Natural Resource Revenue Could Reduce Out-of-school Numbers

Natural Resource Revenue Could Reduce Out-of-school Numbers By 86% In 17 Developing Countries

A new paper from UNESCO’s Education for All Global Monitoring Report, shows that 17 developing countries* could pay to provide an education for 86% of their out-of-school children or 42% of their out of school adolescents if they managed their revenues from natural resources better.

Released the week of the World Economic Forum on Africa (Cape Town, South Africa 8-10 May), the policy paper reveals that an extra US$5 billion in funding for education could be raised from these 17 countries per year if 30% of income from their minerals and 75% from their oil and gas was converted into public revenue and 20% of this sum invested in education . This is equivalent to two and a half times the amount that these countries received in aid to education in 2010. It would fill a fifth of the $26 billion financing gap needed to give all children a good quality basic education.

“National commitment to education has to be supported by adequate resources.  The 17 countries covered in this study face tremendous educational challenges that can be met only through additional financing to expand their systems,” said Irina Bokova, Director-General of UNESO. “The study finds that revenue from natural resources could enable these countries to reach over 11 million out-of-school children. This is an investment in future generations that should be seized now.”   

The EFA Global Monitoring Report’s paper, “Turning the resource curse into a blessing for education,” gives examples of the revenue that natural resources could bring to education:

-          In the Lao People’s Democratic Republic, the value of copper and gold this year is expected to be worth more than double its value in 2008, enough to double their education budget and almost achieve universal primary education.

-          Better managed exports of copper in Afghanistan could pay to send nearly two million of its children to school.

The country could raise US$120 million over the next five years for education if 30% of its share of copper resources were converted into public revenue and 20% of this sum invested in education. The amount raised would be equivalent to a third of the money the country receives in aid for education.

-          The Papua New Guinean government currently converts 24% of its earnings from oil, copper and gold into public revenue. It could raise an additional US$50 million a year for education if 30% of its revenue from minerals were converted into public revenue and 20% of this sum invested in education. This could send over 300,000 of its children to school

Transparency of natural resource exports is key, but is not enough on its own to secure a country’s future; it is also vital to ensure countries strike a good deal, and allocate a share to education. 

“Many countries have mismanaged the income from their natural resources, have poorly negotiated with extractive companies, or have made misguided spending choices” said Pauline Rose, director of the Education for All Global Monitoring Report. “In some cases, the funds have been channeled into armed conflicts instead of towards education. If they managed their income revenue better and put 20% of the revenue into education, ten of the 17 countries we analyzed could reach universal primary education.”

The EFA Global Monitoring Report has partnered with international NGO Global Witness and the Africa Progress Panel, chaired by Kofi Annan, to call on countries to use their natural resource revenue for social goods such as education. They are also calling on the G8 to prioritize transparency on the agenda.

Recommendations:

1.     ‘Old’ and ‘new’ resource-rich countries must maximize the revenue they get from their resources to improve social services and particularly education

2.     Funds from resources must be managed efficiently and transparently to enable citizens to monitor the way they are being used. All countries rich in natural resources should publish annual budget data (including resource revenues, the Enacted Budget, actual spending, and an Audit Report) as well as sign up to Extractives Industry Transparency initiative and other transparency and fair taxation measures.

3.     At least 20% of the funds raised from resources should be channeled into education, which will bring equitable and sustainable benefits for the population.

ENDS

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