Sustaining tertiary education financing in Botswana

Tlotlo Mbazo - BG reporter
Tuesday, 11 June 2019
Sustaining tertiary education financing in Botswana

Rapid growth in the number of students poses a challenge to the sustainability of higher education financing in Botswana. Human Resource Development experts concur that only innovative approaches can provide mid to long-term solutions to ensure financial sustainability of funding of higher education.

Dr Emmanuel Botlhale of the University of Botswana says it is inevitable to discuss the importance of human resource development whenever issues of funding of tertiary education are raised. This is because human resource development is key to issues of economic development.  “We need a competent human resource for key challenges that our country faces today. “In addition, Botswana aspires to reach higher levels of economic success and for us to deliver on the NDP11 and Vision 2036 and any other national development agenda, for example, there is critical need for a relevant human resource,” Botlhale said at the National Human Resource Development Conference recently.

Dr Botlhale is worried however that the current financing model is government driven and not sustainable. “We need ways in which we can go beyond this model. “This is not only the case in Botswana, empirical evidence shows that there are financing gaps in sub-Saharan Africa which need to be closed for us to move our countries forward,” he said. He added that Botswana needs to be innovative and adopt a new normal. Botswana currently has a human resource development gap according to the Human Resource Development Index.

The 2017 Global Human Capital report states that Botswana ranked 91 out of 130 countries. With aspirations to move away from a resource-based economy to a knowledge-based economy, Dr Botlhale believes that bold steps and decisions need to be taken. Firstly, he questions the efficiency of the loan/grant scheme that has proven not to be sustainable as there is reluctance of beneficiaries to pay back. Further there are no efficient and effective methods of collection. He worries that these grants are not even targeted to the most deserving candidates.  “We also need to do a cost benefit analysis to determine whether these grants are yielding the results they are supposed to. “These are not comfortable conversations but we need to have them because there are parents who could pay for their children’s university education, but they don’t because the grant is available.

“As long as a student has attained points above the cut off points, they are automatically funded,” Botlhale said, adding that in some instances, funded for qualifications that will not earn them employment. Currently, Botswana is said to have an estimated unemployment rate among the youth of 25 percent and projected to grow if not addressed. Additionally, it is estimated that there are currently over 87 000 unemployed graduates in Botswana. Another uncomfortable issue on the table is whether or not Botswana should be implementing cost sharing and or cost recovery in higher education financing. “Cost sharing is the way to go, because we are saying at least pay something. Cost recovery however, looks at recovering 100 percent of the cost,” Botlhale said.

Botlhale is also convinced that if Botswana could tap into what other countries are doing by adopting Public Private Partnerships (PPPs) in financing tertiary education, she would go a long way.  Countries like India, Bangladesh and Pakistan have a robust PPP strategy that specifically talks to financing human resource development. “As far as PPPs are concerned we don’t want to reinvent the wheel, we can learn from the developing world that has more established PPP strategies in this area.” He recommends that Botswana could develop a Corporate Social Responsibility (CSR) policy that mandates companies operating in Botswana 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.

South Africa also has several innovative higher education funding models that have proven to bear fruit. 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.  Speaking at the National Human Resource Development Conference, founder of ISAFAP, Sizwe Nxasana said 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. “When we began, only government was funding higher education,” Nxasana said.But what worried him the most was that though government was financing higher education, the dropout rate was high at 55 to 60 percent. For every 10 students who start, only four or five would complete their courses, not even within the regulated time. The other challenge was that 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 business 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 they as industries are 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.  “Let’s all look at funding as a means to an end,” Nxasana challenged participants. ISFAP assists students pursuing degrees in actuarial science, accounting, engineering, data science and medicine.  Currently, they are getting a 91 percent pass rate compared to 45 percent from the government’s funding model. This is because students are funded properly and given proper wrap around support throughout their course of study.”

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, according to Nxasana, which has become a multi-trillion dollar industry where there are philanthropists, social investors including big development financial institutions.

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