Prof. Chacha Nyaigotti-Chacha and Dr. Cosam C. Joseph

Inter-University Council for East Africa

Investment in Higher Education:

New Directions

Presentation made at the SARUA Leadership Forum, University of

Dar es Salaam, Tanzania, 5th August 2010

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Outline

Global Trends on Higher Education

Chronological Landscape Higher Education in

Sub-Saharan Africa

Dynamics of Policies on Funding of Higher

Education in Africa

A university in the Current Context

Challenges of Universities

Why Invest in Higher Education?

Who should pay?

Models of Payment: Global Lessons

Innovative fund raising

Opportunities for African Universities

Conclusion

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Global Trends

Financing HE

Human Capital

Theory

• Shift part of burden of HE costs from

governments to students, families and other

stakeholders

• Investing in education had both private and

social rates of returns.

• More educated society may translate into

higher rates of innovation, higher overall

productivity and assimilation of new

technologies.

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Global Trends (Contd…)

Shift from Elitist

to Universal

access to HE

Elite Mass Universal(EFA)

< 15% 15-50% > 50%

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Chronological landscape of HE in Sub-Saharan Africa1. Colonial/Pre-Independence Era

-Colleges affiliated to Colonial power universities

-Emphasis on agriculture and teaching

2. Post-Independence

-Expansion of HE with support from former rulers and

donors

-Agenda was on nationalism & National development

3.1990s-todate

-Revitalization of HE in SSA

-Globalization

-Internationalization

-Private Higher Education

-Demand for Quality Assurance from Stakeholders

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Policy dynamics on Funding HE for

AfricaThe World Bank and other international financial

institutions

1980-1990s

Education is an economically and socially productive

investment…The current financing arrangement…

result in the misallocation of public spending on

education…There is evidence, deriving from the effect

of schooling on earnings and productivity, that in

countries the average dollar invested in primary

education returns twice as much as the one invested in

HE. Yet governments in these countries heavily

subsidize HE at the expense of primary education.

(World Bank 1986)

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Policy dynamics (Cont'd)..........

World Bank: 2000s

“In fact, it is doubtful that any developing country could not make

any significant progress towards achieving the United Nations

Millennium Development Goals foe Education-universal enrolment

in primary education and elimination of gender disparities in

primary and secondary education-without a strong tertiary

education system”.

“Because skills for the knowledge economy are built at the tertiary

education level, improving tertiary education systems should be

high on SSA’s development agenda. And African tertiary

education institutions and policy makers must ensure that the

workforce acquires the skills to compete, innovate, and respond to

complex social, environmental, and economical situations”.

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Impacts of HE Policies of the 1990s

Decline of HE institutions in Africa

-Enrollment

-Infrastructure

-Research

-Brain drain

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Challenges to Governments and HE Institutions

Governments

Institutions

• Reform HE in response to twin pressures of

rising private demand and heavily

constrained public budget constraints.

• Ensure that increasingly autonomous

institutions respond to public interest

agendas while taking great responsibility of

their financial sustainability

• Manage an increasingly complex portfolio

of aims and funding to satisfy stakeholders

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A University: The current context

The University is no longer a quite place

to teach and do scholarly work at a

measured pace and contemplate the

universe as in the centuries past.

It is a big, complex, demanding,

competitive business requiring large

scale ongoing investment.

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Multitude Stakeholders and Requirements....

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Some challenges to universities

Accountability: Public agendas have become more

complex and demanding and institutions need to

respond to a broader range of stakeholders .

Rapid growth and complexity of volume of HE activities

( teaching, research and outreach services)

Core funding from governments has not kept pace with

this growth

Investment in institutional infrastructure has fallen

below the levels needed for sustainability

Increased market pressures and in a more competitive

environment.

Why invest in Higher

Education/University?

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Purpose“I do believe that it is necessary to stress

that most countries today, human resource

development and human capital formation

are either extremely important, absolute

vital, or a matter of life and death. In the

case of Malaysia … we think it is a matter

of life or death”

Abdullar Bin Ahmed Badawi, Prime Minister of Malaysia

(Opening Speech of the 2006 Meeting of the Association

of Commonwealth Universities)

Conceptual Links from HE to Economic Growth

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University Funding Modelling System: Impact

Based

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University Funding Model

Economy Wide Impacts

University Research and Productivity Model

Educational Attainment and Productivity Model

Research Funding

Productivity byIndustry

Overall LabourProductivity

Governmentexpenditure, exports andlabour force size changes

Graduating domesticestudents and international students who obtain permanent visas

The system of University Models

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MUST

MUST

Account for Economic implications of

expanding the university sector

MUST, TO RECEIVE A GRANT

(a) Higher government funding

(b) Changes in the size of labour force

(c) Gains in productivity from having a more highly educated workforce,

and

(d) Gains in productivity from additional research funding

Including

Value on Investment (VOI) perspective and

Institutional Financial Sustainability

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1. Shape the development of enterprise technology and

human resources, infrastructure, focusing on the need for

commitment to transformative change, not just greater

productivity (Culture of Change).

2. Can be an essential element in resourcing the institution’s

business process portfolio and creating innovative

solutions.

3. Can inspire and guide the efforts of institutions to craft

strategic responses to the mixture of challenges and

opportunities that currently confront HE.

Example: ICT can be conceived as a strategic integrator

and enabler of collaboration and innovation, yielding

strategic differentiation and prosperity.

Government Funding Model: Global

Lessons: Performance Based

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Output-oriented Research Funding

Input-oriented Research Funding

Input-oriented Teaching Funding

Output-oriented Teaching Funding

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Economic Thinking

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Optimal Financing of HE: Global Lessons

Economic

Thinking

(i) Public financing through

-grants to HE institutions

- income related grants

-guarantees for students Loans

(ii) Private financing through

-tuition fees

-repayment through Student Loans

-Contribution through business

-Contributions through endowments

(iii) Philathropists/international organizations

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Typology of Allocation Mechanisms: Global

Lessons

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Typology (Contd….)

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Typology (Contd….)

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Typology (Contd….)

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Typology (Contd….)

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Typology (Contd….)

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Typology (Contd….)

Some Innovations on institutional fund

raising

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Endowment Fund

An investment fund set up by an institution in which regular

withdrawals from the invested capital are used for on-going

operations or other specified operations or other specified

purposes.oluntary contributions from alumni, employers and other

benefactors.

Voluntary contributions from

-alumni,

-employers and

-other benefactors.

Internationalization Dimension

Student Exchange

-Ocassional

-Fulltime

Research

Consultancy Services & Contractual research

Business ventures (Public-Private-Partnership)

Opportunities for African universities

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Exploitation of Regional initiatives

There is utmost need for realization of concerted efforts of inter-governmental bodies such as AU, NEPAD and AU and universities such as SARUA, AAU

World Bank support in Tertiary Education (Accelerating Catch-up)

Optimize the current WB initiative as a breakthrough to the new era

International Partnership in HE

Exploit existing opportunities from donor organizations, foundations/philanthropists

Diaspora contribution Need for networking and linkage with Africans in the diaspora for expertise and resources mobilization (The case of India $ China)

CONCLUSIONS

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Remember, if you cant invest in your institution

adequately and rationally,

You can’t measure the Quality of your academic business!

If you cannot measure it, you cannot control it.

If you cannot control it, you cannot improve it.

If you cannot improve it, you cannot compete.

If you cannot compete, you cease to exist.

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Thank you very much for your

attention

Ahsanteni sana