A sustainable higher education funding model is a priority

The 21st century has witnessed enormous challenges when it comes to financing higher education.

The situation is dire in Africa where the demand for higher education has surged more than three-fold, where the number of higher education institutions has increased exponentially while much of the continent’s economy is stagnant when it comes to the production of raw materials, and where governments face poor tax revenues.

Thus, finding a sustainable but strategic method of financing higher education in Africa should be a priority for policy-makers, researchers and donor institutions if higher education institutions are to offer accessible and affordable higher education.

For these reasons, the University World News article “Government urged to abandon new university finance plans” dated 29 March warrants significant attention from all African higher education experts, policy analysts and researchers.

In the article, culled from Ghana’s Joy Online, it is reported that Ghana’s finance minister has proposed “fixed block grants” for public-funded universities as part of the raft of medium-term measures to address the fiscal challenges facing the Ghanaian national economy.

With the “fixed block grants” the government anticipates it will wean public universities off its payroll and make them responsible for their own payroll and other recurring expenses.

This approach to financing higher education has been criticised as a short-sighted proposal on the part of the government. However, it is necessary to review how Ghana’s public universities are funded and consider the foundations for a more robust public higher education system which ensures its accessibility and sustainability.

Such a review process should follow democratic procedures.

Annual block grants

The annual block grant is an amount of money that a government disburses to its universities every year. It gives a university the autonomy to determine how much to allocate among its competing financial needs. However, the university is fully accountable to the government about how it spends the grant.

It allows the institution to engage in realistic strategic planning, establish appropriate financial controls, including budgets, over its expenses, expenditures and revenue streams in accordance with its priorities and particular circumstances.

It also allows the university to identify other revenue tools it could use to boost its revenue streams.

And finally, the university is allowed to charge competitive tuition fees according to government guidelines.

Nonetheless, the government will provide funding for research projects and capital expenditures, such as building maintenance and renovation and the construction of new lecture halls and laboratories, or allow the university to enter into a contract with private developers to provide such necessary infrastructure.

Fixed block grants: A different modality

As a big advocate of annual block grants for African universities, I am increasingly worried that fixed block grants for Ghanaian public-funded universities are a totally different financial modality.

It seems such a grant would be disbursed once to every university or higher education institution for it to use to pay off its daily, weekly and monthly expenses, including its payroll.

This financial modality would put many public-funded universities, particularly the newly established ones, into financial difficulties with the result that they would have to respond with higher tuition fees and service charges for students.

These universities are already suffering from severe under-investment and their staff salaries are out of sync with inflation and rising living costs.

It would be impossible for Ghana’s government to say that public universities are on their own financially and then turn around and dictate to them how much they should charge their students for tuition fees and other services.

I therefore agree with the leadership of Africa Education Watch that this would lead to inaccessible and unaffordable university education in Ghana. It would also be difficult for the government to achieve its own policy objective of increasing higher education enrolment from 18% to 40% by 2030.

Finally, it would negatively impact the constitutional right of Ghanaians to higher education.

New financing sources

The traditional mode of financing public university education in Africa is unsustainable over a long period. Originating after political independence from European colonial powers, this mode of financing requires the central government to be responsible for higher education expenses and expenditures.

Higher education institutions in return remit the tuition revenue they collect from students to the central government. Consequently, higher education institutions are dependent on central government for all their funding. This is a classic case of what I call “absolute dependence”.

A change in the absolute dependence of Ghana’s public universities on government funding will require central government to hold conferences with appropriate stakeholders to explore new financing sources.

In fact, new financing plans for higher education institutions cannot be simply imposed on them. That would ignite a series of strikes by staff and students and it would throw the higher education system into chaos.

Higher education institutions and other stakeholders should have input into the plans and reasonable time should be taken for adjustments to them and for their implementation.

Dr Eric Fredua-Kwarteng is an educator and policy expert in Canada.