Ministers Mull Bonds to Finance Education

(PANA)--African ministers of education and finance meeting on Thursday welcomed a proposal to introduce long-term financial instruments to finance education in Africa.

Ugandan State minister for finance Ephraim Kamuntu said long-term sources of funding were required for education initiatives in Africa at a time of a global financial crisis. ‘Education is a long-term investment. The nature of human development is such that funds are required to train people for a period of 20 years before any return is made. The parents do not have such kind of money,’ the Ugandan minister told PANA in an interview on Thursday.

African Development Bank (AfDB) President Donald Kaberuka said on Wednesday the bank was already in the process of partnering with other donors to finance education. The plan is to offer loans to small and medium type businesses, known as SMES, to invest in the education and get the returns gradually, given the sector’s need for long-term investment. Kaberuka said the bank was partnering with the World Bank’s private-sector arm, the International Finance Corporation (IFC), to finance the small businesses to invest in education.

Kamuntu said the SMEs were key sources of growth for African countries. ‘Education needs long-term investments. The governments need mechanisms to put some money in the education sector through the issuance of bonds to finance education,’ he said.

Experts from the First-Track Initiative, an initiative of the World Bank, said the increased number of pupils still locked out of school required additional funding for education. To meet this demand, the Fast-Track Initiative is looking for additional $1.8 billion to expand education in the continent. ‘We are willing to discuss this proposal further on the need to introduce education bonds to raise funds for education infrastructure. We are forming a task force on that,’ Linda English, the deputy head of the Fast-Track, told PANA.

The Ugandan Minister said his country was also ready to discuss with potential donors willing to invest in bonds.

<< Back to main