Private sector engagement in education sector

Context: Education Sector Initiatives and Progress Achieved

Over the past decades, Nepal has made significant progress in the education sector to expand education services and programs to increase access and participation in school education and literacy. A headstart has been given through the Constitution of Nepal by making education a mandatory provision stating ‘Every citizen shall have the right to get compulsory and free education up to the basic level and free education up to the secondary level from the state’. It has, then, been supplemented through several initiatives and programs with different targets such as Education for All (EFA 2001-2015), Millennium Development Goals (MDGs 2000-2015), School Sector Reform Plan (SSRP 2009-2015), Community School Strengthening and Enabling Decade (CSSED 2019-2028) and others.

The major achievements of Nepal’s education sector pertain to Education for All (EFA) Goals 1 and 2. Herein, as for EFA 1, Nepal expanded and improved comprehensive early childhood care and education (ECED), especially for the most vulnerable and disadvantaged children (77.7 percent ECED against a target of 82 percent). Regarding EFA 2, the aim was to ensure all children, especially girls and children belonging to disadvantaged groups, have access to complete and free education. In this, the net intake rate in primary schools rose to 92.7 percent for girls and 93.3 percent for boys. Over the years with many educational programs and initiatives planned and carried out, net enrolment rates steadily improved, even if they fell short of the SSRP target of 98 percent. The net enrolment rate in basic education in 2015 reached 88.7 percent. Other major accomplishments include the gradual increase in secondary education enrolment, a steady fall in repetition rates, and improved promotion/survival rates.

Besides, Nepal joined the United Nations in signing the Incheon Declaration in 2015 and committed to the Sustainable Development Goals (SDGs) 2030. Building on SDG 4 – ‘Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all’- Nepal has been responding to this and attempting to ensure that students of this country can complete school education and benefit from the social and economic benefits that arise from this. In this regard, Nepal has developed and approved the Nepal National Framework for Education 2030 and National Strategy for the Development of Education Statistics (NSDES), which are the key guiding policy documents for federal, provincial, and local governments to develop their education plan, program, and monitoring mechanism to achieve SDG 4.

However, challenges relating to high student-teacher ratio, high dropout rates, low instructional time, unemployment and underemployment among graduates, low awareness of parents and communities tied to a lack of capacity in School Management Committees (MSCs) and Parent-Teacher Associations (PTAs) still linger and reflect wide problems in the education sector. This suggests that although education has always been seen as an indispensable asset for human progress, Nepal has not been able to actualize this.

Need for private sector engagement in the education sector

In the case of Nepal, the economy is not constrained by low human capital. Instead, a recent report titled ‘Nepal Private Sector Engagement Assessment, 2020’ posited that the shadow price of human capital, which is measured in terms of return to education, is low and has remained low for more than two decades since it was first reported in 1998 with a record low estimate of 6.13 percent. Nepal’s most recent return to education data shows an internal rate of return of only 7.9 percent for the entire working life of a Nepali worker against a 12 percent cost of capital borne by the same worker. This shows that the investment to stay an additional year in school is in the unprofitable financial interest of the worker.

Moreover, the same report also suggests that a weak domestic economy has plunged Nepal’s return to education and has lowered Nepali workers’ propensity to acquire for learning. Likewise, another striking finding of the report was that a certain segment of the Nepali population who go abroad to study spent USD 470 million in FY 2018/19, which accounts for more than a third of the Government of Nepal’s entire budget for the education sector. This signifies how the people enrolled in the Nepali education system are stuck in a loop. The education system lingers with many challenges as mentioned above due to which the return to education is very low. This further demotivates any person to yearn to learn more from this education system, and they tend to go abroad. Because of this, skilled manpower is either not generated or not retained causing limitations in creating a skilled workforce. This, in turn, causes the country’s economy to weaken resulting in a weak education system. Therefore, investments and partnerships with the private sector are critically important to strengthen the education system and establish a stronger accountable system.

Private sectors have the resources required to create an enabling educational environment that can provide high returns to education.

For this, private sector engagement has to be undertaken as a strategic approach in planning and programming outcomes across all levels of the education sector. For instance, in the United States, charter schools that were publicly funded but privately operated and managed showed 0.4 standard deviation better learning outcomes than completely public schools. Here, under this model, the charter schools were given increased levels of autonomy over their budgets, staffing, governance, curriculum, etc, and in return, they were subjected to heightened levels of accountability. Because of this, the schools were able to pursue strategic priorities through innovation and raise the quality of services.

Taking reference from the same, private sector engagement can be a great way to go ahead, especially in a developing country like ours where the state does not have the capacity and resources to be the sole provider. While there are risks associated with the formation of non-state sector groups serving their profit interest, there are also enough shreds of evidence of outcomes with efficient and quality education provided to even the poorest segment of the groups. This has been possible because poor families also actively opt for private schools as they prefer a more accountable system.[1]

Now, taking an instance of the current target to achieve the SDG 4: Education 2030 agenda, the government aims to expand its scope for further transforming the current education system by bringing it at par with the global education scenario by emphasizing life skills, livelihood skills, accessing and managing knowledge in a way that there is sustainability and inter-connectedness. This serves as a perfect opportunity for the government to extend its hands to the private sector so that an enabling environment can be created more effectively and efficiently. The private sector, in this case, could include the business community, providers of ancillary education services (publishing, training, connectivity, IT, others), providers of core education services (kindergartens, schools, colleges, others), membership associations (forums), and others.

Nepal is in a precarious position where it needs to aim at strengthening the ability of the education system to be able to increase the returns to education. For this, all in all, the fact remains that the current tepid approach by the government is not enough and that the private sector has a role to play in making sure that the education system is strengthened.

[1] In the case of Nepal, there are four different types of private schools such as Classes A, B, C and D schools where C and D classes offer education at low-cost and are most preferable by low-middle-class families.