In a ground-breaking report on education in the developing world, the charity finds that sub-Saharan Africa has the lowest school enrolment rates and highest drop-out figures. War-torn countries are among the worst affected, but even Zambia lacks blackboards in a quarter of its classes, and there is one textbook to every 20 children in Tanzania. Girls are the main losers.
At press conferences today in London, Washington and Johannesburg, Oxfam will urge donor countries and institutions concerned with debt relief to focus on the education crisis which, it says, is directly linked to Africa's poverty.
A new "education performance index" - which looks at enrolment, equality of treatment for boys and girls, and the number of years spent in school - is topped by Bahrain, Singapore and the United Arab Emirates. Muslim countries are found, on the whole, not to neglect girls' schooling.
African countries fare badly in the index, with Niger and Ethiopia found to be worst of the 104 countries in the survey. Botswana is in 22nd place, South Africa is 40th and Kenya 44th.
Oxfam says nearly 900 million people - one in four adults in the developing world - are illiterate and that 125 million children never attend school.
"Today a child in Mozambique can expect to go to school for two to three years of his or her life, with luck.
"Ethiopia has one of the lowest rates of enrolment in the world and one of the largest gender gaps. Fewer than one-third of 6 to 11-year-old boys and one-tenth of girls are enrolled in school," the authors of the report say.
Oxfam claims that the international community's deadline for universal education - 2015 - will be unattainable unless governments act now. The report says universal primary education by 2015 would cost $8bn (pounds 5bn) - the approximate amount Europeans spend every year on mineral water.
Oxfam wants increased aid from rich countries and a stronger focus by donors on education as a means for alleviating poverty. It wants poor countries to divert money from arms spending to education and for debt- relief bodies to reward them for doing so.
According to the report, Zambia currently spends four times more on debt servicing than on education.
"Unless differences in educational opportunity are reduced, inequalities in education will create an increasingly unequal, less prosperous and more unstable world," says the report, entitled Education Now.
Oxfam says that despite stories of successful entrepreneurs who have no formal education, there is strong evidence that people who are under- educated are disproportionately represented in the ranks of the poor.
"In Niger, 70 per cent of families living in poverty are headed by an adult with no education. Maternal primary education improves infant survival prospects," says the report.
It also points to positive examples of progress - in Uganda, for instance, where a primary education enrolment drive has recruited 2 million pupils in less than a year. Oxfam also praises Mali and Burkina Faso - two of the world's poorest countries - for community-level initiatives.