Johannesburg - There is a scramble on to plug the funding gap, amid threats of a credit downgrade, following the capping of university fees next year.
President Jacob Zuma on Friday announced no increase for university fees next year, and economists have said two sources of funding will be channelling funds from elsewhere or increasing taxes.
Efficient Group director and chief economist Dawie Roodt said the underlying cause for the university protests was not fees, but South Africa’s sluggish economic growth.
“The strike for a no fee hike by students is not about fees, but about the weak economic growth that has resulted in the high unemployment and poverty.
“The number one reason is that the country is ideologically confused, there is weak leadership and contradictory policies,” he added.
South Africa saw unprecedented marches by thousands of students for no fee increases last week, including marches to the ANC headquarters in Johannesburg and to the Union Buildings in Pretoria.
These protests continued yesterday as students pushed for free tertiary education.
Speaking to eNCA yesterday, Higher Education Minister Blade Nzimande said the fiscus was stretched and called on private sector funding.
“Money will be brought in from the private sector because they are the beneficiaries of the higher education. There is enough money in this country, let us look for it wherever possible,” he said.
Peggy Drodskie, the chief operations officer at the SA Chamber of Commerce and Industry, said yesterday that small business would not be able to provide the funding and big business had already contributed through bursaries.
“If you look at the economic growth, it is putting strain on big business and wage increases add to costs. This means it will be difficult to put aside additional funding for education,” Drodskie said.
Funding sources
Finance Minister Nhlanhla Nene last week cut the projected economic growth for this year to 1.5 percent from his previous forecast of 2 percent.
Drodskie said the government should tap into reserves of the Sector Education and Training Authority (Setas) as companies made contributions towards skills development.
“There are large reserves collected by Setas over several years, which we believe can be looked into. I am not saying this is a permanent solution,” Drodskie said.
First National Bank economist Alex Smith said there were various places where the government could get funds from, but it was unlikely to do so due to political sensitivities ahead of local government elections next year.
Roodt said the taxpayer was overburdened and suggested that the money be rechannelled from the basic and secondary education sector.
“South Africa’s education expenditure is very high compared to other parts of the world. The problem with the basic and secondary education is not money, it is quality. Universities get badly trained students and have to retrain these students,” Roodt said.
However, free tertiary education did not mean that all matriculants would enter universities, he added.
“There are limited spaces, and not all people are university material,” Roodt said.
Meanwhile, the the SA Students’ Congress said it believed the 0 percent fee hike was not the end of the road.
BUSINESS REPORT