In this week&rsquo;s edition, we examine this year&rsquo;s education budget, compare Egypt&rsquo;s spending with other countries and discuss education spending patterns across wealth quintiles and in urban vs rural areas.
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The start of a new school year again brings to the fore the pressing question of how to improve the quality of education in Egypt given the constraints of government spending. Speaking at the National Youth Conference in Alexandria in June, President Abdel Fattah El-Sisi <a href="https://www.sis.gov.eg/Story/182155/President-El-Sisi-attends-the-National-Conference-for-Youth-in-Borg-Al-Arab%2C-Alexandria?lang=en-us#:~:text=President%20Abdel%20Fattah%20El%2DSisi%20witnessed%20a%20dialogue%20session%2C%20as,at%20achieving%20the%20nation's%20interest">said</a> that basic education alone needs upwards of EGP400&ndash;500 billion for some 25 million students, a sum that is currently beyond the government. This statement acknowledged for the first time the government&rsquo;s non-compliance with the education spending requirements in the 2014 constitution, which oblige the state to allocate 4% and 2% of GDP to pre-university and university education respectively.
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The <a href="https://documents1.worldbank.org/curated/en/099445409262223752/pdf/P175907102b76b3f1151214e6c1b11e13937b12503fb.pdf">challenges facing</a> the education system in Egypt <a href="https://documents1.worldbank.org/curated/en/099445409262223752/pdf/P175907102b76b3f1151214e6c1b11e13937b12503fb.pdf">are reflected</a> in poor outcomes. Approximately one in two students meet the minimum global standard for performance in mathematics and science, while only one-quarter of students reach the average level. The learning poverty report also indicates that some 70% of students at age 10 are unable to read and understand age-appropriate text.
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With the majority of middle- and low-income children attending public schools, government education expenditure is vital.
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<h3 style="text-align: justify;">Government Education Spending</h3>
Looking closely at public spending on education in Egypt, we find that although spending has increased in absolute terms using current prices, it has declined when measured both as a percentage of total government spending and as a percentage of GDP.
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Wages consume the lion&rsquo;s share of the education budget&mdash;70.5% of 2023/24 budget&mdash;while investments account for 19.1%. As a result, the construction of new public schools and classrooms has not kept up with needs, which has increased classroom density. Some schools operate on a two- and three-shift system to compensate for the shortage of school buildings.
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Government expenditure (functional) on education in Egypt is lower than global rates and lower than the average spending in middle-income countries and several states whose economic conditions are comparable to Egypt.
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In an attempt to address the fact that functional expenditure falls short of constitutional requirements, the government has begun <a href="https://www.imf.org/external/error.htm?URL=https://www.imf.org/external/pubs/ft/gfs/manual/index.htmhttps:/www.imf.org/external/pubs/ft/gfs/manual/index.htm">counting</a> funds spent on education by public government bodies&mdash;including ministries and their subsidiary departments, service or economic public agencies, government scientific and research centers&mdash;as well as any sums allocated within public reserves and spending by public sector companies and the public business sector, as public spending on education. By this expansive definition, the state has in fact <a href="https://www.undp.org/egypt/egypt-human-development-report-2021">met</a> the spending requirements set forth in the constitution.
The state has also resorted to adding the equivalent of 10% of the value of the interest on government debt to education allocations. This is a pro forma addition submitted to parliament, but it does not appear in any official budget documents.
<h3>Household Spending on Education in Egypt</h3>
According to the 2019/20 income and expenditure survey issued by the Central Agency for Public Mobilization and Statistics (CAPMAS), households with individuals enrolled in education spend an average of EGP8,850.60 annually on education, or 12.5% of total household spending nationwide. The average household expenditure on education in urban areas was EGP12,829.8 (15.7%) compared to EGP5,720.2 (9.2%) in rural areas. It is worth noting that these figures predate the Covid-19 pandemic and successive waves of inflation.
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Broken down by household income, the lowest 10% spends 6.4% of total household spending on education (about EGP2,271.80), compared to 18.9% (about EGP32,200.30) in the top decile. The single biggest education expense for the bottom decile was private lessons and tutoring (30.8% of household education expenditure), while for the top decile, it was tuition fees and expenses (67.1%).
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Households in the bottom decile spend more on private lessons and tutoring because most children from these households attend public schools, where the quality of education is declining due to classroom overcrowding&mdash;average classroom size is 54 students in primary education and 51 students in preparatory education. In contrast, household spending by the top 10% goes to tuition fees and expenses for private schools.
These figures also demonstrate the relative importance of public education for rural and urban areas. In rural areas, 89.8% of students are enrolled in public education, significantly higher than in urban areas (82.6%). Only 14.2% of students in urban areas and 2.7% in rural areas are enrolled in private educational institutions.
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<h3>Implications of Falling Government Spending on Education</h3>
1. Increased spending on private lessons: At the beginning of his proposal to legalize private tutoring centers, last year Minister of Education Reda Hegazy <a href="https://www.shorouknews.com/news/view.aspx?cdate=20102022&amp;id=efe7873a-4eb0-4561-a4fb-ea603d94f7b4">said</a> that private tutoring costs households some EGP47 billion annually, none of which is seen by the state or the ministry.
2. Shortage of teachers and low teacher wages: This is one of the most significant implications of the decline in government education spending. The Ministry of Education has previously <a href="https://www.worldbank.org/en/country/egypt/publication/egypt-public-expenditure-review-for-human-development-sectors">estimated</a> a shortage of more than 320,000 teachers.
For the first time in many years, President Sisi in January 2022 issued a decree for the appointment of 30,000 teachers annually for a period of five years, <a href="https://mof.gov.eg/ar/posts/stateGeneralBudget/63a95e67da80a50008d14783/%D9%85%D9%88%D8%A7%D8%B2%D9%86%D8%A9%20%D8%B9%D8%A7%D9%85%D8%A9%202023%2024">for a total</a> of 150,000 new teachers at an annual cost of EGP1.4 billion.&nbsp;
Despite its importance, the measure will not remedy the teacher shortage in public schools. Ultimately, 150,000 teachers will be hired to plug a deficit of 320,000 teachers&mdash;a deficit that is constantly increasing due to the growing numbers of students enrolled in public education every year.
Moreover, although the Egyptian government recently announced wage increases for government workers, including in educational institutions, the raises are not enough to offset the higher prices of all goods and services caused by successive waves of inflation and the erosion of the purchasing power of the Egyptian pound.
3. The misallocation of limited government resources: The state has directed substantial resources to establish public schools that will not be accessible to everyone. Japanese schools, for example, were established under a funding agreement with the Japan International Cooperation Agency in 2018 worth EGP18.6 billion. In May 2019, the government received an additional grant of EGP7.5 million from Japan. The funds reached 48 schools operating in 25 governorates in the 2021/22 academic year. Only 11,000 students are enrolled in these schools, making for an <a href="https://enterprise.press/stories/2022/02/28/project-profile-how-japanese-schools-are-part-of-egypts-educational-reform-program-65944/">average cost</a> of EGP15,600 per student. The government <a href="https://scenenow.com/Buzz/100-German-Public-Schools-Will-Be-Established-Across-Egypt#:~:text=The%20Ministry%20of%20Education%20announced,and%20develop%20German%20language%20curricula">is seeking</a> to expand the initiative, considering the establishment of 100 German schools, similar to the Japanese model.
The tablet project is another example. Former Minister of Education Tariq Shawki initiated the project starting in the 2018/19 academic year, with the aim of helping students access digital knowledge sources. Four years later, the project proved to be a failure and tablets <a href="https://www.masrawy.com/news/education-schooleducation/details/2022/9/7/2287820/%D9%84%D8%A7-%D8%B5%D8%AD%D8%A9-%D9%84%D8%A5%D9%84%D8%BA%D8%A7%D8%A1-%D8%A7%D9%84%D8%AA%D8%A7%D8%A8%D9%84%D8%AA-%D8%A3%D8%A8%D8%B1%D8%B2-%D8%AA%D8%B5%D8%B1%D9%8A%D8%AD%D8%A7%D8%AA-%D9%88%D8%B2%D9%8A%D8%B1-%D8%A7%D9%84%D8%AA%D8%B9%D9%84%D9%8A%D9%85-%D8%B9%D9%86-%D8%A7%D9%85%D8%AA%D8%AD%D8%A7%D9%86%D8%A7%D8%AA-%D8%A7%D9%84%D8%AB%D8%A7%D9%86%D9%88%D9%8A%D8%A9-%D8%A7%D9%84%D8%B9%D8%A7%D9%85%D8%A9-2023">were not used</a> in examinations as planned, according to Minister of Education Reda Hegazy.
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Despite these challenges, over the past few years, the Egyptian government has moved ahead with several national megaprojects in transport, roads, and bridges, showing that it can mobilize financial investments. It should also be emphasized that the limited financial resources currently available <a href="https://aps.aucegypt.edu/en/articles/472/policy-paper-expensive-classrooms-poor-learning-the-imperatives-of-reforming-school-construction-in-egypt">should be used</a> to support free public education.
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"Adasa" is a weekly policy digest by Alternative Policy Solutions. "Adasa" provides an analysis of a select number of policy developments and their effect on inclusive development and socioeconomic change.

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