Government Education Funding and Government Higher Education Investment in Uganda

Abstract

The paper examines the relationships between government funding of education and government investment in higher education in Uganda during the 2005 to 2020 period. The major hypotheses of the study are that government funding of higher education (GHE) depends on government investment in education (GIE) and the reverse is true. During the given period, government spending on education as a percentage of GDP for Uganda was on average 2%, while the world average was 4% (World Bank, 2022). This implies that low levels of government funding are responsible for the low levels of government investment in higher education in Uganda. Therefore, the study aims to estimate the government investment function of higher education and the production function of government funding in Uganda during the given period. The analyses of the relationships between government education funding (GIE) and government investment in higher education (GHE) are conducted by using the generalised least squares (GLS) method. The dataset for the study was obtained from Uganda’s Ministry of Education and Sports (MoES), Education Sector Plan. The effects of 1% government spending on primary education, secondary education, technical and vocational education training (GTVE) and GHE on GIE were as follows: 0.354%, 0.086%, 0.044% and 0.063% per annum, respectively. This implies that in Uganda, GHE contributes very little (0.063%) to GHF compared to the contribution of GPE to GIE (0.35%). Meanwhile, a 1% increase in GIE might have caused growth in GHE and GTVE to rise by 11.45% and 17.18%, respectively. Hence, the paper suggests increasing GIE, GTVE and GHE adequately.