Ghana: Balancing costs of education

Several issues debated during Ghana’s 2012 campaign season regarding education funding are expected to be revisited in 2013. The cost and quality of education ranks as a high priority for citizens, and as the new government articulates its policy, it will be seeking to balance that priority with fiscal discipline.

To be sure, spending levels are not the problem. According to figures from the UN Educational, Scientific and Cultural Organisation (UNESCO), Ghana spent 5.6% of its gross national product (GNP) on education in 2010, the most recent year for which statistics were available for its Education for All Global Monitoring Report, released in March 2013.

This figure is higher than the global average of 4.8% and the average in sub-Saharan Africa of 4.7%. It is also higher than the average for middle-income countries, which currently stands at 4.8%. Indeed, spending levels are an improvement on the past, with UNESCO data showing that Ghana’s spending on education in 1990, at 4.2% of GNP, lagged behind the global and regional averages at the time.

Schooling is no longer free once students begin their senior school careers; fees and costs apply, which in part serves to explain why two-thirds of students end their formal education after junior high school, according to a study by the Imani Centre for Policy and Education, a Ghanaian think tank.

The Ghana Education Service, a department of the Ministry of Education, has placed caps on tuition and costs for public high schools, such as a maximum of GHS161 ($83) per term for tuition, and a daily meal cost of GHS1.8 ($0.92), to make schooling more affordable, particularly for families and students in rural areas. In some cases, scholarship money is available from the government. These costs, however, are still unaffordable to many families.

The fees were implemented in part to bring about greater fiscal discipline – a significant concern given that deficit spending in 2012 surged to 12.1% as election-year expenditure ballooned and oil revenue was less than anticipated due to production problems. The 2013 budget, introduced in March, aims to cut the figure to 9%, though analysts had expected this figure to be 6-7%, according to a Reuters survey. The shortfall in revenues versus expenditures is significant, and concerns regarding the deficit impacted Fitch Ratings’ outlook on Ghana, which was downgraded from stable to negative as of February 2013.

With these economic factors at play, Ghana will need to navigate its way to a middle ground that allows education accessibility without further stress on the country’s balance sheet. Indeed, making education free at the senior level, which was one policy proposal suggested by a political party during last year’s elections, would require significantly more funding and investment from the government as well as aid and development groups, which currently provide around 10% of the sector’s annual spend.

According to the study by Imani, reforming the scholarship secretariat and targeting associated costs would perhaps be a better idea. “Fixing the scholarship secretariat and providing money to even 50% of students will be cheaper and easier than scrapping the merit-based admission system and paying fees for all students regardless of their economic status,” the report said.

The priority of the new government and the Ghanaian people remains aligned: the provision of improved education. Certainly, if the country is to sustain its very robust growth rates of around 7% over the medium- and long-term, ensuring it has an educated and skilled work force is crucial. However, with tighter budget restrictions in 2013, the trick will be doing so in a measured fashion that does not worsen the government’s already overburdened balance sheet.