UNESCO-AAU
CONFERENCE ON INNOVATIVE
FUNDING OF HIGHER EDUCATION
LOME : EDA OBA HOTEL
NOVEMBER 26-28, 2014
OUTLINE OF THE PRESENTATION
I.
II.
III.
IV.
V.
STATUS OF HIGHER EDUCATION IN AFRICA
CURRENT TRENDS OF AFRICAN HIGHER EDUCATION
HIGHER EDUCATION FOR GROWTH
FINANCING OF HIGHER EDUCATION
CHALLENGES/ONCLUSIONS
I.
STATUS OF HIGHER EDUCATION IN
AFRICA
• The post independence era African Higher
Education’s evolution went through four
distinct phases:
Stability
Growth
Crisis and
Reforms
II.
CURRENT TRENDS OF AFRICAN HIGHER
EDUCATION
i.
Enrolments increased from 2.7 million in 1991 to 9.3 in 2006
and 12 m in 2012 that represents a GER of around 10%.
ii.
Differentiation and diversification (emergence of different
types of institutions and surge in various providers: e.g.,
cross-border provision, public, private, distance and
religious, etc.)
II.
CURRENT TRENDS OF AFRICAN HIGHER
EDUCATION
iii. Increased access to marginal and non-conventional
beneficiaries or non traditional students; however, access is
still limited
iv. Robust delivery modes such as ICT has contributed, to a
certain way, in expanding learning opportunities and
democratizing higher education
v. Academic and student mobility as well as massive brain
drain; most higher education institutions face a critical
shortage of faculty and are, in fact, run by junior faculty
II.
CURRENT TRENDS OF AFRICAN HIGHER
EDUCATION
vi. Lack of adequate facilities and instructional resources such
as books and scientific journals
vii. Most higher education institutions focus more on teaching
at the expense of research
viii. Research is severely underfunded. This underinvestment
significantly limits knowledge production
ix. Issues of quality, equity, relevance, funding, brain drain,
harmonization and promotion of a higher education and
research space have emerged as consistent challenges
across the whole continent
III.
HIGHER EDUCATION FOR GROWTH
• Higher Education plays a significant role in economic growth in the
following manner:
• It contributes to the formation of human capital
• It creates knowledge that boosts economic growth
• It impacts directly or indirectly on all the major
characteristics of development: human capital,
literacy, health and competiveness
• It boosts labour productivity as highly qualified
workers are more productive than the less qualified
ones
III.
HIGHER EDUCATION FOR GROWTH
• It finally plays a key role in the provision of:
the relevant skills for the labour market;
the capacity to understand and use global knowledge
in science and technology especially for agriculture
and
the capacity to assess existing information and
generate new understanding through research and a
much closer working relationship with the productive
sectors of the economy
IV.
FINANCING OF HIGHER EDUCATION
• Higher education is a labour and capital intensive enterprise.
Thus onerous equipment, infrastructure and costly human
capital are required for its operations.
• On average, SSA devoted 4.9 % of its Gross Domestic Product
(GDP) to higher education in 2012
• On average SSA devoted, in 2012, 15.2% of its recurrent
education budget to higher education
• So the bulk of the financing of higher education in SSA is
borne by the government; other sources are students and
their families, development agencies and the private sector.
• The government bears all or nearly all of the following
categories of costs:
IV.
FINANCING OF HIGHER EDUCATION
• Recurrent costs (Faculty & staff, material and operational,
utilities, instructional, and overtime, etc, too high)
• Capital costs (fixed costs associated with durable
educational inputs such as land, furniture and equipment)
incurred by the government
• Direct costs comprised of tuition and fees, student living
and stipend are incurred by the government and too high
• Now the key question is who should pay for higher
education in Africa: The government or the
government and students and their families?
IV.
FINANCING OF HIGHER EDUCATION
•
Should cost recovery thru fee payment be introduced as a way of financing
higher education? If yes, how should this be implemented?
•
Other possible funding sources of higher education are:
• Student Loan Schemes (e,g,, Ghana, Kenya, etc,)
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Tuition and Fees paid by students
Tax levies on business turnover or profits
Tax credits
Tax on financial transactions
Private sector interventions through research grants, merit scholarships,
internships, study tours
Development agencies’ contributions
Donations
Research Grants
Public Private Partnership (PPP)
The funding model of HE in Africa should move from the model implemented
at the University of Grenoble, France (current in most Francophone countries),
to a model similar to the one implemented at the University of Wisconsin
Madison in the United States of America.
University of Wisconsin
Madison
University Joseph Fourier of
Grenoble
Comparing 2 funding models:
Universities of Wisconsin Madison
(USA) and Grenoble (France)
• Federal Agencies Contracts:
27%;
•Madison
State Subsidies: 21%
• Donations: 20%
• Tuition and Fees: 16%
• Others: Contracts, etc. :
16%
• Government Subsidies:
77%
•UJFG
University Generated
Resources: 15%
• Local Communities’
Subsidies: 3%
• Others: Contracts, etc. : 5%
UWM AND UJFG 2010 BUDGETS’ STRUCTURE
FINANCING
PUBLIC
INTERNAL
Tuition and Fees
State Contribution
Local Government
Contribution
Initial Provision of the
Foundation
Academic Fees by
semester
Resources generated by
continuing training
Incomes generated by
capital outays
 Conference Center Rental
 Accomodation nd Housing
Sponsored Grants
EXTERNAL
Funding Agencies
 Project Fundng
 Competitive Research
Grants
Partners
Foundation
 Alumni and Friends’
Contribution
 Business and Private
sector
 Interests on Investment
Funds
 Initial Allocations
 Big Projects
BANKING
ENVIRONMENT
University
 Accounts
 Crédits
 Investments
Faculty and Personnel
 Account Management
 Loans at preferential
rates
Students
 Stipends remitted thru
banks
 Loan Schemes
FINANCING
Characteristics of a bank that provides loans to education
• A Bank providing support to Education is a robust system that
grants not only loans to students but also to the various
activities of the educational system as its mission includes but
is not limited to :
• Collecting resources from the private sector to fund
education ;
• Taking over from the government funding responsibilities for
specific education projects ;
• Granting loans to students ;
• Providing research and publication loans ;
• Providing funding for equipment rental ;
FINANCING
Characteristics of a bank that provides loans to education
• Financing projects ;
• Mobilizing resources and providing services for
education needs ;
• Mobilizing financial resources for education from
donors ;
• Analyzing the recurrent costs and cost-benefit of
education ;
• Financing scientific research and education ;
• Support investment in capital outlays and other
key university infrastructure.
FINANCING
. Basic elements of a funding model
• A model that guarantees the long-term funding
sustainability of the university should comprise :
• A trust-fund component with a reputable financial
institution that is governed in a flexible manner;
• A cost recovery component that is based on equity
and means-testing ;
• A Loan scheme that is equitable and transparent ;
• A donation component that encourages private
donors and the private sector to contribute ;
FINANCING
Basic funding model components
• Clear and transparent eligibility criteria and terms and
conditions of loans’ reimbursement (interest rates,
duration (period of grace), terms of reimbursement,
default, etc.);
• Efficient management of funds and recovery system ;
• Capacity to contribute effectively to the expansion of
access and improvement of higher education quality in
terms of teaching, learning and research ;
• Sustainablity of model and continuous improvemnt.
FINANCING : PUBLIC (University of Kaolack/Senegal)-PRIVATE
(Bank)-FOUNDATION PARTNERSHIP
Université
Du Sine Saloum de
Kaolack
Fondation
USSK
Banque/
Institution
Financière
V.
SOME CHALLENGES AND CONCLUSIONS
1. Higher education involvement in Research and
Development is rather limited
2. Lack of reliable data for informed decision making and
planning and monitoring and evaluation
3. Lack of clear, consistent and comprehensive policies
governing the role of the private higher education
subsector
4. Funding too much dependent on Government allocations
and inability to try cost recovery options
5. Rapid expansion of enrolments and very limited
infrastructural capacity of higher ed institutions
THANK YOU FOR YOUR ATTENTION