# _In-Kind Transfers_

# _Education_

Education has remained a priority for Zambia. Between 2006 and 2013, the proportion of public expenditure on education in total government expenditure was 15–21 percent (equivalent to 3.7–4.4 percent of GDP). In in 2014 and 2015, in real terms, public expenditure on education has increased to over 5 percent of GDP. In the 2015 proposed budget, education is the largest single-sector allocation, putting Zambia in the top 33 percent of Sub-Saharan African countries ranked by public education expenditure as a share of GDP (World Bank 2015).

Enrollment at all levels continues to rise. Zambia’s public education system is organized according to four levels: early child education (ECE) for preprimary school children; primary education (grades 1–7) for children ages 7–14; secondary education (grades 8–12) for children ages 15–19, and tertiary (college and university degree programs). “Basic” education consists of 9 years of education: 6 at the primary level and 3 at the secondary level. Since 2000, student enrollment has been increasing at all levels. Between 2009 and 2013, enrollment at higher education and secondary school levels increased substantially (48 percent). The enrollment increase in secondary education reflects the growing number of graduates at the primary education level. Similarly, the recent rapid growth of higher education enrollment is due mainly to the increasing number of graduates from secondary education and probably due also to more students aspiring to higher education. A 2014 study showed that almost 90 percent of primary and secondary students want to pursue at least a bachelor’s degree in higher education.

In 2014 and 2015, the focus of education expenditure began to shift gradually from basic to secondary and higher education, with increased capital outlays for those levels. Non-administrative expenditures are highest at the primary education level. Between 2006 and 2013, per-student public expenditures at the primary level saw a large increase (in nominal terms). Nonetheless, in 2013 public expenditure per student at the high school level (grades 10–12) was 2.7 times larger than the same amount at the basic school level (grades 1– 9), while expenditure per student at the university level was over 15 times larger than that at the basic school level. Although a “free” primary education policy was introduced in 2002, students continue to pay out-of-pocket fees. This reality further reduces the value of the in-kind transfer for primary education provided via government expenditure. At the other end of the education spectrum, a relatively generous bursary program subsidizes the cost of textbooks and other supplies for public university students who come primarily from relatively wealthy households.

Private expenditures by poor households on public education can be traced partly to weak public expenditure execution. For example, 30 percent of primary schools do not receive the government grants that support the free education policy on time so end up collecting fees from students to cover the shortfall. Likewise, by law, the bursary scheme is a loan/financing scheme––but the program lacks a loan collection mechanism. These monies could be self-sustaining (instead of an adding annual budgetary burden), and the current budget transfer that they require could be redirected toward pro-poor education spending. However, at present, the scheme’s implementation constraints preclude this possibility.

# _Health_

During the last decade, Zambia expanded its health investments. Zambia’s annual per capita total health expenditure increased from US$26.50 in 2003 to $86.00 in 2014.<sup>10</sup> The latter is equivalent to the recommended US$86 per capita per annum (in 2012 constant dollars) for low-income countries (though

> **10** Government expenditures on health account for over **50% (US$48) of the total; the rest (US$38)** is paid by donors, households, employers. Figures come from the WHO Global Health Expenditure database: http://apps.who.int/nha/database.

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