Payoffs of Education Expenditure In Botswana: Long Run Economic Growth Implications

Currently, Botswana is one of high income economies in Africa. Since independence in 1966, the government has put emphasis on the development of human capital through education and skills development of the citizens. The country has dedicated much of the government funds to education to the extent possible while the contribution and payoffs of education expenditure have been limited. This study examines data from 1960-2013 and attempts to link GDP and education expenditure in a long run framework. It has been noted that member states of the United Nations are under pressure to achieve development goals and countries like Botswana need to estimate not only public spending requirements and the macroeconomic implications of financing them, but also the potential social and economic rewards associated with education. Estimations show that at least 40% of people in developing economies are illiterate and governments intend to leave no stone unturned in eliminating this problem. This study applies the Johansen cointegration test and Granger causality procedure to examine the long run affiliations of the variables. Astoundingly, for Botswana economy, there is no long run comovement between GDP and education expenditure for the period 1960-2013. It is advised to review the quality of education and the programmes offered by the local institutions.