* Experts discuss various financing model for higher education * A Tertiary Education Student Development Fund to be established
Government’s continued struggle to finance all qualifying students for tertiary education and sustain funding has necessitated the formation of a Tertiary Education Student Financing Policy.
Currently, government is the main sponsor of tertiary education.
The Policy, which is a work in progress, is expected among other things to promote the existence of an effective, efficient, equitable and sustainable student tertiary education financing.
The Ministry of Finance and Economic Development is on the other hand undertaking an audit of the Department of Tertiary Education Financing (DTEF) activities over the past 10 years.
According to insiders, this audit will give real time information regarding the current model of tertiary education financing and expose the operational issues associated therewith.
With dwindling numbers of government sponsored students, year after year in local higher education institutions, it is evident that only innovative approaches can provide mid to long-term solutions to ensure sustainability of funding higher education in Botswana.
According to the Sixth Tertiary Education Statistics Report, while the number of tertiary education students on Government sponsorship increased from 28 976 in 2008/09 to 48 703 in 2012/13, thereafter, the number of sponsored students gradually decreased from 48 703 in 2012/13 to 38 806 in 2016/17.
In 2020, the total number of sponsored students was 39 446.
Some human resource development experts have always frowned at the current government-driven financing model stating that it can never be sustainable, especially considering the reluctance of beneficiaries to pay back.
The Report, a collaborative work of the Human Resource Development Council (HRDC) in partnership with Statistics Botswana, states that this could be necessitated by the existing policies, which provides for students’ sponsorship up to tertiary undergraduate level.
The 2020 data revealed that of the 56 666 students enrolled in tertiary education institutions in 2020, 39 446 about 70 percent were on government sponsorship, while only 12, 646 about 22 percent and 4 574 (eight percent) were on self and other entities sponsorship respectively. Of the 56 666 students, 37 061 about 65 percent were in public tertiary institutions while 19 605 (35 percent) were in private institutions.
Experts also say with aspirations so ambitious as Botswana’s, to shift from a resource-based economy to a knowledge-based economy, as well as to attain a high income status, it has become increasingly important to find ways to sustain financing to develop the country’s human resource because ultimately, it is the human resource that is key to economic development.
Currently, government is limited to offer students who have obtained 36 points in their BGCSE, 50/50 percent loan/grant scheme sponsorship to further their studies in chosen tertiary institutions locally, with top performers receiving sponsorships to even study abroad.
Some have in the past called for a cost-benefit analysis to determine whether the grants provided by government are yielding the desired results and to consider cost-sharing with parents who can afford to pay for their children’s university education, in order to relieve government of the burden.
Botswana has an unemployment rate of about 26 percent, with youth unemployment projected to be higher at around 41 percent, according to the Multi Topic Survey of Statistics Botswana.
According to the HRDC spokesperson, Dr. Faith Tuelo, HRDC is represented in the Ministry’s multi-sectoral technical working committee to facilitate the development of the highly-anticipated Tertiary Financing Policy.
HRDC is mandated among others, with the provision of advice on all matters of national human resource development. Without derogating the generality of this function, HRDC formulates the national human resource development plan, which identifies the current and future national skills requirements in order to bridge the gap between skills demand and supply, Dr. Tuelo explained.
HRDC also advises Government and in particular the Department of Tertiary Education Financing on annual priority skills determining academic programmes of critical importance for funding.
According to Dr. Tuelo, the Council has been advocating for development of the policy and establishment of the Tertiary Education Student Development Fund (TESSF) in accordance with the Human Resource Development Act, Section 28 (1), and development of the associated regulations and instruments, which they believe will go a long way in alleviating funding needs. There are many other options and innovative ways that some countries have adopted to fund tertiary education. Countries including India, Bangladesh and Pakistan have robust Public Private Partnership (PPP) strategies that contribute financially to human resource development.
Some countries have developed Corporate Social Responsibility (CSR) policies that mandate companies operating within their borders to dedicate part of their profits to CSR that is tied to financing human resource development.
For example, in India it is mandatory by law to set aside a certain percentage of profits towards financing education. Sixty percent of their profits go to Health and Education. Singapore on the other hand has a human resource development model that has proven to work well where synergies are created with all stakeholders to fund tertiary education.
In neighbouring South Africa, several innovative higher education funding models exists that have borne fruits.
One such is the Ikusasa Student Financial Aid Programme (ISAFAP) that was established to provide financial aid to poor and middle-income university students in selected fields of study critical to South Africa’s economic development including, Actuaries, Accountants, Engineers, Medical Doctors, Pharmacists and Prosthetists.
When ISAFAP was established, the South African government was mostly funding higher education. Founder of ISAFAP, Sizwe Nxasana said in an earlier interview that when he established the programme, he was responding to the question of whether higher education funding by government was sustainable among other issues.
He acknowledged that governments alone were not able to finance human resource development. They also observed that what prevailed at the time presented challenges, among them, the country was not focusing on producing the necessary skills that they needed for the economic development.
The government-funding model was only concerned with whether the candidate comes from a poor family and whether they were registered at a given university.
“This was not enough especially in a country that produced surplus skills, for example in areas of Humanity degrees, so there was no match of supply and demand,” Nxasana said, adding that ultimately this also contributed to a large number of unemployed graduates.
What ISAFAP did, according to Nxasana was to approach organised businesses and involved them in trying to address the country’s financing challenges that were not addressed before. This meant that they would now come up with more efficient systems and focus on producing priority skills.
“You cannot just go to companies to help you do this, but you need to approach them in an organised manner because they also have their priorities,” Nxasana said, adding that it also helps to approach for example, business umbrella bodies like banking association, engineer associations and use their moral persuasion to appeal for assistance.
“This changed the narrative, not only was it about funding poor students, we are now looking into what curriculum universities are delivering and whether it will produce industry-ready students,” Nxasana said, adding that this nullifies the argument from private sector that there is a mismatch with what institutions of higher learning are producing and what the industry is looking for.
“This is because they would be part of the funding of the very skills that they need.” Nxasana added that when private sector is involved, not just through their CSR initiatives, there is focus on priority skills because the private sector will not fund something that is not worthwhile.
“You must speak the language that the private sector speaks, if they understand a return on investment, align your need with their interest so that they get involved in a meaningful way.”
He advised that Botswana takes advantage of multinational companies that should be playing a much bigger role in transforming Botswana’s economy as they are let off easily. “You can do a lot more to hold companies that are working in Botswana accountable,” he said.
Nxasana believes that the issue of tertiary funding goes beyond funding students from poor and working class background, but ensures that young people ultimately play a meaningful role in the economic development of the country.
Another option that Botswana has according to Nxasana, is impact investing that has been implemented by countries like the US. The US has implemented income-sharing agreements, for example, where instead of giving a student a loan, a company takes equity stake in them.
Upon completion of their studies, the student would pay a certain percentage of their salary to the company for a specific period. Impact investing is a huge trend in the world, which has become a multi-trillion-dollar industry where there are philanthropists, social investors including big development financial institutions.
Currently, government is the main sponsor of tertiary education.
The Policy, which is a work in progress, is expected among other things to promote the existence of an effective, efficient, equitable and sustainable student tertiary education financing.
The Ministry of Finance and Economic Development is on the other hand undertaking an audit of the Department of Tertiary Education Financing (DTEF) activities over the past 10 years.
According to insiders, this audit will give real time information regarding the current model of tertiary education financing and expose the operational issues associated therewith.
With dwindling numbers of government sponsored students, year after year in local higher education institutions, it is evident that only innovative approaches can provide mid to long-term solutions to ensure sustainability of funding higher education in Botswana.
According to the Sixth Tertiary Education Statistics Report, while the number of tertiary education students on Government sponsorship increased from 28 976 in 2008/09 to 48 703 in 2012/13, thereafter, the number of sponsored students gradually decreased from 48 703 in 2012/13 to 38 806 in 2016/17.
In 2020, the total number of sponsored students was 39 446.
Some human resource development experts have always frowned at the current government-driven financing model stating that it can never be sustainable, especially considering the reluctance of beneficiaries to pay back.
The Report, a collaborative work of the Human Resource Development Council (HRDC) in partnership with Statistics Botswana, states that this could be necessitated by the existing policies, which provides for students’ sponsorship up to tertiary undergraduate level.
The 2020 data revealed that of the 56 666 students enrolled in tertiary education institutions in 2020, 39 446 about 70 percent were on government sponsorship, while only 12, 646 about 22 percent and 4 574 (eight percent) were on self and other entities sponsorship respectively. Of the 56 666 students, 37 061 about 65 percent were in public tertiary institutions while 19 605 (35 percent) were in private institutions.
Experts also say with aspirations so ambitious as Botswana’s, to shift from a resource-based economy to a knowledge-based economy, as well as to attain a high income status, it has become increasingly important to find ways to sustain financing to develop the country’s human resource because ultimately, it is the human resource that is key to economic development.
Currently, government is limited to offer students who have obtained 36 points in their BGCSE, 50/50 percent loan/grant scheme sponsorship to further their studies in chosen tertiary institutions locally, with top performers receiving sponsorships to even study abroad.
Some have in the past called for a cost-benefit analysis to determine whether the grants provided by government are yielding the desired results and to consider cost-sharing with parents who can afford to pay for their children’s university education, in order to relieve government of the burden.
Botswana has an unemployment rate of about 26 percent, with youth unemployment projected to be higher at around 41 percent, according to the Multi Topic Survey of Statistics Botswana.
According to the HRDC spokesperson, Dr. Faith Tuelo, HRDC is represented in the Ministry’s multi-sectoral technical working committee to facilitate the development of the highly-anticipated Tertiary Financing Policy.
HRDC is mandated among others, with the provision of advice on all matters of national human resource development. Without derogating the generality of this function, HRDC formulates the national human resource development plan, which identifies the current and future national skills requirements in order to bridge the gap between skills demand and supply, Dr. Tuelo explained.
HRDC also advises Government and in particular the Department of Tertiary Education Financing on annual priority skills determining academic programmes of critical importance for funding.
According to Dr. Tuelo, the Council has been advocating for development of the policy and establishment of the Tertiary Education Student Development Fund (TESSF) in accordance with the Human Resource Development Act, Section 28 (1), and development of the associated regulations and instruments, which they believe will go a long way in alleviating funding needs. There are many other options and innovative ways that some countries have adopted to fund tertiary education. Countries including India, Bangladesh and Pakistan have robust Public Private Partnership (PPP) strategies that contribute financially to human resource development.
Some countries have developed Corporate Social Responsibility (CSR) policies that mandate companies operating within their borders to dedicate part of their profits to CSR that is tied to financing human resource development.
For example, in India it is mandatory by law to set aside a certain percentage of profits towards financing education. Sixty percent of their profits go to Health and Education. Singapore on the other hand has a human resource development model that has proven to work well where synergies are created with all stakeholders to fund tertiary education.
In neighbouring South Africa, several innovative higher education funding models exists that have borne fruits.
One such is the Ikusasa Student Financial Aid Programme (ISAFAP) that was established to provide financial aid to poor and middle-income university students in selected fields of study critical to South Africa’s economic development including, Actuaries, Accountants, Engineers, Medical Doctors, Pharmacists and Prosthetists.
When ISAFAP was established, the South African government was mostly funding higher education. Founder of ISAFAP, Sizwe Nxasana said in an earlier interview that when he established the programme, he was responding to the question of whether higher education funding by government was sustainable among other issues.
He acknowledged that governments alone were not able to finance human resource development. They also observed that what prevailed at the time presented challenges, among them, the country was not focusing on producing the necessary skills that they needed for the economic development.
The government-funding model was only concerned with whether the candidate comes from a poor family and whether they were registered at a given university.
“This was not enough especially in a country that produced surplus skills, for example in areas of Humanity degrees, so there was no match of supply and demand,” Nxasana said, adding that ultimately this also contributed to a large number of unemployed graduates.
What ISAFAP did, according to Nxasana was to approach organised businesses and involved them in trying to address the country’s financing challenges that were not addressed before. This meant that they would now come up with more efficient systems and focus on producing priority skills.
“You cannot just go to companies to help you do this, but you need to approach them in an organised manner because they also have their priorities,” Nxasana said, adding that it also helps to approach for example, business umbrella bodies like banking association, engineer associations and use their moral persuasion to appeal for assistance.
“This changed the narrative, not only was it about funding poor students, we are now looking into what curriculum universities are delivering and whether it will produce industry-ready students,” Nxasana said, adding that this nullifies the argument from private sector that there is a mismatch with what institutions of higher learning are producing and what the industry is looking for.
“This is because they would be part of the funding of the very skills that they need.” Nxasana added that when private sector is involved, not just through their CSR initiatives, there is focus on priority skills because the private sector will not fund something that is not worthwhile.
“You must speak the language that the private sector speaks, if they understand a return on investment, align your need with their interest so that they get involved in a meaningful way.”
He advised that Botswana takes advantage of multinational companies that should be playing a much bigger role in transforming Botswana’s economy as they are let off easily. “You can do a lot more to hold companies that are working in Botswana accountable,” he said.
Nxasana believes that the issue of tertiary funding goes beyond funding students from poor and working class background, but ensures that young people ultimately play a meaningful role in the economic development of the country.
Another option that Botswana has according to Nxasana, is impact investing that has been implemented by countries like the US. The US has implemented income-sharing agreements, for example, where instead of giving a student a loan, a company takes equity stake in them.
Upon completion of their studies, the student would pay a certain percentage of their salary to the company for a specific period. Impact investing is a huge trend in the world, which has become a multi-trillion-dollar industry where there are philanthropists, social investors including big development financial institutions.
