Malawi Public Expenditure Review: Education Sector

1. Malawi Public Expenditure Review: Education Sector 21 November 2007

2. What have been the key expenditure trends? • Expenditure in education is higher now than 10 years ago • Expenditure on teaching and learning materials has been increasing in real terms • Malawi’s education recurrent expenditure relative to GDP is above the regional average

3. Main Findings

4. (1) There are imbalances in expenditures between sub-sectors • Recurrent expenditures in primary education need to increase by 40 percent to reach the education MDG (of universal completion of primary school) • However: • Primary education expenditure has remained stagnant/decreasing in real terms since 2001/02 • University education expenditure has almost tripled over the same period

5. (2) There are large inefficiencies in primary education, leading to low quality • Around 50% of the resources spent on primary education are wasted • It takes about 22 school years to produce a primary graduate • 70 percent of drop outs are in the first 4 standards, before lifelong literacy and numeracy is achieved • Drop out imply that 40 percent of ‘pupil years’ are wasted; an other 8 percent wasted due to repetition • The two major causes are: (i) wide diversity in funding allocations across schools, and (ii) lack of qualified teachers

6. (3) There are large imbalances in distribution of resources between schools • Variation in level of funding across schools does not follow any criteria • Also wide disparities in number of teachers, textbooks, and classrooms available to schools with same number of pupils • Northern region receives much higher share of primary and secondary education expenditures: • for example, in 2003/04, per student expenditure on primary education was more than double in the Northern region, compared to Southern region

7. (4) There is still an acute shortage of primary school teachers, particularly in rural areas • About 6000 new teachers are needed every year, but the current out put is less than 3000 • From 2000 to 2004, the overall number of primary teachers declined, but while rural schools lost 4,700 teachers, urban schools added 850 • Teachers avoid placement in rural schools mainly because of shortage of teacher housing • Teacher absenteeism is also very high: one fifth of teachers are absent on any given day (partially due to the impact of HIV/AIDS)

8. (5) There is a huge gap in quality between Conventional Secondary Schools (CSSs) and Community Day Secondary Schools (CDSSs) • CDSSs account for almost 70 percent of secondary enrollment, but have almost no facilities, funding, and qualified teachers • CSSs have better funding, better teachers, and many have boarding facilities (and even subsidize costs of boarding for the students) • This inequitable distribution results in a large waste of resources: more than 50% of secondary students fail MSCE exam, mainly in CDSSs

9. (6) There are large expenditure inefficiencies in university education • A university student costs 167 times more than a primary student in Malawi, compared to 64 times more in Zambia • Ratio of students to staff is very low • Boarding facilities are subsidized by the government • Many students drop out, resulting in a big waste of resources; as a result the cost of producing each graduate is US$30,000 • Fees that students on the normal entry program pay (K25,000 per year) is too low to cover most operational expenses • Undeserving students benefit from the student ‘loan’ scheme, but never pay back

10. (7) The are large inequities in the distribution of public expenditure in education • Very few poor children complete primary education, because families cannot afford it • Further 40 percent of children from poorest quintile of households do not even start primary school • Benefits of expenditure in secondary education is heavily skewed towards the non-poor: • Children from richest decile are 10 times as likely to attend secondary school (than poorest decile) • Richer students attend boarding schools, while poorer students attend CDSS • Expenditure in tertiary education exclusively benefits the households from the richest decile

11. (8) HIV/AIDS is having an adverse impact on expenditures in the education sector • Total cost of HIV/AIDS in terms of lost teachers and absenteeism is estimated at 4.4% of education budget, and could increase to 12% • Government contribution to funeral expenses may not be sustainable: it is eating up 5 percent of ORT budget, and even more in primary education • It costs government more money to replace teachers who die (e.g. from HIV/AIDS) than to provide ART

12. Recommendations

13. (1) A higher share of the budget should be allocated to primary education • In order to achieve the education related MDGs, substantial resources could be saved in tertiary education and reallocated towards primary education • Lower primary education needs to receive its fair share of resources through internal allocation of classrooms and teachers

14. (2) The significant imbalance in allocation of education expenditures should be addressed • When future education budget is increased, proportionately more resources should be allocated to central and southern regions • Distribution of funding across schools must follow an equitable financing formula, and not perpetuate past geographical inequities

15. (3) Teacher development & management should be the cornerstone of primary education policy • There is need to increase the output of trained teachers to approximately 6,000 every year through: • Review of pre-service teacher education program to balance length of training against need for significant output • Additional investments to increase places in TTCs • Introduce teacher incentives & financing mechanism to encourage teachers to stay in rural areas • Excess number of under-qualified teachers in secondary schools should be transferred back to primary schools

16. (3) Teacher development & management should be the cornerstone of primary education policy (Cont’d) • Teacher absenteeism can be reduced through the following measures: • introduce legislation to give communities option to manage their local school & right to hire/fire teachers • increasing monitoring, and • raise quality of school management (including head teacher qualifications)

17. (4) Imbalance between community day secondary schools and conventional secondary schools should be addressed • Resources should be allocated equitably between different types of public secondary schools to level out quality • Physical structures of CDSSs should be upgraded to an acceptable standard

18. (5) There is need to improve equity of access and benefits from education • Government boarding schools should be phased out altogether, or should be limited to girls (and vulnerable groups), where essential • Bursary scheme for secondary education needs to be adequately targeted to needy students • Number of female teachers should be increased to reduce drop-out rates for girls • Intake for girls should increase to 50% by increasing number of places in boarding facilities for girls

19. (6) Introduce reforms to reduce the large inefficiency in university education • Need to reduce government subsidy to university, and to increase cost sharing with students from richer families • Loan allocation system should be reviewed so that recipients are based on means testing • Universities need to be more accountable for use of public funds & progress in implementing reforms by setting up a reporting mechanism (e.g. semi-annual or annual reports should be produced)

20. (7) Ministry’s HIV/AIDS policy should be implemented to mitigate impact on the sector • Government should prioritize providing funding to implement the policy • There is need to ring-fence education money to limit the amount of resources spent on funerals • A more permanent solution would be to transfer responsibility for funeral expenses to the Department for Human Resource Management and Development (DHRMD)