Higher Education Funding Frameworks

Pundy Pillay

Outline

Part OneAccess and Equity in Higher EducationHigher Education and Development Part Two Country Profiles – All SADC countries except Angola, DRC and Malawi Part ThreeCommon Themes, Good Practices, Possible Lessons

Access in African Higher Education

Defining HE or ‘tertiary’ educationParticipation rates in SSA generally

low, around 5%GER varies from 0.4% in Malawi to

34% in MauritiusDeveloped countries: 60-70%Developing countries: 16%

Equity

Gender Socio-economic statusLocation

These 3 stratifying factors skew

participation in favour of males

richer families, and urban households

Barriers to Access

Poor and inadequate schooling

NER in secondary schooling

Developed: 92%

Developing: 53%

SSA: 25%

Contd.

Public commitment to HE spending - varies in terms of both % of national income

and of the budget- Where HE exp. is low, there are various

reasons1) Educ. exp. is low generally;2) Schooling is a priority3) Inter-sectoral competition for resources4) HE is a low priority

Higher education and development

The role of higher education is changing with increased globalization

HE is now as important for developing, poor countries as it is for rich countries

Why?1) Social returns to HE underestimated2) Developing countries have multi-modal patterns

of economic development3) HE critical for economic growth and

technological absorption

HE Funding: Key Questions

Public Commitment to HE spendingImpact on Access and EquityFunding Mechanisms – institutions,

studentsBudgeting and Planning ProcessesEfficiency and Effectiveness of HE

FinancingSpecial Initiatives

Country Profile: Botswana

Expenditure as % of GDP high (9%)HE has been “free’ in practiceScholarships to students in private HEIsNew university being established on PPP

basisLoan system ineffective and inefficient

Country Profile: Lesotho

High level of govt. funding of HEGovernment provides very large proportion of

institutional fundingGovt. funds students thru’ loan/grant schemeNo recovery of loans so far but some plans now

underwayHigh level of bursary expenditure on students

outside country

Country Profile: Madagascar

Low expenditure on HE even though education takes up 25% of budget

High level of government funding of HEIsNominal tuition feesNo funding formula for institutions –

allocations on an incremental budgeting basis

Country Profile: Mauritius

Govt. spending only 25% of all HE expenditureDifferentiated government funding modelNo funding formula – incremental budgeting

used by institutions55% of funding for HE goes from private HHs to

overseas HEIsNo national student loan scheme but private ones

Country Profile: Mozambique

High level of exp. on HEMinimal cost sharing – nominal feesGovt. finances quality improvement

initiatives in both public and private HEIsHEI funding on the basis of inputs (student

numbers)High dependence on donor fundingProvincial scholarships for equity

Country Profile: Namibia

High exp. on education and HE gets 15%National loan scheme benefits relatively

few studentsNo clear criteria for funding allocationsCost sharing (fees) introducedUnit costs of HE are high indicating

systemic inefficiency

Country Profile: South Africa

High commitment to public spending on HEVery effective loan schemeClose link between planning and fundingFunding formula redistributed to achieve

government’s HE objectivesSubstantial cost-sharingSerious, quality, efficiency and equity issues

Country Profile: Swaziland

High level of education expenditure – 20% of budget; 6% of GDP

High level of government funding of HE (80%) Also relatively high level of tuition fees (20%) No funding formula – govt. assesses

institutional budgets Substantial student support – grants and loans

Country Profile - Tanzania

Educ. exp. as % of budget is highGovt. main funder of HE – institutions and loansLimited cost sharingSignificant donor involvementLoans to students in private HEIsNo cost recovery of loansTEA provides “soft” loans to both public and

private HEIs

Country Profile - Zambia

Higher education budget is high Poor oversight of HE by MoENo funding formula Dual track tuition with govt.-sponsored

and fee-paying studentsHuge institutional debtsNew university – state-established but

expected to be self-financing

Country profile - Zimbabwe

Economic crisis – public HEIs not fully developed

State funding of infrastructure affected by inflation and currency crisis

95% of recurrent expenditure from statePrevious full govt-sponsorship of students

replaced by parallel programmeSome means-tested grants to needy students

Common Themes

HE financing is often INADEQUATE, and almost everywhere, INEQUITABLE and INEFFICIENT

Enrolments are growing everywhereSerious financial constraints

Common Themes (contd.)

Responses:Cost-sharing – Namibia, Swaziland,

Zambia, Zimbabwe (in some cases, dual-track)

Expansion of private higher education sector

Common themes (contd.)

Private Higher Education in SADCSerious equity questionsQuestionable quality – Mozambique;

Tanzania; ZambiaAbsence of regulatory framework to

effectively monitor both local and overseas providers

Common themes (contd.)

Efficiency of HE ExpenditureInefficient because of poor planning and

budgeting – Mozambique; Namibia; Tanzania; Madagascar; Zambia

Inefficient because of no cost recovery of loans – Botswana; Lesotho; Tanzania

No systematic funding mechanism such as funding formula

Common Themes (contd.)

Inadequacy of Higher Educ. Expenditure• Reasons alluded to earlier• But also because of weak departments of

higher education within Ministries of Ed.• Significant involvement of donors in

Mozambique and Tanzania, for example – sustainability implications

Good practices

Financing policies that address

inadequacy of public expenditure

1. Public-private partnerships – Botswana; Zambia

2. Differentiated funding model in Mauritius

3. Cost-sharing – Namibia, Swaziland, Zambia, Tanzania, South Africa

Good practices (contd.)

Financing polices that promote equity1. Provincial scholarships – Mozambique2. Loans to students in private HEIs –

Botswana, Tanzania3. Loan scheme to address equity and

access – South Africa4. Funding formula to promote equity –

South Africa

Good Practices (contd.)

Funding policies to promote efficiency

1. Linking HE planning to budgeting –

South Africa

2. Funding to improve quality of provision

- Mozambique

Some Possible Lessons

1. Cost Sharing CS is necessary in most countries in the

light of serious public resource constraints

CS can take a number of forms Number of advantages and disadvantages

to CS Form of CS must minimise impact on

equity/inequity

Possible Lessons (contd.)

2. Developing efficient and equitable loan scheme

Look at South African and Kenyan examples

Encouraging signs in Namibia but not anywhere else in SADC

Successful loan schemes need some necessary pre-conditions – e.g. efficient tax system

Possible lessons (contd.)

3. HE funding formula to promote effectiveness

Look at South Africa model for resource allocation in HE

Important for the following reasons: predictability of revenue; promoting institutional autonomy and equity; in-built efficiency incentives