NOTE 4 HIGHER EDUCATION FINANCING IN GUINEA NOTE 4 HIGHER EDUCATION FINANCING IN GUINEA ©2015 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. Contents Acknowledgements v Abbreviations and Acronyms vii Executive Summary 1 1. Introduction 4 2. Education Finance in Guinea 5 3. Higher Education Financing 7 How Is Funding Determined for Higher Education and 4.  What Funding Model Is Used? 8 Is Higher Education Funding in Guinea Equitable? 5.  14 6. Challenges and Recommendations 15 References 16 List of Figures Figure 1:  Higher Education Enrollment and Coverage 4 Figure 2:  Education Sector Funding Flows, Guinea 5 Comparison of Public Expenditures Across Economic Community of West Figure 3:  African States Countries* 6 Figure 4:  External Financing of Education, Use of Funds 6 Public Expenditures on Education, 2008 through 2012 Figure 5:  7 Figure 6:  Total Expenditures by Sub-sector, GNF Million 7 Higher Education Current Budget, 2008 through 2012, in GNF Millions Figure 7:  7 Structure of the Current Budget, by Sub-sector, 2012 Figure 8:  8 Uses of Capital Expenditures, by Level and Type of Investment, Figure 9:  2008 through 2012 (Current GNF Millions) 8 Current Expenditure by Student in Public Institutions Figure 10:  9 Earning Incremental by Level of Education Compared to no Education Figure 12:  Category for Employed Working Age Population (Age 15–64) 10 Average Monthly HH Income, by Sector of Employment, Youth and Adult 10 Figure 11:  Time it Takes to Find Employment upon Graduation, by Level of Education 11 Figure 13:  Number of Students Receiving Higher Education Subsidies, Figure 14:  Public and Private, 2012 12 Figure 15:  Budget Execution Rates at MESRS 14 Access to TVET and Higher Education, by Household Income, 2012 Figure 16:  14 Per Pupil Costs, TVET and Higher Education by Level, Figure 17:  in Constant 2008 GNF 15 Access to TVET and Higher Education, by Gender, 2008–12 Figure 18:  15 List of Tables Education Expenditures of Household, by Type and Level of Education, Table 1:  in and Outside of Conakry, 2012 (Private Expenditure Per Pupil) 9 Table 2:  Higher Education Recurrent Budget (2012) 9 Average Monthly HH income by Level of Education, Youth and Adult, (GNF) 10 Table 3:  Table 4:  Social and Private Rates of Return to Schooling 11 Evolution of Scholarship Financing Funds Committed and Executed, Table 5:  in GNF Millions  12 Monthly Average Student Expenditure by School Type Table 6:  13 Table 7:  Leakages Suffered by the Public Institutions on Scholarships in 2012 13 List of Boxes Box 1:  Variable Fees and Income-Contingent Loans 14 iv | Higher Education Financing in Guinea Acknowledgements The four higher education policy notes were prepared by Na- Fatoumata Camara Poly, Abdoulaye Mbemba Camara, Atigou thalie Lahire (Task Team Leader), with contributions from Bah, and Ousmane Kaba Sonali Ballal, Francois Keslair, Jaques L’Ecuyer, Adrien Lor- The peer reviewers were Lucy Fye, Harsha Aturupane, Atou enceau, Achille Mignondo Tchibozo, and Claire Morel. These Seck and Roberta Bassett. Valuable comments on initial drafts notes were prepared in partnership with the Guinean Ministry were received from Peter Materu, and Emanuela Di Gropello. of Higher Education team led by Abdoulaye Diakité (Secre- Cheick F. Kante and Peter Materu provided overall guidance taire General) and comprising of the following members: for the project. Tidjane Diallo, Sékou Konaté, Momo Bangoura, Mamadou The World Bank is grateful for the funding received from Kodiougou Diallo, Abdoul Karim Diallo, Mamadi Kuruma, the Norwegian Education Trust Fund. Higher Education Financing in Guinea | v Abbreviations and Acronyms CPS Country Partnership Strategy DAF Division of Administrative and Financial Affairs DNIP National Directorate of Public Investment DNPIP National Directorate of Public Investment Programming ELEP Limited Poverty Assessment Survey GDP Gross Domestic Product GNF Guinean Franc ICT Information and Communication Technology ISMG Institut Supérieur des Mines et Géologie de Boké ISSEG Institut Supérieur des Sciences de l’Education de Guinée MEF Ministry of Economy and Finance MESRS Ministry of Higher Education and Scientific Research PPP Public-Private Partnership PREMA Program for Reform of the State and Modernization of Administration PRSP3 Third National Poverty Reduction Strategy Paper SSA Sub-Saharan Africa TVET Technical and Vocational Education UGANC Université Gamal Abdel Nasser de Conakry UGLCS Université General Lansana Conté de Sonfonia Higher Education Financing in Guinea | vii Executive Summary The World Bank’s Country Partnership Strategy (CPS) for The education system must equip graduates with the skills Guinea in FY 2014–171 confirmed the Government’s priority needed by the emerging export-oriented economy. Develop- to build 21st century skills for improved employability and to ing relevant skills programs that provide students with the implement systemic reforms. Guinea is emerging from years competencies in demand and will subsequently enable them of political and economic isolation and instability. The demo- to be employed in an economy that values a technological and cratic election of President Alpha Condé has opened the door scientific skill set. Government needs to lay the groundwork for the international donor community, including the World to offer training in the relevant fields at the secondary, voca- Bank, to come forward and support the new government. Its tional, and higher education levels. important reform agenda, PREMA,2 has helped restore the Despite its abundant natural resources, Guinea has strug- confidence of the international community. The World Bank gled to become attractive to investors and entrepreneurs. In will partner with the Government of Guinea to develop sys- the Ease of doing Business report, Guinea ranks 175th out of tems that will “improve lagging human development indica- 189 countries.3 Firms operate in a heavily constrained envi- tors for absolute poverty reduction, through more efficient and ronment and face frequent power shortages and a slow bu- transparent allocation of resources, and to build shared prosper- reaucracy. All of these factors contribute to poor business pol- ity by aligning the business environment and education system icies. This unfavorable business environment is also partly the with Guinea’s economy” (World Bank, 2013, pp. 1). This is in result of poor governance and petty corruption. The Interna- line with the government’s priorities, as per the Third National tional Finance Corporation is providing substantial support to Poverty Reduction Strategy Paper (PRSP3) approved in 2013. strengthen Guinea’s business environment. Lack of local skills The PRSP3 aims to reduce poverty and to create and sustain is an important constraint, and in order for jobs in the emerg- a vibrant private economy by maximizing rents from Guin- ing sectors (mining, construction, hotel industry, banking and ea’s substantial mining sector. The Bank supports the Govern- finance) to be filled by Guineans rather than foreigners, the ment’s agenda on improving human capital by: (a) promoting Government must equip its youth with the skills required. both the quantity and quality of education and (b) upgrading In 2012, the Government requested special support from the skills for the needs of emerging and export-oriented sectors Bank in the form of technical assistance to conduct an analysis such as agriculture, tourism, mining, and telecommunications of the higher education system. This analysis would be used and Information and Communications Technology (ICT). to prepare a comprehensive higher education strategy to meet The education system has made significant progress, with the needs of both the economy and the labor market. Since the the primary gross enrollment rate reaching 83 percent as of early 2000s, the Bank had limited involvement in this critical 2013. However, challenges remain in the areas of coverage, sub-sector. Per the Government’s request, the Bank mobilized quality, and relevance. Approximately 60 percent of the stu- resources to engage in policy and analytical work in the areas dent population between the ages of 8 and 14 are out of school, of governance, financing, and diagnostic of skills demand and and learning assessments conclude that the government must supply from a new employer survey prepared specifically un- step up its efforts to improve completion rates, gender parity, der this technical assistance project. and learning outcomes. University enrollments have increased tenfold over 10 years, reaching more than 95,000 students in 1. Supply and Demand: Higher Education and Skills. This note 2012. However, Guinea’s higher education coverage rate re- reviews the current state of education and workforce skills mains relatively low compared to its neighbors, at 916 students from an employer perspective. It identifies the key bottle- at 100,000 inhabitants. In addition, the traditional opportu- necks faced by firms in hiring qualified workers and provides nities for Guinean graduates on the labor market through concrete recommendations to improve workforce quality. the civil service are no longer sufficient. Graduates between 2. Current Outcomes and Challenges: Diagnostic of the High- the ages of 25 and 35 are facing unemployment rates close to er Education System. In this note, we trace the evolution of 30 percent, increasing the likelihood of social instability. the higher education system. The note shows trends over All of these goals must be achieved while ensuring that the time, highlights tracer characteristics, and draws compari- needs of the labor market are met by the education system. sons between the public and private provision of education. 1 The other two areas are: improving governance and service delivery and 3. Governance of Higher Education. The key governance issues stimulating growth and economic diversification (World Bank. 2013. Country faced by the Guinean higher education system are presented. Partnership Strategy for Guinea). The note delves into the reforms undertaken by the govern- 2 PREMA stands for Program of Reform of the State and Modernization of ment after 2011 with a focus on the two presidential decrees. the Administration and it has the following items on agenda: organization of the country, management of the human resources available in the public sector, improvement of fiscal and economic governance, and overhaul of the judiciary. 3 World Bank (2014). Doing Business Report. Higher Education Financing in Guinea | 1 Conceptual Framework To increase the relevance of the education system to the labor market, the agriculture, construction and mining industries • Reforms between • Education and skills pro le recommend a focus on the entire system. 1989–2010 • Employment in the current As Guinea strives to embark on an accelerated development • State of business climate path, its ability to meet the demands of a diversified economy higher education • Production and skill needs • Labor market insights will be partly determined by the quantity and quality of its trained workforce. An emphasis on growing Guinea’s Tech- Diagnostic Supply & Demand nical and Vocational Education and Training (TVET) sector, adjusting university programs for greater relevance, and de- veloping strategic partnerships with the private sector will gradually close the gap between skills supply and demand. Financing Governance • Education nance • Governance challenges Current Outcomes and Note 2:  • Higher education nancing • E ciency & Equity • Higher education governance Challenges: Diagnostic of the • Best practices: Higher Education System international examples Human capital is increasingly a key ingredient for economic success: in Guinea, vast mineral reserves paired with a lack of appropriate skills to exploit their potential keeps the country 4. Financing of Higher Education. The note provides a brief trapped in poverty. Though enrollment rates have significant- overview of education funding and structure; the main fo- ly improved over the past decade, Guinea has yet to ensure cus is on the sources and uses of public and private funds for that its education system produces a labor force composed of higher education. workers with the low, middle, and high level skills required by high-growth-potential sectors. These four distinct policy notes are intended for policy Access to higher education remains a more significant bar- makers and technical staff. They may be read individually or rier for girls. In 2011–12, only one fourth of higher education as a series. The results from this work will also form the cor- students were girls, in contrast to high schools where about 40 nerstone for a new higher education operation in Guinea. percent of students were girls.4 However, the share of girls by level remains rather stable over time. This implies: girls have as good, if not superior, academic performance as boys, and once Higher Education and Skills: Note 1:  they enter higher education, they do not face many constraints Supply and Demand in continuing to pursue their education. Between 1989 and 2010, three major reforms—the trans- Economic development and civic participation in Guinea formation of Higher Education Institutions into public ad- are hampered by an extremely low literacy rate and a poorly ministrative institutions, extension and diversification of educated working population, especially in rural areas. Near- universities, and transition to the Licence-Master-Doctor- ly 22 percent of youth were either economically inactive or at system—have set the higher education system on a more unemployed in 2012, with the highest unemployment rates promising path, though progress remains to be made in the found among the educated population, pointing to a marked areas of institutional autonomy, access in equity, institutional mismatch between the supply and demand of skills. capacity, and teaching quality. In general, the education system is neither responsive to nor Higher education receives a disproportionate share of all currently producing graduates equipped to adequately meet public education spending, relative to enrollment levels. More the needs of the labor market. Universities offer a predomi- troubling is the allocation: nearly half of the budget goes to nantly theoretical education, despite the fact that firms value scholarships, and of that, the majority supports predominant- experience and practical skills. The school to work transition ly wealthier students enrolled in private institutions. offers further insight into the extent of the training-labor mar- With the simultaneous removal of entry requirements and ket absorption mismatch. Graduates of longer-term programs substantial increase in high school graduates, higher educa- enter the job market earlier than those completing short pro- tion enrollment has soared. Though private institutions are grams, but there is no distinction between the different levels multiplying and thus helping to absorb the surge, Guinea re- of programs. Employers report difficulty finding employees mains below the Sub-Saharan average for private higher edu- with the skills they require, and the informality of the labor cation enrollment. It should be noted that while access has ex- market, aggravated by the preference for hiring through per- panded, secondary education access, completion, and course sonal networks, has important consequences for equity and selection largely determine the distribution of tertiary educa- efficiency. tion students across program areas, with obvious consequenc- Universities offer predominantly theoretical education, es for subsequent employment opportunities. Furthermore, when firms value experience and practical skills. For example, the current system offers little flexibility and few opportunities in the construction, industry and service sectors, one in five firms state that they cannot find the type of qualifications they need, leading to a substantial proportion of vacancies. 4 ELEP (2012). 2 | Higher Education Financing in Guinea for adjustments to labor market needs. High repetition rates budget not only prevent better leveraging of public funds; they throughout primary and secondary education creates delays also remove incentives to develop relevant and innovative high- in university enrollment and thus the entry of the most skilled er education programs. Indeed, funding for higher education is labor onto the labor market. neither allocated nor used efficiently: almost half of the higher Guinea’s higher education landscape offers ample public-pri- education funding for operating expenditures is used to support vate partnership possibilities, from forecasting to curriculum students in public and private universities through stipends and development, training, job placement, and equipment provi- scholarships, regardless of the academic merits of the student sion. Public-private partnerships (PPPs) are the key to devel- and the value of the program in the labor market. Furthermore, oping the healthy, equitable, and high-quality education system evidence shows that this support is both insufficient to cover that will enable Guinea to develop and sustain a skilled and students’ needs, and not allocated to the students most in need. versatile workforce that will enable Guinea to take advantage of Improving the effectiveness and efficiency of the sector will its immense natural resources and achieve economic stability. require revamping of the scholarship and subsidy payments to higher education students and institutions, greater involve- ment of the private sector as partners, and the introduction of Note 3: Governance of Higher Education performance-based contracts for increased accountability of both public and private institutions. Over the past decade, governance reforms, which include in- creased institutional autonomy, diversification of programs, and additional resources for institutions, have contributed to the re- awakening of the higher education sector in Africa’s developing Policy Recommendations countries. In Guinea, the central government has pursued three Policy challenge Recommendations decentralization strategies: delegation to (a) a lower level of gov- ernment, (b) a buffer body, or (c) institutions themselves. Skills supply and demand Develop and improve skills mismatch relevant programs aligned with Moving towards a fully autonomous system should be an employer demand incremental process. Given the differences in economic con- Involve the private sector ditions and development of the higher education system, this as partners in curriculum note examines countries on a similar scale, particularly in the development, practical training, Sub-Saharan Africa (SSA) region, namely: Ethiopia, Nigeria, and financing. Ghana, and Kenya. Disconnect between schools/ Facilitate intermediaries to link The successful reforms among the ones adopted are high- graduates and potential skills profiles with jobs lighted to provide examples of best practices. employers Reform labor market access Guinean institutions do not have the institutional autono- Uneven access to relevant Reduce geographical inequities my to hire and fire permanent teaching staff, and the growth training programs and ensure school and labor of teaching staff has not kept pace with enrollments. Private in- market reform and adequate stitutions “poach” teachers from public institutions, aggravating distribution of training programs throughout the country the shortage, and the low level of international faculty indicates that opportunities for research collaboration and innovation are Expand education opportunities for the poor and girls insufficient. More than one third of qualified teachers will retire within the next two years. Guinea recently adopted and is in the Lack of autonomy of The government and the institutions higher education institutions process of adopting Decrees that will change the higher educa- need support to facilitate their tion landscape. This roadmap for a successful transition towards transition towards a decentralized a more decentralized system of higher education should be com- and more autonomous higher bined with initiatives to relax the stringent conditions attached education system to the budget and allow more flexibility in its use; give control to Higher education institutions institutions over the recruitment, promotion, and management should be given control over the recruitment, promotion, and of their teaching and research staff; and implement adequate ac- management of their teaching countability and quality assurance mechanisms. and research staff. Autonomy with adequate Note 4: Financing of Higher Education accountability and quality assurance mechanisms. The education sector is supported by three sources of financ- Inflexible budget Relax the stringent conditions ing: government, household, and donor financing, respective- attached to the budget and allow more flexibility in its use ly. Major challenges include highly centralized funding, dis- connect between the budget and sectoral goals, fluctuation in Inefficient and disproportionate Revamp the scholarship and spending on student subsidy payments to higher expenditures and consequent lack of predictability. scholarships education students and Guinea’s suboptimal allocation of resources is among the institutions most important challenges facing the education sector. One- Lack of accountability Introduce performance- third of total public education funding goes to higher educa- based contracts for increased tion, even though enrollment accounts for only eight percent of accountability of both public and the entire student body, and the subsidies eating up most of the private institutions. Higher Education Financing in Guinea | 3 1. Introduction but the Ministry of Economy and Finance (MEF) and the Ministry of Planning, retain control over budget decisions for Guinea’s higher education coverage rate, at 916 students for both current expenditures and capital investments.5 100,000 inhabitants, remains relatively low compared to its One-third of total public education funding goes to high- neighbors. Guinea is behind Ghana, Benin, Cape Verde, and er education, even though enrollment accounts for only Togo in Western Africa, but ahead of Mali, Burkina Faso, Ni- eight percent of the entire student body. The higher educa- ger, Senegal, and The Gambia (Figure 1). Universities are con- tion sector faces a fundamental funding problem: subsidies centrated in the capital, with sixty-five percent of all enrolled have become entitlement programs for students and universi- students studying in Conakry. In total, there are 17 public ties, and removing them will be a political challenge no matter and 39 private universities. The two largest public universi- how justified. Expansion of private education is also support- ties serve one third of all Guinean higher education students ed by public funds: almost every student enrolled in a private and offer a differentiated set of study programs. The Université university receives a government stipend. Higher education Gamal Abdel Nasser de Guinée (UGANC), founded in 1962, also receives the largest share of capital expenditures. Despite focuses on the sciences, including medicine. The relatively this relative advantage, unit costs remain low, suggesting that new Université Général Lansana Conte de Sonfonia (UGLCS), funding increases are neither meeting the expanding demand founded in 2005, primarily offers degrees in law, the social nor supporting programs that meet the needs of the economy, sciences, and literature. By their size, these two institutions either directly or indirectly through student subsidies. constitute the core of public higher education in Guinea. Spe- This suboptimal allocation of resources is among the cialized schools—such as the Institut Supérieur des Sciences most important challenges facing the education sector in de l’Education de Guinée (ISSEG) (education) or the Insti- Guinea: not only do these subsidies prevent better leverag- tut Supérieur des Mines et Géologie (ISMG) (geology)—and ing of public funds; they also remove incentives to develop small higher education institutions outside of Conakry have relevant and innovative higher education programs. much lower enrollment. This note largely relies on analysis from the recent public Guinea’s higher education administration has a turbu- expenditure review of the education sector in Guinea. We lent history littered with restructurings: management has provide a very brief overview of education funding and the changed twenty three times since 1957, including ten times system structure, but primarily focus on the sources and uses since 1991, with the latest in 2010. In just the five years be- of public and private funds for higher education. The data tween 2007 and 2011, seven ministers served at the Ministry includes detailed information on public expenditures, house- of Higher Education and Scientific Research (Ministère de hold spending, and education outcomes.6 l’Enseignement Supérieur et de la Recherche Scientifique or MESRS). The MESRS is responsible for the administrative management of universities and other higher-level institutes, 6 The public expenditure data in this section is from the Ministry of Econ- omy and Finance over a period of 5 years from 2008 to 2013. The education 5 Ministry of Planning’s National Directorate of Public Investment Pro- statistics have been compiled from various education ministries in Guinea gramming (DNPIP) and the MEF’s National Directorate of Public Investment and are primarily for the year 2012. The 2007 and 2012 household surveys (DNIP) have dual control on capital budgeting decisions. provide data on household spending. Figure 1:  Higher Education Enrollment and Coverage Enrollment* Coverage** 100,000 3,000 80,000 2,500 2,000 60,000 1,500 40,000 1,000 20,000 500 0 0 2000–01 2001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12 Benin Burkina Faso Cape Verde The Gambia Ghana Guinea Mali Niger Senegal Togo Public Private Note: *Ministry of Higher Education and Scientific Research, Annual Statistics 2012. **UNESCO Institute for Statistics.a a Coverage data is for 2012, except for Benin and The Gambia for which data is for 2011, and for Senegal for which data is from 2010 (likely outdated). 4 | Higher Education Financing in Guinea 2. Education Finance in Guinea Figure 2:  Education Sector Funding Flows, Guinea Guinea’s education funding is highly centralized, and the Donor budget is disconnected from sectoral goals. Planning and Community programmatic budgeting begins with the Ministry of Economy Education Households and Finance (MEF) and the Ministry of Planning. MESRS, like Ministries MASPFE other sector ministries, only provides feedback. Most planned MEPU-EC MEFTFP budgets are incremental changes from the previous year, with- MESRS MAPLN Regional (IRE) and District out any particular focus on any programmatic needs, and (DPE) o ces the sectoral ministries play only a very minor role in budget Ministry of Education preparation. Furthermore jurisdictional conflicts among var- Territorial Sector ious stakeholders further weaken the support for sector pri- Administration and Expenditure Decentralization Local orities. In particular, the dual control over the capital budget Governments by the Ministry of Planning’s National Directorate of Public Investment Programming (DNPIP) and the MEF’s National Directorate of Public Investment (DNIP) leads to duplication Central government resources –55 % of total education expenditure and confusion, impeding the sector ministries. Similarly, the Local Government Resources –<1 % of total education expenditure International donor funds –~10 % of education expenditure Division of Financial Affairs (DAF), the key office that plans Household expenditures –35 to 38 % total education expenditure and implements the budget, must coordinate with both the school infrastructure entities and the Human Resources Divi- Source: Public Expenditure Review. sion, which controls the personnel decisions. Human resource management functions lack capacity, especially in personnel projections. DAF lacks access to real-time statistics on their After the Government, households are the second largest cash positions, and experiences significant procurement de- source of funding for education. Household data8 suggests lays. As a result, education ministries and decentralized enti- that households spend approximately GNF 190,000 (US$ 26) ties lack the financial tools and the political presence necessary on each child attending primary school, approximately GNF to communicate their needs to sector actors at the central level. 366,000 (US$ 51) on each student in middle or high school, Three sources of financing support the education sector: GNF 534,100 (US$ 75) on each student attending technical government, household, and donor financing. The central and vocational education and training (TVET) schools, and government contributes over fifty-five percent of total educa- GNF 1.1 million (or approximately US$ 163) on each student tion expenditure, whereas household expenditures make up a attending university. In total, household expenditures are little less than forty percent (Figure 2). International donors equivalent to 1 percent of Guinean GDP. To put this num- contribute less than 10 percent of total education expenditures, ber in context, UNESCO Institute of Statistics reports private while local government resources constitute less than 1 percent sources account for 2.4 percent of GDP in Benin, 2 percent of total expenditures. The combined share of public, private, in Burkina Faso, 1 percent in Burundi, 0.3 to 0.4 percent in and international contributions to education add up to approx- Malawi and Niger, and 0.6 percent in Mali. imately 4.3 percent of Guinea’s gross domestic product (GDP). Donor funds constitute the third largest source of financ- In 2012, Guinea spent approximately GNF 1 trillion ing for education in Guinea. Guinea relies heavily on inter- (US$ 142 million) of its public resources (excluding transfers national donors to support education spending, especially for to local governments) on current and capital expenditures in capital investments at the primary level (Figure 4). According education.7 In terms of GDP allowing for cross country com- to budget records held by MEF, between 2008 and 2012, in- parisons, Guinea’s public education expenditures account ternational development agencies and donors committed GNF for only 2.6 percent of GDP, placing it below even the lowest 932 billion (US$ 132.7 million) to support the education sector levels of funding observed in many African countries as well in Guinea, but only 65 percent of these funds were received.9 as low-income countries. Across the world, the rate of public International donor funds during this four-year period equaled expenditures on education averages the equivalent of 4.7 per- approximately 14 percent of all government expenditures on cent of GDP; across low-income countries, this rate is 4.2 per- education. This translates into an average annual commitment cent. Currently, the education sector in Guinea receives only of 0.5 percent of Guinea’s GDP (but annual flows are uneven). 13.3 percent of all public expenditures—once again, lagging The World Bank is the largest donor in the country, account- behind the seventeen percent generally observed in Sub-Saha- ing for 53 percent of total international funding. The United ran Africa and low-income countries (Figure 3). Nations Children’s Fund and the African Development Bank follow, contributing 12 and 14 percent, respectively. 7 In this note, we are using the budget commitments as the basis for the expenditure analysis. In 2012, the same year, the appropriations for the edu- cation sector were higher—at GNF 1.1 trillion, and the payment orders were 8 ELEP 2012 slightly lower, at about GNF 960 billion. Usually payments and commitments 9 The discrepancy is largely due to the political turmoil of 2010, when many are relatively close, but both are below appropriated amounts. In 2012, pay- international donors stopped their investments. These figures are based on ments were lower than commitments. This might be because the closing of ac- the result of a survey undertaken as part of this review; and do not reflect the counts could be continu-ing. We explore the relation between appropriations, full extent of external financing presence in Guinea, as they do not include commitments, and actual expenditure in coming pages. financing from Non-Governmental Organizations. Higher Education Financing in Guinea | 5 Figure 3:  Comparison of Public Expenditures Across Economic Community of West African States Countries* Share of Public Education Expenditures in GDP* Education Expenditures as % of Public Expenditures** 9% 8.2% 30% 8% 24% 24% 25% 23% 22% 7% 6% 5.3% 5.6% 5.6% 20% 18% 18% 18% 5% 4.7% 4.5% 4.6% 4.3% 16% 17% 3.9% 4.2% 15% 13% 14% 14% 4% 3.4% 3.3% 3% 2.6% 10% 2% 5% 1% 0% 0% Guinea Benin Burkina Faso Cape Verde The Gambia Ghana Liberia Mali Niger Senegal Togo Sub-Saharan Africa Low Income Guinea Benin Burkina Faso Cape Verde The Gambia Ghana Mali Niger Senegal Togo Sub-Saharan Africa Low Income Source: MEF and WDI, 2013. Note: * For the GDP chart, data for Guinea is from 2012; data for Benin, Cape Verde, Senegal, Sub-Saharan Africa and Low income Countries is from 2010; data for Liberia is from 2008 and data for all other countries is from 2011. For the public expenditure chart, data for Benin, Cape Verde, Ghana, Senegal, Sub-Saharan Africa, and Low income Countries is from 2010. Data for all other countries is from 2011. ** Data for Guinea is from 2012; data for Benin, Cape Verde, Senegal, Sub-Saharan Africa and Low income Countries is from 2010; data for Liberia is from 2008 and data for all other countries is from 2011. *** Data for Benin, Cape Verde, Ghana, Senegal, Sub-Saharan Africa, and Low income Countries is from 2010. Data for all other countries is from 2011. Figure 4:  External Financing of Education, Use of Funds sector. However, it shows the change in the government’s pri- orities over time. Capital expenditures accounted for approxi- Higher Education mately five percent of total public funding in 2012. In the same Technical Education and 3.17% Vocational Training Early year, Conakry received nearly 28 percent of all public spend- Childhood 2.23% 1.95% ing, and the central administration of education accounted for Adult Secondary Education Literacy another 12 percent. 3.96% 1.22% While personnel costs account for the bulk of recurrent public expenditures, the share of transfers and subsidies is much larger in Conakry on a per capita basis. This is in spite of the fairly low number of students enrolled in public schools in Conakry, due to a prevalence of private schools. The biggest recipient of public funding is primary education, which accounts for 42 percent of all education spending in 2012. This is a slight decline in share from 45 percent in 2008. Elementary Higher education accounted for one third of total expendi- Education tures in the 2012 budget, similar to its share in 2008. The share 87.46% of lower secondary education has varied between fourteen and eighteen percent of total education expenditures, and Source: Data received from Project Coordination Unit (2013). TVET between 3.5 and 5.5 percent. Pre-primary education and literacy programs are negligible in size compared to the rest of the sub-sectors (Figure 6). After primary education, higher education has the sec- Funding for education from local and regional govern- ond highest total current expenditures, despite significant- ments, totaling about GNF 26 billion, account for less than ly fewer enrollments than primary education. In 2012, of the 1 percent of education expenditures, and these generally do GNF 956 billion (US$70 million) spent on operating activities not finance higher education. for the entire education sector, GNF 407 billion (US$30 mil- Guinea’s public expenditures on education have fluctuat- lion) was spent at the primary level, serving 1.6 million stu- ed over the years, making predictability in financing very dents. GNF 324 billion (US$23.7 million) was expanded at the complex. Funding increased by about 76 percent in nominal higher education level, serving 92,000 students. Since 2008, terms between 2008 and 2012, but experienced a decline fol- operating budgets at the secondary level and TVET have near- lowing a surge in 2010 when total public expenditures reached ly doubled, but combined expenditures in these three sectors GNF 1.18 trillion (Figure 5). This surge resulted from exces- still lag behind higher education. Although literacy training sive spending across sectors during the period of political in- also got a big boost relative to its dismally low starting point, it stability, and is not a unique phenomenon for the education remains small. Current expenditures at the pre-primary level 6 | Higher Education Financing in Guinea Public Expenditures on Education, 2008 through 2012 Figure 5:  Public Expenditures in Education Shares by Use Area 1,400,000 100% 1,200,000 80% 1,000,000 800,000 60% 600,000 40% 400,000 20% 200,000 0 0% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Total Current Expenditures Total Capital Expenditures Central Administration Conakry Region Other Regions International Students/Services Services not broken down by type Source: MEF. Figure 6:  Total Expenditures by Sub-sector, GNF Million Higher Education Current Budget, 2008 Figure 7:  through 2012, in GNF Millions 512,871 500,000 200,000 455,743 341,498 1,200,000 8,645 1,000,000 400,000 150,000 4,464 257,985 7,759 800,000 185,443 128,818 427,049 132,452 300,000 385,880 102,718 21 600,000 100,000 314,534 79,685 49,305 52,126 258,089 72,140 12 47,645 48,989 34,862 200,000 733 37,992 400,000 41,106 29,472 425,712 24,756 26,682 200,000 50,000 1,832 1,798 100,000 NA- 692 0 2008 2009 2010 2011 2012 0 0 Pre-school Primary Lower Secondary Upper Secondary 2008 2009 2010 2011 2012 TVET Higher Education Literacy Training Capital Current Source: MEF. Source: MEF. declined between 2008 and 2012, despite an increase in total The bulk of capital investment was made in 2010, when enrollment. (The share of public institutions in total enroll- Guinea intensified its investments in school buildings. This ment stayed constant during this period. Over 80 percent of heavy investment was mainly due to political instability, and preschool attendees were served by private child development the surge in spending was not limited to the education sec- centers, 96 percent of which are in Conakry). tor, but was spread across sectors. Between 2008 and 2012, of the total investment at the higher education level—approxi- 3. Higher Education Financing mately GNF 350 billion—(i.e. approximately 92 percent) went towards the construction of new school buildings (Figure 9). In 2012, higher education in Guinea received GNF 342 bil- In contrast, primary and secondary education received ap- lion in public funds—an amount 84 percent higher than the proximately GNF 128 billion in capital expenditures during total funding for higher education in 2008, but less than the the same period: 45 percent of capital investment in education over half trillion GNF spent on current and capital expendi- in Guinea. Total investment in new primary and secondary tures in 2010 (Figure 7). school buildings and classrooms was approximately 94 billion, Higher education receives a disproportionately large or 72 percent of total investments at these levels, producing share of public expenditures because it is funded differently approximately 610 new classrooms.10 Of the GNF 15 billion from the rest of the education sector. All students, includ- spent at the TVET level (approximately US$2 million), ap- ing those who are in private institutions, receive subsidies or proximately 68 percent was spent on new school construction scholarships from the government. This amount, which was approximately GNF185 billion in 2012, accounted for nearly half of current expenditures in higher education. In contrast, 10 The unit cost of each new classroom at the primary level is estimated at scholarships and subsidies are entirely absent from the prima- GNF 150 million, and at the secondary level GNF 165 million. The estimated ry, secondary, and TVET budgets (Figure 8). number of classrooms assumes a blended unit cost of GNF 155 million. Higher Education Financing in Guinea | 7 Structure of the Current Budget, by Sub-sector, 2012 Figure 8:  Primary Secondary TVET Higher Education Other Other Equalization Equalization non-personnel Goods/ Salaries non-personnel grants Services grants 21% 11% 10% 4% 0% 21% Other operating grants 26% Goods and Services School supplies/ School 3% teaching supplies/ materials teaching 3% materials 8% Equalization grants Scholarships 4% Salaries Salaries Personnel 46% 86% 82% 75% Source: MEF. Figure 9:  Uses of Capital Expenditures, by Level and higher level is 1790 percent of per capita income) or Rwan- Type of Investment, 2008 through 2012 da (570 percent of per capita income), unit costs are around (Current GNF Millions) 100 percent of per capita income. Tuition payments are the largest source of expenditures 350,000 for households with students attending university (Table 1). 300,000 Tuition accounts for over a third of household expenditures 250,000 for students enrolled in public universities—this share is half 200,000 the total household expenditures for students enrolled in pri- 150,000 vate universities in Conakry, and over 63 percent for students in private universities outside of Conakry. The share of tuition 100,000 expenditures is relatively low for private schools at the higher 50,000 education level. Tuition accounts for 70 percent of household 0 Schoo Buildings Other School Buildings Other School Buildings Other expenditures for primary and secondary school students. After Primary and Secondary TVET Higher Ed tuition expenses, transportation is the second highest source 2008 2009 2010 2011 2012 of expenditures, especially in Conakry—households with stu- dents in public higher education institutions spend over one Source: MEF (2013). third of their education expenditures on transportation. and another 30 percent on the construction of administrative buildings.11 How Is Funding Determined for 4.  Per pupil expenditures at higher education institutions Higher Education and What Funding have fallen below their 2008 levels (in real terms) after a sharp increase between 2009 and 2011. In 2010 and 2011, Model Is Used? unit costs reached 206 percent of GDP per capita, but in 2012, the higher education budget suffered significant ex- Higher education financing is determined on the basis of his- penditures (salary costs declined slightly, but the major torical numbers of staff and students. Higher education insti- reduction hit subsidies in grants due to lower numbers of tutions directly negotiate their budget allocation with the Min- high school graduates), which reduced unit costs by al- istry of Finance, and the amount allocated to the institutions most a quarter. At the TVET level, unit costs are about 50 is based on student numbers rather than programs. The evo- percent of per capita income, but this sector is very small lution of financing to institutions has increased over the years, and the high costs reflect not the higher quality of education, from 0.34 percent of GDP in 2006 to 1.02 percent in 2012. but rather higher overheads. Guinea’s unit costs at the high- The unit cost per student is low compared to other countries er level—130 percent of GDP per capita—is not very high. in the sub-region, and remains the same across academic pro- Across low income countries, even when excluding extremely grams (GNF 362,090 or US$51). high-cost countries such as Malawi (where unit costs at the In 2012, the higher education recurrent budget reached a total of 393 billion GNF (Table 2). 11 The central budget data does not provide information on the capital in- Financing of Public Institutions vestments at the pre-primary level such as the Early Childhood Care and Education centers or adult literacy centers as the construction and the main- There is wide variation in expenditures per student within tenance of these centers are under the responsibility of local governments. the public university sphere (Figure 10). 8 | Higher Education Financing in Guinea Education Expenditures of Household, by Type and Level of Education, in and Outside of Conakry, 2012 Table 1:  (Private Expenditure Per Pupil) Higher Primary Secondary Education TVET Public Private Public Private Public Private Public CONAKRY (total expenditure, in 000) 64 423 231 670 243 560 339 Tuition 0% 70% 26% 70% 36% 49% 32% Uniforms 51% 10% 22% 8% 8% 4% 2% Books 3% 1% 2% 1% 3% 3% 3% School Supplies 56% 10% 19% 7% 13% 11% 1% Transportation 0% 3% 17% 9% 35% 27% 53% Room and Board 1% 4% 11% 2% 4% 6% 7% Other expenses (inc tutoring) 2% 2% 1% 2% NA NA 1% OUTSIDE CONAKRY (total expenditure, in 000) 125 342 153 628 219 987 209 Tuition 16% 68% 13% 74% 33% 63% 51% Uniforms 47% 16% 44% 11% 5% 9% 14% Books 2% 1% 2% 1% 3% 1% 0% School Supplies 33% 15% 33% 12% 21% 9% 18% Transportation NA NA 4% 2% 31% 18% 13% Room and Board 1% 1% 1% 1% NA NA 3% Other expenses (incl. tutoring) 1% 1% 2% 1% 9% NA 1% Source: ELEP (2012), statistics computed with less than 20 observations are reported as N/A. Per-student expenditure is higher in higher education vo- Table 2: Higher Education Recurrent Budget (2012) cational institutions, in particular at the Institute of Agronomy Year 2012 Allocations Executed amounts and Veterinary of Faranah (ISAV) and the Boke School of Min- ing and Geology (ISMG) (4,250,000 GNF and 4,214,000 GNF Foreign 27,303,073,000 27,270,077,311 respectively). These are followed by the Higher Institute of Arts Private institutions 120,676,875,381 111,567,180,000 at Dubreka (ISAG) (3,104,578 GNF) and the School of Hospi- Public institutions 152,826,455,431 134,455,679,002 tality and Tourism (ESHT) (2,877,850 GNF). This is explained Research institutions 10,875,339,801 10,875,330,727 by the low number of students in professional institutes and the importance of the share of resources devoted to these struc- Central administration 81,326,818,942 66,403,167,278 tures (for example, Boke and Faranah monopolize 15 percent Total 393,008,562,555 350,571,434,318 Current Expenditure by Student in Public Institutions Figure 10:  3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Centre Univeritaire De Kindia (CUK) Centre Univeritaire De Labe (CUL) Centre Univeritaire de N’Zérékoré (CUZ) Ecole Supérieure De L’Hotellerie Et Du Tourisme Institut Sup De Commerce Et D’Administration Des Institut Superieur Agronomique Et Veterinaire De Institut Superieur De Formation A Distance (ISFAD) Institut Superieur Des Arts De Guiness Dubreka (ISAG) Institut Superieur Des Mines Et Geologie De Boke Institut Superieur Des Science De L Education De Institut Supérieur D’Architecture Et D’Urbanisme Institut Supérieur Des Science Et Médecine Institut Supérieur de I’Information et de la Institut Supérieur de technologie de Mamou Universite Gamal Abdel Nasser De Conakry (UGANC) Université Général Lansana Conté De Sonfonia Université Julius Nyéréré De Kankan (UJNK) Source: Ministry of Higher Education and Scientific Research, Annual Statistics (2012). Higher Education Financing in Guinea | 9 Average Monthly HH income by Level of Table 3:  Average Monthly HH Income, by Sector of Figure 11:  Education, Youth and Adult, (GNF) Employment, Youth and Adult   Youth Adult 1,268,706 Services 1,208,711 No education 594,114 621,800 Incomplete primary 844,550 843,907 1,164,532 Completed primary 1,125,062 1,110,756 Industry 1,239,521 Lower secondary 1,316,509 1,288,089 523,584 Upper secondary 1,514,030 1,450,641 Agriculture 515,527 TVET 1,625,374 1,652,276 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 Higher education 1,944,192 1,925,775 Adult Youth Total 884,132 843,101 Source: ELEP (2012). of resources for less than 5 percent of enrollment). However, (2) Second, by setting up courses/programs in line with labor the available means of these institutes are very low given the market demand and in accordance with internationally rec- high cost of materials and subsequently explains the difficulties ognized standards to improve the employability of graduates. of these structures to accommodate additional students. In contrast, universities that capitalize more financial resources have lower pupil spending with about 2,000,000 Is Higher Education Funding in Guinea Efficient? GNF on average. The majority of students are oriented to in- Funding for higher education is neither allocated nor used stitutions with less professional and vocational training such efficiently. Adults with primary education generally earn fifty as UGANC, Sonfonia, Nzerekoré, Labe, Julius Niéréré in Kan- percent more than those with no education (GNF 1,110,756 ka, and Kindia facing overstaffing (over 50 percent). Despite or $159 per month, compared to GNF 621,800 or $88 per the significant resources injected (61 percent) in these facili- month), but the middle-school premium over primary school ties, student spending remains very low. is only eight percent (Table 3). The highest-paying sector by In addition, if one considers that these institutions account household income is the service industry for adults, and the for most staff and transfer costs which constitute the bulk of industry sector for youth (Figure 11). the resources involved in the functioning/running of institu- Estimates by level of education reveal that a higher level tions (respectively 30 percent and 28 percent respectively with of education is associated with higher earnings at all levels 20 percent and 21 percent for universities), the problem of how of education, both for wage employment and household in- these structures can continue to support their recurrent costs come (Figure 12). The other notable aspect regarding educa- arises with acuity. tion’s significant role in poverty reduction is the direct linear Two key recommendations to rebalance the distribution relationship between education and earnings. As educational of resources and a more equitable allocation within and be- achievement increases, the likelihood of poverty declines. For tween the different institutions are: (1) First, by implementing example, in wage employment compared to no education lev- the appropriate management reforms of staff (status, recruit- el, attainment of some primary education increases monthly ment criteria allocation, redeployment) and scholarships (cri- earnings by 37 percent and the corresponding figures for com- teria for the granting and maintenance of the scholarships); pleted primary, completed lower secondary, completed upper Earning Incremental by Level of Education Compared to no Education Category for Employed Working Figure 12:  Age Population (Age 15–64) 180% 155% 149% 146% 152% 160% 136% 140% 124% 127% 120% 100% 103% 104% 95% 100% 88% 74% 77% 80% 61% 54% 60% 37% 42% 31% 33% 40% 20% 0% Wage employment HH head education level HH member average education level HH member median education level Incomplete primary Completed primary Completed lower Secondary Completed upper secondary Higher Source: Estimates based on ELEP 2012. 10 | Higher Education Financing in Guinea Table 4: Social and Private Rates of Return to Schooling Difference Average in average years of Expected Average number schooling Private per Public per life-time years of of years of within the student student Private rate Social rate of Level of education earning schooling schooling school level payment Payment of returns returns Primary 11.7 2.8 2.8 2.8 605,866 351,222 10.3% 10.0% Lower Secondary 14.6 8.5 5.7 2.5 932,615 399,367 4.2% 4.1% Upper Secondary 15.9 11.3 2.8 2.3 1,046,179 429,007 3.2% 3.1% Higher education 21.3 14.7 3.3 2.7 2,759,649 4,229,922 8.9% 7.5% Source: Estimate based on ELEP 2012 and Guinea Public Expenditure Review of the Education Sector (2014). secondary, and post-secondary education are 61 percent, 88 Time it Takes to Find Employment upon Figure 13:  percent, 100 percent and 136 percent, respectively. The pat- Graduation, by Level of Education terns based on household income for the other three classifi- cations closely follow the same pattern. Overall, for wage and Ph.D. 31% 36% 17% 8% 8% household head’s education, a higher level of education seems to reward the highest incremental yields, while for average Masters 22% 42% 19% 8% 9% and median years of household member’s education, prima- College 29% 35% 21% 9% 9% ry completion yields high returns. Therefore, education is the most important factor for poverty reduction. Professional Type A 19% 37% 22% 8% 13% Higher education graduates earn three times more than Professional Type B 30% 21% 16% 19% 14% those who have no education. Primary education has the High School 29% 26% 13% 8% 25% highest private and social rates of return (Table 4). This is consistent with other findings in developing countries.12 After Middle school 25% 24% 16% 3% 33% primary education, the rates of return for higher education are 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% the most favorable at 8.9 percent, compared to 7.5 percent of Upon completion Less than 1 year Between 1 and 2 years social rates of returns. Between 2 and 3 years More than 3 years Most employees work in areas unrelated to their skill levels.13 Half of government employees hold technical and Source: ELEP 2012. professional degrees. Similarly, the distribution of tasks with- in firms is unrelated to employer credentials, except perhaps for workers who pursued their education beyond high school, late entry into the labor market. A quarter of youth between again suggesting that specialization at the workplace is not the ages of 20 and 24 are still in secondary school. necessarily a continuation of skills learned at school. There is Almost half of the higher education funding for operat- a gap between skills cultivated by education and formal train- ing expenditures is used to support students in public and ing, and what employers demand from workers. Employers private universities through stipends and scholarships, re- frequently offer and fund further training to close the gap: 70 gardless of the academic merits of the student and the value percent of government workers, 40 percent of construction of the program in the labor market. All students who suc- workers, and 30 percent of workers in manufacturing and cessfully pass the high school exit examinations are eligible commerce participate in training of substantial duration. The for entry into higher education, and subsequently eligible for average duration of training is 18 months, with little variation scholarships (for more in-depth information, see note 2). The across sectors, suggesting that employer-offered training is current funding structure serves as an entitlement program substantive, and beyond simple orientation sessions. benefitting students of privileged backgrounds and supporting Educated youth face higher unemployment rates, and the established programs, which may be following an irrelevant school to work transition can take a long time. Only one- curriculum and taught by faculty with outdated knowledge. third of the most educated Guinean youth find jobs upon In 2012, the Guinean government allocated GNF 175 bil- graduation, and for most, finding a job can take years. House- lion for scholarships and direct transfers to students in higher hold surveys show that (Figure 13) close to half of high school education: half of current expenditures for higher education. graduates cannot find jobs within one year of graduation. Over 87,000 students (public and private universities com- Among workers aged 20 to 24, the share of unemployed is 8.9 bined) benefited from this type of financial support (Figure percent, indicating that this transition is relatively difficult. 14), equivalent to 95 percent of higher education students (or Late entry to school and high repetition rates contribute to 96 percent at public universities, and 89 percent in private universities). Although institutions are encouraged to gener- ate their own funding, this amount is in reality very modest: in the range of 1.5 percent in certain institutions. Registration 12 (Lee and Psacharopoulos (1979), Baumol, Blackmann, and Wolff (1989) fees for students in public institutions remained constant at 13 Employer survey, World Bank, 2013 GNF15,000 (or US$2) since 2008. Higher Education Financing in Guinea | 11 Figure 14:  Number of Students Receiving Higher Surveys of students and higher education institutions Education Subsidies, Public and Private, 2012 provide further evidence that higher education scholar- ships and subsidies are neither well targeted nor adequately 80,000 managed. With the support of the World Bank, the Guinean 2,582 government undertook a survey14 to assess the use and man- 60,000 agement of scholarships and subsidies. The survey had three objectives: first, to assess the leakage incurred in the transfer 40,000 66,608 of funds from central to higher education institutional levels; 2,351 20,000 second, to better understand the procedures and management 20,836 of scholarships/grants; and third, to collect students’ opinions 0 and suggestions on possible scholarship reform. The survey Public Private covered twenty-nine institutions, including all seventeen pub- Receives scholarships or grants No public assistance lic universities and thirteen of the twenty-nine private insti- tutions. 2,568 students from public institutions and 871 from Source: Annual Statistics. private institutions were interviewed. For students enrolled in both public and private institu- tions, one notes that the expenditures far exceed the finan- Funds allocated to scholarships increased rapidly between cial support received (Table 6). For most, the subsidy amounts 2008 and 2010, and have been declining since, though the are small—among students who attend public schools, aver- number of students receiving subsidies has remained stable age expenditures are around GNF 815,000 per month. This (Table 3). Direct transfers to private institutions saw a steep suggests that scholarships can pay for only twelve to sixteen increase in 2010, with the funding almost doubling due to in- percent of monthly expenditures. Among students enrolled creased availability of private institutions and growing student in private institutions, the subsidies account for a quarter of numbers. The student body increased from 8,700 in 2008 to total expenditures, which are, on average, GNF 1.5 million per 22,900 in 2010, and 23,187 in 2012. Approximately 13 to 14 month. The comparison of expenditures suggests that tuition percent of scholarships and financial aid support is directed to alone cannot explain the cost differentials—students of private Guinean students studying outside of Guinea. universities have higher expenditures on basic items such as The volume of subsidies for private institutions contin- food and clothing, perhaps due to lifestyle differences. ues to increase rapidly (Table 5). These subsidies, which are Student responses to survey questions also show that stu- paid directly to universities based on enrollments, by offering dents mostly rely on financial support from their families. more enrollment options, are seen as a way to free up space Many live with their parents (60 percent across public univer- in overcrowded public universities. Monthly scholarships for sities and eighty percent across private) and over two-thirds students in public institutions are very small, ranging from report receiving additional contributions from their parents. GNF 95,000 (US$13) and 130,000 (US$19) and increasing by While 40 percent of students report debt of GNF 100,000 or year of study. Tuition subsidies offered to students in private institutions are more considerable and vary by institution, with an estimated monthly average of GNF 400,000 (US $55). 14 World Bank. 2013. Survey on the Living Conditions of Students in Guinea Table 5: Evolution of Scholarship Financing Funds Committed and Executed, in GNF Millions   Budget Public institutions Private institutions Foreign scholarships 2006 Total credits 26,731 0 8,420 Total executed 26,731 0 8,406 2007 Total credits 40,313 11,639 11,623 Total executed 40,313 9,540 9,864 2008 Total credits 55,271 20,774 12,788 Total executed 55,271 20,661 12,857 2009 Total credits 76,554 45,592 14,490 Total executed 76,554 45,591 6,140 2010 Total credits 95,563 80,338 32,502 Total executed 95,563 80,153 34,623 2011 Total credits 90,557 113,713 25,401 Total executed 89,853 87,348 24,720 2012 Total credits 54,720 132,286 27,303 Total executed 36,910 119,188 27,270 Source: MEF. 12 | Higher Education Financing in Guinea more, only fifteen percent of them report having jobs. 40 per-  onthly Average Student Expenditure Table 6: M cent of the students have one business-owning parent, and by School Type only fifteen percent report parents with no professional activi- ty. Similarly, students who receive scholarships generally have Type of expenditure Public Private educated parents—half the students in public universities, and Food 204,972 214,156 slightly more in private universities, report that their fathers Clothing 144,097 209,105 have at least completed high school. Health 65,403 90,856 Results from the survey also show that monitoring of stu- dents in private and public institutions can be improved. Transport 111,711 208,147 43 percent of students interviewed reported that they were Tuition 92,892 481,178 absent at least once during exams, twenty percent were absent Communication 92,287 156,700 once during exams, 10 percent twice, 5 percent three times Extra curricula 62,615 103,271 and 8 percent four or more times. Attendance should be a de- Others 40,788 73,200 termining factor in scholarship renewal. Receiving a scholar- ship should be an indicator of success, but under the current Total 814,765 1,536,613 structure, it is not. Furthermore, the system leaves room for Source: Survey (2012) abuse. Focus groups organized as part of this survey indicated that some students receiving a scholarship in a public insti- tution were simultaneously enrolled in another program in a the considerable amounting of funding allocated to private in- private institution. stitutions. Despite the substantial financing provided for these Sizable amounts of funds are either lost or not used for institutions, they are not required to report on results. While the intended purpose. Results from the tracking survey show this kind of partnership is certainly very commendable, the that the scholarship funds are rarely executed to exhaust all opacity of this approach needs to be revised urgently. appropriations (Table 7). The leakage rate at public institutions The low execution rates for scholarships and subsidies could be as high as 17 percent. This finding is based on the in- are partly due to the extremely conservative funding fore- formation from fourteen public higher education institutions casts—the model overestimates the number of beneficiaries, and 47,039 higher education scholarship holders enrolled in sometimes even double counting them, but must account for those institutions (69 percent of all public scholarship holders lack of financial controls, especially the inadequate criteria in higher education). The lowest-performing higher educa- for the granting and renewal of scholarships. The Ministerial tion institutions had leakage rates between 13 and 17 percent. budget office has also reported that some losses are due to in- Others suffered losses between 0.14 and 7.14 percent. The av- terest rates charged by certain banks: some public universities erage loss rate is 6.85 percent or GNF 3.137 billion. do not have an account at the Central Bank of the Republic of The study could not determine the losses incurred at pri- Guinea and are required, in the interest of safety, to open an vate institutions or their resource utilization. The lack of account in commercial banks with higher interest rates. It is analysis is a stark reminder of the lack of accountability, given important to note that the low execution of these funds is also Table 7: Leakages Suffered by the Public Institutions on Scholarships in 2012 Credits (GNF Amount received Loss Public Institution No. of bursaries millions) (GNF millions) (GNF millions) Loss rate CU Labe 2,003 1,280 1,094 186 14.53% ISAG Dubreka 2,784 6,936 6,926 10 0.14% ISSMV Dalaba 1,886 5,828 5,047 781 13.40% CU Kindia 4,639 6,386 5,332 1,054 16.50% ISMG Boke 1,542 4,200 3,900 300 7.14% UDECOM Guinee 414 954 922 32 3.35% CU Zerekore 1,083 1,059 1,035 24 2.27% ISAV Faranah 1,523 5,365 5,158 207 3.86% UJNK Kankan 5,432 5,053 4,750 303 6.00% URL Conakry 424 1,948 1,900 48 2.46% UGLC 20,703 2,061 1,951 110 5.34% IST Mamou 1,685 1,627 1,579 48 2.95% ESTH 2,357 2,163 2,133 30 1.39% ISIC Kountia 564 928 918 10 1.08% Total 47,039 45,786 42,647 3,139 6.86% Source: tracking survey (2012). Higher Education Financing in Guinea | 13 Figure 15:  Budget Execution Rates at MESRS Access to TVET and Higher Education, by Figure 16:  Household Income, 2012 120% 100% 100% 90% 80% 80% 43% 60% 70% 61% 40% 60% 50% 23% 20% 40% 0% 30% 18% 2008 2009 2010 2011 2012 18% 20% 9% Commitments Payment Authorizations Actual payments 10% 15% 9% 0% 2% 3% Source: MEF. Technical and professional Higher education Richest Richer Middle Poorer Poorest apparent in the overall execution of operating expenditures at Source: ELEP (2012). MESRS. Data from MEF shows that in 2012, the total com- mitment across all types of operating expenditures was 88 per- cent of total budget allocations for MESRS, and the actual pay- Given the inadequacy of the attribution system and ex- ments were only 64 percent. This compares poorly not only to cessive proportion of the higher education budget allocated the historical execution rates at the Ministry, but also to other to scholarships, guinea could consider implementing new Ministries that oversee other education sectors (Figure 15). financing instruments. box 1 describes variable fees and For example, across all ministries, the actual payments were income-contingent loans as a way for the higher education 74 percent of initial budget allocations. system to increase access while still recovering costs. Delays in disbursement of funds appear to be another important problem. Of the 3,439 students interviewed, nine- ty-four percent mentioned that they received their scholar- Is Higher Education Funding in 5.  ships with a delay of more than a month. The average delay Guinea Equitable? in payment of grants is 41 days. Some students have even put the delay at 90 days. Interviewed students cite the complexity Students from wealthier households have disproportionate- of the system, along with the number of administrators in- ly higher access to higher education. ELEP data show that volved, as the two main reasons for the delays according to the the same holds for TVET as well. Across TVET schools, interviewed students. Due to these delays, students report re- students from the top two quintiles account for two thirds stricting their spending—over half reported cutting expenses, of the student body (Figure 16). This is a function of where and nearly seventy percent asked for financial support from students live and what they can afford to do with their time. their families to cover their expenses. A majority of students Poor, rural students are less likely to live close to a TVET (65 percent) favor receiving scholarships through automated school, and more likely to be required to work to support banking as a means of curbing delays. their families. Box 1: Variable Fees and Income-Contingent Loans Variable Fees and Income-Contingent Loans Variable fees Variable (or liberalized) fees—set by universities—offer several benefits over a flat fee. They can increase the resources entering the higher education system by being open ended, and they can increase competition among universities, increasing quality and relevance, as well as the efficiency of resource use. And by being akin to income transfers to targeted income groups, they have the potential to be more equitable than other approaches to revenue generation, especially when they are set at higher rates for those who can afford them and are combined with redistributive policies to help poorer students pay those fees. In most variable fee schemes, the government usually places a ceiling on the maximum and has most students make at least some contribution toward their education, though exempting qualified poor students from fees based on need and equity helps ensure that they are not excluded or sent to low-cost and possibly low-quality institutions. Otherwise, requiring students to pay at least some of the cost generally improves their motivation and performance. Of course, governments will differ in what the variable fee structures and ceilings should be to ensure access, equity, and cost-recovery. Income-contingent loans More governments recognize that income-contingent loans are better for access. Repayment is contingent on the future in- come of the borrower: people with low earnings make low repayments, and people with low lifetime earnings do not repay the loan principal in full. Such a loan protects a student from excessive risk and can promote efficiency (by the protection from risk) and access (fees financed by the loans free resources for access). 14 | Higher Education Financing in Guinea Access is even more skewed towards wealthier house- Per Pupil Costs, TVET and Higher Education Figure 17:  holds at the higher level: Four in five university students by Level, in Constant 2008 GNF come from households from the top two quintiles—these students (approximately 73,000 of them or 2.4 percent of all 4,000,000 students in Guinea) are the direct beneficiaries of a quarter 3,000,000 of Guinea’s public education expenditures. Students from the poorest households constitute only three percent of university 2,000,000 students and two percent of TVET enrollment. 1,000,000 Households carry significant burdens for sending their 0 children to higher education, but compared to lower levels 2008 2009 2010 2011 2012 of education, their collective contribution is small. In 2012, TVET Higher Education households spent approximately GNF 243,000 for each stu- Source: MEF. dent enrolled in a public university, and approximately GNF 560,000 for each student enrolled in a private school. Given the enrollment figures for this year, one can conclude that house- holds collectively spend GNF30 billion15 on higher education, Access to TVET and Higher Education, by Figure 18:  which is approximately nine percent of the public expendi- Gender, 2008–12 tures on higher education. In contrast, households contribut- ed approximately GNF 298 billion for the 1.6 million students TVET enrolled in primary schools16—which is approximately seven- 450 ty percent of the publicly funded operating expenditures of GNF 407 billion—and households spent approximately GNF students/100,000 inhabitants 375 191 billion17 on 660,000 secondary school students (approxi- 300 mately GNF 289,000 per student or $41 per student), slightly 225 under thirty percent of whom are enrolled in private schools (Figure 17). These estimates underline the fact that household 150 contributions towards operating expenditures are greater than 75 the public contributions at the higher education level. Even 0 if these estimates were off by a reasonable margin, this exer- 2008 2009 2010 2011 2012 cise still shows us the regressive nature of public funding of education in Guinea, where households carry a much greater Higher Education burden for lower levels of education. Enrollment trends suggest that there is also a gender bias: 1500 Males enjoy greater access to higher education compared to students/100,000 inhabitants 1200 females, and are therefore more likely to benefit from public funding. The differences in enrollment between males and fe- 900 males are large at higher education institutions compared to TVET (Figure 18). Since the enrollment figures are low, we 600 show the number of students per 100,000 inhabitants. In gen- 300 eral, enrollments have been increasing for TVET, whereas for higher education, after a modest increase from 2008 to 2011, 0 enrollments declined for both males and females in 2012. 2008 2009 2010 2011 2012 Male Total Female 6. Challenges and Recommendations Source: Annual enrollment statistics, 2011–2012. The review of higher education financing reveals that in comparison to the sector as a whole, higher education re- ceives a disproportionate amount of public funds. House- indiscriminately, regardless of a program’s success or the value holds shoulder a much smaller share of funds, compared to it adds to labor productivity, and regardless of the merits or lower levels of education. Higher education funding is inef- needs of the students receiving funds. Finally, management ficient in its allocation—not only does it support programs and monitoring of public funds in higher education show im- with little value in the labor market, the funds are also spent portant weaknesses. 15 This estimate is based on 2012 ELEP data (in Table 1) and enrollment fig- 1. The lowest hanging fruit for efficiency improvements is ures for public and private entities. The estimate assumes that 95 percent of a revamping of the scholarship and subsidy payments to higher education enrollment in in Conakry. higher education students and institutions. An import- 16 This estimate assumes that approximately 25 percent of the enrollments are in Conakry for public schools and approximately 90 percent for private ant reform would be to link scholarship in particular, and schools. higher education funding in general, to a programs’ demon- 17 Similar assumptions as the estimate for primary schools. strated ability to produce students with high demand skills Higher Education Financing in Guinea | 15 in growing sectors. Limiting subsidies to students enrolled system and in ensuring its adequacy with labor market in programs in demand by the economy would certainly demand. The higher education sector has been given ad- improve efficiency, but can be difficult politically. There is ministrative and financial autonomy through the recent some evidence that a merit-based scholarship system would presidential decrees (063/622), which grants institutions receive student support.18 A combination of merit based greater freedom to generate their own resources and spend and performance-based scholarships would result in a very these resources according to their priorities. An important different student profile and cost structure at the higher source of funding would be for TVET and higher educa- education level. Currently, approximately 58 percent of all tion institutions to engage in cost-recovery to raise funds scholarship funds go to students from the top 20 percent directly from the private sector. This could be an important income earning families. Cutting scholarships and subsi- source of funding, especially for TVET and higher educa- dies by half to students from the richest households would tion institutions, where there are direct linkages with the free up GNF46 billion. Since few students do not receive business community. scholarships and assistance at the higher level, these funds 3. Introduce performance-based contracts for increased ac- could be used to increase subsidies for students from poorer countability of both public and private institutions. The families (thus reducing some of the barriers such students government is currently setting up a competitive fund to face). They could also shift the focus to girls, who are disad- introduce short-term technical training programs in both vantaged in accessing higher education, or quality improve- higher education and TVET institutions in partnership with ment activities. the private sector. This is an important first step in inno- 2. Involve the private sector as partners in curriculum vative financing innovation in financing. As a second step, development, practical training, and financing. By be- Government is encouraged to negotiate performance con- coming involved in curriculum development and provid- tracts with public and private institutions to link financing ing practical training opportunities, future employers will to performance. Performance contracts can also be used to have a stake in the development of the higher education encourage public-private partnerships with local businesses. 4. Programmatic budgeting, though already tested in the ed- 18 Student surveys suggest that over ninety percent of the students acknowl- ucation sector, will need to be replicated in other sectors edge that the subsidy system needs some reform, and over two-thirds support as well. However, this approach can only materialize if there a merit based subsidy system. is political will to better align financing with sector goals. References Baumol, W.J., S.A.B. Blackmann and E.N. Wolff. 1989. Ministère de l’Emploi – Enseignement Technique-Formation Productivity and American Leadership: The Long View. Professionnelle, Agence Guinéenne pour la Promotion Cambridge: The MIT Press. de l’Emploi. 2013. Enquête Spécifique sur l’emploi et le Lee, K-H., and G. Psacharopoulos. 1979. “International travail décent, ESE-TD-2012. Conakry: MEETFP and Comparisons of Educational and Economic Indicators: UNDP. Revisited,” World Development, 7(11&12). World Bank. 2009. Financing Higher Education in Africa. Lorenceau. 2013. «La valorisation des compétences et de Washington, DC: World Bank. l’éducation universitaire sur le marché de l’emploi en . 2013. Employer Survey in Guinea. Washington, DC: Guinée.» Paper prepared for the World Bank. World Bank. Marshall, J. H. 2013. Guinea Public Expenditure Review . 2013. Survey on the Living Conditions of Students in (PER): Education and Health Diagnostics, background Guinea. Washington, DC: World Bank. paper prepared for the World Bank, July. . 2013. Country Partnership Strategy (FY 2014–17) MESRS, Service Planification et Statistiques. 2013. Annuaire – Guinea. Washington, DC: World Bank. Statistique Enseignement Supérieur 2011–2012. Conakry, . 2014. Education Public Expenditure Review on République de Guinée: Ministère de l’Enseignement Education. Washington, DC: World Bank. Supérieur et de la Recherche Scientifique. . 2014. Doing Business Report. Washington, DC: Ministère de l’Education Nationale et de la Recherche World Bank. Scientifique. 2007. Description Du Programme Sectoriel de l’Education (PSE) 2008–2015. Conakry: République de Guinée. 16 | Higher Education Financing in Guinea