Free education policy under the economic microscope

For the past decade, one topical issue that has been exhaustively debated especially during the electioneering campaigns was “free SHS policy”.

The then candidate (now president) rightfully diagnosed that education holds the key to Ghana’s development and suggested that his government will prioritize education by fully funding education from Kindergarten through to Secondary school level.

True to his word, he intimated recently during a ceremony in the Eastern region that from September 2017, his much talked about free education policy will kick start. This piece intends to interrogate other issues as far as this policy is concerned and bring to the attention of the public, policy makers especially the President and the economic management team the real issues surrounding this free education policy.

BRIEF HISTORY

Many scholars have proven that there exists a positive link between education and development. It must be stated that, the World Bank being a development oriented entity hither to never invested in education. They focused on projects that directly impacted on developments. After some years, a plethora of scholarly works drew the attention of the Bank to the need of investing heavily in education. The Bank finally invested in educational projects in the 1960s.

Free education has been an old policy that many countries around the globe have attempted implementing. Many developed countries implemented this program between 100 to 200 years ago. In Africa, several attempts have been made by many countries to implement free education policies at least at the basic levels. Arguably, Ghana was among the first countries to introduce the fee free policy in Africa.

Under the Accelerated Development Plan (ADP), the first President Dr Nkrumah sought to provide free tuition for all pupils. Kenya under both Presidents; Kenyata and Moi introduced free basic education in 1974 and 1979 respectively. Tanzania tried same in 1974, Nigeria 1976, Uganda and Malawi just to mention a few have all attempted implementing this policy. All these were done by former leaders of these countries to raise the needed manpower to deliver maximum development.

In recent history, after the “World Declaration on Education for All” forum (1990) in Jomtien Thailand, discussions on free basic education came back onto the front burner. Education was and is viewed as a fundamental human right, hence the need for governments and donors to commit enough resources to the sector to ensure every child, no matter the economic circumstance receives some appreciable minimum level of education.


NANA ADDO’S POINTS


Obviously, in the mind of H.E Nana Addo, children must have no financial impediment as far as accessing education is concerned. In his view, the best way of ensuring equity in the distribution of oil proceeds is to invest in a sector where almost every household benefits.

The constitution of Ghana places emphasis on free education at the basic level and further talks about ensuring free education at other levels of education based on resource availability. In the opinion of the President, we have the resource now because countries like Singapore whom are not as resource endowed as Ghana could fund education; hence Ghana has no excuse.

GHANA’S EDUCATION – REAL ISSUES

When one takes a cursory look at Ghana’s budgets (for the past decade), especially from the years 2009 to 2014, it becomes palpably clear that governments’ expenditure in education nominally increases every year. From the 2014 budget, the total resource allocated to the sector was GHS 6.6 billion representing a 17.5% increase over the 2013 figure.

The education expenditure as a percentage of Gross Domestic Product (GDP) has been increasing from 2009 through to 2012 only to fall in 2013 and 2014. Studying the budgets of 2009 through to 2014, the education expenditure as a percentage of GDP are 5.3%, 5.5%, 6.3%, 7.9%, 6.1% and 5.85% respectively. Ghana’s average expenditure within the period is 6% of GDP which meets the investment threshold into education set by the African Union and UNESCO.

However, it must be noted that, the expenditures above are tilted towards compensation; hence compensation biased. In specifics, an average of 70% of total expenditure within these periods were spent on compensation. In 2014, GHS 5.1 billion representing 77.2% of total education expenditure within the period was spent on compensation. It is obvious that after spending these huge figures on compensation, little is left for capital expenditure (capex) within the sector.

For instance, out of the colossal amount earmarked for education, a meagre GHS 647 million was allocated for capex in the year 2012. It is therefore not surprising why governments have found it difficult meeting other educational obligations such as paying subventions and providing other inputs. Unfortunately, this challenge is not exclusive to Ghana. Many African countries including Kenya and Uganda which tried tirelessly to implement free education policy were spending an average of 73% of the total educational budget only on wages and salaries.

Per the data from the Ghana Living Standards Survey study VI (GLSS VI), it is instructive to note that households on average spend highest on basic education, higher on secondary education and relatively low on tertiary education. From the statement above, it will be misleading to conclude that free education will offload burdens of all households.

For instance, as at 2012/13 academic year, across the country, the public owned about 13305 KG schools, 14112 primary schools, 8818 Junior High Schools and 535 Senior Secondary Schools. On the other hand, private individuals collectively owned 5972 KG schools, 5742 primary schools, 3618 Junior High Schools and 293 Senior High Schools.

On average, at the basic levels (KG to JHS and), the cost of attending a private school far outweighs public schools. So looking at the number of private basic schools, it is not surprising that households on average spend much at the basic levels.

FREE EDUCATION AND EQUITY

In the opinion of the President, a wholesale free education will ensure equity. This may be true in the political space but in the policy space, free education policy will even worsen inequality. Why this assertion? Equity is the quality of being fair.

Fairness may be necessary because there may be other inhibiting factors that prevented and or prevent a group from realizing the fullest benefits hence the need to provide a platform or opportunity for these groups to basically be in a better place to realize missed benefits in the past. Affirmative action policies stem from the equity principle.

Many households in Ghana send their wards to private basic schools because the quality in these schools are relatively higher and these schools to a large extent increase the probability of a pupil passing creditably and gaining access to the best (grade A) secondary schools in the country.

Students from these grade “A” schools have a greater chance of going to the tertiary schools. Firstly, there are some urban poor (poor households in the urban areas) households that virtually “squeeze stones to get water” in order to send their wards to private basic schools.

How will free education that segregates the urban poor households patronizing private schools ensure equity as far as these marginalized households are concerned? Secondly many children from poor households do not even get access into the best secondary schools in the country. These best secondary schools are occupied largely by children from middle income and upper income brackets. All these individuals are going to enjoy free education.

How equitable is this policy? Lastly, since these children from middle and upper income brackets have access to these best secondary schools, the likelihood of them entering into the tertiary institutions is close to one (1). For the past six (6) years, there have been a number of secondary schools in Ghana (names withheld) that have not sent more than two students to any public tertiary institution in the country.

This means, the already economically empowered households will still be empowered by the state; while the poor will continuously be marginalized. In the long run, free education at the secondary level will bring about serious inequality.

Instructively, per the data from GLSS VI, education’s share of total households’ expenditure is 8%. Again, the same survey revealed that about 24.2% households are considered poor. Thus, about 9.8% of households in Ghana are considered extremely poor, while the difference are considered poor.

That puts the non-poor households in Ghana at about 75.8%. For the purpose of this discussion, let’s assume that 40% of households in Ghana are poor and cannot fund their children’s education, does it mean for equity to prevail we have to include the 60% non-poor households and make them benefit from a policy they may not need? Will it not be promoting equality (populace policy) rather than equity (judicious use of resource)?

For the past decade, one topical issue that has been exhaustively debated especially during the electioneering campaigns was “free SHS policy”. The then candidate (now president) rightfully diagnosed that education holds the key to Ghana’s development and suggested that his government will prioritize education by fully funding education from Kindergarten through to Secondary school level.

True to his word, he intimated recently during a ceremony in the Eastern region that from September 2017, his much talked about free education policy will kick start. This piece intends to interrogate other issues as far as this policy is concerned and bring to the attention of the public, policy makers especially the President and the economic management team the real issues surrounding this free education policy.

BRIEF HISTORY

Many scholars have proven that there exists a positive link between education and development. It must be stated that, the World Bank being a development oriented entity hither to never invested in education. They focused on projects that directly impacted on developments. After some years, a plethora of scholarly works drew the attention of the Bank to the need of investing heavily in education. The Bank finally invested in educational projects in the 1960s.

Free education has been an old policy that many countries around the globe have attempted implementing. Many developed countries implemented this program between 100 to 200 years ago. In Africa, several attempts have been made by many countries to implement free education policies at least at the basic levels. Arguably, Ghana was among the first countries to introduce the fee free policy in Africa.

Under the Accelerated Development Plan (ADP), the first President Dr Nkrumah sought to provide free tuition for all pupils. Kenya under both Presidents; Kenyata and Moi introduced free basic education in 1974 and 1979 respectively. Tanzania tried same in 1974, Nigeria 1976, Uganda and Malawi just to mention a few have all attempted implementing this policy. All these were done by former leaders of these countries to raise the needed manpower to deliver maximum development.

In recent history, after the “World Declaration on Education for All” forum (1990) in Jomtien Thailand, discussions on free basic education came back onto the front burner. Education was and is viewed as a fundamental human right, hence the need for governments and donors to commit enough resources to the sector to ensure every child, no matter the economic circumstance receives some appreciable minimum level of education.

NANA ADDO’S POINTS

Obviously, in the mind of H.E Nana Addo, children must have no financial impediment as far as accessing education is concerned. In his view, the best way of ensuring equity in the distribution of oil proceeds is to invest in a sector where almost every household benefits. The constitution of Ghana places emphasis on free education at the basic level and further talks about ensuring free education at other levels of education based on resource availability. In the opinion of the President, we have the resource now because countries like Singapore whom are not as resource endowed as Ghana could fund education; hence Ghana has no excuse.

GHANA’S EDUCATION – REAL ISSUES

When one takes a cursory look at Ghana’s budgets (for the past decade), especially from the years 2009 to 2014, it becomes palpably clear that governments’ expenditure in education nominally increases every year. From the 2014 budget, the total resource allocated to the sector was GHS 6.6 billion representing a 17.5% increase over the 2013 figure. The education expenditure as a percentage of Gross Domestic Product (GDP) has been increasing from 2009 through to 2012 only to fall in 2013 and 2014. Studying the budgets of 2009 through to 2014, the education expenditure as a percentage of GDP are 5.3%, 5.5%, 6.3%, 7.9%, 6.1% and 5.85% respectively. Ghana’s average expenditure within the period is 6% of GDP which meets the investment threshold into education set by the African Union and UNESCO.

However, it must be noted that, the expenditures above are tilted towards compensation; hence compensation biased. In specifics, an average of 70% of total expenditure within these periods were spent on compensation. In 2014, GHS 5.1 billion representing 77.2% of total education expenditure within the period was spent on compensation. It is obvious that after spending these huge figures on compensation, little is left for capital expenditure (capex) within the sector.

For instance, out of the colossal amount earmarked for education, a meagre GHS 647 million was allocated for capex in the year 2012. It is therefore not surprising why governments have found it difficult meeting other educational obligations such as paying subventions and providing other inputs. Unfortunately, this challenge is not exclusive to Ghana. Many African countries including Kenya and Uganda which tried tirelessly to implement free education policy were spending an average of 73% of the total educational budget only on wages and salaries.

Per the data from the Ghana Living Standards Survey study VI (GLSS VI), it is instructive to note that households on average spend highest on basic education, higher on secondary education and relatively low on tertiary education. From the statement above, it will be misleading to conclude that free education will offload burdens of all households.

For instance, as at 2012/13 academic year, across the country, the public owned about 13305 KG schools, 14112 primary schools, 8818 Junior High Schools and 535 Senior Secondary Schools. On the other hand, private individuals collectively owned 5972 KG schools, 5742 primary schools, 3618 Junior High Schools and 293 Senior High Schools. On average, at the basic levels (KG to JHS and), the cost of attending a private school far outweighs public schools. So looking at the number of private basic schools, it is not surprising that households on average spend much at the basic levels.

FREE EDUCATION AND EQUITY

In the opinion of the President, a wholesale free education will ensure equity. This may be true in the political space but in the policy space, free education policy will even worsen inequality. Why this assertion? Equity is the quality of being fair. Fairness may be necessary because there may be other inhibiting factors that prevented and or prevent a group from realizing the fullest benefits hence the need to provide a platform or opportunity for these groups to basically be in a better place to realize missed benefits in the past. Affirmative action policies stem from the equity principle.

Many households in Ghana send their wards to private basic schools because the quality in these schools are relatively higher and these schools to a large extent increase the probability of a pupil passing creditably and gaining access to the best (grade A) secondary schools in the country.

Students from these grade “A” schools have a greater chance of going to the tertiary schools. Firstly, there are some urban poor (poor households in the urban areas) households that virtually “squeeze stones to get water” in order to send their wards to private basic schools. How will free education that segregates the urban poor households patronizing private schools ensure equity as far as these marginalized households are concerned? Secondly many children from poor households do not even get access into the best secondary schools in the country. These best secondary schools are occupied largely by children from middle income and upper income brackets. All these individuals are going to enjoy free education.

How equitable is this policy? Lastly, since these children from middle and upper income brackets have access to these best secondary schools, the likelihood of them entering into the tertiary institutions is close to one (1). For the past six (6) years, there have been a number of secondary schools in Ghana (names withheld) that have not sent more than two students to any public tertiary institution in the country. This means, the already economically empowered households will still be empowered by the state; while the poor will continuously be marginalized. In the long run, free education at the secondary level will bring about serious inequality.

Instructively, per the data from GLSS VI, education’s share of total households’ expenditure is 8%. Again, the same survey revealed that about 24.2% households are considered poor. Thus, about 9.8% of households in Ghana are considered extremely poor, while the difference are considered poor.

That puts the non-poor households in Ghana at about 75.8%. For the purpose of this discussion, let’s assume that 40% of households in Ghana are poor and cannot fund their children’s education, does it mean for equity to prevail we have to include the 60% non-poor households and make them benefit from a policy they may not need? Will it not be promoting equality (populace policy) rather than equity (judicious use of resource)?

FREE EDUCATION AND MORAL HAZARDS

In all the African countries, including Ghana, that tried implementing free education suffered on the supply side. Right after the introduction of the program, there was upsurge in enrolment in public schools. This contributed to overcrowded classrooms thereby worsening teacher to student ratio and pupil to text book ratio. It is not therefore surprising that few years after implementation of this program, quality suffered, poverty ultimately increased and development slowed.

Again, looking at the components the government intends absorbing, it will be relatively be cheaper to be a boarding student than being a day student. Schools will also benefit better from governments if the number of boarding students are huge. This may lead to admission of many students into the boarding system thereby putting pressure on school facilities and posing a potential health challenges (outbreak of diseases. Not only this, the introduction of this policy may reduce parents’ commitment in ensuring quality educational delivery. Once parents are told education is free, they tend to have a lackadaisical attitude towards education of their wards.

Lastly and most importantly, school administrators will find a new avenue to exploit (justifiably or unjustifiably) this policy. For example, schools like Achimota, Prempeh College, Accra Academy and other grade “A” schools may in tend levying huge PTA fees and still take government’s subventions (free money). This may even worsen if subventions are not paid timeously.

SUSTAINABILITY OF FREE EDUCATION

During the campaign, the candidate Nana Addo intimated that if waste is reduced, laudable policies like this can be implemented. Of course the wastage in the system is huge and reducing it will help raise resources for other important activities. However, financing free education through this source is hypothetical. The person Nana Addo may have a favourable record as far as corruption is concerned but that does not mean his appointees have his traits. Until we observe proceedings for some time, the commitment to fighting corruption remain mere talks so making a sound analysis based on a rhetoric (at least for now) is problematic.

Again, this piece may not want to talk much about the reasonableness of using the heritage fund for this policy. Suffice to say that, once the heritage fund is earmarked specifically for children’s (our heritage) needs, it is in order. However, the total amount in the fund is less than 300 million dollars. If we use all (deplete the fund) to say fund form one students this year, how can we fund the others (forms one and two) this year and the years ahead? Again, the government plans to use oil revenue (commit part of the ABF) to fund this policy. Yes, there are oil producing countries that have implemented this policy with oil resource.

The point must be made that in as much as we can copy from other countries, we must look at our peculiar circumstances in the copying process. That said, Ghana does not determine the oil price on the international market. Few years ago, the prices took a nosedive. For 2017, the projection for oil pricing is relatively favorable but what happens if in 2019 oil prices head southwards?

Lastly, this policy is the vision of Nana Addo. Obviously, other political parties believe in this policy but the level of passion and commitment towards it may differ. What happens to this policy if the Nana Addo’s government loses power in the next 4/8 years? Will commitment to this policy be the same?

POLICY OPTIONS TO THE GOVERNMENT

Improve data. If really the government wants to ensure equity, the reliable basis for promoting equity will be data. As it stands now, we are assuming that all pupils and students need free education. If really we want to help the poor, why don’t we find a smart way of identifying the poor and reaching them directly? Will we be able to know expenditure and income levels of households if we take our data gathering serious? So can we wait a little (for a year), work on the data, identify poor households (rural and urban) and support them? Absorbing fees of poor households is pertinent because education is a right not a privilege but a wholesale policy that ignores data will ultimately provide little or no help to the poor.

Assuming loosely that the government has all the resources available, is having a whole sale free education the best policy alternative for the government looking at the level of unemployment? Unemployment is ripe in Ghana, largely because of the general economic situation of the country and the nature of education. Will focusing on technical, science, mathematics, French education at the SHS levels and funding these areas of education since they hold brighter chance in helping reduce unemployment in the country not be a better option?.

For example, technical education provides basic employable skills, so with this kind of education, unemployment may be minimized. With strong focus on science education, Ghana has great potential in exporting Doctors, nurses and laboratory technicians to other countries. The country will enjoy brain gain with such policies. Will this not be a judicious use of the little national resource?

At the basic level, it is surprising that private schools with relatively less trained teachers do better than public school teachers. The only academic guess for this misnomer is that supervision is higher in private schools. If really we are interested in helping the poor, why don’t we concentrate on helping areas where the poor are concentrated? Unarguably, the poor are highly concentrated in public schools, why don’t we recruit supervisors for district and local public schools and provide these schools with basic logistics (educational inputs) so that the quality gap between the public and private basic schools can be bridged? Won’t this initiative empower public school pupils to do better and progress as far as higher education is concerned?

The Anamuah-mensah committee made a very germane point that will improve equity in SHS education. The proposal was that “government should build model schools in all districts”. The truth is that there are some districts that are disadvantaged. If really we are interested in ensuring equity at the national level, why don’t we give this laudable proposal the maximum oxygen to function?


CONCLUSION
This piece is not to pooh pooh free education. In fact, the benefits of education can’t be over emphasized. There are enough literatures that point to the fact that education impacts fertility, civic responsibility, agriculture, employment, income levels and national development. The purpose of this piece is to direct our minds to other relevant issues. Free education is a great idea but not all great ideas are economically superior. Free education is a second best strategy, let us think a little and adopt the ultimately best approach taking into consideration our peculiar circumstances.

FREE EDUCATION AND MORAL HAZARDS

In all the African countries, including Ghana, that tried implementing free education suffered on the supply side. Right after the introduction of the program, there was upsurge in enrolment in public schools. This contributed to overcrowded classrooms thereby worsening teacher to student ratio and pupil to text book ratio. It is not therefore surprising that few years after implementation of this program, quality suffered, poverty ultimately increased and development slowed.

Again, looking at the components the government intends absorbing, it will be relatively be cheaper to be a boarding student than being a day student. Schools will also benefit better from governments if the number of boarding students are huge.

This may lead to admission of many students into the boarding system thereby putting pressure on school facilities and posing a potential health challenges (outbreak of diseases. Not only this, the introduction of this policy may reduce parents’ commitment in ensuring quality educational delivery. Once parents are told education is free, they tend to have a lackadaisical attitude towards education of their wards.

Lastly and most importantly, school administrators will find a new avenue to exploit (justifiably or unjustifiably) this policy. For example, schools like Achimota, Prempeh College, Accra Academy and other grade “A” schools may in tend levying huge PTA fees and still take government’s subventions (free money). This may even worsen if subventions are not paid timeously.

SUSTAINABILITY OF FREE EDUCATION

During the campaign, the candidate Nana Addo intimated that if waste is reduced, laudable policies like this can be implemented. Of course the wastage in the system is huge and reducing it will help raise resources for other important activities. However, financing free education through this source is hypothetical.

The person Nana Addo may have a favourable record as far as corruption is concerned but that does not mean his appointees have his traits. Until we observe proceedings for some time, the commitment to fighting corruption remain mere talks so making a sound analysis based on a rhetoric (at least for now) is problematic.

Again, this piece may not want to talk much about the reasonableness of using the heritage fund for this policy. Suffice to say that, once the heritage fund is earmarked specifically for children’s (our heritage) needs, it is in order. However, the total amount in the fund is less than 300 million dollars. If we use all (deplete the fund) to say fund form one students this year, how can we fund the others (forms one and two) this year and the years ahead? Again, the government plans to use oil revenue (commit part of the ABF) to fund this policy. Yes, there are oil producing countries that have implemented this policy with oil resource.

The point must be made that in as much as we can copy from other countries, we must look at our peculiar circumstances in the copying process. That said, Ghana does not determine the oil price on the international market. Few years ago, the prices took a nosedive. For 2017, the projection for oil pricing is relatively favorable but what happens if in 2019 oil prices head southwards?

Lastly, this policy is the vision of Nana Addo. Obviously, other political parties believe in this policy but the level of passion and commitment towards it may differ. What happens to this policy if the Nana Addo’s government loses power in the next 4/8 years? Will commitment to this policy be the same?

POLICY OPTIONS TO THE GOVERNMENT

Improve data. If really the government wants to ensure equity, the reliable basis for promoting equity will be data. As it stands now, we are assuming that all pupils and students need free education. If really we want to help the poor, why don’t we find a smart way of identifying the poor and reaching them directly? Will we be able to know expenditure and income levels of households if we take our data gathering serious? So can we wait a little (for a year), work on the data, identify poor households (rural and urban) and support them? Absorbing fees of poor households is pertinent because education is a right not a privilege but a wholesale policy that ignores data will ultimately provide little or no help to the poor.

Assuming loosely that the government has all the resources available, is having a whole sale free education the best policy alternative for the government looking at the level of unemployment? Unemployment is ripe in Ghana, largely because of the general economic situation of the country and the nature of education. Will focusing on technical, science, mathematics, French education at the SHS levels and funding these areas of education since they hold brighter chance in helping reduce unemployment in the country not be a better option?.

For example, technical education provides basic employable skills, so with this kind of education, unemployment may be minimized. With strong focus on science education, Ghana has great potential in exporting Doctors, nurses and laboratory technicians to other countries. The country will enjoy brain gain with such policies. Will this not be a judicious use of the little national resource?

At the basic level, it is surprising that private schools with relatively less trained teachers do better than public school teachers. The only academic guess for this misnomer is that supervision is higher in private schools. If really we are interested in helping the poor, why don’t we concentrate on helping areas where the poor are concentrated? Unarguably, the poor are highly concentrated in public schools, why don’t we recruit supervisors for district and local public schools and provide these schools with basic logistics (educational inputs) so that the quality gap between the public and private basic schools can be bridged? Won’t this initiative empower public school pupils to do better and progress as far as higher education is concerned?

The Anamuah-mensah committee made a very germane point that will improve equity in SHS education. The proposal was that “government should build model schools in all districts”. The truth is that there are some districts that are disadvantaged. If really we are interested in ensuring equity at the national level, why don’t we give this laudable proposal the maximum oxygen to function?

CONCLUSION

This piece is not to pooh-pooh free education. In fact, the benefits of education can’t be over emphasized. There are enough literatures that point to the fact that education impacts fertility, civic responsibility, agriculture, employment, income levels and national development. The purpose of this piece is to direct our minds to other relevant issues. Free education is a great idea but not all great ideas are economically superior. Free education is a second best strategy, let us think a little and adopt the ultimately best approach taking into consideration our peculiar circumstances.