Higher Education Financing

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1 Higher Education Financing Trends and Possibilities in SADC

2 Outline The HE Financing Context Note on HE and Development HE Funding Key Questions Common Funding Themes Good Practices Possible Lessons Way Forward

3 Access in African Higher Education Participation rates in SSA are generally low, around 5-6% Gross Enrolment Ratio (GER) varies from 0.4% in Malawi to 37% in Mauritius Double digit GERs: Botswana; Ghana; Mauritius; Nigeria; i RSA Developed countries: 60-70% Developing countries: 16%

4 Gender Equity Socio-Economic Status Location/Region These three stratifying factors skew participation in favor of males, richer families, and urban households

5 Barriers to Access 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

6 Higher Education and Development e e 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

7 HE Funding: Key Questions s Public Commitment to HE Spending Impact on Access and Equity Funding Mechanisms - institutions, students Budgeting g and Planning Processes Efficiency and Effectiveness of HE Funding Special Initiatives

8 Common Themes HE financing is often INADEQUATE, and almost everywhere INEQUITABLE and INEFFICIENT Enrolments are growing everywhere Serious financial i constraints t

9 Common Theme: Responses Cost sharing Namibia; Zambia; Zimbabwe (in some cases, dual- track Expansion of the private higher p p g education sector

10 Common Theme: Private Higher Education Serious equity questions Questionable quality Mozambique; Tanzania; Zambia Absence or weakness of regulatory framework to effectively monitor both local and overseas providers

11 Common Theme: Efficiency of HE Expenditure Inefficient because of poor planning and budgeting Mozambique; Namibia; Tanzania; Madagascar; Zambia Inefficient because of no/low cost recovery of loans Botswana; Lesotho; Tanzania No systematic funding mechanism such as funding formula

12 Common Theme: Inadequacy of HE Expenditure Reasons alluded to earlier But also because of weak departments t of higher education within Ministries of Education Significant involvement of donors in Mozambique and Tanzania, for example sustainability implications

13 Good Practices ces 1: Financing policies that address inadequacy of public expenditure Public-private partnerships Botswana; Zambia Differentiated funding model in Mauritius Cost-sharing Namibia; Zambia; Tanzania; South Africa

14 Good Practices 2: Financing policies that promote equity Provincial scholarships Mozambique Loans to students t in private HEIs Botswana; Tanzania Loan scheme to address equity and access South Africa Funding formula to promote equity South Africa

15 Good Practices 3: Financing policies to promote efficiency Linking HE planning to budgeting South Africa Funding to improve quality of provision - Mozambique

16 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 CS also has a number of advantages and disadvantages Form of CS adopted must minimize impact on equity/inequity

17 Possible Lessons: s 2. Developing e efficient and equitable loan schemes Examine South African and Kenyan examples Encouraging signs in Botswana, Tanzania with respect to loan recovery Successful loan schemes need some necessary pre-conditions o e.g. eg efficient ce tax system

18 Possible Lessons: s 3. HE funding formula to promote effectiveness Examine South African model for resource allocation to universities Important for following reasons: predictability of revenue; promoting institutional autonomy and equity; inbuilt efficiency incentives

19 Way Forward: Key Issues HE provision: the state and the market Alternative funding mechanisms and sources HE planning and budgeting at the system and institutional levelsels

20 Insert Body text here

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