Ghana will miss SDG-12 unless country invests in human capital – Report

If Ghana must attain the Sustainable Development Goal 12 (SDG-12), which aim is to achieve the sustainable management and efficient use of natural resources by 2030, the country must invest in human capital and education as these are the most effective means, a World Bank report says.

The 2018 edition of Atlas of the Sustainable Development Goals by compiled the World Bank Group, reports that many developing countries are having negative Adjusted Net Savings (ANS).

Investment in human capital or education with regards to depletion of natural resources and environmental degradation is measured by the (ANS) as a percentage of the Gross National Income (GNI) of a country.

Adjusted Net Saving is dependent on the following; deduction of consumption of fixed capital to obtain net national saving, addition of current public expenditure on education to account for investment in human capital, deduction of estimates of the depletion of a variety of natural resources to reflect the decline in asset values associated with extraction and depletion and deductions are also made for damages from carbon dioxide and particulate emissions.

If a country’s net saving is positive and the accounting includes a sufficiently broad range of assets, economic theory suggests that the present value of social welfare is increasing. Conversely, persistently negative adjusted net saving indicates that an economy is on an unsustainable path.

According to the World Bank as of the time of the study, Ghana’s Adjusted Net Savings as percentage of GNI as of 2015 was around negative 10-15 per cent.

Though there are no International conventions and agreements for Adjusted Net Savings, it is recommended that, both developed and developing countries, Adjusted Net Savings should not be negative as positive ANS is a necessity for sustainability and wealth building, as opposed to running down of the country’s assets.

Given Ghana’s negative Net Savings, which the World Bank says is a result of insufficient savings and investments in education to offset the running down of physical capital and depletion of
natural resources, it makes socioeconomic sense to allocate more resources to education by making education free from the basic level up to the secondary level for those who are unable to afford the cost of education – in order to increase social welfare and reduce poverty.

As recorded consistently by the World Bank Group in many studies, growth and poverty reduction at the global level have not really resulted in closing the chasm that exists between the haves and have-nots. This persistent inequality is what challenges efforts geared towards extreme poverty eradication.

The World Bank in 2013 said, focusing solely on growth acceleration is not enough – growth must be inclusive. This entails empowering all citizens to participate in, and benefit from, the development process, and removing barriers against those who are often excluded.

Addressing extreme poverty is a challenge that many countries are still grappling with today, the Bank noted.

While most approaches, including by the World Bank group and other development institutions turn to focus on growth for poverty reduction, there is a growing consensus that a strong concern for inclusion is also needed.

However, the investment should not just be about increasing the volume of money pumped into education. Because for a natural resource dependent country like Ghana, the resources are fast depleting, hence it is imperative to ensure that, whatever money will be put into developing the human capital should be efficient, prudent and effective

Curiously, it is important to determine if there is a huge unprecedented investment in education through the Free Senior High School policy, in the context of efficiency, prudence and effectiveness

Without placing value on efficiency, prudence and effectiveness, the investment in education will just be for the results and not impact. The result of Free Senior High School will be that, a significant fraction of the population will receive secondary education through free education saddled with infrastructural and human capacity challenges.

It will be a system introduced impetuously to address the exacerbation of the already huge infrastructure gap that existed by free Senior High School policy without putting in the appropriate structures to enable it run effectively like those countries that have done it successfully.

This will undoubtedly result in poor quality education, making many beneficiaries lacking proper training for job acquisition and rendering large masses of people unemployed though “educated”. Apparently, the people in the end are not empowered to participate in the growth and development process to reduce poverty – which is supposed to be the focus of the policy.

The quality of education will be deeply debilitated and in the end, none or very little impact is made with regards to the quality of the knowledge and skills ingrained in graduates.

How then can the country become efficient and make investment in education impactful?

To be efficient with resource allocation to developing human capital through education, there is need to look at reducing inequality as well as empowering young Ghanaians with the requisite skill sets to enable them contribute to, and benefit from the development process significantly, should they be unable to progress to the tertiary level.

Making the Free SHS policy target-specific as opposed to the current status-quo where all students in Government Senior High Schools are getting everything virtually free – notwithstanding their socioeconomic status, will be a good starting point.

Agreeably, making social intervention programmes exclusive to those who truly need them remains a challenge across the world, and Ghana is no exception.

However, Ghana has chalked some incredible successes in this regard with the Livelihood Empowerment Against Poverty (LEAP) – a social intervention policy that provides cash grant to the extremely poor households across the country and aims to alleviate short-term poverty and encourage long-term human capital development.

LEAP’s success lays the foundation on which the country can start working towards identifying those who truly need free education to allow parents who are financially buoyant to pay their wards’ school fees to do so.

Another social intervention programme that seems to be working well with regards to target-specificity is the World Bank funded Secondary Education Improvement Programme (SEIP).

SEIP seeks to increase access to education by granting scholarships to Senior High Students from poor socioeconomic backgrounds as well as improving quality in low performing schools.

So these two policies can be studied to give the basis for developing a mechanism that makes the free SHS policy on the national scale, exclusive to only those who need it.

After making free SHS exclusive, what else needs to be done to ensure that investment in education is efficient and impactful?

Switzerland’s instructive success story is a good example.

Switzerland is a country built on strong institutions. It has a long history of social harmony, economic stability and long-term, rational decision-making.

In a lecture delivered on June 23, 2017 on the theme: “Leveraging ODA to Build Enduring Development Institutions: The Case for Vocational Education and Training” at the Annual Conference of Swiss Development Cooperation École polytechnique fédérale de Lausanne, Switzerland, Dr. Okonjo-Iweala, a former Managing Director of the World Bank said, strong educational institutions are at the core of Switzerland’s success enabling the creation of a broad, educated, and secure middle class.

Switzerland devotes a large share of public expenditure to education – allocating $16,090 per student. This enables the recruitment and retention of highly qualified teachers who receive average salaries at the primary and upper secondary levels that are nearly double the average salaries of their peers in other OECD countries.

Switzerland is a particular leader in its approach to vocational training. Switzerland is raised along with Germany as one of the countries where vocational training receives as much attention as university degrees.

“More than 65 per cent of students in upper secondary education in Switzerland are enrolled in highly practical pre-vocational or vocational programmes. These vocational education programmes are highly practical, with 90 per cent of students combining school and work-based learning, unlike other OECD countries that are only school-based. This system equips individuals to find well-paying jobs and provides the country with a high-skilled workforce that has contributed significantly to its economic success,” she said.

The strong importance the Swiss people have attached to Technical and Vocational Education has reflected in Switzerland’s public transport system.

At the core of Switzerland’s public transport system are railways, which connect almost every corner of the country integrating the Swiss Federal Railways (SBB) with private railways and every other form of public transport.

Ghana needs to draw inspiration from Switzerland’s success in vocational and technical education and invest more in technical and vocational education and training (TVET).

The best way to harness the power of education to take people out of poverty is not through free education for all. If free education is made exclusive, the money that will be saved on it should be invested in building a strong education system. Ghana can only experience the power of education if it adopts an educational system that provides an educational environment that attracts high enrolment of secondary school students in vocational and technical programmes.

Like Switzerland’s, the educational environment must be highly hands-on, with a significant fraction of students combining school and work-based learning. Private participation will be needed to make inputs in making work-based learning work effectively.

This sort of system will equip the Ghanaian youth to innovate, self-employ or find well-paying jobs and provide the country with a high-skilled workforce. This skilled workforce, will include children of the poor (whose ward’s education was paid for by government), middle class and the upper class (who had the means to pay themselves) as opposed to an education system where every child’s education, whether rich or poor, is paid for by government and churns out poorly trained youths that lack the skills set to innovate or find jobs. This way, citizens are empowered to participate in, and benefit from the growth development process – which the World Bank says is the best way to alleviate extreme poverty.

In consequence, Ghana’s over reliance on natural resources for growth will plummet and consumption at the national level will be made sustainable and responsible – consumption in line with the Sustainable Development Goal 12 and give Ghana a positive Adjusted Net Savings.

By Bismark Elorm Addo
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