Financing education in Malawi: Opportunities for action. Country case study for the Oslo Summit on Education for Development.

EXECUTIVE SUMMARY

Malawi, one of the poorest countries in the world, has been chosen as a country case study to serve as an example of a Least Developed Country that is non-fragile. An assessment of the state of education shows a mixed picture. On one hand, access to primary schools, with nearly all children aged 6 enrolled, is significantly better than the average for the sub-Saharan region. This is as a result of the Malawi Government’s commitment to education, including the adoption of free primary education in 1994. Furthermore, this enrollment level has been achieved even though population growth remains high, with 10 million of Malawi’s overall 17 million now below 20 years of age.

On the other hand, there are some results that are significantly worse than the regional average, including: primary completion at only 31%; secondary enrollment at only 15%; pupil to qualified teacher rates at 78:1 in primary and 44:1 in secondary; and primary pupil to classroom ratio of 111:1. These factors influence learning outcomes; in independent assessments, Malawi’s primary children demonstrate weaker reading and math scores on average than almost all comparable countries in the region.

On a more positive note, Malawi has achieved overall gender equity at the primary level and increasing equity in the highest grades (during which female drop out rate is much higher than male), thanks to current initiatives. However support must continue, especially at secondary and tertiary levels. Malawi has a substantial challenge at the secondary and tertiary levels regarding socio-economic equity in the distribution of support; for example, only 3% of government subsidies at the tertiary level benefits the two lowest wealth quintiles, while 82% benefits the highest quintile.

The education assessment in this report identifies four bottlenecks to further progress in Malawi.
These include: the persistent problem of high repetition rates, especially in lower primary, where some 25% of children each year repeat the same grade; the need to address the high and inequitable cost of tertiary education in Malawi; the deep challenge of management capacity, a problem that is apparent throughout the civil service; and the immediate issue of mismanagement of resources for which Malawi’s government has had negative publicity in the last two years.

This report analyses the state of financing of Malawi’s education sector, covering government spending, household spending and the amount and different modalities of donor finance. Overall, with about 40% of public expenditure funded by donors,total spending on education is 7% of GDP. This rate is higher than many other African countries including Kenya, Uganda, Mozambique and South Africa, countries that on average have better education results than Malawi. This implies that Malawi has a lower level of expenditure efficiency.

One area of expenditure in which Malawi may be setting a high standard is the primary school grant program, through which a grant is given to each school’s management committee, which is made up of elected community members and senior teaching staff. The grant is a minimum of about $1,200 USD per school each year (more for large schools) and evidence of significant benefits from this new program is already emerging. In addition, the program greatly contributes to improved equity, decentralization, and accountability. Future funding from the Global Partnership for Education is expected to finance a performance-based element ofthese grants.

Four priorities for action are recommended for Malawi:

1. An immediate challenge is the consequence of donors’ suspension of budget support to Malawi, following the revelation of large thefts within government. The government is struggling to cope without such support and the education sector is already experiencing setbacks. The challenge is to find a donor finance modality that can support under-funded budget lines, yet has sufficiently robust systems of accountability. Donors and government are working on this.

2. The second priority is to improve the efficiency of resource usage by addressing some of the issues that underlie the bottlenecks to further progress. However, these challenges are deeprooted and have been there for years. The Malawi government must start the process with clear leadership to catalyze ‘business as unusual’.

3. Government can aid this process by seeking donor support for education systems development. This may include a combination of technical assistance and financial support.
   Such support needs careful design so that results can be sustained. Political economy analysis is likely to be an essential tool. More emphasis on achieving strong working relationships between key individuals in donors, government, and technical assistance will be needed. So too will be flexibility on the part of donors providing this support to systems, so that support can be adapted to prevailing circumstances, such as changes in key individuals.

4. Finally, government and donors should put more focus on aid harmonization. While donors may be unable to return to pooled budget support in the short term, much can be done to coordinate better (e.g., financing modalities), despite the different regulations and varying risk-appetites amongst donors.
   Even though additional resources are needed immediately in Malawi, it is not so much the amount of donor resources that is important, but rather the way the resources are made available and the relationships that come with the resources.