YES to Basic Education! A Greater YES to Schooling Quality!!!

According to conventional wisdom, structural transformation involves transfer of labour skills from low-productivity agriculture to high-productivity sectors, especially manufacturing. Notably, even though Africa is home to about 60 per cent of the world’s fastest growing economies, the patterns of growth have not resulted in dramatic changes in the structure of African economies. 

In response to Africa’s paradoxical scenario, development experts investigate factors that could explain why growth of African economies has not been accompanied by improvements in the ratio of manufacturing value added to GDP. Amongst other things, in today’s knowledge economy, the role of education, more education and quality education in development is pointed. Given the currency of the skills-structural transformation debate, the 2014 edition of the African Economic Conference was centred on the role of knowledge and innovation in Africa’s transformation.

Hitherto, studies on the schooling-growth puzzle, such as that by Hanushek and Woessmann, mostly capture cognitive ability at basic levels of education, making light of the fact that schooling quality differences across countries may be several magnitudes bigger at the secondary and post-secondary level. Yet, skills required in a technology-intensive world are acquired at the tertiary level of education. 

In a recent paper, we sought answers to the question: do differences in post-secondary schooling quality across Africa explain the variation in manufacturing performance? Specifically, we analysed the relationship between human capital quality and manufacturing capacity while building a new database on schooling quality. To probe the causal relationship between human capital quality and transition to large-scale manufacturing businesses, we build a new database of post-secondary schooling quality. We used country-level average test score of students in GMAT examinations as the main measure of post-secondary schooling quality.

By controlling for important factors such as corruption, black market premium in the foreign exchange market, institutional quality, geographical variables, budget allocation in education, and the occupational mix of graduates produced at the tertiary level, we were able to establish that a positive and significant relationship exists between post-secondary schooling quality and manufacturing performance. 

Otherwise stated, the findings of the study indicate the presence of a strong and positive relationship between schooling quality and manufacturing capacity, as well as schooling quality and economic growth. Inter alia, our study extends the debate on the relationship between education and economic performance (GDP Per Capita) to that between post-secondary education quality and manufacturing capacity in Africa. We also noted that while regulatory reforms are necessary, upgrade of human infrastructure is most crucial for the transformation of African economies. 

The study posits that schooling quality should be highly prioritized in policy since it drives human capital accumulation which in turn contributes to growth, development, adoption of new and better technologies for production. Moreover, schooling holds indirect benefits such as increased involvement in civic activities, adoption of efficient political systems and economic management techniques. Asian exemplars, South Korea & Singapore, with experiences of structural transformation and high human development placed great emphasis on education and schooling quality, both in policy and practice.

It is pertinent to note that basic education in Africa has dramatically improved in the last decade. These improvements were recorded as countries strove to achieve the MDGs, powered by financial resources from resource booms plus significant donor support from developed countries and multilateral agencies. 

Nevertheless, findings of our study suggest that concomitant attention be paid to the delivery of high quality post-secondary education. Consequently, proceeding from the MDGs’ prioritization of universal basic education, a post-2015 development framework should encourage investment in the quality of secondary and post-secondary schooling as pivotal to Africa’s structural transformation, poverty reduction and accelerated economic development.

The discussion continues…