Financing Public Higher Education in Tanzania: Towards a New Model and
Implications for Development and Retention of the Next Generation of Academics
By
Johnson M. Ishengoma (PhD)
University of Dar es Salaam
Faculty of Education
Department of Educational Planning and Administration
P.O. Box 35048
Dar es Salaam, Tanzania
E-mail: ishe2004@yahoo.com/jishengoma@hotmail.com
Paper presented at the University Leaders’ Forum: Next Generation of Academics,
Accra, Ghana, November 22nd -25th 2008
Financing Public Higher Education in Tanzania: Towards a New Model and
Implications for the Development and Retention of Next Generation of Academics 1
Johnson M Ishengoma
University of Dar es Salaam
1.0. Introduction
The current system of financing (public) higher education in Tanzania is flawed and
lopsided to such an extent that it has generated controversies, partisan debates among
different stakeholders and crises in higher education sector as manifested by perennial
students’ strikes in public higher education institutions and budget deficits. The Tanzania
government-despite of the existence of cost sharing in higher education policy for the
past 15 years and its limited financial ability to finance public higher education because
of many competing needs- still shoulders the burden of financing both public and private
higher education through disbursing interest free loans and grants through the Higher
Education Students’ Loans Board (HESLB) and the Tanzania Education Authority
(TEA). The current system of financing public higher education is in dire need of being
revisited to avoid further looming crises in the higher education sector.
This paper attempts to provide an alternative sustainable model for financing public
higher education in Tanzania in the context of development and retention of new
generation of academics. The paper focuses on financing public universities and
This paper draws from a book chapter titled “Tanzania” in Pillay, Pundy (Ed.) Forthcoming. Higher
Education Financing for Access and Equity: Case Study of Seven African Countries. Ford Foundation,
Sizanang Center for Development and Research and the Center for Higher Education Transformation.
1
2
university colleges. The major thesis of this paper is that while the Government has the
responsibility of financing higher education because it is also the beneficiary (among
many beneficiaries) of higher education products or outputs, its financial ability is limited
because of many competing and compelling needs, compared to higher education. This
situation calls for a new approach to financing higher education in Tanzania to make it a
shared responsibility instead of the current unsustainable approach.
The paper is organized into four major sections: section one is an introduction; section
two briefly introduces some basic facts about higher education in Tanzania; section three
discusses the current system or mode of financing higher education in Tanzania and
problems associated with this current system; and section four introduces an alternative
approach or model to financing public higher education in Tanzania including
establishing a Higher Education Banks (HEDUBANK). There are no conclusions or
recommendations in this paper.
2.0. Basic Facts about Higher Education in Tanzania
Tanzania with the current total population of around 37.6 million people has ( as of
November 2008) a total of total of 44 higher education institutions distributed as follows:
twelve (12) public universities and university colleges/institutes; 21 private universities
and university colleges; and eleven (14) non-university higher education institutions
(including technical colleges, but excluding non-university institutions in Zanzibar), most
of these currently offering degrees in professional fields. In 2006/07 total student
enrollment in both private and public universities and university colleges and institutes
was 49,967, with public universities enrolling a total of 39,218 students or 78.4% of the
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total students. Private universities, despite of the fact that they outnumber public
universities, enrolled a total of 10, 749 (21.5%) of the total student population. Table 1
below shows a list of Tanzania Commission for Universities (TCU) recognized
universities and university colleges in Tanzania as of April 2008, including their
geographical location which has an implication for their financing.
Table 1: TCU-Recognized Public and Private University Colleges and their Geographical
Location, 2008
Public Universities/University Colleges and Institutes
Institution
Location
University of Dar es Salaam
Dar es Salaam
Ardhi University
Dar es Salaam
Muhimbili University of Health and Allied Sciences
Dar es Salaam
Open University of Tanzania
Dar es Salaam
Sokoine University of Agriculture
Morogoro
Mzumbe University
Morogoro
University of Dodoma
Dodoma
State University of Zanzibar
Zanzibar
Dar es Salaam University College of Education
Dar es Salaam
Moshi University of Cooperative and Business Studies
Kilimanjaro
Mkwawa University College of Education
Iringa
Institute of Journalism and Mass Communication
Dar es Salaam
Private Universities and University Colleges
Hubert Kairuki Memorial University
Dar es Salaam
International Medical and Technological University
Dar es Salaam
St. Augustine University of Tanzania
Mwanza
Mount Meru University
Arusha
University of Arusha
Arusha
Muslim University of Morogoro
Morogoro
Zanzibar University
Zanzibar
St. John’s University of Tanzania
Dodoma
Teofilo Kisanji University
Mbeya
Aga Khan University Tanzania Institute of Higher
Dar es Salaam
Education
Tumaini University Dar es Salaam College
Dar es Salaam
Iringa University College
Iringa
Makumira University College
Arusha
Kilimanjaro Christian Medical College
Kilimanjaro
Stefano Moshi Memorial University College
Kilimanjaro
Mwenge University College of Education
Kilimanjaro
Weil University College of Health Sciences
Mwanza
Sebastian Kolowa University College
Tanga
Ruaha University College
Iringa
University College of Education Zanzibar
Zanzibar
4
Source: Adapted from Tanzania Commission for Universities (2008) Guide to Higher
Education in Tanzania, 2008 Fourth Edition. Dar es Salaam: TCU pp. iii-iv.
Despite the liberalization of the higher education sector, participation and admission
rates and general gross enrollment ratio in higher education in Tanzania are still low
compared to neighboring and other SADC countries implying the low capacity of the
higher education sector to enroll more students because of limited funding. Table 2
shows available data on gross enrollment ratios in higher education in Tanzania and
in some other selected African countries for the year 2004.
Table 2: Gross Enrollment Ratios in Higher Education for Selected Sub Saharan
African Countries, 2004 (%)
Country
Gross Enrollment Ratio
Tanzania
1.0
Kenya
3.0
Uganda
3.0
Burundi
2.0
Rwanda
3.0
Mozambique
1.0
Botswana
6.0
Angola
1.0
Lesotho
3.0
Zambia
2.0
Swaziland
5.0
Namibia
6.0
South Africa
15.0
Zimbabwe
4.0
Source: GUNI (2007) Higher Education in the World 2007 Table IV 1.5 pp. 383-384
5
3.0. Current Higher Education Funding Formula/Model and Its Limitations
Financing of public higher education in Tanzania in the context of cost sharing policy is
(ideally) supposed to be a shared responsibility between different stakeholders and
beneficiaries of higher education products. But practically this is not happening. The
Government-despite its declining financial ability to finance public higher education- is
not only financing public higher education institutions through subventions to cover
recurrent and capital development budgets; but is also financing tuition-dependent private
higher education institutions (the majority of these have disguised for profit motive
manifested by the high tuition fee they charge- through providing interest-free loans to
cover tuition fee and related cost to students enrolled in private universities and those
enrolled in privately sponsored programs in public universities through the Higher
Education Students’ Loans Board (HESLB) and the Tanzania Education Authority
leading to inequities in higher education financing. Despite of the existence of a plethora
of beneficiaries of higher education products, their contribution to higher education
remains insignificant mainly limited to welfare costs.
Table 3 shows trends in Government financing by source from 2000/01-2005/06. Data
presented in Table 3 shows that while domestic revenue increased by 55% from 2000/012005/06, during the same period Government finance registered consistent deficits
between revenue and expenditure implying the Government’s inability to adequately
finance critical sectors including higher education and also inability to control its
expenditure. The consistent deficit pattern between government revenue and expenditure
6
also explains why Tanzania continues to depend on donor financing for education, health
and infrastructure and why public higher education institutions consistently receive less
funds they request from the Government for both recurrent and capital development
budgets (See Table 5).
Table 3: Trends in Government Finance by Source, 2000/01-2005/06 (TZS mill).
Financial Year
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
A. Domestic Revenue
929625
1042945
1217517
1459303
1773710
2066752
1. Tax Revenue
827789
938478
1105746
1342798
1615248
1895967
Import & Excise Duty
250397
266322
293695
352320
350532
419260
Sales Tax (Local &
0
0
0
0
0
0
301983
351894
424338
548572
731597
837912
Imports
182143
208675
249854
315958
439796
496361
Domestic
119840
143219
174484
232614
291801
341551
Income Tax
194013
219852
276050
366651
465455
549074
Other Taxes
81396
100410
111663
123500
132040
157555
Refund Accounts
-
-
-
-48245
-64376
67834
2. Non-Tax Revenue
101836
104467
111771
116505
158462
170785
B. Total Expenditure
1307214
1462767
1989538
2516943
3248352
4035114
1. Recurrent
1020961
1118156
1488641
1780115
2017490
4035114
2. Development
286253
344611
500897
736828
1230662
1385183
Local Funds
35069
50236
95662
133041
239651
370038
Foreign Funds
251184
294375
405235
603787
991211
1015145
-377589
-419822
-772021
-1057640
-1474642
-1968362
Imports)
VAT
C. Deficit/Surplus (A-B)
Source: Adapted from the United Republic of Tanzania (2006) The Economic Survey 2005. Dar es Salaam:
Ministry of Planning, Economy and Empowerment p. 74
7
Despite the declining ability to finance public higher education, the Government remains
a major source of funding; followed by external donors. Table 4 shows sources and
amount of funding recurrent expenditure for the University of Dar es Salaam Main
Campus, the former University College of Lands and Architectural Studies (UCLAS) and
Sokoine University of Agriculture (SUA) from 2001/2002-2005/06.
Table 4: Sources and Amount of Funding for Recurrent Expenditure for UDSM, UCLAS,
and SUA, 2001/02-2005/06 (‘000 TZS).
Institution Year
Sources of Funding
Total
% Contribution by
Source
UDSM
Govt.
EXD
INC
Govt.
EXD
INC
2001/02
14602
9972
874
25448
57.4
39.1
3.4
2002/03
15172
11035
877
27084
56.0
41.0
3.0
2003/04
15677
6416
895
22988
68.0
28.0
4.0
2004/05
16869
4069
1996
22934
73.0
18.0
9.0
2005/06
22680
5938
1000
29618
77.0
20.0
3.0
UCLAS
2001/02 3306691 146236
73630
3526557
93.7
4.1
2.1
2002/03 2896773 123791
55150
3075714
94.1
4.0
1.8
2003/04 3216442 176317 182880
357639
89.9
4.9
5.1
2004/05 3288257 109877 285474
378608
89.5
2.9
7.5
2005/06 3225885 245936 168216 3640037
88.6
6.7
4.6
SUA
2001/02 9011742 2900790 60000 11972532
75.3
24.2
0.5
2002/03 10159233 3151954 77497 13388634
75.9
23.5
0.6
2003/04 11007795 4141154 82611 15231560
72.3
27.2
0.5
2004/05 11171056 4447904 258424 15877384
70.4
28.0
1.6
2005/06 11201872 5135151 300000 16637023
67.3
30.9
1.8
Source: Adapted from URT (2006) Basic Statistics on Higher Education, Science and
Technology Dar es Salaam: Ministry of Science, Technology and Higher Education pp. 28-29
The general impression we can discern from limited data presented in Table 4 is that the
Government is still the source of funding for public higher education, followed by
donors. Institutional contribution-despite the fact that all public universities are
undertaking various income generation activities as a part of revenue diversification
strategy under cost sharing policy- is still small or to be precise, insignificant to make
these institutions financially autonomous. However, despite public higher education’s
institutions heavy reliance on government funding for basic core functions, due the
8
Government’s financial inability to finance these institutions, public higher education
institutions are currently grappling with budgetary cuts by Government, particularly for
recurrent expenditures as summarized in Table 5 for the UDSM and its former two
constituent colleges.
Table 5: UDSM Recurrent Expenditure Budgetary Requests vs. Government
Approval, 2000/01-2006/07 (TZS mill.)
Request/Gov
Approval Ratio
Institution
Year
Request
Approval
(%)
Main Campus
2000/01
26,971,097,194
22,295,585,316
82.6
2001/02
23,950,500,000
12,962,933,600
54.0
2002/03
22,703,220,309
13,112,908,820
54.7
2003/04
29,442,119,596
16,869,293,885
57.0
2004/05
30,142,200,195
17,861,103,881
59.0
2005/06
44,524,155,229
28,416,449,520
64.0
2006/07
76,600,000,000
28,800,000,000
38.0
UCLAS
2000/01
4,211,566,222
2,587,680,510
61.4
2001/02
4,060,795,959
2,829,670,520
69.6
2002/03
4,927,370,176
2,842,827,422
57.6
2003/04
4,002,679,505
3,078,483,303
77.0
2004/05
4,601,509,400
3,508,311,103
76.2
2005/06
5,103,194,896
3,375,885,576
66.1
2006/07
5,209,246,445
3,503,421,145
67.0
MUCHS
2000/01
12,306,194,720
6,072,368,200
49.3
2001/02
13,862,429,628
6,072,368,300
43.8
2002/03
10,903,237,118
6,204,186,800
56.9
2003/04
11,391,441,768
6,824,605,480
60.0
2005/06
6,345,249,546
4,448,233,700
70.1
2006/07
14,484,458,344
7,681,458,144
53.0
Source: Adapted from UDSM (2006 & 2007) Facts and Figures 2005/06, 2006/07 Dar es
Salaam: UDSM pp. 164-165; 168-169
Data in Table 5 shows that the Government approved slightly above half or at times less
than half of the funds requested by the UDSM for its recurrent expenditure for all six
years surveyed consequently forcing the University to streamline its budget to cope with
budget deficits. The University is now considering adopting unit cost budgeting as a long
term strategy of dealing with perennial budgetary cuts. The above situation of inadequate
9
funding of public universities by the Government due its financial limitations calls for
new model or approach to funding higher education in Tanzania. In section 4 below we
propose a new approach cum model for funding public higher education.
4.0. Towards a New Model/Approach of Financing Public Higher Education in
Tanzania
Although in the Tanzanian context it is almost impossible to propose a viable model or
framework for financing higher because of intense and deliberate politicization of
financing of higher education and because of the entrenched mindset of “free higher
education” among the majority of Tanzanians, unfortunately including the educated, this
paper proposes the market model which seem to have been successful in Kenya and
Uganda higher education sectors. The market model for higher education financing is
proposed in the context of two major trends that have characterized the changes in higher
education sector in Tanzania since the 1990’s when the Government liberalized the
provision of higher education: these are some limited privatization of public higher
education and the emergence of the private higher education sector.
The market model also advocated by Oketch (2003) and Lamptey (1994) stresses the
injection of the market principles and market driven approaches into the financing of
higher education to make it completely self-financing. While Oketch views marketing
model of financing higher education in terms of financial diversification and partial
privatization of public universities; Lamptey advocates for the adoption of the
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contemporary marketing concepts of product, price, place and promotion (the 4 P’s) in
higher education.
The market model for financing public higher education in Tanzania is justified when we
consider higher education sector to be composed of market segments and therefore it can
be marketed using an effective marketing mix through opening up dialogue with potential
markets ready to finance higher education because they are beneficiaries and consumers
of higher education products.
In the context of Tanzania the market is also justified in the larger context of the market
economy which has been adopted since late 1980’s in wider context of improving the
efficiency, accountability and quality. This proposed model is guided by three principles:
shared costs, equity and human resource development.
While the market model of financing higher education has been criticized and branded as
academic capitalism driving universities into entrepreneurial competition (Levidow,
1998); the model if cautiously adapted can turn around the finances of Government and
donor dependent public higher education institutions. The model has worked at Makerere
and Nairobi universities and there is no reason why it should not work in Tanzania’s
public higher education institutions. The components of the proposed model are
summarized in Table 6.
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Table 6: Proposed Model for Financing Public Higher Education in Tanzania
Market Segment in
Financing Mode
Cost/Budget Item
Level of Financing in
Rank Order
% (Annually)
1. Higher Education
Revenue
1,2, & 4
1=5%
Institutions
diversification and
2=5%
privatization of
4=100%
services; contracted
research &
consultancy; sale of
patents; enrollment of
privately sponsored
students
2. Students and their
Cost sharing
3
100%
Parents
3. Government
Direct subventions to
1, 2
1=95%
HEIs; introduction of
2=95%
an education levy
4. Private
Direct donation to
1
Variable
Sector/Potential
responsible
Graduate Employers
institutions, student
and professorial chairs
sponsorships;
sponsorship of
contracted research
5. External Donors
Direct grant to higher
1
Variable
education institutions,
faculty, departments,
bureaus etc.
6. Financial
Creation of Higher
Variable
Variable
Institutions and Banks
Education Loans
Bank to replace
HESLB. Students and
their parents can
borrow money to pay
for tuition and related
costs at a market
interest rate
7. Alumni
Direct donations to
1&3
Variable
institutions to
establish Endowment
& Trust Funds
KEY: 1=Capital Development; 2=Direct Training Costs; 3=Students; Direct Costs; 4=Other
Administrative and Personal Emoluments Costs.
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4.1. Towards the Establishment of the Higher Education Bank: A New Financing of
Higher Education Strategy
One of the critical components of our proposed model is the establishment of the Higher
Education Bank (HEDUBANK) by private investors to replace the Higher Education
Students Loans which appears to be ineffective and offers interest free loans which are
unrealistic in the market economy in which the higher education sector is operating. This
proposed Bank can give loans to higher education institutions at an interest rate to be
determined. Currently, there is one private commercial bank (Azania) which provided
limited education loans to parents.
The idea of an education bank has worked very well in Nigeria. The Nigerian Education
Bank (EDUBANK) was established in 1993 after the Nigerian Student Loans Board was
resolved due to its gross failure in recovering student loans amounting to NGN 400
million (US$ 3.34) by the time it was dissolved (Ishengoma, 2002: 16). The roles of the
Nigerian Education Bank are: (a) to serve as intermediary in Nigeria’s credit market; (b)
harness private sector resources for the funding of education; and (c) take over part of the
government’s educational funding responsibilities.
The specific functions of the Nigerian Bank are: (a) student lending; (b) lending for
publishing books; (c) leasing educational equipment; (d) project financing; (e) funds
mobilization; and (f) provision of advisory services for educational purposes (Chuta,
1998: 426). The Bank is fully subscribed to by the Federal Government of Nigeria. The
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Bank also provided loans to university faculty for sabbatical leave and attendance at
conferences abroad and for book publishing.
The proposed model supported by a special higher education bank is definitely an ideal
and a viable strategy for financing of higher education in Tanzania to develop and retain
the next generation of academics and for stemming both internal and external brain
currently adversely impacting capacity building and human resource development in
public higher education institutions in Tanzania.
References
Chuta, E.J. (1998) “New Dimensions in Educational Financing: The Nigerian Education Bank,”
Higher Education 35, 433-433
Global University Network for Innovation (GUNI) Higher Education in the World, 2007. New
York. Palgrave McMillan.
Ishengoma, Johnson M “Tanzania” in Pillay, P (Ed.) Forthcoming. Higher Education Financing
for Access and Equity: Case Study of Seven African Countries.
Ishengoma, Johnson M (2002) “Financing of Higher Education in the Federal Republic of
Nigeria: Developments and Trends.” State University of New York at Buffalo, Center for
Comparative and Global Studies in Education, International Comparative Higher Education
Finance and Accessibility Project.
Lamptey, Alice S (1994) “Financing Higher Education in Africa: A Marketing Perspective,”
Dakar: UNESCO, BREDA Series No. 5
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Levidow, Les (1998) “Marketing Higher Education: Neo-Liberal Strategies and Counter
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