bank (2010), the country should institute a fully-fledged student loans program. This entails redesigning the tertiary scholarship into a fully recoverable student loan scheme administered through a credible commercial bank. Government involvement in this should only be up to guaranteeing the loans and on ensuring that scarce skills are developed with the scholarship as an incentive for such.    


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