The growing divide in education funding between high- and low-income nations threatens to derail progress towards universal education, leaving millions of children behind, and stalling future economic growth.
As high-income countries invest heavily in education, low-income countries are struggling. This growing funding divide threatens to undermine global development and push universal education goals out of reach.
Currently, one-third of countries fail to meet basic education funding benchmarks. According to the Global Education Monitoring (GEM) Report, low- and lower-middle-income nations need to allocate $504 billion annually—equivalent to 6.3% of their GDP—to achieve the 2030 target of universal basic education across pre-primary, primary, and secondary levels. However, many of these countries are falling short, highlighting a widening gap in education investment.
The Education 2030 Framework for Action established two key finance benchmarks, urging governments to allocate at least 4% to 6% of GDP to education, and/or allocate at least 15% to 20% of public expenditure to education. However, around one-third of countries allocate less than 4% of their GDP to education, and less than 15% of total government spending is dedicated to the sector.
In low-income nations, households bear 39% of education costs, a stark contrast to the 15% burden in high-income countries. These expenses include tuition fees and school materials.
Modest Recovery in Education Spending Post-Pandemic
Education spending, which stagnated during the COVID-19 pandemic, showed modest recovery in 2021, reported by Education Finance Watch 2023. The total global real expenditure on education, which includes contributions from governments, official development assistance, and households, rose to $5.4 trillion in 2021 after remaining at $5.3 trillion for two consecutive years. This $0.1 trillion increase was primarily driven by higher government spending across all income groups. Notably, high-income countries (HIC) saw only a modest rise, while middle-income countries (MIC) experienced a more substantial increase of 7.6% year-on-year, reflecting the uneven recovery rates.
Government spending on education relative to GDP has seen the most significant growth in low-income countries (LIC), increasing from 3.2% in 2018 to 3.6% in 2021. However, this is still below the international benchmark of 4-6% of GDP.
In Sub-Saharan Africa, government spending on education accounts for 16.8% of total public expenditure but just 3.8% of GDP, falling short of benchmarks. Meanwhile, Europe and Northern America meet the GDP benchmark with 4.7%, but allocate only 11.8% of total spending to education. Globally, the share of countries meeting the benchmarks declined from 76% in mid-2022 to 66% in mid-2023, signalling a troubling trend.
Education Finance Watch 2023 also reveals that merely increasing funding does not guarantee better educational outcomes. For instance, South Africa, an upper middle-income country, struggles persistently with a high learning poverty rate of 79%, even though the country invests US$1,400 per child in education. This level of learning poverty is similar to Guinea, a much lower-income country, which invests about US$50 per child.
Education Impacts Future Earnings
Pandemic-induced learning loss disproportionately impacted low- and middle-income countries, where education systems were already fragile. Around 86% of students worldwide face reduced future earnings, with middle-income countries—home to 76% of the global student population—experiencing the most significant setbacks. These countries lost an entire year of learning, leading to a projected 9% drop in future annual earnings and a 0.1% contraction in economic growth.
In contrast, high-income countries mitigated learning loss effectively, experiencing reductions equivalent to 0.4 years of schooling. This translates to a 4.2% decline in future earnings and a 0.7% decrease in economic growth.
Decline in Humanitarian Funding for Education
Humanitarian funding for education had seen steady growth, rising from $136 million in 2012 to $1.16 billion in 2022. However, this progress came to a halt in 2023, when funding dropped to $1.12 billion—a 4% decline compared to the previous year.
Yasmin Sherif, Executive Director of Education Cannot Wait (ECW), the UN’s global fund for education in emergencies and protracted crises, criticised this decline at Modern Diplomacy, “This is madness. It simply doesn’t make any sense. In the countries with the greatest needs – where girls and boys face grave violations of their human rights including killing and maiming, forced recruitment into armed groups, sexual violence, abduction, attacks on schools and denial of humanitarian access – we are delivering the least amount of education support.”
In 2023, Save the Children identified 11 countries where children’s education faces high risk are also the most underfunded, among them are Burkina Faso, Ethiopia, Haiti, Sudan, and Yemen.
“We must act now – as a united people – to place funding for education in emergencies at the top of the global agenda. This is our investment in human rights, our investment in equality and our investment in peace in our times,” said Sherif.