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The School Feeding Investment Case

Cost-Benefit Analysis

3

Contents

Acknowledgements ............................................................................................................... 4

Executive Summary ............................................................................................................... 5

1. Introduction to the Cost-Benefit Analysis .......................................................................... 6

1. Quick overview of the methodology ...................................................................................... 6

2. Country-specific features ..................................................................................................... 6

3. Sources ............................................................................................................................. 6

2. Zambia’s Home-Grown School Feeding Programme .......................................................... 7

1. Programme structure and main goals .................................................................................... 7

2. Targeting and beneficiaries .................................................................................................. 7

3. Institutional framework ....................................................................................................... 8

3. Cost-Benefit Analysis: Methodology .................................................................................. 9

1. Introduction to the Cost-Benefit Analysis ............................................................................... 9

2. Cornerstones of the Cost-Benefit Analysis ........................................................................... 11

3. Key data assumptions ....................................................................................................... 11

4. Approach and process ....................................................................................................... 12

4. Cost-Benefit Analysis: Main Findings ............................................................................... 13

1. Cost of School Feeding ...................................................................................................... 13

2. Value Transfer ................................................................................................................. 13

3. Healthcare Expenditure Reduction ...................................................................................... 14

4. Return on Investment ....................................................................................................... 14

5. Increased Productivity ...................................................................................................... 14

6. Healthier Life ................................................................................................................... 16

7. Summary ........................................................................................................................ 17

5. Conclusion and Recommendations .................................................................................. 19

1. Conclusion ....................................................................................................................... 19

2. Recommendations ............................................................................................................ 19

4

Acknowledgements

This study was carried out under the overall guidance of David Ryckembusch, Senior Programme Adviser

at WFP Safety Nets and Social Protection Unit, and under the direct supervision of Simon Cammelbeeck,

WFP Country Director in Zambia, and Edna Kalaluka Senior Programme Officer in Zambia.

This study was conducted through the WFP-MasterCard partnership and the MasterCard Employee

Engagement Programme, which allows for MasterCard employees to be seconded to WFP for short-term

missions. The authors are thankful to MasterCard for partnering with WFP for this study, and in particular

to Serge Simonet and Edwin Van Baalen for their constant support to this partnership as well as to Caroline

Bird, Deanna Helmig and Annika Schlingheider from WFP Private Partnerships Unit, global and regional

human resources and all MasterCard corporate teams involved in this partnership.

This study was made possible thanks to the support and cooperation of the Zambian Ministry of General

Education, and in particular of Dr. Faith Nchito, National Coordinator for School Feeding, the District

Education Board Secretaries, the Food and Agriculture Organization of the United Nations, the International

Labour Organization and all WFP staff who took part or supported this study in Zambia Country Office,

Regional Bureau for Southern Africa and Headquarters.

The authors would like to express their heartfelt thanks to Mr. Omar Benammour, Programme Policy

Officer at WFP Safety Nets and Social Protection Unit, Ms. Trixie-Belle Nicolle, Programme Policy Officer at

WFP Regional Bureau for Southern Africa, Mr. Fanwell Hamusonde, WFP Programmes Consultant - School

Feeding in Zambia, Mrs. Jennifer Sakwiya, WFP Senior Programme Assistant in Zambia and Mr. Miyoba

Mukengami, WFP Senior Programme Assistant in Zambia, for their continuous and invaluable support.

The authors would also like to thank Mr. Luca Pellerano, Chief Technical Advisor at the International

Labour Organization in Zambia, Ms. Jelena Licina, Consultant at WFP Business Development Cash &

Vouchers Unit, Ms. Aline Samu, WFP Programme Officer at WFP Regional Bureau for Southern Africa, Ms.

Aurore Rusiga, WFP P4P Country Coordinator in Zambia, Mr. Chris Liswaniso, WFP Senior Logistics Assistant

in Zambia, Mr. Daniel Mubanga, WFP Senior Logistics Assistant in Zambia and Mr. Allan Mulando, WFP

Senior VAM Officer in Zambia.

The report was jointly prepared by Oskar Litton (MasterCard Sweden) and Naïl Lazrak (WFP SNSP).

DISCLAIMER – This study is not an audit or an evaluation report. Although it includes a section about

logistics, it is not a supply chain analysis either. This report is aimed at assessing the current level of cost-

efficiency of the Home-Grown School Feeding programme in Zambia and at formulating recommendations

to further improve it.

This report is the product of the staff of the World Food Programme (WFP). The views expressed in it

do not necessarily reflect the official position of WFP, its Executive Director, its Executive Board, its partners

or the United Nations in general.

5

Executive Summary

School feeding in Zambia was re-introduced by WFP in 2003 as a response to the 2001-2002 drought.

Shortly after that, the Government of Zambia also began a school feeding project. The two were finally

merged in 2011 and the transition to a Home Grown School Feeding was initiated. It is jointly operated

with the UN World Food Programme under the Home-Grown School Feeding model since 2011. In 2015, it

covered over 891,000 out of approximately 3.5 million pre-primary and primary school children. As such,

school feeding provided a direct value transfer to 5.5% of the total country population, which in turn

indirectly benefitted their households and agricultural producers involved in the programme, therefore

contributing to the overall country’s development, acting as an investment in human capital and

representing an additional demand on the national agriculture.

School feeding is the most widely used social safety net in the world. As a cross-cutting

intervention, school feeding benefits not only children, but also their households as well as the entire value

chain which help serving a meal to a child at school. As such, it is a powerful tool for development, and

it directly addresses Sustainable Development Goals 1 (No poverty), 2 (End hunger), 3 (Good health and

well-being), 4 (Quality education), 5 (Gender equality) and 8 (Decent work and economic growth). When

it is operated under the Home-Grown School Feeding model, as it is the case in Zambia, it also addresses

SDG 12 (Responsible consumption and production) by leveraging this additional demand to foster local

agricultural production.

This study illustrates the various pathways through which school feeding creates value on the short-,

mid- and long-term, in Zambia’s GDP, by measuring the added value for each dollar invested in this

programme. It provides concrete evidence proving that school feeding is not so much a cost than an

investment in human capital. As a value transfer, school feeding is a social safety net for the households.

It also improves the children’s health and cognitive abilities. Most of all, it provides an incentive for parents

to send their children to schools, resulting in a longer, better education for them.

In a sample of 15 countries in which this study has been carried out recently, school feeding has proven

to have a Cost-Benefit Ratio ranging from 1:3 to 1:9, meaning that for each US$1 invested in school

feeding, US$3 to US$9 are created in the country’s GDP as a result of the various outcomes of school

feeding.

In Zambia, every US$1 invested in school feeding results in creating US$8.25 in the country’s

GDP, on the short and longer term. Feeding one child during his entire schooling costs US$134.59, and it

creates US$1,109.93 in the country’s GDP, most of which by leading the children to receive a better

education. As a result, the Net Present Value of school feeding is positive and it is equal to US$975.34 per

beneficiary, showing that school feeding is a profitable investment in Zambia.

6

1. Introduction to the Cost-Benefit Analysis

1. Quick overview of the methodology

The Cost-Benefit Analysis is an analytical tool based on an economic modelling of school feeding

outcomes, developed to illustrate to stakeholders the short- and long-run costs and benefits of a particular

safety net programme. As an economic model, it leverages four data sources: results from the academic

literature, data collected at country level, information collected from WFP and other international agencies’

experts and information collected from government experts.

It highlights the various benefits of an existing programme, taking into account this programme’s

specifics as well as national and local context data. This study considers school feeding as an investment

in human capital, which contributes to the development of the country. The purpose of this study is to

provide evidence of the economic relevance of the Zambian school feeding programme in respect of the

country’s development, as a cost-efficient social protection programme.

2. Country-specific features

This Cost-Benefit Analysis of the Zambian school feeding programme is based on the 2015 exercise,

and therefore focused on actual expenditures and education performances as observed from January 1st to

December 31st, 2015. This period is that of a full running cycle, as the schoolyear in Zambia matches the

calendar year and also begins in January.

The results of this study are expressed in US dollars, due to the fact that a number of indicators

leveraged within the economic model are calculated in US dollars. The Zambian Kwacha to US dollar

exchange rate went through significant fluctuations in the recent past, as a result of the variation in

economic conditions. In order to avert the risk of a bias associated with these variations, all amounts

expressed in Zambian Kwacha were associated with a specific date and converted in US dollars according

to the historical, official exchange rate corresponding to this date. In particular, this was the case for the

expenditures associated with school feeding, which occurred throughout the school year.

3. Sources

Most of the information provided in this report is based on documents and information provided by WFP

Country Office in Zambia and the Government of the Republic of Zambia, which were analysed

together with officers operating this programme through interviews and meetings.

Macro-economic data, health data and some education data were taken from publications of the World

Bank, the World Health Organization (WHO) and the UNESCO Institute for Statistics (UIS).

7

2. Zambia’s Home-Grown School Feeding Programme

1. Programme structure and main goals

The Government of Zambia introduced school feeding in public schools as early as 1964, but this

programme was interrupted in the 1980s due to economic constraints. In 2003, following a severe drought

in the country, the Government of Zambia and the UNWFP re-introduced new school feeding projects to

support access to education in the most affected areas. These projects were later merged and transitioned

into the current Home-Grown School Feeding (HGSF) programme, jointly operated by WFP and the

Government.

The main goal of this programme, as defined by the Revised Sixth National Development Plan1, is to

improve quality, access and equal participation to primary education. The second goal, as defined

by the National Food and Nutrition Strategic Plan2, is to reduce rural poverty by improving local

household economies and providing ready market for local agriculture.

The Home-Grown School Feeding programme provides one hot meal per day to every child enrolled

in primary school in the targeted districts, throughout the schoolyear. The academic year has on average

180 school days, broken down in three terms of approximately 60 days each.

2. Targeting and beneficiaries

As it is currently designed, school feeding is aimed at supporting in priority the least advanced districts

within the country. The HGSF programme currently covers 35 districts out of 1033, in eight different

provinces. These districts were selected based on three education indicators and three economic indicators:

- Dropout rate

- Net enrolment ratio

- Completion rate

- Extreme poverty rate

- Access to arable lands

- Proportion of total farmer households.

Home-Grown School Feeding covers pre-primary and primary schools only and is implemented in both

public and community schools. In 2015, the programme supported a maximum of 891,077 beneficiaries

in 2,308 schools (out of more than 8,800 schools), accounting for approximately 25% of all children enrolled

in primary school. The Government of the Republic of Zambia is planning to scale up this programme to

reach 2 million children by 2020, which will provide a direct value transfer to 13% of the total population,

indirectly benefitting the children’s households as well as agricultural producers and all economic agents

involved in the school feeding value chain.

The gender ratio among the beneficiaries is 1:1.

1 Ministry of Finance (2014), Revised Sixth National Development Plan 2013-2016. 2 National Food and Nutrition Commission of Zambia (2011), National Food and Nutrition Strategic Plan for Zambia

2011-2015. 3 The full list is available in annex 1, along with the number of beneficiaries per district.

8

Figure 1: Home-Grown School Feeding districts (please note that this map represents the former districts before they were split by government between 2011 and 2015)

Source: WFP VAM, 2016.

3. Institutional framework

The Home-Grown School Feeding programme is operated through a partnership between the

Government of Zambia and WFP. At a strategic level, the programme’s objectives are set by the National

Food and Nutrition Strategic Plan, the Revised Sixth National Development Plan and the National

Social Protection Policy4, which entrust its implementation to the Ministry of Education, Science,

Vocational Training and Early Education (MESVTEE). The Home-Grown School Feeding programme is a

component of the National School Health and Nutrition Policy of the MESVTEE5.

Until 2015, WFP’s contribution to this programme was framed by the Country Programme 200157

(2011-2015), in line with the United Nations Development Assistance Framework (2011-2016).

As of 2016, this programme is continued by the Country Programme 200891 (2016-2020), which will

strengthen the partnership between WFP and other UN agencies, including UNICEF, ILO and IOM, as part

of the joint UN Joint Social Protection Programme (2015-2018).

4 Ministry of Community Development (2013), Mother and Child Health, National Social Protection Policy. 5 Ministry of Education, Science, Vocational Training and Early Education (2006), National School Health and

Nutrition Policy.

- Chadiza

- Chama

- Chienge

- Chilubi

- Kalabo

- Kaputa

- Katete

- Kawambwa

- Kazungula

- Luwingu

- Mkushi

- Mongu

- Namwala

- Nyimba

- Petauke

- Senanga

- Sesheke

- Siavonga

- Mumbwa

- Lufwanyama

- Masaiti

- Mwinilunga

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3. Cost-Benefit Analysis: Methodology

1. Introduction to the Cost-Benefit Analysis

The School Feeding Cost-Benefit Analysis is aimed at quantifying, in economic terms, the benefits

deriving from a school feeding intervention. Its main objective is to assess and compare the monetary

cost and the economic benefit of providing school feeding, by estimating the value created in terms

of value transfer, increased education and improved health and nutrition to the beneficiaries, showing that

school feeding is a relevant investment on both the short and the long term for the children, for their

communities and for the country’s development.

This tool was developed by WFP in partnership with the Boston Consulting Group in 2009-2011. It

leverages academic evidence and WFP’s experience in school feeding and social protection, and it uses

country-specific data on nutrition, health, education and macro-economic indicators.

The Cost-Benefit Analysis takes into account all the quantifiable outcomes and all the costs of a school

feeding intervention, throughout the lifetime of the beneficiary. Amounts are discounted at their Net Present

Value (NPV). The Cost-Benefit Ratio is an assessment of the economic profitability of the programme. The

following benefit drivers are taken into account in the scope of the Cost-Benefit Analysis:

1. Value Transfer: the distribution of a food ration at school is a direct value transfer to the

households, by freeing their budget from an amount equivalent to that of the meal at local market

prices;

2. Healthcare Expenditure Reduction: school feeding generally improves the children’s general

health, which provides an indirect value transfer to the households by alleviating their healthcare

expenditures associated with the specific risk factors addressed by school feeding;

3. Return on Investment on Saved Assets: the direct (1) and indirect (2) value transfers to the

household will be partly invested in productive assets, such as animals, and this capital will in return

bring an additional revenue to the family;

4. Increased Productivity: school feeding promotes access to education and learning, by providing

to parents a strong incentive to send their children to school, and it was proven to reduce dropouts

and increase enrolment, attendance, and cognition when in class, enabling the children to be more

productive when they become working adults;

5. Healthier Life: by reducing vitamin A deficiency, iron deficiency, and by providing an education to

safe hygiene, school feeding was proven to reduce the students Disability Adjusted Life Years

(DALYs), defined by the WHO as the years of healthy life lost due to diseases.

One should note that these benefit drivers represent only quantifiable outcomes which can be expressed

or assessed in dollar value in such a way they can compare to the cost of feeding a child during his

schooling. However, these benefits are not the only outcomes of school feeding. Academic evidence

and empirical evidence have shown that school feeding, as a multi-dimensional intervention, has various

positive non-monetary outcomes, including:

- School feeding builds stronger community ties, as the planning and implementation of the

programme involve parents, teachers and local communities at large when they actively participate

in food preparation and management of the programme;

- School feeding reduces gender inequality, as most out-of-school children are girls; this reduction in

gender equality is not only translated into a higher access to education granted to girls, but through

10

girls’ education, school feeding indirectly reduces teen pregnancies by keeping girls in schools and

reducing their exposure to harmful behaviours when they are idling; and other conditions associated

with poor girls’ education;

- School feeding improves schools’ infrastructures, as it requires the construction of warehouses and

kitchens to prepare the meals, as well as school gardens in some schools;

- School feeding can serve as a platform to deliver other development actions, and in particular, it

can channel health interventions such as de-worming.

Furthermore, this study focuses only on benefits driven by school feeding from the children’s point of

view, considering school feeding as an investment in their human capital. It does not measure the additional

benefits associated with the choice of Zambia to procure almost all of the food commodities within the

country under the Home-Grown School Feeding modality, which leverages the additional demand driven

by school feeding to support the development of national agriculture and agribusiness across the value

chain.

Data was collected both at central level and at school level, controlling for the difference between schools

supported by the programme (“treatment group”) and a sample of similar schools which are not enrolled

in the programme (“control group”).

On the cost side, the Cost-Benefit Analysis relies upon results from the National Cost Assessment (NCA),

which was undertaken in Zambia in May-June 2016. The NCA provides a detailed analysis of all the costs

incurred by a given school feeding programmes during one running year and serves as a data source for

cost optimization and scaling-up. However, as it provides a comprehensive picture of the costs of a given

school feeding programme, the NCA can also be used as an input for further studies such as the Cost-

Benefit Analysis. Cost categories, as determined by the NCA are:

1. Commodities: cost of all the commodities served to the children as per the actual ration, including

maize, pulses and vegetable oil

2. Logistics, Storage and Utilities: cost incurred to carry and physically handle the food

commodities to the schools

3. Management & Administration (excluding staff): overheads incurred by WFP and the

Government of the Republic of Zambia and workshops required to manage the programme

4. Staff: costs incurred by the use of human resources to manage and operate the programme,

including administrative staff and cooks

5. Capital costs: costs associated with the construction and rehabilitation of cooking equipment, and

the purchase of cooking, serving and eating utensils.

Within each of these cost categories, as a result of the methodology followed to perform the National

Cost Assessments, community costs were also taken into account when applicable in order to reflect

accurately the financial reality of this programme. Community costs are both actual expenditures and in-

kind contributions made by the local communities to the programme, and which contribute to its proper

functioning.

Finally, it is important to highlight that the Cost-Benefit Analysis does not rely upon planned or budgeted

costs or expected outcomes of school feeding (for instance, expected increase in enrolment), but uses

solely actual data, both for costs and benefits (data provided by the Ministry of Education on actual increase

in enrolment).

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2. Cornerstones of the Cost-Benefit Analysis

The Cost-Benefit Analysis is focused from a single beneficiary perspective, meaning that the “total

cost” refers to the cost required to feed a single child during his entire pre-primary and primary schooling,

while the “total benefit” refers to the value created per beneficiary.

The Cost-Benefit Analysis uses the life of the beneficiary as a timeframe. Indeed, school feeding

brings a number of benefits, some of which occurring while the beneficiary is at school, but also when he

or she becomes a working adult.

Finally, benefits on the long term are discounted at their Net Present Value (NPV), in order to reflect

the advantage of a school feeding intervention in current dollars and allow to compare benefits with current

costs.

3. Key data assumptions

The Cost-Benefit Analysis relies upon a number of macro-economic data indicators and variables which

are common to all schools in the country, regardless of their enrolment in the school feeding programme.

These data come either from peer-reviewed academic literature or international sources such as the World

Bank. Below is an overview of the general data assumptions:

INDICATOR UNIT VALUE SOURCE

Social Discount Rate % 6.0% Academic literature6

GDP growth rate in 2012 when the children entered school for

the first time % 6.73% World Bank

GDP growth long-term forecast % 1.83%-3.93%

(min/max) OECD

Poverty headcount ratio at national line

% 60.50% World Bank

Age of beginning of school years 6 MESVTEE

Age of end of school years 15 MESVTEE

Duration of primary and pre-primary schooling

years 9 MESVTEE

Average start of working life years 21 WFP Country

Office

Average end of working life years 58 WFP Country

Office

6 The Social Discount Rate is the rate used to discount the Net Present Value of social protection programmes, which differs from the regular discount rate used in corporate economic planning as it is not only sensitive to inflation and economic growth, but also to a country’s social perspectives. For more information, please refer to Juzhong Zhuang et al. (2007), Theory and Practice in the Choice of Social Discount Rate for Cost-Benefit Analysis: A Survey, Economics and Research Department Working Pqper, Manila: Asian Development Bank, and Mark Harrison (2010), Valuing the Future: The Social Discount Rate in Cost-Benefit Analysis, Visiting Research Paper, Canberra: Productivity Commission.

12

4. Approach and process

The Cost-Benefit Analysis was conducted in May-June 2016 based on data provided by the Government

of the Republic of Zambia (national and district level through education authorities) and WFP Country Office,

gathered by the WFP focal point for school feeding and then computed by WFP Safety Nets and Social

Protection analysts. A validation of data sensitivity was performed with the purpose of double-checking the

data and verify that the overall result is not over-determined by a single parameter.

The results from this study remain valid as long as school feeding remains operated under the current

model, and even if the programme were to be scaled up. The CBA may be updated as and when required,

for instance when significant modifications have been introduced into the programme design.

The control group was sampled with the support and advice of the WFP Vulnerability Analysis and

Mapping (VAM) officer. The data used in this analysis came only from official, published sources. Macro-

economic indicators were provided by the World Bank, health indicators were provided by the World Health

Organization and education indicators came from the national Education Management Information System

(EMIS) provided by the Ministry of Education. Knowledge on the programme design and operating model

were provided by the programme stakeholders and legal documents.

As some of the districts where school feeding is implemented are affected with extreme social and

economic conditions, and given that schools in the treatment group and the control group need to have

similar features in order to be comparable, this study compares results from 12 selected districts,

considered as the treatment group, with indicators from 12 sampled similar districts which do not fall in

the scope of the programme, considered as the control group. Indeed, extremely remote districts cannot

be compared with urban districts, and only by comparing similar districts can we ensure that the difference

between the control group and the treatment group is fully attributable to school feeding, and not to the

environment of the schools.

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4. Cost-Benefit Analysis: Main Findings

1. Cost of School Feeding

School feeding costs in Zambia were assessed in detail during the National Cost Assessment exercise,

undertaken in May-June 2016. The results of this study can be summarized as follows: the actual, total

cost associated with feeding a single child during the whole year 2015 was equal to US$14.95. This amount

breaks down as follows:

CATEGORY TOTAL COST

(K)

COST PER

BENEFICIARY

(K)

TOTAL COST

(US$)

COST PER

BENEFICIARY

(US$)

% OF

TOTAL

Commodities 32,627,465.50 37.08 3,753,704.87 4.21 28.2%

Logistics, Storage and

Utilities 19,479,113.78 22.14 2,241,021.27 2.51 16.8%

Management and

Administration 1,052,415.98 1.20 121,077.72 0.14 0.9%

Staff (incl. cooks) 59,665,167.93 67.80 6,864,322.07 7.7 51.5%

Capital costs 3,001,106.26 3.41 345,269.45 0.39 2.6%

Total cost 115,825,269.45 131.63 13,325,395.38 14.95 100%

This amount allowed for about 121 million meals to be served to a maximum of 891,077 children. Based

on actual costs from 2015, it can be estimated that feeding one child during his entire schooling costs

US$134.59.

2. Value Transfer

School feeding acts as a value transfer to the households as it frees their budget from an amount

equal to the value of the food basket served at local market prices, therefore acting as an indirect,

conditional social transfer in kind. In Zambia, the daily food basket includes 120 g of maize, 20 g of pulses

and 10 g of vegetable oil7, corresponding to an annual, direct value transfer of US$8.08, or a total transfer

of US$72.73 per child throughout his or her schooling.

This value transfer is a social safety net for the households, as it alleviates the cost of the children’s

schooling, and it also offsets the opportunity cost of lost child labour to the family. Food-insecure

households affected by extreme poverty typically spend most of their income on food, and they also rely

on labour and income provided by their children. 10.9% of primary school age children in Zambia are out

of school8, and labour still affects more than a quarter of children aged 5 to 149, part of which combine

7 Source: WFP Country Office (2016). 8 Source: UNESCO Institute for Statistics (2015). 9 Sources: ILO (2008), US Department of Labor’s Bureau of International Labor Affairs (2011), UNESCO Institute

for Statistics (2012).

14

work and school. The Government of the Republic of Zambia is actively engaged to eliminate this

phenomenon, as it launched the Child Labor Policy and released the Labor Force Survey in 2011, and more

recently with the Employment Amendment Act in 2015.

As school feeding is not only an incentive for parents to send their children at school, but also provides

the households with an additional revenue, it has proven a very powerful tool in fighting child labour

worldwide.

3. Healthcare Expenditure Reduction

In addition to the direct value transfer, school feeding in Zambia improves the children’s health by

contributing to avert health conditions associated with iron deficiencies, vitamin A deficiencies and unsafe

water, sanitation and handwashing, which would have incurred private healthcare expenditures. On

average, private healthcare expenditures in Zambia represent US$34.97 per year per person (out-of-pocket

expenditures)10, and health conditions associated with iron deficiencies, vitamin A deficiencies and unsafe

water, sanitation and handwashing correspond to 2.15% of all diseases affecting children aged 5 to 14 in

Zambia11. As a result, healthcare expenditures averted thanks to school feeding correspond to an US$6.76

economy per child throughout his or her schooling, providing an additional, indirect value transfer to the

household.

Both these transfers occur on the short term as they are directly associated with school attendance.

4. Return on Investment

Disfavoured households are known to be very active asset managers, despite the smallness of their

assets. The additional revenue made available by the direct and indirect value transfer calculated above

will be spent shortly for the most part, but households will invest a small portion of it – about 15%12 – in

productive assets such as farm animals or livestock, which will in turn provide them with an additional

revenue.

This return on investment effect lasts longer than school attendance, as the lifetime of these assets

during which they generate a cash flow may be longer than the schooling duration. The additional income

associated with these assets, net of their cost price, is US$32.20 per child throughout his or her schooling.

5. Increased Productivity

School feeding has proven to increase the length and quality of education received by the

beneficiaries. In schools where the children are served a daily meal, the average schooling duration (net

of attendance and dropouts) is equal to 11.07 years, while children who do not receive meals achieve only

10.50 years of schooling on average13, showing a 5.4% increase in total schooling duration directly

attributable to school feeding. It should be noted that districts enrolled in the school feeding

programme, although commensurate to the control group, remain more severely affected with economic

10 Source: WHO (2016) 11 Source: WHO, Institute for Health Metrics and Evaluation and others, Global Burden of Disease Study (2013). 12 Abhijit Banerjee and Esther Duflo (2005), “Growth Theory through the Lens of Development Economics”, in

Philippe Aghion and Steven Durlauf (2005), Handbook of Economic Growth, Amsterdam: Elsevier, pp. 473-552. 13 Calculated based on education indicators provided by the MESVTEE Education Management Information System

and using the equations provided by the UNESCO Institute for Statistics in their handbook Education Indicators: Technical Guidelines (2009), available on http://www.uis.unesco.org/Library/Documents/eiguide09-en.pdf

15

constraints, which would have led to worse education performances than the control group in the absence

of school feeding.

Economics of Education consider schooling as an investment in human capital. Human capital, as

defined by Gary Becker14, is a set of knowledge, skills and social and personal characteristics that increase

a worker’s productivity. Most of an individual’s human capital is developed early during his life under the

effect of education. Human capital can be later augmented by training and experience. Jacob Mincer15

proved this correlation between wages and the length of schooling by developing an equation known as

the Mincer equation. From this correlation, which is observed in every country of the world, a Rate of Return

to Education can be calculated, which associates the length of schooling with individuals’ wages as observed

in a given country. In a given country, the working population is composed of individuals who achieved a

variable number of years of education. By correlating this number with the wages they receive, it has been

observed that the most important part of these wages are determined by the number of years of schooling,

although a minor part of the wages is also determined by other parameters. As calculated by Claudio

Montenegro and Harry Patrinos, the Rate of Return to Education in Zambia is equal to 12.6%

(increase in wages associated with one additional year of schooling)16.

In Zambia during the 2004-2014 decade, the GNI per capita was on average equal to US$1,165.45 per

year per person, but the GNI per capita of the poorest 20% of the population, used as a base wage

in this study, was equal to US$211.72 per year per person17.

As school feeding has proven to increase schooling duration in Zambia by 0.57 year, the children who

benefitted from school feeding can therefore expect to earn wages 7.18% higher than the base wage due

to this additional schooling. Only the difference between this higher revenue and the base wage can be

attributed to school feeding, but the base wage itself cannot be associated with school feeding.

In addition, since this effect lasts throughout the working life of the beneficiary, that is to say

approximately between the ages of 21 and 58 (taking into account the age of retirement and life expectancy

effects), it is necessary to discount the cash flows associated with future wages to calculate their Net

Present Value, to make them commensurate with expenditures and costs associated with the provision of

school feeding in the present. The discount rate used to for social protection programmes is not identical

to that used for private sector investments, as it does not only rely upon forecasted inflation and economic

growth but also needs to take into account the forecasted human and social development of the country.

This rate is called the Social Discount Rate and this study uses a 6.0% rate for Zambia, based on a

benchmark of various similar studies in developing countries18. As a consequence, the Net Present Value

of future wages decreases over time even if the nominal wage increases every year, as the discount factor

gets higher every year.

As a result of the above, a child who benefitted from school feeding can expect to earn an additional

US$241.93, during his entire lifetime, as compared to a child who did not receive meals at school. This

amount is discounted.

School feeding does not only increase the duration of schooling, but also the quality of the education

received, as it improves the cognition of children when in class. Indeed, children who are not hungry show

better understanding and learning abilities, which also leads to an increase in human capital. This cognition

14 Gary Becker (1964, 1993), Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Chicago: University of Chicago Press.

15 Jacob Mincer (1974), Schooling, Experience and Earnings, New York: National Bureau of Economic Research, and other publications.

16 Claudio Montenegro and Harry Patrinos (2014), Comparable Estimates of Returns to Schooling Around the World, Policy Research Working Paper, The World Bank, p. 36. See also George Psacharopoulos (2006), “The Value of Investment in Education: Theory, Evidence, and Policy”, Journal of Education Finance, 32, 2.

17 Computed from World Bank, World Development Indicators: GNI per capita and Income share held by lowest 20%.

18 Juzhong Zhuang et al. (2007), Theory and Practice in the Choice of Social Discount Rate for Cost-Benefit Analysis: A Survey, Economics and Research Department Working Pqper, Manila: Asian Development Bank, and Mark Harrison (2010), Valuing the Future: The Social Discount Rate in Cost-Benefit Analysis, Visiting Research Paper, Canberra: Productivity Commission.

16

effect is not country-specific and it can be measured through variations in test scores. It has been evidenced

in various environments across the globe19 and corresponds to an average 0.17 Standard Deviation in test

scores for every year during which a child benefitted for school feeding. A 1 Standard Deviation increase

in test scores is associated with an increase in expected wages of 11.0%20.

As school feeding beneficiaries attended school during a total of 11.07 years, a child who benefitted

from school feeding during his entire schooling can expect to earn an additional US$695.97 during his

entire lifetime, as compared to a child who did not receive meals at schools, during his entire lifetime.

The total benefit associated with increased productivity of the beneficiary when he or she becomes a

working adult corresponds to a Net Present Value of US$937.90, which corresponds to the marginal part

of their revenue they will earn in addition to the base wage during their entire lifetime.

Below is a representation of this marginal part of the revenue over the lifetime of the beneficiary before

it is discounted:

Average Income Projection average value per beneficiary, USD

This increased productivity outcome occurs mainly on the long term as it begins with the working life of

the beneficiaries and ceases with retirement. It is concentrated on the first years of this working life as

further years are more discounted, therefore corresponding to a lower Net Present Value.

6. Healthier Life

School feeding directly contributes to reduction of the DALYs associated with three health risk factors,

that are iron deficiency and vitamin A deficiency, which can lead to anemia and other health conditions,

and unsafe water, sanitation and handwashing.

A DALY can be defined as a year of healthy life lost due to illness, disability or early death21. DALYs

associated with every known illness and health risk factor are periodically published for each country of the

world and each age group in the Global Burden of Disease Study, published by the World Health

19 A summary of these evidences can be found in Kristjansson et al. (2016), “Costs, and cost-outcome of school feeding programmes and feeding programmes for young children. Evidence and recommendations”, International Journal of Educational Development, 48: 79-83.

20 Matthew Jukes, Lesley Drake and Donald Bundy (2007), School Health, Nutrition and Education for All: Levelling the Playing Field, Cambridge, CABI Publishing, pp. 97-109.

21 More information on DALYS on: http://www.who.int/healthinfo/global_burden_disease/metrics_daly/en/.

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

5,000.00

6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81

Age of the beneficiaryNet value created by school feeding Base wage School feeding beneficiaries wage

17

Organization together with other international agencies and academic partners, including the Institute for

Health Metrics and Evaluation22.

In Zambia, DALYs associated with the risk factors averted by school feeding in the age group 5-14, are

on average:

- Iron deficiency: 0.0049 DALY

- Vitamin A deficiency: 0.0001 DALY

- Unsafe water, sanitation and handwashing: 0.0070 DALY

School feeding can reduce the prevalence of these three risk factors, pro rata the daily nutritional intake

covered by the programme, which approximately corresponds to 33% of the daily nutritional needs as per

the food basket. As a consequence, school feeding leads to averting 0.0039 DALY yearly, per child,

corresponding to a value creation equal to US$60.33.

It should be noted that this effect is not redundant with the healthcare expenditure reduction calculated

above, as the DALY reduction in fine equates to days of life saved due to the school feeding intervention.

7. Summary

Below is a breakdown of the various economic outcomes of school feeding over time:

Discounted Cash Flows average value per beneficiary, USD

22 More information on the Global Burden of Disease Study on: http://www.who.int/healthinfo/global_burden_disease/gbd/en/

-20.00

-10.00

-

10.00

20.00

30.00

40.00

50.00

6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81

Age of the beneficiary

Total Cost Value Transfer

Healthcare Expenditure Reduction Return on Investment

Increased Productivity Healthier and Longer Life

18

Below is a representation of the cumulated value created by school feeding over the lifetime of the

beneficiary, net of the cost of school feeding:

Cumulated Discounted Cash Flows average value per beneficiary, USD

Below is a comparison of all costs and benefits generated by school feeding (discounted at their Net

Present Value):

Cost-Benefit Analysis average value per beneficiary, USD

Feeding one child during his or her entire schooling costs US$134.59 and leads to a creation of value in

the country’s GDP equal to US$1109.93. In other terms, every US$1 invested in school feeding in

Zambia creates US$8.25 of value in the country’s GDP, showing that school feeding is a relevant and

profitable investment as a social safety net.

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81

Age of the beneficiary

Net value created

3823 1

693

134

1110

737 32

938

60

Commodities Logistics,storage and

utilities

Managementand

administration

Staff costs Communitycosts

Total Cost Total Benefit Value Transfer HealthcareExpenditureReduction

Return onInvestment

IncreasedProductivity

Healthier andLonger Life

× 8.3

19

5. Conclusion and Recommendations

1. Conclusion

School feeding in Zambia is a profitable investment as it contributes to develop human capital. School

feeding acts as a value transfer to the households and provides parents with an incentive to send their

children to school, therefore increasing the length and quality of education. By actively helping to reduce

out-of-school children and to improve their education, school feeding is a powerful tool to support

development on both the short and on the long term.

The Cost-Benefit Ratio of school feeding in Zambia is 1:8.25, meaning that for every US$1 invested

in school feeding in Zambia, US$8.25 are created in the country’s GDP. This result does not include

benefits for agricultural producers driven by Home-Grown School Feeding, which represents an additional

demand to the agricultural sector, nor does it include non-monetary benefits such as community integration

and gender equality.

2. Recommendations

As a profitable investment for Zambia, school feeding will benefit the country even more when it will be

scaled-up. As it had been introduced following a severe drought, it was aimed at supporting in priority the

most affected areas in the country and therefore covers 35 districts, or approximately 28% of all pre-

primary and primary schoolchildren in the country. The Government of the Republic of Zambia plans to

scale up this programme to reach 2 million schoolchildren by 2020. The results of this study confirm that

such a scaling-up will positively impact the country’s development in areas which are currently not covered

by the programme.

Schoolchildren represent about 20% of the Zambian population. Scaling-up school feeding can make

this programme a major social protection intervention in Zambia, by reaching directly those most in need

and who will be supporting the country’s development in one generation, and indirectly their parents and

local communities, as well as the entire value chain involved in producing food and serving meals at schools.

20

WFP Zambia

Plot 10/4971, Tito Road, Rhodes Park

P.O. Box 37726

Lusaka, Zambia

For more information, please contact:

World Food Programme

Safety Nets and Social Protection Unit

Via Cesare Giulio Viola, 68

00148 Rome, Italy