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Badilisha Lugha KISWAHILI

Why we need to diversify higher education financing strategies

23rd April 2012
There are a number of ways, strategies or approaches which can be explored to finance higher education (File Photo)

Enrolment into higher education in Tanzania is still quite low. In a country of over 40 million people, the gross enrolment ratio remains around 1%.

Whilst the expansion of private higher education enrolment has had a significant impact in boosting access, these universities are relatively small and as of 2005, almost 90% of students were in Public universities and other institutes of higher learning. The Private higher education sector is, however, continually expanding and its proportion of intake can only go up.

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 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.

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 neighbouring and other SADC countries implying the low capacity of the higher education sector to enroll more students because of limited funding. However, most tertiary institutions are struggling to cope up with growing enrolment against the available infrastructure and services.

This article reviews the current financing strategies for higher education, in order to propose ways to deal away traditional ways of financing education and look into alternative ways to diversify financing strategies by venturing into new financing strategies.

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.

The Government 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 and students enrolled in privately sponsored programs in public universities through the 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.

The funds for higher education in developing countries come mainly from three different traditional sources:

(a) Government (central and local) subversion: reliance on government for resources has almost doubled. Lower and Higher education has been largely a state funded activity with about three-quarters of the total expenditure being borne by government. The relative shares of non-government sources such as fees and voluntary contributions have been declining. On the other side, the needs of the higher education system have been growing rapidly. It is being increasingly realized that public budgets cannot adequately fund higher education, particularly when sectors of mass education are starved of even bare needs.

As a consequence, several policy directions on new ways of diversifying resources, resulting from a variety of pressures and opportunities are continually emerging with several alternatives, including student fees, student loans, user fees and privatisation.

On the other side, higher education institutions have been depending on philanthropic support and development agencies.

Although in the Tanzanian context, it is almost impossible to propose a viable model or framework for financing higher education. This is 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.

Ishengoma in his 2006 PhD Thesis on ‘Financing Higher Education in Tanzania’ proposes the “market model” which seems to have been successful in Kenya’s and Uganda’s higher education sectors. This means that education institutions need to consider the fact that investment in education institutions is like any other economic investment and think beyond the box.

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. This is 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 other scholars such as Oketch and Lamptey 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 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.

Ishengoma further argues that while the market model of financing higher education has been criticized and branded as academic capitalism driving universities into entrepreneurial competition; 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.

There are a number of ways, strategies or approaches which can be explored to finance higher education. Some of these approaches have been used in other countries and were successful. This article presents some new improvements which can help in income generation away from the government grants/ subversions. The proposed improvements are:

(a) Start-up Income generating activities: most public and private institutions have ample and idle land which can be used to start up income generating activities. UDSM and the Mlimani City project is a good example though more could have been done to ensure optimal utilisation of their idle land;

(b) Strengthening research and consultancy activities: though most of the higher education institutions have research and consultancy bureaus or units, they are yet to be strong enough to attract highly financed research and consultancy works which could have earned these institutions additional income, while increasing their credibility;

(c) ©Formation of joint ventures- in non core area in same business with experienced and investors with capital;

(d) Explore opportunities in capital markets: institutions can purchase bank shares or invest in other profit making companies or business through purchase of shares, This can increase institutional income base;

(e) Joint ventures with industries and business enterprises: This can be done through establishing programs which can be funded by interested industries or business enterprises. Institutions could entice industries to fund research programs and other innovations; and findings from these researches can be used to improve innovations and productivity in industries and business enterprises.

I think it is only at UDSM where such ventures were established, which include Industrial Products Innovations (IPI) and BICO which had been conducting joint research and innovations in order to improve improving industrial productivity. There might be others for such purposes. However, they have not been very active due to various reasons including lack of adequate funding and neglect. Many institutions have not utilised this opportunity.

Whenever possible these industries could support the institutions to establish infrastructures. Business enterprises can also support higher education institutions through sponsoring students in areas of their interest and employ them after graduation. Currently, some few industries such Airtel and mining companies just to mention a few are sponsoring students to study courses related to their business, so they can employ them thereafter.

(f) Sale of publications: doing research and publishing academic materials including books, journals, newsletters and others, is compulsory for staff in higher education institutions. There is a code in higher education institutions for all academic staff which says: “publish or perish”, which motivates staff to conduct research and write academic work for publication.

Currently, many courses in tertiary institutions lack text and reference books which are relevant to courses and Tanzanian context. Those few academic staff who managed to publish have been able to sell a number of copies beyond their expectations. The demand for more publications growing fast as enrolment and establishment of tertiary institutions is growing fast. Institutions can utilise this opportunity to support their staff to write, and institutions can support them to publish and share income after being sold;

(g) Utilise Alumni: former students at these institutions can be encouraged to support some programmes in their former institutions. Some of the alumni are currently at decision making bodies in public or private corporates;

(h) Other alternatives could be to encourage bursaries, grants and scholarships from firms and charitable organisations; as well as fund raising, both internally and abroad.

I have attempted 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. However, this is not an exhaustive list of alternative ways of improving financing of higher education institutions, more ideas and innovations can be generated. The article focused on financing public universities and university colleges.


The writer is a specialist in education management, planning, economics of education and financing, and policy studies. He is reached through: [email protected] or 0754304181.

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