Debt and Education

The ongoing debt crisis in poor countries has had and is still having a severe impact on access to education. This second briefing in the series explores the impact of debt and debt cancellation on education in poor countries.

A detailed briefing on this issue, produced by Jubilee Debt Campaign with Oxfam, Save the Children, VSO and World Vision, is downloadable using the link on the right.

Education is crucial in giving individuals, communities and countries a route out of poverty, conflict and instability. But today, 80 million children, more than half of them girls, never go to school. The debt crisis has worsened the education gap in impoverished countries, both by draining resources away from education, and because the conditions imposed in return for loans or debt relief have often made it even harder for governments to provide education.

Debt draining resources from education
Over many years, resources have been drained away from education in poor countries, as their governments struggle to pay debts - often incurred through reckless or self-interested lending by the rich world.

Globally, another $17 billion per year is needed to provide education for all girls and boys. In 2005, developing countries altogether spent 30 times this amount on servicing debt.

The World Bank and IMF say that Kenya's debt is 'sustainable' and it is therefore not eligible for debt relief. Kenya's last two budgets allocated $350 million more to paying debts than to education. Over one million Kenyan children do not go to primary school.

Conditions stifling education
In the 1970s and 1980s, donor institutions told poor country governments to balance their books by reducing investment in education and introducing school fees. Today, these institutions claim to support greater investment in education - but they still make this investment very difficult by, for instance, putting limits on public spending or on the amount governments spend on wages for teachers and other public servants.

In 2004, the IMF told Zambia to freeze public sector wages, meaning that it could not afford to employ 9,000 newly qualified teachers, despite a severe teacher shortage.

The impact of debt on education
The result of debt draining resources from education, and conditions stifling investment, is a poorer education system, with fewer teachers, poor infrastructure, and school fees which keep children out of school.

Nepal spends more on debt than education. It has only one teacher to every 180 children. It won't get debt relief until it spends years meeting conditions set by creditors.

Chad spent $66 million on debt service in 2006. It is one of the many poor countries charging some kind of fee for school. Only one third of girls in Chad go to school.

Debt cancellation making a difference
Repeated studies have shown the positive impact of debt relief on social services, most of them agreeing that education is the biggest winner.

After getting debt relief, Malawi, Tanzania and Uganda all abolished primary school fees. This helped get over a million more children into school in each country.

Debt relief paid for training of 4,000 teachers each year in Malawi, and salaries for 5,000 community teachers in Mali.

What next?
Rich countries need to cancel all illegitimate and unpayable debts, without imposing conditions that limit investment in education. Southern governments must listen to their own citizens' demands that funds from debt cancellation are used to improve essential public services, including education, and be open and accountable to their own people for the use of these funds.