Save the Children finds one in six countries spend more on paying back debt than children's education
LONDON/GENEVA, 12 October 2022 – One-sixth of the poorest countries in the world are spending more on paying back debt to wealthy nations and investors than they are on children’s education, said Save the Children.
New analysis published today by the child rights organisation shows that 12 out of 71 low- and lower middle-income countries with available data spent more on external debt than they did on education in 2020. The analysis also shows that by 2024, interest payments are expected to absorb on average 10% of the annual budget across low-and lower middle-income countries, an increase from 7% in 2015, diverting further resources towards debt servicing and away from social sectors, including education.
WE STAND SIDE BY SIDE WITH CHILDREN IN THE WORLD'S TOUGHEST PLACES.
Nearly one-third of children in low-income countries still do not complete primary school.[1] Even before the pandemic, the world was not on track to meet the goal of all children in school and learning, with an estimated 200 million children expected to be out of school in 2030. Now, children’s education and their futures are under serious threat from multiple crises, including COVID-19, more frequent and dangerous conflicts, and climate change.
Hollie Warren, Head of Global Education Policy and Advocacy at Save the Children UK, said:
“Education systems desperately need more and better funding across low- and lower middle-income countries. Instead, they are being gutted to service unmanageable debts. It is wrong that the world’s poorest children are having to suffer because of a debt crisis that was not of their making.”
“Underfunded education systems cause millions of children around the world to show up each day to overcrowded classrooms without enough teachers, books or materials to properly learn. Millions of children are also still not in school – their education disrupted by conflict, climate change and crises, and with each day of school that a child misses out on, it becomes harder for them to catch up.
“Global education leaders have the opportunity to fix this at the forthcoming Annual Meetings of the World Bank Group and International Monetary Fund. The Annual Meetings offer an important opportunity governments and education leaders to come together to mobilise action for education for every child. For us to stand any chance of success in meeting the challenges ahead, more and better financing for education is non-negotiable. This funding needs to be spent more fairly and target the children most impacted by inequality and poverty.
“The world has a moral imperative to ensure that they are adequately funding education to ensure that all children are in school and learning.”
Worsening debt burdens are threatening the ability of low- and lower middle-income governments to sufficiently increase their spending on education. According to the International Monetary Fund, more than half of lower income countries are either in or at moderate or high risk of debt distress as of August 2022.[2]
In 2020, the UN estimated an annual US$148 billion funding gap in achieving universal access to primary and secondary education, a gap which could increase by up to a third due to COVID.[3] Further, existing funding has not been reaching the most marginalised children – UNICEF estimates that children from the poorest households in low-income countries receive only 10% of government funding towards education, compared to 38% for children from the richest households.
Save the Children is calling on governments in low- and middle-income countries to increase their education spending to at least 20% of their budget. Governments can raise funding for their education budgets by progressively expanding their tax base, improving debt sustainability, accessing sustainable and affordable loans, and accessing new forms of innovative finance.
Donors can support governments by urgently increasing the share of official development assistance (ODA) for education, offering to share revenue generation and budgeting expertise, and mobilising other forms of funding that can be channelled to low- and middle-income countries including the International Monetary Fund’s Special Drawing Rights (SDRs) – a reserve asset created to provide liquidity and make the global economy more resilient.
For further enquiries please contact:
Daphnee Cook daphnee.cook@savethechildren.org / +254 717 524 904
Samantha Halyk samantha.halyk@savethechildren.org / +44 (0) 74 235 19077
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*this has been edited as of June 2023 to fix an error in the data analysis on external debt servicing
