EDUCATION FINANCE BRIEF, GHANA(COUNTRY PRESENTATION)

HARMONY HOTEL, ADDIS ABABA

MINISTRY OF EDUCATION

November 07, 2012

BACKGROUND ON THE EDUCATION FINANCE BRIEF

CONTEXT: This education finance brief is produced in the context of

the UIS education finance capacity building project. PURPOSE:The purpose is to provide an overview of the education

financing in Ghana over the last decade. CONTENT:The document is structured around key policy questions

based on the availability of data. These policy questions are extracted from a list of ten questions suggested by UIS in the framework of the project.

THE TEN POLICY QUESTIONS1. How large is the public education expenditure in your

country?2. What is the breakdown of expenditure by levels of

government and administration (ministries)?3. What is the breakdown of current and capital expenditure?4. How much is allocated to each level of education?5. How much is allocated to different nature of expenditure?6. How large is the contribution of development partners in

educational development?7. How large is the households’ expenditure in educational

development? (If data are available)8. How much is spent for each student at each level of

education?9. Is public education expenditure spent in an equitable

manner (if data are available and this is a serious concern to your country)?

10. Is remuneration policy sustainable (if data are available and this is a serious concern to your country)? 

Q1: How large is the public education expenditure in Ghana?

Current Situation In 2010, the government of

Ghana spent GH¢2,564,363,357 for the education sector.

Government total spending in Ghana for 2010 was GH¢11,039,923,940.

In 2010, education expenditure as a % of total government expenditure

was 23.2%.

From 2004-2010 the education expenditures as % of total government expenditures ranged between 18.3% and 26.5%. After a downward pattern from 2005 to 2007, it has been in growing trend since 2008. Situation Against Benchmarks

• FTI target for education expenditure as a % of total government expenditure is 20%.• Ghana, with the exception of 2008 (18.3%) has met the target from 2004 to 2010.• In 2010 Ghana was 3.2 percentage points beyond the FTI target.

23.8

26.5

22.021.0

18.3

22.323.2

7.57.6

8.3 9.1

9.9

9.09.8

0%

500%

1000%

1500%

2000%

2500%

3000%

2004 2005 2006 2007 2008 2009 2010

Education Expenditure as % of Total Government Expenditure, 2004-2010

As % of Total Spending

As % of GDP

FTI target

Policy recommendation:

Currently, Ghana allocates 23.20% of its budget to education while FTI benchmark recommends 20%. This implies that government is spending more than it should on Education. Ghana needs to improve upon the internal efficiency of education management in order to create value for money through;

(i) Efficient use of resources.• The biometric registration of all Civil and Public service staff.• Strict adherence to the procurement law.• Meeting the required PTR across the various levels of education.

(ii) Efficient targeting mechanism for policy interventions.•The introduction of the common targeting mechanism among five (5) sector ministries, Education, Health, Employment and Social Welfare, Local Government and Agriculture.

•Periodic monitoring and evaluation of social protection programs like Free School Uniform Program among others.

Q1: How large is the public education expenditure in Ghana (cont’d)?

Q1: How large is the public education expenditure in Ghana (cont’d)?

Ghana compared to ECOWAS countries

• Between 2006-2009, Ghana allocated 23.1% of its resources to education,

which is second highest among the 10 neighbouring countries.

• Among the ECOWAS sub-region, Ghana ranks 2nd in terms of share

of Government expenditure allocated to education after Cote d’Ivoire.

• The 3 countries with lowest shares are: Liberia (12.1%), Cape Verde (13.8%) and Benin (15.9%).

International Comparism of Education Expenditure as a % of Total

Government Expenditure

12.113.8

15.917.6 18.1

19

21.8 22.3

24.4 24.6

0

5

10

15

20

25

30

Liberia CapeVerde

Benin Togo SierraLeone

Senegal BurkinaFaso

Mali Ghana Coted'Ívoire

Q1: How large is the public education expenditure in Ghana (cont’d)?

Ghana compared to some SADC countries

In 2009, most SADC countries reported higher GDP per capita than Ghana. However in 2006-2009, the % of Ghana’s public expenditure on education as a % of total government expenditure ranks 1st among SADC countries.

11.412.6

16.2 16.9

21 21.6 22.4

24.4

0

5

10

15

20

25

30

International Comparison of Education Expenditure as a % of Total Government Expenditure

The Ministry of Education implements education budget in Ghana. The ministries that are providing educational services in the country include the Ministry of Education (MoE), the Ministry of Health, the Ministry of Food and Agriculture, the Ministry of Employment and Social Welfare, the Ministry of Youth and Sports. The MoE is by far the main educational services provider in Ghana. Government expenditure for the MoE usually represents more than 90% of the total Public Education Expenditure. Breakdown of education expenditure by other sector ministries is not readily available.

Q2: What is the breakdown of expenditure by levels of government and administration (ministries)?

Ghana’s current education expenditure increased from GH¢123,969,039 in 2004 to GH¢2,131,174,643 in 2010.

• For the same period, capital expenditure increased from GH¢25,993,098 to GH¢433,188,894.

• In 2010 current expenditure represents 83.1% of total education expenditure as against 16.9% of capital expenditure.

The figure shows that capital expenditure from 2008 to 2010 represented ¼ of Ghana’s total expenditure on education.

Over the years, current expenditure increased from 65.3% in 2005 to 83.1% in 2010.

Over the same period, capital expenditure dropped from a high of 34.7% to 16.9%. That was a drop of 18.6 p.p.

Q3: What is the breakdown of current and capital expenditure?

82.7% 83.1%

17.3% 16.9%

79.0%72.1%

79.8%74.6%

65.3%

34.7%25.4% 20.2%

13.4%21.0%

0%

10%20%

30%40%

50%60%

70%80%

90%

2004 2005 2006 2007 2008 2009 2010

% of Current Expenditure % of Capital Expenditure

Analysis of Public Expenditure by Levels of Education

From 2006 to 2010, primary education has been allocated with an average of 31.2% of the total government expenditure on education.

Average allocation to Special Education, Non-formal and TVET education is just a little over 2% over the same period.

Q4: How much is allocated to each level of education?

3.4

31.2

15.9

14.2

1.2

0.5

0.4

2.9

21.6

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

Pre-school

Primary

Lower Secondary

Higher Secondary

TVET

SPED

NFED

Teacher Education

Tertiary

Average Allocation of Resources to Different Levels of Education (2006-2010)

Analysis of Public Expenditure on Primary Education

In 2010 Ghana’s resource allocation to primary education was 27.9%. This was 22.1 p.p. less than the benchmark set by EFA-FTI (50%).

Less than 1% of the country’s total expenditure was expended on Special Education (SPED) and Non-Formal Education in 2010 respectively.

Expenditure on tertiary education ranked 2nd to that of primary education. That was 20.0% of the total allocation to education went to tertiary level of education.

In 2010, the government of Ghana expended 45.1% of her resource allocation to education on Basic education (Pre-school to Junior High School).

Q4: How much is allocated to each level of education (cont’d)?

Expenditure by Level of Education in 2010

2.8%

27.9%

14.4% 15.6%

1.5% 0.7% 0.5%2.4%

20.0%

0%

5%

10%

15%

20%

25%

30%

There was a gradual decline of resource allocation to primary education in Ghana from 2008 to 2010.

Resource allocation to primary education as at 2010 summed up to 27.9%.

Expenditure on primary education was highest between 2007 and 2008. That may be partly due the mainstreaming of pre-school as part of primary education at the time. The expenditures were 35.0% and 35.2% respectively.

In 2008, most ECOWAS countries allocated more resources to primary education than Ghana.

Ghana may have to increase substantially resource allocation to primary education in order to meet EFA-FTI benchmark and also catch up with the sub-regional average.

Q5: How much is allocated to different nature of expenditure?

Evolution of Education Expenditure allocated to primary as a % of Public Government Expenditure at all Levels: 2006-2010

27.6%

35.0% 35.2%

30.5%27.9%

0.%

5.%

10.%

15.%

20.%

25.%

30.%

35.%

40.%

2006 2007 2008 2009 2010

In 2010, for all levels of education, current expenditure was higher than capital expenditure.

With the exception of Upper Secondary, Special and Tertiary Education levels, capital expenditure for 2010 was less than 10% of the total education expenditures to such levels as Pre-school, Primary, JHS, NFED and Teacher Education.

Special Education had a fair balance between current and capital expenditures in 2010. That was 56.1% of current expenditure as against 43.9% of capital expenditure.

How much is allocated to different nature of expenditure?

Current and Capital Expenditure by Level of Education, 2010

95.3 95.6 95.0

65.975.2

56.1

99.8 99.2

69.9

4.7 4.4 5.0

34.124.8

43.9

0.2 0.8

30.1

0

20

40

60

80

100

120

% of current expenditure % of capital expenditure

Total contribution of Development Partners to education in 2010 summed up to GH¢64,742,440.45.

The above figure was 2.5% of total resource allocated to the education sector in that year.

Donor financing to education over the years dropped from a high of 8.9% in 2005 to 2.5% in relation to total education expenditure for 2010.

Q6: How large is the contribution of development partners in educational development?

Contribution of Development Partners in education development as a % Education Expenditure

7.3

8.9

2.7

6.85.8

4.9

2.5

0.01.02.03.04.05.06.07.08.09.0

10.0

2004 2005 2006 2007 2008 2009 2010

% of Donor Funding to Education Sector

Q7: How large is households’ expenditure in educational development?

Despite the introduction of free and Compulsory Universal Basic Education (fCUBE) programme embarked on by the Ministry of Education during the Education Reform (1987), households continue to contribute in one way or the other towards the education of children of school going age.

ITEM ACCRA

OTHER URBAN

RURAL COASTAL RURAL

RURAL SAVANNA

ALL AMOUNT %

School and Registration Fess 99.50 35.05 8.27 11.33 4.02 25.13 28.3Contributions to PTA 2.74 1.99 0.90 0.92 0.50 1.29 1.5Uniforms, Sports & Clothes 9.44 55.84 4.52 4.28 3.14 5.06 5.7Books and School Supplies 28.12 11.41 5.00 4.90 2.40 8.49 9.6Transportation 30.92 6.22 4.32 2.96 0.51 6.37 7.2Food, Boarding & Lodging 88.59 43.58 29.15 31.00 9.96 36.10 40.7Expenses on Extra Classes 20.14 7.39 3.21 3.38 0.51 5.64 6.4In-kind Expenses 1.35 0.54 0.64 0.49 0.19 0.56 0.6Total 280.80 162.02 56.01 59.26 21.23 88.64 100.0

1. Existence of rural-urban differences in household expenditures in schools and colleges.

2.Amount spent by households

on education increases as one moves higher on the education ladder. This is particularly so with the proportion of the total amount spent on school and registration fees as well as the amount spent on books and school supplies.

Q7: How large is households’ expenditure in educational development?

Policy Recommendation

The Government of Ghana, through the Ministry of Education has vigorously embarked on interventions to pupils in basic public schools in recent time. For 2012, •Capitation Grant (100%), •Free Exercise Books (12.1 million)• Free Uniforms (428,155)•Free Meals (1.4 million children) •Laptops (60,000).

However with the exception of the Capitation Grant, these programs cannot be said to have achieved 100% coverage. Probably there is the need to retarget the vulnerable (rural coastal, forest & savanna) to improve on level of equity.

Unit cost per child increases as pupils’ progress through the educational ladder. For instance in 2010, it cost the country GH¢213.75 to educate a child at the primary level. At the same time an amount of GH¢1,988.62 was expended on the one at the tertiary level.

Q8: How much is spent for each student at each level of education?

Unit Cost per Child by Level of Education, 2004-2010

2006 2007 2008 2009 2010

Per Capita GH¢ 49.21 93.24 151.65 168.44 223.59

Unit Cost GH¢ 45.79 83.11 142.09 158.42 213.75

Per Capita GH¢ 88.73 127.47 206.57 242.95 336.37

Unit Cost GH¢ 83.69 114.76 192.98 227.91 319.60

Per Capita GH¢ 221.76 328.54 291.36 617.61 602.91

Unit Cost GH¢ 134.65 128.05 211.32 558.36 397.33

Per Capita GH¢ 105.34 107.46 284.70 776.21 1827.34

Unit Cost GH¢ 104.50 106.88 229.13 570.28 1375.00

Per Capita GH¢ 949.85 1426.46 2015.55 2298.72 2843.40

Unit Cost GH¢ 620.42 1026.40 1512.70 1785.13 1988.62

SHS

TVET

TERTIARY

Level

Primary

JHS

Unit cost for Primary education in Ghana steadily increased from GH¢45.79 in 2006 to GH¢213.8 in 2010 which represent about 467% increase.

Over the same period, unit cost at the Lower Secondary moved from GH¢83.69 to GH¢319.6 which is 382% increase.

Unit cost at the Upper Secondary level rather shows an oscillating curve. From a unit cost of GH¢134.65 in 2006, the cost moved to an all time high of GH¢558.36 in 2009 and dropped to GH¢397.3 in 2010.

Q8: How much is spent for each student at each level of education?

Unit Cost per Child by Level of Education, 2006-2009

Policy ImplicationAs part of the new education reform introduced in 2007 to extend the duration of Senior High School duration to four years, massive investment was made in 2009 to accommodate the first cohort of forth year in 2010.

2006 2007 2008 2009 20100.00

100.00

200.00

300.00

400.00

500.00

600.00

Uni

t C

ost

in G

H¢

THE GHANA TEAM INSTITUTIONEdward Dogbey MOEElliot Nii Lantey Lamptey MOEKwame Agyapong Apiadu-Agyin MOERobert Ntseful GESEmmanuel Amoah GESBaba Seidu Fuseini MOFEPEmmanuel Newman (Dr) NCTE