The scar city of resources is one of the constraints that surpasses the good will enshrined in the principle of universal basic education in the Universal Charter of Human Rights, and puts limits on how far one can put into operation the human development approach which regards lack of access to education as a human privation.

Expenditure in the education sector, at current prices, increased 16-fold in the 1990-1998 period, which corresponded to an average annual increase of 41.5%. This growth was slightly higher than that for total state expenditure, which was an average of 40%. This level of growth in the resources allocated to the education sector shows the priority given by the government to education. Table 3.4 summarises the evolution of the funding of education over a ten-year period.

As can be seen from graph 3.18, internal recurrent expenditure on education, as a percentage of total recurrent state expenditure, in the 1990-1999 period, was always lower than 18%, with the sole exception of 1998 (18.2%), and was even lower than 16% in the 1993-1995 period. This figure is much lower than the 25% noted in many African countries.

The growth in the volume of resources made available for education hides a major weakness: more than half of all educational expenditure is financed from foreign funds. The proportion of external funding in the State Budget, mainly for capital expenditure, has ranged from a maximum of 63.3% in 1994 to a minimum of 44% in 1998, and it was envisaged that, in 1999, it would amount to 42.5%. This sharply demonstrates the strong dependence of the sector on foreign aid, despite the recent trend for a decline in this aid, as shown in graph 3.19.

The dependence on contributions from the international community to fund education reflects the fragility of the Mozambican economy. But it is pertinent to note that the internal funding of the education sector through the General State Budget is not yet in line with the priority given to education in political speeches.

In absolute terms, the amount of resources channeled to the sector has grown substantially, as stressed earlier. However, not only is total educational expenditure still low as a percentage of GDP, but it has actually declined: it fell from 6% in 1992 to around 4% in the last three years.

Internal (domestic) expenditure on education in proportion to the GDP is much lower, despite a slight recovery, advancing from just 1.6% of GDP in 1995 (the lowest figure for the period) to around 2.2% in 1998 and 1999. This sum is very low, particularly if we bear in mind that internal expenditure on education in the African countries benefiting from the HIPC (Heavily Indebted Poor Countries) debt relief initiative is, on average, about 4% of GDP, or twice as much as the current rate in Mozambique.

These indicators show that, fortunately, there is still space to increase the financing of education with domestic funds, even if the foreign funds continue to play an important role, as long as the priority given to education in political discourse is implemented at the level of resource allocation.

The HIPC initiative will not be sufficient, in itself, to increase the internal funding of educational expenditure to the level seen in African countries that are under conditions similar to Mozambique.

A World Bank study forecasts that the coming years about US$ 120 million dollars will be released annually by HIPC. This figure will grow until it reaches about US$ 167 million in 2017. If one in four the dollars released by the HIPC initiative is allocated to education, one can envisage this contributing to an increase of about 1.7% in internal educational expenditure expressed as a percentage of GDP. Thus will still remain below 4%.

Table 3.4: Public expenditure on education as % of GDP and of total state expenditure, 1990-1999
	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999(*)
GDP (billions of meticais)	2.334	3.580	4.757	7.829	13.145	21.267	32.093	39.693	46.134	52.913
DTG - Total government expenditure	690	959	1.483	2.304	4.097	5.157	6.773	9.498	10.207	13.461
Recurrent	343	458	757	1.167	1.978	2.188	3.077	4.272	5.268	6.606
Capital (internal + external)	347	501	726	1.137	2.119	2.969	3.696	5.226	4.939	6.855
Total government expenditure as % of GDP	29,6%	26,8%	31,2%	29,4%	31,2%	24,2%	21,1%	23,9%	22,1%	25,4%
MINED	109	171	263	380	653	799	1.300	1.322	1.468	1.645
Total internal expenditure	50	75	125	171	203	268	486	648	875	1.005
- recurrent	45	65	104	145	142	249	441	583	798	907
- capital	5	10	21	26	61	19	45	65	77	98
Total external expenditure	59	96	138	209	450	531	814	674	593	640
Ministry of Higher Education	nd	nd	nd	nd	nd	nd	nd	237	400	476
Total internal expenditure	7	12	22	34	58	65	109	123	163	214
Total external expenditure	nd	nd	nd	nd	nd	nd	nd	114	237	262
Total internal expenditure in education	57	87	147	205	261	333	595	771	1.038	1.219
Total external expenditure in education	59	96	138	209	450	531	814	788	830	902
As % of total	50,9%	52,5%	48,4%	50,5%	63,3%	61,5%	57,8%	50,5%	44,4%	42,5%
DTE - Total educational expenditure (int + ext)	116	183	285	414	711	864	1.409	1.559	1.868	2.121
DTE as % of DTG	16,8%	19,1%	19,2%	18,0%	17,4%	16,8%	20,8%	16,4%	18,3%	15,8%
Recurrent internal expenditure on education as % of total recurrent expenditure	15,2%	16,8%	16,6%	15,3%	10,1%	14,4%	17,9%	16,5%	18,2%	17,0%
DTE as % of GDP	5,0%	5,1%	6,0%	5,3%	5,4%	4,1%	4,4%	3,9%	4,0%	4,0%
Internal expenditure on education as % of GDP	2,4%	2,4%	3,1%	2,6%	2,0%	1,6%	1,9%	1,9%	2,2%	2,3%
Exchange rate (MT/US$)	929	1.435	2.433	3.723	5.918	8.890	11.294	11.546	11.850	12.771
(*) Budgeted amount Source: MINED