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Escaping the low-financing trap: Strategies for sustainable educational development in low-income countries

Research reports

Written by Keith M. Lewin

This report identifies and addresses the financing challenge for education systems in low- and low middle-income countries, with a particular focus on sub-Saharan Africa (SSA). There is a low-financing trap which has meant that many countries, especially in SSA, have had static levels of public investment in education as a proportion of government budgets and of gross domestic product over the last two decades.

A new policy dialogue is needed to catalyse escape from low-financing traps for education and reduce the need for aid in future. This means investment in enhanced efficiency and effectiveness, and new goals and targets tailored to realistic capacities and resources. Financing is needed that accelerates progress towards becoming fiscal states that balance revenue, borrowing and expenditure.

Education financing in SSA is at a watershed. If the next decade is like the last two, the SDG4 targets for 2030 will not be met and financing will remain stagnant at levels far short of what is necessary.

The challenge to the Bretton Woods institutions, and to bilateral development partners, is to provide more aid of a different kind than in the past to catalyse system-level changes that accelerate progress and reduce future dependence on aid. Financing ‘gaps’ need durable solutions. More resources should be directed towards catalytic reforms that lead to educational development that is financially sustainable. This really would be a game changer to escape the low-financing trap, match aspirations to achievable goals, and promote endogenous development strategies that can translate educational development promises into development realities.