The Economics of Education: World Bank delivers new report on Tertiary Education and Competitiveness to African Finance Ministers

WASHINGTON, 11 October 2008 – African governments must invest more in tertiary education--and those investments must be smarter-- if their graduates are to succeed in today's intensely competitive global environment. This was the main message delivered to African Finance Ministers during a roundtable on tertiary education held during the World Bank-Fund Annual Meetings in Washington DC.

Sub-Saharan Africa has an extremely low enrollment rate in tertiary education, averaging five percent, compared to 20 percent in East Asia and 29 percent in Latin America and a world average of 24 percent. The need, therefore, for expansion, is clear. What is critical, however, is that it takes place in a way that preserves quality and relevance, and is fiscally sustainable.

A new Bank study, launched at the roundtable, titled Accelerating Catch-up: tertiary education for growth in Sub-Saharan Africa, highlights some of the options available for countries to develop reform strategies towards more efficient, more relevant and higher quality tertiary education systems.

Underscoring its commitment to the sector, over the last 18 years, the Bank has channeled more than US$6 billion to education projects in Sub-Saharan Africa (SSA). Of this amount, the tertiary education sector has received just over US$1.15 billion. For economic growth to be sustainable in an increasingly globalized and competitive market, much will depend on how effectively a country can assimilate available knowledge and establish a comparative advantage in selected areas of economic growth. “Capital is necessary, but the arbiter of economic success—even survival—in the world today is the capacity to mobilize knowledge and to use it to the full,” said Yaw Ansu, Sector Director for Education in the World Bank's Africa Region.

Tertiary education in Africa has come a long way in the past two decades and the achievements have been impressive: enrollments have expanded at 8.7 percent annually, compared to 5.1 percent for the world as a whole, and have tripled since 1990 to almost four million students. The private sector has established itself as an important part of the tertiary system, accounting for 18 percent of enrollments in the region. Women's access to tertiary education has improved markedly, from one out of six students in 1990 to roughly one out of three today. As a result, maturing tertiary education systems now characterize numerous African countries.

These accomplishments, however, have not come without a price. On average, Sub-Saharan African countries now spend 18.2 percent of government budgets on education, approaching the upper limits of what is generally considered to be feasible. In spite of this, enrollment growth has outpaced financing capabilities and in many cases resulted in deteriorating educational quality.
Public expenditure per tertiary student fell from US$6,800 in 1980 to US$1,200 in 2002, and recently averaged just US$981 in 33 low-income SSA countries. The ratio of academic staff to students has fallen significantly, producing over-crowded classrooms and unrelenting workloads for teaching staff.

A more knowledge-intensive approach to development is the only path that will lead to sustained development. Although many countries in SSA have been growing at an encouraging rate over the last 5-10 years, the challenge now is how to move from this strong baseline to sustained growth.

Obiageli Ezekwesili, Vice President for the World Bank's Africa Region and a former Education Minister herself, highlighted the challenges facing tertiary education and the need to strategically connect the education sector to the economic agenda: “Even though social and political demands call for ever increasing enrollment rates in colleges and universities, these must be balanced against the need to raise the quality and relevance of education and research. Governments must develop strategies to produce graduates who can help lift the economies out of poverty – this is not just the remit of education ministries – this is an integral part of the development strategy that begins with the Finance Ministers.”

Finance Ministers around the table were supportive of the new report, pointing to its timeliness and the rich research that underpinned its findings. Ministers cited examples from their respective countries, touching, among other issues, on the role of the Diaspora and brain drain; the need for curricula that reflect the needs of the local economy; the need to overhaul fee systems; and for greater selectivity in some areas of tertiary education. The value of regional approaches as a way to leverage constrained budgets was also echoed around the table.

The report, which will be available Wednesday, October 15, 2008 on the Bank's website in English, French, Portuguese and Swahili, has benefited from a series of consultations with an External Advisory Panel (EAP) comprised of eminent scholars, government leaders and development practitioners from Africa and beyond.