Financing challenges bring new opportunities

György Hölvényi MEP, Standing Rapporteur for Education for the European Parliament’s Committee on Development, calls for the prioritisation of education in dwindling aid budgets, as well as increased transparency in spending and global solidarity.

• Aid to education is projected to fall by nearly one-quarter by 2027, the steepest drop in decades.

•  In low-income countries, aid funds up to half of public education budgets. However, only 1 in 5 education aid dollars currently reaches those countries.

• Member of the European Parliament György Hölvényi argues that we can address these challenges by increasing transparency and efficiency in how aid is delivered; use ODA to support, not substitute, national investment; prioritise education as a foundation for economic and human development

While everyone emphasizes the importance of education for both individual progress and national prosperity, investment in education remains woefully insufficient.

Low- and lower-middle-income countries, which are furthest away from achieving Sustainable Development Goal 4, face an annual funding gap of US $97 billion. For these countries, external assistance accounts for 17% of their public education spending, rising to as high as half in some cases.

Aid is vital in supporting educational progress worldwide, especially in the poorest and most vulnerable countries.

However, changes in the international environment are leading most donor countries to assign a lower priority to development assistance, and to make matters worse, donor priorities appear to be shifting away from education.

The Global Education Monitoring report’s latest analysis, published this week, reveals that aid to education fell sharply in 2024, with deeper cuts expected by 2027, marking the steepest decline since the 1990s.

Turning challenges into opportunities

As Standing Rapporteur for Education for the European Parliament’s Committee on Development, I recognize that finding the funds to adequately finance our collective ambition to provide quality education for all is a significant challenge.

However, if we are to close the gap between our development aspirations and the financing required to meet them, we must approach this moment as an opportunity. Doing so will require action to increase the transparency, credibility, and predictability of development cooperation.

This has been the focus of my participation in the Fourth International Conference on Financing for Development (FFD4) in Seville this week, which we must urgently build on to close the education financing gap.

Africa: A case study of progress and persistent challenges

Since the independence of African states, an estimated US $6 trillion has been invested in developing countries to promote economic and social progress. While some progress has been made, it often remains invisible to European citizens.

In sub-Saharan Africa, development lags that of other regions. Despite being the largest recipient of Official Development Assistance (ODA)over US $60 billion annually—the region still faces the highest rates of hunger (1 in 4 people), adult illiteracy, and extreme poverty (45%).

Sub-Saharan Africa is now the only region where the number of out-of-school children is increasing. While areas like South Asia have made significant strides since the 1960s, structural challenges—conflict and instability, corruption, and weak governance—persist.

These factors undermine public confidence in development assistance in both donor and low-income countries, and despite commitments to improved reporting and transparency, the results remain unclear to the public.

We urgently need a strategy to restore trust in development assistance by improving the visibility of donor funding, ensuring its efficient use, and ensuring that recipient countries share responsibility for the results that external assistance is intended to achieve.

The need for long-term public investment in education

The decline in public financing for development, especially for education, is deeply concerning. Education is a long-term investment—returns aren’t immediate, but by the mid-term, they are substantial.

In this sector, private financing cannot replace public funds; it can only complement them. The education sector requires predictable funding for long-term planning.

The current shift toward market-oriented development cooperation must be accompanied by continued investment in basic education. Alarmingly, the share of aid going to basic education fell from 40% in 2016 to 30% in 2023.

Across Africa, there are 600 million children for whom education is essential to securing their future and the future of their countries. This is an urgent challenge that requires immediate solutions.

Africa’s fast-growing, youthful population presents not only a challenge but a huge opportunity for economic and social advancement, and education is the key to unlocking it.

Building foundations for sustainable growth

Basic education which delivers foundational literacy and numeracy skills lays the groundwork for vocational training and skills development. Initiatives like the EU’s Global Gateway must go beyond infrastructure and include education and training.

Since 2021, major donors like France, Germany, the United Kingdom, and the World Bank have decreased the share of their development assistance being spent on education.

The European Union remained the only large donor increasing its support for education, allocating 10.2% of its foreign assistance to the sector.

In parallel with the decrease in education financing across other donors, we observe a shrinking commitment to basic education.

This is exacerbated by a lack of alignment between education and training and job creation. Two-thirds of African countries lack national vocational training plans.

A robust mechanism is needed to monitor and align education outcomes with employment strategies. We need to support Africa to do everything possible to avoid losing the potential of the human capital carried by its youth.

With opportunities – education and jobs in a secure environment – provided for youth in Africa, we can ensure that funding for education, infrastructure, and economic investments will have a local impact, allowing young people to realise their potential and contribute to their country’s development.

Cuts and new actors

The European Union and its Member States contribute around 42% of global aid. Whilst cuts will reduce the overall volume of aid, there are grounds for optimism regarding new actors

Though smaller in volume, Central and Eastern European countries bring fresh approaches to partnerships, especially in education.

For example, Hungary, through the Hungary Helps Programme, has supported education and vocational training in 10 countries

Strategic cooperation with local organizations, such as churches, ensures direct community ownership, accountability, and responsibility.

Supporting national resource mobilization

There is a growing trend of channeling education aid through international organizations rather than directly through governments. Too often, external aid fills budget gaps rather than driving genuine development.

This is not in the long-term interest of either donor or low-income countries.

Education financing must recognize domestic efforts and use Official Development Assistance (ODA) as a catalyst, encouraging governments to take political and budgetary responsibility.

In times when debt burdens may exceed public service spending, ODA alone isn’t the solution.

Given the education funding gap is estimated at US $97 billion annually, it would be misleading to believe ODA alone can fill this gap.

Joint efforts are needed: well-designed public-private partnerships, domestic resource mobilization in partner countries, and strategic use of ODA and debt relief.

A call for solidarity and political consensus

We are working to agree on these priorities in the European Parliament, and I hope this can form the basis for a shared agenda among donor states across Europe and beyond.

With a political consensus on the continued importance of development assistance, the value of aid for education, and agreement on how to use it most effectively, we can act in solidarity to deliver on the promise of quality education for all.

MEP György Hölvényi is the Standing Rapporteur for Education for the European Parliament’s Committee on Development and a member of the International Parliamentary Network for Education (IPNEd).

This article was originally published by the Global Education Monitoring Report on 1 July 2025 on the World Education Blog.