Lost boys and girls: why investing in ECD is critical

Post-Covid recovery in the early childhood development (ECD) sector is not enough to secure the future of a generation of young children, says Kate Lefko-Everett, a senior associate at Trialogue. Critical improvements in access, quality and the regulatory environment are required before meaningful progress can be made.

In a sector that has traditionally been thin on reliable data, much of the information available about the population of young children in the country and the extent of their participation in ECD programmes has
generally come from the annual General Household Survey (GHS) conducted by Statistics South Africa.

As to be expected, in the year that Covid-19 spread rapidly throughout the world and forced many countries into lockdown, the 2020 GHS results reflected the reality of the first year of the pandemic: the percentage of children under five years old enrolled at an educational institution dropped considerably, to 24% from 37% in the
previous year.

Given that this age group numbers over 5.7 million – the largest-single age cohort (based on five-year increments) in a youthful country – the decline of 13 percentage points in enrolment figures suggests that over 720 000 young children were “lost” to the ECD sector and no longer recorded as attending a crèche, preschool, or other type of early learning programme. Rather, more than two-thirds remained at home.

When remaining at home is unsafe

Despite reducing the risk of contracting Covid-19, in other ways home was not always the safest place to be, particularly for vulnerable young children and families under duress. Protracted lockdowns had serious
consequences, and a series of research briefs developed by the Children’s Institute at the University of Cape Town (UCT), together with the Children’s Hospital Trust and the Michael & Susan Dell Foundation, brought to light the many complex ways in which the pandemic affected children’s wellbeing.

Closures of ECD programmes and lower enrolment levels, as shown in the GHS results, were specifically linked to food insecurity and lower access to nutrition; disruptions in both preventative and promotive healthcare such as routine immunisations and screening; and likely consequences in children’s progress towards achieving age-appropriate learning outcomes.

These far-reaching effects will remain with children for years to come.

Why investing in ECD is important

There is growing recognition internationally and within South Africa that the first 1 000 days are among the most important in the life of every child. The United Nations Children’s Fund (UNICEF) (formerly the United Nations International Children’s Emergency Fund) describes this ‘unique period of opportunity’ which roughly spans from conception to the age of two years old, as a window for setting the foundation of ‘optimum health and development’ throughout a person’s life.

The clear linkages between early childhood interventions and long-term wellbeing have also firmly embedded the policy case for programmatic investment. Participation in quality ECD programmes has been found to both improve academic performance, workplace productivity and earnings, and lifelong health outcomes; and to reduce risky behaviours, crime rates and economic inequality.

Few other social interventions have achieved such definitive and impactful results, and following a review of more than a decade of evidence the World Bank concluded that “investing in young children is one of the smartest investments that countries can make”. Economists have estimated the rate of return to be as high as $17 for every dollar invested in ECD, with the greatest returns for the most disadvantaged children and at the earliest life stages.

Lauded in policy, lamented in practice

Over a decade ago the 2011 National Development Plan and Vision 2030 established a target of universal access to two years of ECD participation for all children up to the age of five. GHS data indicates that the country remains far from reaching this goal.

The subsequent National Integrated Early Childhood Development Policy (NIECDP), released in 2015, has been commended for its thoughtful and comprehensive guidelines on ECD access, institutional arrangements, infrastructure requirements and provisions for monitoring and quality assurance. However, experts, including
Professor Eric Atmore of the Centre for Early Childhood Development, have maintained that there is neither the capacity nor the political will within government to deliver on its ECD policy commitments.

The recently tabled Basic Education Laws Amendment (BELA) Bill (B2-2022) appears likely to pass, introducing compulsory school attendance from Grade R from as early as 2023. This may push enrolment numbers up – but only for the 19% of five-year-olds not attending any form of school or preschool.

Further strikes to a fragile sector

In this faltering context, the onset of the pandemic pushed the already-fragile ECD sector towards near-total collapse. All educational institutions ceased in-person operations as South Africa went into its first hard lockdown. A rapid survey conducted by BRIDGE and a number of its partner organisations found that in a sample of around 4 000 ECD operators, 99% experienced non-payment of fees, 96% were unable to cover their operating costs and 68% were concerned that they would be unable to reopen. An estimated 118 000 to 175 000 practitioners and staff faced unemployment.

Schools were able to resume at least some in-person instruction within a few months of the first lockdown. ECD operators, however, endured a more protracted period of closure and were only permitted to reopen in July after what Nurina Ally, Rubeena Parker and Tess Peacock described as “urgent litigation and a scathing court judgment” against the Minister of Social Development.

After months of unpaid fees and government grants – the two main income streams for most operators – some respite was expected with the announcement of the R496 million ECD Stimulus Relief Fund in 2021. Yet as of March of 2022, and a full year after applications closed, less than half of qualifying staff had received their payments and the Department of Social Development (DSD) risked losing the remaining R250 million at the end of the financial year.

Looking at the sector today

Although Covid is likely to remain with us for some time to come, South Africa appears to have begun its recovery from the pandemic. GHS results show the gradual return of young children to ECD programmes, from 24% in 2020 to 29% in 2021 (see Figure 1).

Although percentages differ this trend is also evident through other data sources. The National Income Dynamics Study – Coronavirus Rapid Mobile Survey (NIDSCRAM) found that during April/May 2021, 36% of respondents living with children indicated that at least one child in the household had attended an ECD programme in the previous seven days. This represents a near-recovery to the 38% enrolment found in the pre-lockdown period. Only 7% of respondents answered this way between mid-July and mid-August of 2020.

But amid the push to return to “normalcy”, it is important to establish that getting back to the way things were pre-Covid is simply not enough in relation to ECD. Millions of children are missing out on the early interventions they so desperately need and deserve in their first 1 000 days, while policy targets eclipse, enrolment numbers fall
short, stimulus grants remain unpaid and operators struggle to cover basic costs.

New perspectives and insight

Fortunately, in a moment of reckoning with lifelong implications, a number of groundbreaking studies have been
published that fill critical data gaps and have the potential to inform targeted interventions in response to the urgent needs of the sector. Importantly, they also evidence the significant capacity for impact when multisector stakeholders – including government departments, corporates, philanthropists, non-profits and academics –
work together effectively.

ECD Census 2021

For the first time since 2013, a national audit of the ECD sector was conducted in the form of the ECD Census, undertaken in partnership with the DSD and the DBE with funding from the Lego Foundation. Initial results were released in May 2022, generating new insights in a number of
key areas:

• Quantification of the sector. The ECD Census found that just over 1.6 million children are enrolled in 42 420 early learning programmes (ELPs) countrywide. Seven in ten (71%) of these children were between the ages of three and five years old.

• Informal nature of services. Two-fifths (41%) of ELPs were either unregistered with the government or reported that their registration had lapsed. This is in contravention of the Children’s Act, 2005
  (Act No. 38 of 2005) – but also alludes to the registration challenges experienced by many operators. The Census also found that 22% of teaching and managerial staff did not have a relevant ECD qualification.

• Significant gaps in subsidy coverage. Only a third of ELPs (33%) received government subsidies – intended to
  enable poor children to access ECD. The main income source for most ELPs (69%) are fees paid by parents and caregivers, which average R509 nationally but are over R800 per month in the Western Cape and Gauteng provinces.

The complete dataset will be available for further analysis at UCT’s DataFirst Centre.

Thrive by Five Index

The Thrive by Five Index was developed in partnership by the DBE, Innovation Edge, USAID and ECD Measure, within funding from First National Bank (FNB). Based on a survey sample of 5 139 children aged four to five years old, the Index is a rigorous new instrument for assessing developmental progress and school readiness.

Thrive by Five measures three domains: early learning, social-emotional functioning and physical growth, based
on height and the prevalence of stunting. Results released in 2022 showed that only about a third of children enrolled in ELPs were on track to ‘thrive by five’.

A time for new solutions

Given the crucial importance going beyond recovery in the ECD sector to truly deliver on the policy promises made to young children, the time has come for structural change and innovative ways of working. Considering
such changes may cause discomfort among donors, corporates and philanthropists accustomed to more traditional forms of supporting ECD. Yet the firm evidence generated by the World Bank, Nobel Prize winning economist James Heckman and many others, provides assurances of positive future returns.

There are ample opportunities for impactful involvement in the following ways:

1.Generate new research, data and thought leadership.

The ECD Census and Thrive By Five Index are a few of the important new measures supporting a better understanding of the state of the ECD sector. There are still information gaps to be filled. One recent example of this is by the FirstRand Foundation, which has adopted a new ECD strategy and commissioned a study analysing self-sustainability obstacles and prospects, conducted by Trialogue. Watch this space for more research and thought leadership to come.

2. Take advantage of a key policy moment.

On 1 April 2022 the mandate for ECD was transferred from the DSD to the DBE. Together with the likely imminent passing of the BELA Bill, the timing is right to build new relationships with policymakers and implementers, identify critical needs, and push for increased access and support for quality ECD.

3. Channel capital into the sector.

The recent studies of the ECD sector confirm that it is a largely informal sector, operated mainly be women in low-income communities and funded privately by parents and caregivers. With fees averaging R509 per month there is little left for financing the types of physical and infrastructure upgrades needed to achieve compliance with government registration requirement, nor are operators likely to quality for traditional loans.

More accessible funding is needed, and as an example of how this can work, GROW Educare has developed a microlending scheme to support ECD centres towards becoming “sustainable businesses that deliver exceptional education.”

4. Pilot new funding models.

As reported in The 2021 Trialogue Business in Society Handbook, most corporates support the education sector, but ECD tends to lose out in favour of investments at the school and tertiary levels. It received only 13% of CSI education spend last year, and 27% this year. In addition to increasing the amount of CSI directed to ECD, donors should consider new funding models and practices with potential for greater impact within the sector. One such initiative was the Impact Bond Innovation Fund (IBIF), a multiparty, public-private sector coalition to sustainably finance ECD.

Initially targeting 3 000 children in low income communities in the Western Cape, the IBIF used the model of social impact bonds. As described by the Bertha Centre for Social Innovation and Entrepreneurship at UCT, this means “governments only pay if pre-determined outcomes are achieved.” The IBIF ran for three years and project partners are exploring possibilities for a potential successor.

5. Support advocacy and structural change.

Many donors are reticent when it comes to supporting advocacy. According to last year’s Trialogue Business in Society Handbook, only 9% of companies funded social justice and advocacy initiatives, and average CSI spend in this area amounted to less than a percent. However, the weakness of the ECD sector signals that profound change is needed.

Many leading experts, non-profits and practitioners have signed on to support the Real Reform for ECD (RR4ECD) campaign, which has called for five simple yet transformative changes that could lead to a major systemic overhaul: (i) a one-step registration process; (ii) government subsidies for all eligible children, regardless of programme type; (iii) simplified, adequate health and safety standards; (iv) greater clarity on achieving conditional registration; and (v) more infrastructure support.

6. Work in partnership.

Many of the most innovative and effective recent initiatives in the sector – including the ECD Census, Thrive by Five Index and IBIF – have been conceptualised and implemented through collaborative partnerships between funders, government departments, non-profits, academics, and practitioners.

KYB has evidenced the potential of such multi-stakeholder initiatives through a partnership between the Hollard Foundation and local and provincial government, and later with ECD franchise SmartStart. The KYB ecosystem approach simultaneously aimed to build government capacity, finance enterprise incubation and increase ECD access.

7. Lead by example.

Finally, many of South Africa’s largest corporates are also among the biggest employers. Like other parents and caregivers, low- to middle-income staff in particular are likely to need – and experience difficulty finding – quality affordable ECD. Although few companies currently offer on-site childcare, research has shown that internationally such services have been linked with reputational benefits as well as increased loyalty, productivity and availability among staff.

For employers unable to offer childcare directly, the Earlybird Educare social enterprise offers a noteworthy solution: it establishes quality ECD centres in residential and commercial properties, including the ABSA Towers in central Johannesburg, Siemens Campus in Midrand and 8 Merchant Place on the FirstRand Group’s Sandton premises.

A fixed portion of the revenue from these sites subsidises delivery of the same ECD programme at sites in low-income communities through Blue Door, the nonprofit arm of the company. Through this approach, corporates have the opportunity to build their profiles as employers of choice, support staff, invest in quality ECD and increase access for low-income children in need during their first one thousand days.

Source: The Trialogue Business In Society Handbook 2022 (25th Edition)