Sub-Saharan Africa is confronted with an annual education funding shortfall of $70 billion, a situation exacerbated by persistent underfunding and unequal allocation of resources both within the region and from international sources.
As highlighted in UNESCO’s report, “Closing the global SDG4 financing gap: Accelerating sustainable financing solutions for education,” this region represents the most significant portion of a $97 billion annual deficit required to meet Sustainable Development Goal 4 (SDG4) across 79 low- and lower-middle-income nations from 2023 to 2030.
“A 2023 costing exercise revealed that achieving SDG4 in 79 low- and lower-middle-income countries would require US$461 billion annually from 2023 to 2030. However, these countries face a substantial financing gap of US$97 billion per year, with Sub-Saharan Africa accounting for the largest share—US$70 billion annually,” the report stated.
UNESCO has raised concerns regarding the financial repercussions of underinvestment in education, particularly as governments in low- and middle-income nations face losses of $1.1 trillion each year due to students dropping out early, and an additional $3.3 trillion annually for children lacking fundamental skills.
The financial challenge for achieving SDG4
The report reveals that these governments allocate inadequate resources to education, with an average expenditure of only $55 per student annually, in stark contrast to the $8,543 spent in high-income nations.
This funding gap signifies a persistent neglect of educational needs, resulting in millions of children being deprived of quality learning experiences.
The UNESCO report underscores the unequal allocation of global educational resources. In 2022, the total official development assistance (ODA) for education reached $16.6 billion; however, less than one-third of this funding was aimed at basic education in Sub-Saharan Africa, which is home to more than half of the world's out-of-school children. Furthermore, 41% of low- and lower-middle-income countries do not meet the recommended spending levels of at least 4-6% of GDP or 15-20% of public expenditure on education. This funding deficiency has significant implications, leading to inadequate learning outcomes and restricted opportunities for marginalized children.
Recommended actions to address the funding gap
The UNESCO report emphasizes the need for immediate measures to close the education financing gap.
Key recommendations are as follows:
Enhancing domestic resource mobilization: Governments should broaden their tax bases and aim to elevate the tax-to-GDP ratio to a minimum of 15%, dedicating 4-6% of GDP or 15-20% of public expenditure to education initiatives.
Ensuring that wealthy corporations and individuals contribute their fair share while also expanding the tax base by incorporating the informal economy.
Standardizing tax policies, tackling illicit financial flows, and reforming global financial systems to facilitate investments in education.
Allowing low-income nations to redirect funds saved from reduced debt obligations towards education by promoting initiatives such as “debt swaps for education,” where debt relief is granted in exchange for commitments to educational investments.
Implementing innovative financing mechanisms such as education bonds, blended finance, and social impact bonds to draw in private and philanthropic contributions. Promote inventive financial guarantees to stimulate additional investment in public education.
Boosting tax revenue through broader tax bases and effective collection methods while ensuring that education spending is equitable and impactful.
Finance and education ministries should work together to develop sustainable, long-term funding strategies for education.
Empowering low-income countries to play a significant role in international tax discussions and establishing equitable global tax regulations to enhance education funding.