Higher Education Financing

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Higher Education Financing –

Trends and Possibilities in SADC

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Outline

• The HE Financing Context

• Note on HE and Development

• HE Funding – Key Questions

• Common Funding Themes

• Good Practices

• Possible Lessons

• Way Forward

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Access in African Higher Education ccess ca g e ducat o

•Participation rates in SSA are generally low around 5-6%

low, around 5 6%

•Gross Enrolment Ratio (GER) varies from 0 4% in Malawi to 37% in Mauritius

0.4% in Malawi to 37% in Mauritius

•Double digit GERs: Botswana; Ghana;

M iti Ni i RSA

Mauritius; Nigeria; RSA

•Developed countries: 60-70%

•Developing countries: 16%

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Equity

•Gender

•Socio-Economic Status Socio Economic Status

•Location/Region Location/Region

These three stratifying factors skew

participation in favor of males richer

participation in favor of males, richer

families, and urban households

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Barriers to Access a e s to ccess

•Poor and inadequate schooling

•Low public commitment to HE spending

•Where HE spending is low, there are various reasons:

a) Education expenditure is generally low

b) Schooling is a priority

c) HE is a low priority

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Higher Education and Development g e ducat o a d e e op e t

•The role of HE is changing with increased globalization

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

•Why?

a) Social returns to HE underestimated b) Developing countries have multi-modal

patterns of economic development c) HE critical for economic growth and

technological absorption

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HE Funding: Key Questions u d g ey Quest o s

•Public Commitment to HE Spending

•Impact on Access and Equity

•Funding Mechanisms - institutions, students

•Budgeting and Planning Processes g g g

•Efficiency and Effectiveness of HE Funding

Funding

•Special Initiatives

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Common Themes Common Themes

•HE financing is often INADEQUATE

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

•Enrolments are growing everywhere

S i fi i l t i t

•Serious financial constraints

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Common Theme: Responses Common Theme: Responses

•Cost sharing Namibia; Zambia;

•Cost sharing – Namibia; Zambia;

Zimbabwe (in some cases, dual- track

track

•Expansion of the private higher p p g

education sector

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Common Theme: Private Higher Common Theme: Private Higher

Education

•Serious equity questions

Q ti bl lit M bi

•Questionable quality – Mozambique;

Tanzania; Zambia

•Absence or weakness of regulatory framework to effectively monitor both local and overseas providers

local and overseas providers

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Common Theme: Efficiency of Common Theme: Efficiency of

HE Expenditure

•Inefficient because of poor planning and budgeting – Mozambique; Namibia;

budgeting Mozambique; Namibia;

Tanzania; Madagascar; Zambia

•Inefficient because of no/low cost Inefficient because of no/low cost

recovery of loans – Botswana; Lesotho;

Tanzania

•No systematic funding mechanism such

as funding formula g

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Common Theme: Inadequacy Common Theme: Inadequacy

of HE Expenditure

•Reasons alluded to earlier

B t l b f k d t t

•But also because of weak departments of higher education within Ministries of Education

Education

•Significant involvement of donors in Mozambique and Tanzania for

Mozambique and Tanzania, for

example – sustainability implications

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Good Practices 1: Financing policies Good act ces a c g po c es that address inadequacy of public expenditure

•Public-private partnerships – Botswana;

Zambia

•Differentiated funding model in Mauritius

•Cost-sharing – Namibia; Zambia;

Tanzania; South Africa

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Good Practices 2: Financing Good Practices 2: Financing policies that promote equity

•Provincial scholarships – Mozambique

L t t d t i i t HEI

•Loans to students in private HEIs – Botswana; Tanzania

•Loan scheme to address equity and access – South Africa

•Funding formula to promote equity –

South Africa

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Good Practices 3: Financing Good Practices 3: Financing policies to promote efficiency

•Linking HE planning to budgeting – South Africa

South Africa

•Funding to improve quality of provision -

Mozambique

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Some Possible Lessons: 1.

Cost Sharing

CS i i t t i i

•CS is necessary in most countries in the light of serious public resource constraints

constraints

•CS can take a number of forms

•CS also has a number of advantages and disadvantages

•Form of CS adopted must minimize

impact on equity/inequity

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Possible Lessons: 2. Developing oss b e esso s e e op g

efficient and equitable loan schemes

•Examine South African and Kenyan examples

•Encouraging signs in Botswana,

Tanzania with respect to loan recovery p y

•Successful loan schemes need some

necessary pre-conditions – e.g. efficient ecessa y p e co d t o s e g e c e t

tax system

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Possible Lessons: 3. HE funding oss b e esso s 3 u d g formula to promote effectiveness