IMANI: PPPs can fix education

Introduction

Yesterday’s Parliamentary debate on basic schools with crumbling buildings and the subsequent revelation by the minister of education of a funding gap of $200m to fix the most critical ones, brings to the fore once again, the role of public-private partnerships in delivering quality education for all Ghanaian school children.

Education and skills development underpin any policy of human development and productivity, as it is through education that the necessary skills, knowledge and aptitudes are acquired, and the creative abilities of individuals released, to open the way to a better life and society.

Despite meeting the UNESCO and AU 6 percent of GDP threshold for education financing and averaging more than 17 percent of Government expenditure for the last decade, the education sector is a fundamental sector that Ghana needs to develop but that the Ghanaian government have limited resources for. Satisfactory progress has been made in providing access to education but difficulties have been faced in providing quality education services.

Public-private partnership (PPP) has become a fashionable slogan in new development strategies, particularly over the last couple of decades. It is projected as an innovative idea to tap private resources and to encourage the active participation of the private sector in national development. It is more forcefully advocated when public resources are projected to be inadequate to meet needs. PPP is already being adopted in several infrastructure development sectors, such as the development of airports, railways, roads, and so on. The policy initiatives are no longer confined to these; they are being extended to human development sectors such as education and health.

Background

In 2011, the Ministry of Finance in Ghana developed a National Policy on Public Private Partnerships as a way of providing the public with services and infrastructure that the Government of Ghana are unable to fund themselves [1]. Before this policy was established however, the foundations were already laid for private sector partnership in the field of education.

The 1968 Education Act in Ghana detailed government’s vision for full enrolment of all school-aged children in education [2]. The Act called for free and compulsory primary and lower secondary education for all. At the time, in 1971, the gross enrolment rate for primary education in the country was just 67%. While this goal was commendable and ahead of its times, in terms of what was later outlined as a global goal in the Millennium Development Goals, it may have been over-ambitious. At the time, there wasn’t adequate infrastructure or human resources to allow for the enrolment of all children in the public school system. The disequilibrium between the aim of the Act and the reality of the education system acted as the catalyst, with the government giving permission to private individuals to operate schools in order to meet needs.

In the 1992 Constitution, the Government once again tried to provide opportunities for all children by enacting a policy of Free Compulsory Universal Basic Education for All (FCUBE), giving a ten-year implementation deadline. The constitution came into force in 1996. However, since then, universal basic education has still not been achieved. The current government commits itself to the goal, and has expanded the definition of free compulsory basic education to include all types of senior secondary education; technical, agricultural and vocational.

The Education Act of 2008 encouraged participation in education by private entities; “a person or an institution may establish, manage or operate an educational institution in accordance with the guidelines issued, and regulations made in that behalf by the Minister in consultation with the Education Service Council and/or the National Accreditation Board”

Public-Private Partnerships (PPPs) in education can take many forms. These partnerships usually deal with one aspect of the education system: infrastructure, management or service provision. These can be classified under one of the following categories

The Gap in Education Management and Education Provision

In response to the Millennium Development Goals, and to national goals on education, Ghana made a significant effort to improve the enrollment rates of children, especially in basic education, as outlined in the Education Strategic Plan (ESP). In 1990, the Net Enrolment Ratio (NER) was only 45.2%, which increased slightly to 61% in 2001, and then rising to 89.3% in 2013/14, almost doubling the enrolment rates in the 1990 baseline year [5]. Despite these advancements, in 2013, about 440,000 children were still out of school in Ghana and it was estimated by the UN that it would cost $16 billion per year to get those children, part of 61 million globally, back into school [6].

Besides access, the issue of quality has not achieved the same progress as access based on the level of investment in quality education in Ghana. With more than 75 percent of the expenditure in Education going into compensation, the infrastructure, teaching and learning materials (TLMs) fend off the remaining 25 percent thus inadequate for improving the quality of education. These are gaps that the union of private and public sector could help to bridge. Overtime, the number of private schools, or schools involving some type of Public Private Participation (PPP) has increased. It has been estimated that a third of schools in Ghana are private. Part of the appeal of these schools to parents searching for where to send their children for primary or secondary school is the perception of better quality of private schools.

Many international organisations, such as the World Bank and the OECD, have promoted PPP arrangements in education in developing countries, as a way of offering an alternative solution to education systems that fall short of international standards since the 1990s [7]. A consultant to the World Bank, LaRocque (2008) stated that PPPs, when used in the social sector, share a number of characteristics; their formality, the development of a long-term relationship between the partners, and the risk-sharing element of such agreements. The International Finance Corporation (IFC), a member of the World Bank group, has also been a strong enthusiast of PPP agreements in education in developing countries, including in Ghana. Despite these recommendations, as of June 2015, there were only 9 PPP projects under construction and only 14 PPP projects had reached financial closure since 1990 in Ghana [8].

Could PPP help?

Overtime, the number of private schools, or schools involving some type of Public Private Participation (PPP) has increased. It has been estimated that a third of schools in Ghana are private A study by Bennell and Akyeampong (2007) [9] found that teacher motivation greatly affects the education outcomes in twelve developing countries in sub-Saharan Africa and South Asia, including Ghana. They found that teachers in private schools in Ghana are, in general, more motivated than teachers in government schools, which are caused by the better working and living situations offered by private schools, as well as more effective management. Without proper motivation, schoolchildren are at a disadvantage. Two ways to improve the motivation of teachers, and other factors affecting the quality of education in Ghana would be to improve the service provision in schools and the management of schools.

In terms of PPP contracts that affect education outcomes, the following can be said about the four types, Private Management of Schools, PPP which provide vouchers for Private education, those which provide subsidies for private education, and Private Finance Initiatives [10]:

Vouchers have the most significant effect in private education systems that are already well established and have been in place for a significant amount of time. This type of PPP is most common in high-income countries, with governments giving funds to private schools for students to attend. Vouchers create competition among private schools, vying to achieve the highest amount of demand in order to stay open. While the competition could help improve the quality of the education, they have been criticized for reinforcing socio-economic inequalities. Governments may also, partially or fully, subsidize private education. This allows school children to enjoy the benefits of private sector provision and management of education.

Private Finance Initiatives (PFI) provide a way for governments to obtain education infrastructure. There are five main types of PFI. These are: Traditional design and build, where the government contracts with private partners to design and build a facility to specific requirements; Operations and maintenance, where government contracts with the private partner to operate publicly owned facilities; Build-Operate-Transfer (BOT), where a private partner is contracted to finance, build, operate, maintain, manage, and collect user fees for a facility for a fixed period, after which, the title reverts to the government; and Build-Own-Operate (BOO) where the government either transfers ownership and responsibility for an existing facility, or they contract with a private partner to build, own and operate new facilities in perpetuity [11].

Schools may also be publicly funded but be managed privately. The aim of this is to ensure that management staff is efficient as well as giving the schools the flexibility to be innovative with the material they teach. One example of this type of PPP is the chain of Bridge Academies, which operate in Kenya and Uganda, and will be implemented in the Liberian Education Sector soon. These schools are a type of Low-Fee Private Schooling (LFPS), which follow a framework for providing education, with teaching staff constantly monitored. In Ghana, there is similar LFPS with or without the help of the government, such as the Omega schools established by James Tooley in 2009, which currently consist of about 40 schools and more than 20,000 enrolled pupils and the IDP Rising Schools Programme. Part of the attraction of these schools in Ghana is that they offer parents flexible payment options, especially due to the contributions of the capitation grant and they achieve better outcomes at the same time

Mixed Benefits

Many types of PPP, such as LFPS, subsidies and vouchers, have been criticized for reinforcing inequalities and possibly having an indirect negative effect on poverty. It is said that the money spent on private education, even if relatively low, could otherwise be spent on other development factors, such as health or food. The UN has questioned many countries on the use of PPP and LFPS in their countries, such as Morocco and Chile, believing that there is strong evidence that the presence of LFPS in these countries reinforces inequalities and segregation, especially if the type of private education is based on the use of vouchers for private schooling [12].

PFI has also been criticised as a way of attaining something now and paying for it later. It is said that the payments on the goods and infrastructure that are procured can be put off and will eventually become another generation’s problem, thus not holding the government accountable to the deals they’ve made, and possibly pushing the burden of payment on. As well as this, in the UK, where PFI is highly popular, there is fear that although the private sector carries most of the risk, they often charge the government higher interest rates, meaning that, in the end, the government may make a loss [13].

However, successful examples such as we find with the IDP Rising Schools Programme in Ghana must be encouraged and the burden of catering to all pupils by the state, shared. The IDP Rising Schools Programme IDP’s for instance adopts consultative approach to complementing public education endeared it to the Ghana Education Service, the authority that is responsible for education in Ghana. IDP was and is delivering complementary education in safer, well-kept and hygienic school buildings. The IDP Foundation has through competent financial management and focus invested over $1.2m in a private financial aid scheme accessible by proprietors, nearly 600 teachers and nearly 132,000 pupils. These loanable funds at given graciously below competitive market rates have achieved impressive repayment records of nearly 92%. The pupils currently covered constitute a third of qualified pupils who would not have had any form of quality basic education at all were they to be crammed into severely under resourced public schools. The IDP Rising Schools Programme has developed better teacher training guides and selflessly makes it available to any Ghanaian teacher interested in becoming better teachers.

Recommendations

In order to mitigate the negative welfare effects of this type of PPP, targeting needs to be done. The World Bank suggests the following as a guide [14]:

When Ghana considers the private sector’s participation in the education sector, it should be mindful of the type they are inviting and of all the possible social effects this could have. For instance, Ghana doesn’t have as efficient a private sector as other countries, and so introducing vouchers into the education sector may take a while before the benefits could be achieved.

In Ghana, to truly benefit from any PPP arrangement, transparency of the process is key. It must be ensured that the best private corporations are given the contracts, rather than those who simply pay the most or who have connections to those in power. The true essence of PPP is to provide efficient infrastructure, which can only be fulfilled if the process of awarding contracts is actually transparent and not spoiled by corruption.