The inability of a child to read and understand a simple text by the age of 10 is described as learning poverty. Across low- and middle-income countries, the number of children in learning poverty grew by a third—to 70%—between 2019 and 2022, according to the World Bank Group.
Children at the intersection of the effects of COVID-19, climate change and conflict experience the greatest threat to their education, putting their future in jeopardy.
Current global crises put education financing at risk
The solutions are known, but there is a lack of financing at scale to implement them. Even before the pandemic and the current economic crises globally, spending enough on education was low as compared to other sectors.
Domestic budgets, the largest source of financing for education, are being squeezed by rising food and commodity prices, and the increasing severity and cost of climate-related disasters.
Moreover, many countries are unable to increase education spending because they are constrained by worsening debt burdens. An analysis from Save the Children shows that one-third of low- and lower middle-income countries spent more on servicing external debt in 2020 than they did on education.
The importance of non-traditional aid for education
Over the past decade, the call to leverage new financing instruments has been gaining momentum.
Such calls include the Monterrey Consensus, which encouraged “exploring innovative mechanisms to comprehensively address debt problems of developing countries”, and the UN General Assembly resolution 65/146, which recognizes “the potential of innovative mechanisms of financing to contribute to the achievement of the internationally agreed development goals.”
Various initiatives to develop and implement innovative development financing mechanisms have emerged to complement official development assistance (ODA) and address existing financing imbalances.
These initiatives range from international financial and currency transaction taxes and SDG equity-linked bonds to Debt2Ed (a GPE innovative finance tool that transforms a partner country’s debt into new and additional resources for education to enable system transformation), public-private partnerships and market-based financial transactions for development.
GPE’s response: The Multiplier
In these times of declining education financing, GPE has been a leader in crowding-in additional financing to education programs through the GPE Multiplier - an innovative instrument that incentivizes increased investment in education.
Since 2018, GPE has allocated over US$480 million in grants to 40 countries through the Multiplier, unlocking more than $2 billion in additional cofinancing from partners ranging from foundations to multilateral development banks.
GPE innovative finance portfolio works alongside other sources of external funding; it can be invested as a grant or used to lower the interest rate on concessional loans. It can also work alongside other, non-traditional sources of development finance, including private capital.
All GPE partner countries are able to access a Multiplier grant under the 2021–2025 strategic plan.
One of the new initiatives for this period is a lower matching fund requirement for private sector partners and foundations; for these donors, a Multiplier grant can be unlocked by matching each $1 from GPE with a contribution of $1. (For other donors, the ratio remains at $3 in additional resources for every $1 from the Multiplier.)
Leave a comment
Your email address will not be published. All fields are required.