One in three countries did not reach either of the finance benchmarks set in the Education 2030 Framework for Action.
Countries spend at least 4% of their GDP on education
The ambitious SDG education targets will not be met without additional resources, especially in countries that are the furthest behind.
The GEM report calculates that in order to achieve the 2030 target for universal basic education, i.e. pre-primary, primary and secondary education, low- and lower-middle-income countries need to spend US$504 billion or 6.3% of their gross domestic product (GDP) annually.
Having more resources is not necessarily enough, though; countries spending the same amount in terms of income per capita can have wildly different education results depending on whether they are spending effectively, efficiently and equitably. For instance, out of 78 low- and middle-income countries with available information, only 17 - or one in five - maintained a strong equity focus through financing policies. They were mostly upper-middle-income and Latin American countries.
The three main sources of education spending are governments, households and donors. This page will focus on the first two. A separate page is devoted to aid to education.
Every year, of the US$ 5 trillion spent on education worldwide, only 0.5% is spent in low-income countries, while 66% is spent in high-income countries, even though the two groups have a roughly equal number of school-age children.
In the median country, households are covering 30% of the cost of education. In fact, households pick up a much larger education bill in low-income countries (39%) than in high-income countries (15%).
Although donors contribute 13% of spending in low income countries (see sub-theme on Aid)…
… donors' contributions account for less than 1% of total spending globally, which is barely visible in absolute amounts.
The Education 2030 Framework for Action has set two key finance benchmarks for governments. It calls for them to:
- allocate at least 4% to 6% of GDP to education, and/or
- allocate at least 15% to 20% of public expenditure to education.
Globally, governments have not strayed far from these norms. Governments in poorer countries with low capacity to generate domestic resources but with large cohorts of children tend to spend less on education as a share of GDP but more as a share of total government spending.
In sub-Saharan Africa, government spending on education represents 15.5% of total public expenditure and 4.3% of GDP. Conversely, Europe and Northern America meets the benchmark as a share of GDP (5.0%) but allocates a low share of total spending to education (12.2%).
But, altogether, about one in three countries did not meet either benchmark. Play these data over time to see how spending fluctuates over the years.
The main source of government revenue is taxation, even in low-income countries receiving a high share of income from grants (i.e. aid). Overall, average tax revenue as a share of GDP was 14% in low-income, 18% in lower-middle-, 22% in upper-middle- and 33% in high-income countries. Even if all countries assigned the same priority to education in their budget, for instance, countries that raise more taxes and other domestic resources will spend more on education.
Having said that, the large variation in the amount spent on education between countries with otherwise similar characteristics is an indication that there is nothing pre-determined in these relationships. Some countries choose to spend more on education to achieve their objectives. And we should highlight those that do not.
Households spend a significant amount to support their children’s education – and more so in poorer than in richer countries.
This spending can be in the form of tuition and other fees, but can also be for education goods and services, of which some are required (e.g. textbooks) and others are not (e.g. private lessons).
Where such data is standardized across countries, spectacular evidence emerges of the contribution that households are making to total education spending. This can change the way countries’ efforts on education are understood.
On average, households spend 1.9% of GDP on education, while governments spend 4.4% of GDP. This means households account for about 30% of total education spending. Median shares range from 15% in high-income countries to 39% in low- and lower-middle-income countries, reaching 38% in Central and Southern Asia and 37% in sub-Saharan Africa, but only 12% in Europe and Northern America.
For example, in 2019, Nigeria had one of the lowest levels of government expenditure as a percentage of GDP. Yet, once household contributions are taken into account, Nigeria’s total national expenditure on education as a percentage of GDP was similar to that of France.
The government of Pakistan spent about 2.5 percentage points of GDP less on education than did Germany – the blue bar –, but Pakistan spent overall more than Germany because its households spent more than three percentage points of GDP on education – the red bar.
The share of households in total education expenditure rises to over 70% in some countries, including Bangladesh, Haiti and Nigeria.
The Global Education Monitoring Report team has long argued that understanding global education spending requires a joint examination of the three main sources of education funding: domestic public and private funding – discussed in this page – and external donors, discussed in the aid to education page. There is a need for timely and consistent data from low- and middle-income countries on how much is being spent on education and from what sources.