Germany is the world’s top donor country to education, but high costs for students in Germany distort the picture; bilateral programs increasingly focus on vocational training

Germany is the largest donor country to global education: its education ODA reached US$2 billion in 2015. This is equivalent to 8% of Germany’s total ODA, on par with the average share spent by OECD donor countries. This makes Germany the tenth-largest donor as a proportion of its overall ODA. To get a full picture of Germany’s education assistance, it is important to exclude scholarships and other costs of students from developing countries studying in Germany. These costs, which are largely financed by the federal states (‘Bundesländer’), are reported as ODA by some donors but do not constitute cross-border financial flows. In 2015, these costs amounted to US$1 billion or 51% of Germany’s overall education ODA. If this financing is excluded, Germany was only the third-largest donor country to education in 2015, after the UK and the US. In terms of overall ODA spent on education, Germany would only rank 21st (4% of total ODA). CSOs have criticized the high amount of student costs reported as ODA, raising concerns that there are no clear criteria for selecting students that should come to German universities and that these ODA-accountable costs are not linked to the overall development cooperation strategies set by the BMZ.

Promoting education is one of six focus areas of Germany’s overarching development policy in the current legislative term (2013-2017). In practice, education is not a top priority, but has received increased political attention and funding in recent years as part of Germany’s initiatives to tackle the ‘root causes’ of forced migration, particularly in sub-Saharan Africa and the Middle East and North Africa (MENA) region. The government’s focus is on strengthening vocational training systems as part of a wider effort to foster labor markets and job creation in these regions. This has been also reflected in Germany’s G20 presidency in 2017. While education is not a key priority of the country’s G20 agenda, it does place a focus on vocational training and computer literacy (e.g. e-skills) for women and girls.

In line with overall development budget increases, Germany’s education ODA went up from US$1.7 billion in 2013 to US$2 billion in 2015. The growth is driven by an increase in bilateral funding by the Federal Ministry for Economic Cooperation and Development (BMZ), the main provider of German funding for education programs in developing countries. The BMZ has scaled up funding for education programs since 2013, particularly for vocational training. Future levels of funding will depend on the outcome of the current coalition negotiations aft the September 2017 parliamentary election. Current budget estimates foresee further increases in the BMZ’s overall budget in 2018.  This will likely also lead to further moderate increases in education funding.

For further details on methodology, see our Donor Tracker Codebook.

Germany provides the vast majority of its education ODA as bilateral funding: 92% (US$1.9 billion) in 2015. The largest share of bilateral education ODA in 2015 was directed towards ‘post-secondary education’ (64%, see figure below). However, this high share is driven by scholarships and other costs for students from developing countries studying in Germany (US$1 billion), especially indirect costs of tuition. Not counting these costs, only 19% of bilateral education ODA went to post-secondary education programs. The second largest share of bilateral education ODA was allocated to strengthening general education systems (14% or US$262 million), with a particular focus on education facilities and training. Basic education received 11% or US$207 million in 2015, with a focus on primary education; 10% (US$185 million) was allocated to vocational training.

This funding pattern largely overlaps with the priorities for Germany’s global education policy detailed in BMZ’s education strategy, published in 2015. It defines three priority sectors: a) basic education, b) vocational training, and c) post-secondary education. Geographically, it places a focus on Africa, and increasingly on countries affected by fragility and conflict. It further aims at providing equal opportunities for access to education for all children, improving the quality of education (e.g. through teacher training), inclusiveness, and gender equality. Vocational training is a particular focus for Germany. The government stresses the added value of Germany’s support in this area given its long-standing expertise and the success of the German dual vocational training system, in which training is partly school-based and partly company-based.

Overall, Germany’s bilateral education programs focus on middle-income countries (MICs): almost three‑quarters (72%) of all bilateral education ODA between 2013 and 2015 went to MICs. However, this high share is driven by costs of hosting international students, as most foreign students from developing countries studying in Germany come from MICs. Less focus was placed on low-income countries (LICs) in the same period (16% on average between 2013 and 2015). If costs of scholarships, training and other costs associated with hosting foreign students in Germany are not considered, the share of LICs increases, but remains below one-quarter (22%) of overall bilateral education ODA in 2015.

Student costs also distort the picture when it comes to the geographic allocation of education ODA: Between 2013 and 2015, half of bilateral education ODA (US$819 million) was disbursed to countries in Asia, while only 13% went to sub-Saharan Africa (US$211 million). 18% was invested in the MENA region.  However, more than 64% (US$615 million) of education ODA to Asia was made up of costs of hosting students in Germany, driven by costs for students from China (US$202 million) and India (US$97 million). Education is a focus area of BMZ’s work in 11 partner countries: Afghanistan, Ethiopia, Guatemala, Honduras, Yemen, Jordan, Kosovo, Malawi, Mozambique, Togo, and Lebanon. Four of these are in Africa, four in Asia, two in Central America, and one in Europe.

Germany channels its bilateral education ODA mostly through the public sector (45% in 2015), mainly through its implementing agencies GIZ (for technical cooperation) and KfW (for financial cooperation).

For further details on methodology, see our Donor Tracker Codebook.

Germany provided US$161 million in multilateral education funding in 2015 (8% of Germany’s total education ODA). Most of this funding was channeled through the EU institutions in the form of mandatory contributions (81% or US$130 million in 2015). Other recipients were the African Development Fund (AfDF; 7%), the Asian Development Fund (AsDF; 4%), and the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA; 3%).

Germany is also a founding member of the Global Partnership for Education (GPE), and has contributed US$69 million to the GPE Fund since 2008 (as of May 2017). This makes it the 14th-largest GPE donor. In 2015, Germany provided US$8 million to the GPE Fund, which corresponds to 0.4% of Germany’s overall education ODA. The country reports its support to GPE as bilateral ODA to the OECD. Germany pledged €28 million or €7 million per year to the GPE Fund for the replenishment period 2015-2018. In late 2016, the German parliament decided to increase GPE contributions by €2 million to €9 million per year from 2018 onwards. The Global Campaign for Education (GCE) in Germany, a coalition of CSOs advocating for more and better funding to education, has called on the German government to provide at least €100 million per year to the GPE. In addition to contributions to the GPE Fund, Germany committed €6.4 million to the GPE for 2015-2017 through the German BACKUP Initiative – Education in Africa. BACKUP is a program led by GIZ which provides technical assistance to African countries and CSOs to access and use GPE funding.

BMZ’s department ‘Global Issues - Sector Policies’ guides policy development within education  

BMZ drives the formation and implementation of Germany’s development assistance, including for education. Priorities are set by the relevant program areas, taking into account partners’ preferences. The department for ‘Global Issues – Sector Policies’, and within it the ‘Education and Digital World’ (‘Bildung und digitale Welt’, Referat 303) division, develops BMZ’s overall education policy, provides operational guidance for the implementation of projects, and represents Germany on the GPE Board. However, programming of bilateral development assistance for education is driven by regional divisions. Based on overarching priorities and regional quotas, the regional divisions develop projects in cooperation with partner countries, and are responsible for the allocation of Germany’s bilateral development assistance.