Education is one of the main pillars of any economy. It produces both public and private benefits, contributing immensely towards social equity, democracy, and economic and social development.
For these ideals to be met, there must be significant investment by government in education at all levels of scholarship. This is noted in the National Development Plan (NDP), which acknowledges the critical skills shortages that the country is facing, across a broad spectrum of professions such as medicine, engineering and information technology, to mention but a few.
The plan recognises universities as key drivers of training for the production of a competent workforce with these skills, so that economic growth of the country can be accelerated.
Universities directly impact on the economy by employing skilled professionals who in turn train students and produce graduates who offer their services in various sectors, thereby stimulating monetary activities in the economy.
Moreover, universities themselves buy goods and services to keep themselves operational, thereby indirectly participating in the economy through consumption of goods and services. It is thus undisputed that universities play a significant role in the economy.
However, without corresponding financial input, the ideals envisioned in the NDP will not be achieved, severely compromising the production of skilled human capital, knowledge generation and innovation.
There has been a notable and steady increase of spending since 2013. According to Stats SA, total expenditure on the education sector as a whole increased by R80bn over a five-year period, from R169bn in 2009/10 to R249bn in 2013/14, representing an average annual increase of 10.2%.
Over the same period, spending for higher education increased from R38bn to R60bn, representing a 12.1% increase per annum. Between 2015 and 2016, government expenditure on higher education increased marginally by 8%, though it was lower than the 2013/14 period in rand terms. Importantly, the cost factors of education, such as compensation of employees, infrastructure costs, and purchases of goods and services, have also increased significantly.
In response to the continuing requests to provide free higher education, the government has responded. In December 2017, President Jacob Zuma announced that students would access free university education from January 2018. As students and parents celebrated this announcement, university administration across the country was gripped with anxiety, wondering how this entire process would be managed.
It is important to recall that in October, Finance Minister Malusi Gigaba reported that government could not afford to live beyond its means and had no money to afford financing free education sustainably. At the time, the economy was growing slowly and still recovering from recession, experiencing a revenue shortfall of R50.8bn. In a year’s time, this shortfall is projected to be R209bn.
All of a sudden, National Treasury had to begin exploring ways to raise the money needed to give effect to the presidential pronouncement on free higher education.
Gigaba further added that the budget deficit was growing rapidly, projecting it to be 4.3% of the gross domestic product by the end of 2017/18. The message that Gigaba conveyed was that any unplanned government expenditure would plunge the country further into the economic abyss, further slowing economic growth and limiting any real prospects of tackling the chronic challenges burdening the country already.
Any attempt to raise money, either through increasing taxes or borrowing from global financial institutions, would further dampen economic growth prospects.
So, all this means that government cannot be left alone to tackle this mammoth challenge. It requires all stakeholders and social partners to play their roles and, perhaps, with concerted efforts, possibilities can be explored that will at least alleviate the immediate pressures.
The role of the sector
One of the key stakeholders of higher education in South Africa is civil society. I believe the sector has a lot to contribute in terms of addressing this challenge, alongside government, while playing its watchdog role and holding it accountable.
Thus, the role of the sector should be:
– To establish a fund for sponsoring the higher education of needy and deserving students who are academically gifted. It should start with the particular sector and explore engagement with other social partners;
– Linked to the above suggestion, civil society should consider persuading the donors that fund the sectors’ development programmes and interventions to consider sponsoring needy but academically gifted youth for their university training. This persuasion can take place through dialogues with representatives of national civic organisations with their funders and explore possibilities of building capable human resources necessary for spurring economic growth in the country;
– Government should underwrite every historical student debt, given the economic conditions that the majority of current and past students are facing, and explore alternative ways of recovering the money. This exploration should be done in conjunction with the National Treasury, university administrators, students’ representative councils and other pertinent stakeholders of higher education. Collective wisdom is needed to address underwriting of historical debt;
– To continue advocating government engagement with higher education partners in resolving issues of subsidies granted to universities and other institutions of higher learning so they can operate optimally. The reduction of subsidies that has been observed in the past few years has the potential to interfere with effective management of the institutions and may also start affecting the quality of education in the medium to long term, as experienced academics leave universities for other institutions, including private universities, in search of better working conditions; and
– To engage with and lobby the private sector to consider using some of their corporate social investment funds to sponsor deserving youth for their higher education. In a country faced with high income inequalities, the private sector could contribute more of their profits to higher education investment. After all, they employ a good number of graduates in their firms. However, private sector involvement is a negotiated agreement between government, civil society, labour unions and university managements. This stakeholder arrangement is necessary for exploring possible alternatives towards sustainable higher education financing in South Africa.
Given the significant developmental implications of investment in higher education, I argue that leaving this important matter to government alone is impractical.
No needy and academically deserving student, irrespective of their background, race, gender, religion or ethnicity should be denied an opportunity to study further in any institution of higher learning.
Our victory as a country lies in our collective wisdom. Yes, we can!
Kariuki is programme manager at the Democracy Development Programme
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