Higher Education Funding
Frameworks
Pundy Pillay
Outline
Part One
 Access and Equity in Higher Education
 Higher Education and Development
Part Two
Country Profiles – All SADC countries
except Angola, DRC and Malawi
Part Three
Common Themes, Good Practices, Possible
Lessons
Access in African Higher
Education
Defining HE or ‘tertiary’ education
Participation rates in SSA generally
low, around 5%
GER varies from 0.4% in Malawi to
34% in Mauritius
Developed countries: 60-70%
Developing countries: 16%
Equity
Gender
Socio-economic status
Location
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
reasons
1) Educ. exp. is low generally;
2) Schooling is a priority
3) Inter-sectoral competition for resources
4) 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 underestimated
2) Developing countries have multi-modal patterns
of economic development
3) HE critical for economic growth and
technological absorption
HE Funding: Key Questions
Public Commitment to HE spending
Impact on Access and Equity
Funding Mechanisms – institutions,
students
Budgeting and Planning Processes
Efficiency and Effectiveness of HE
Financing
Special Initiatives
Country Profile: Botswana
Expenditure as % of GDP high (9%)
HE has been “free’ in practice
Scholarships to students in private HEIs
New university being established on PPP
basis
Loan system ineffective and inefficient
Country Profile: Lesotho
 High level of govt. funding of HE
 Government provides very large proportion of
institutional funding
 Govt. funds students thru’ loan/grant scheme
 No recovery of loans so far but some plans now
underway
 High 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 HEIs
Nominal tuition fees
No funding formula for institutions –
allocations on an incremental budgeting
basis
Country Profile: Mauritius
 Govt. spending only 25% of all HE expenditure
 Differentiated government funding model
 No funding formula – incremental budgeting
used by institutions
 55% of funding for HE goes from private HHs to
overseas HEIs
 No national student loan scheme but private ones
Country Profile: Mozambique
High level of exp. on HE
Minimal cost sharing – nominal fees
Govt. finances quality improvement
initiatives in both public and private HEIs
HEI funding on the basis of inputs (student
numbers)
High dependence on donor funding
Provincial scholarships for equity
Country Profile: Namibia
High exp. on education and HE gets 15%
National loan scheme benefits relatively
few students
No clear criteria for funding allocations
Cost sharing (fees) introduced
Unit costs of HE are high indicating
systemic inefficiency
Country Profile: South Africa
 High commitment to public spending on HE
 Very effective loan scheme
 Close link between planning and funding
 Funding formula redistributed to achieve
government’s HE objectives
 Substantial cost-sharing
 Serious, 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 high
 Govt. main funder of HE – institutions and loans
 Limited cost sharing
 Significant donor involvement
 Loans to students in private HEIs
 No cost recovery of loans
 TEA provides “soft” loans to both public and
private HEIs
Country Profile - Zambia
Higher education budget is high
Poor oversight of HE by MoE
No funding formula
Dual track tuition with govt.-sponsored and
fee-paying students
Huge institutional debts
New 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 state
 Previous full govt-sponsorship of students
replaced by parallel programme
 Some means-tested grants to needy students
Common Themes
HE financing is often INADEQUATE,
and almost everywhere, INEQUITABLE
and INEFFICIENT
Enrolments are growing everywhere
Serious financial constraints
Common Themes (contd.)
Responses:
Cost-sharing – Namibia, Swaziland,
Zambia, Zimbabwe (in some cases, dualtrack)
Expansion of private higher education
sector
Common themes (contd.)
Private Higher Education in SADC
Serious equity questions
Questionable quality – Mozambique;
Tanzania; Zambia
Absence of regulatory framework to
effectively monitor both local and overseas
providers
Common themes (contd.)
Efficiency of HE Expenditure
Inefficient 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.
2.
3.
Public-private partnerships – Botswana;
Zambia
Differentiated funding model in Mauritius
Cost-sharing – Namibia, Swaziland, Zambia,
Tanzania, South Africa
Good practices (contd.)
Financing polices that promote equity
1. Provincial scholarships – Mozambique
2. Loans to students in private HEIs –
Botswana, Tanzania
3. Loan scheme to address equity and
access – South Africa
4. 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