Better management of revenue from natural resources could provide education to 86% of out-of-school children

Updated on: Tuesday, May 07, 2013

Seventeen developing countries could pay to provide 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. An additional US$5 billion in funding for education could be raised from these 17 countries annually 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 has been revealed by a new policy paper of UNESCO's Education for All Global Monitoring Report to be tabled at the World Economic Forum on Africa (Cape Town, South Africa from May 8 to 10, 2013). The report stated that the additional US$5 billion 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 US$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 UNESCO.

"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," added
Bokova. The EFA Global Monitoring Report's paper, "Turning the resource curse into a blessing for education," gave examples of the revenue that natural resources could bring to education. The report cited that 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. And in Afghanistan, better managed exports of copper 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, which currently converts 24% of its earnings from oil, copper and gold into public revenue, could raise an additional US$50 million a year for education if 30% of its revenue from minerals if converted into public revenue and 20% of this sum invested in education. This could send over 3,00,000 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 EFA Global Monitoring Report.

"In some cases, the funds have been channelled 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 analysed could reach universal primary education," added Rose. 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. The report recommended that "old" and "new" resource-rich countries must maximise the revenue they get from their resources to improve social services and particularly education.

Also funds from resources must be managed efficiently and transparently to enable citizens to monitor the way they are being used. The report suggested that 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. Moreover, it suggested that at least 20% of the funds raised from resources should be channelled into education, which will bring equitable and sustainable benefits for the population.

Better management of revenue from natural resources could provide education to 86% of out-of-school children

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