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.  In line with overall development budget increases, Germany’s education funding went up from US$1.8 billion in 2014 to US$2.2 billion in 2016. This is equivalent to 8% of Germany’s total ODA, on par with the average share spent by donor countries in the Organisation for Economic Co-Operation and Development (OECD). This makes Germany the thirteenth-largest donor to education as a proportion of its overall official development assistance (ODA).

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

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

To get a full picture of Germany’s education assistance, however, 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 2016, these costs amounted to US$1.1 billion, or 49% of Germany’s overall education ODA. If this financing is excluded, Germany was the third-largest donor country to education in 2016 (in absolute terms), after the United Kingdom and the United States. In terms of ODA spent on education as a share of total ODA, Germany would rank 20th (4% of total ODA) when excluding in-country student costs. 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.

Education has received increased political attention and funding in recent years as part of Germany’s initiatives to tackle the ‘root causes’ of forced migration.

Promoting education is a priority of Germany’s overarching development policy in the 2017-2021 coalition treaty. The agreement outlines Germany’s focus on education from basic education to post-secondary education. It further suggests a stronger focus on digitalization and e-education as well as a new partnership with regional development banks to strengthen vocational training.

Education 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.

Growth in education ODA 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 partner countries. The 2017-2021 coalition treaty outlines significant increases in education ODA by the end of the legislative term.

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

Germany provides the vast majority (US$2 billion in 2016) of its education ODA as bilateral funding. The largest share of bilateral education ODA in 2016 was directed towards ‘post-secondary education’ (63%, see figure below). However, this high share is driven by scholarships and other costs for students from partner countries studying in Germany (US$1.1 billion). Not counting these costs, only 18% 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$278 million), with a focus on education facilities and training. 12% (US$243 million) was allocated to vocational training. Basic education’ received 10% in 2016, or US$205 million, with a focus on primary education.

This funding pattern largely aligns 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 (73%) of all bilateral education ODA between 2014 and 2016 went to MICs. This high share is driven by costs for foreign students studying in German universities, as most of these come from MICs. Less focus was placed on low-income countries (LICs) in the same period (14% on average between 2014 and 2016). 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 (21%) of bilateral education ODA.

Student costs also distort the picture when it comes to the geographic allocation of education ODA: Between 2014 and 2016, 39% of bilateral education ODA (US$706 million) was disbursed to countries in Asia, while only 13% went to sub-Saharan Africa (US$228 million). 19% was invested in the MENA region (US$352 million). However, two-thirds (65%; US$461 million) of education ODA to Asia was made up of costs of hosting students in Germany, driven by costs for students from China (US$200 million) and India (US$94 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 (43% in 2016), 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$230 million in multilateral education funding in 2016 (10% of Germany’s total education ODA). Most of this funding was channeled through the EU institutions in the form of mandatory contributions (65% or US$148 million in 2016). Other recipients were the African Development Fund (AfDF; 3%), the Asian Development Fund (AsDF; 2%), and the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA; 2%).

Germany is also a founding member of the Global Partnership for Education (GPE), and has contributed US$77 million to the GPE Fund since 2008 (as of December 2017). This makes it the 14th-largest GPE donor. In February 2018, Germany pledged €38 million (US$49.5 million using GPE’s official conversion) to the GPE for the period 2018-2022 (consisting of €2 million on top of previously pledged €7 million in 2018, and €9 million per year for the four-year period 2019-2022). This is a slight increase from the annual €7 million contributed in previous years. The Global Campaign for Education (GCE) in Germany, a coalition of CSOs advocating for more and better funding to education, has called on the German government to provide at least €100 million (US$ 111 million) per year to the GPE. In addition to contributions to the GPE Fund, Germany committed €21 million to the GPE for 2011-2020 through the German BACKUP Initiative – Education in Africa. BACKUP is a program led by GIZ which provides technical and financial assistance to African countries and CSOs to access and use GPE funding.

Germany announced it will invest €16 million (US$ 18 million) in the Education Cannot Wait fund (ECW) in December 2017. Education Cannot Wait is a special fund launched in 2016 that aims to improve access to education services in humanitarian emergencies and crises. Overall, education accounts for a small proportion of Germany’s humanitarian assistance: 1.4% of humanitarian assistance or US$45 million was allocated to education projects in 2016, according to the UN Office for the Coordination of Humanitarian Affairs (OCHA). The global share of humanitarian assistance spent on education was 2.7% in 2016, according to OCHA. This is still significantly below the 4% target established by the UN Global Education First Initiative (GEFI).

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.