Diamond sales to fund student grants

The Zimbabwean government has relaunched student grants, to be financed from diamond sales, in an effort to resuscitate the tertiary sector. Companies have also pulled resources together to come up with student loans. The country's 2012 national budget has been lauded by lawmakers for prioritising higher education.

Just over 25.1% percent of the total national budget has been allocated to education, a figure that is slightly higher than the Southern Africa Development Community standard of 22% of the overall government budget.

Even though the funding is still inadequate, in a legislative assembly report the parliamentary committee on higher and tertiary education as well as science and technology said things were moving in the right direction.

For more than a decade, Zimbabwe's state-owned universities have operated without student grants or a loan scheme due to an economic and political crisis that only abated with the formation of an inclusive government in February 2009.

As reported previously in University World News, there were attempts to introduce student grants last year. But the plan suffered a stillbirth due to infighting in the coalition government, resulting in the funds being diverted to pay off the Ministry of Higher and Tertiary Education's previous debts.

The sale of Zimbabwe's gems has been opposed by the Western world, including the United States.

Opponents cite human rights abuses at the country's diamond fields, and lack of transparency that has seen the treasury occasionally complaining that the funds were not reaching government coffers, amid fears that the money was being used by President Robert Mugabe's regime to sponsor a terror campaign as he seeks another presidential term that will extend his uninterrupted rule to 36 years.

But in an attempt to win support for the sale of diamonds, the government has announced that budgetary support for student grants will come from the sale of the gems, which is expected to raise US$2 billion annually.

Currently the government is also using diamond proceeds to pay state employees' salaries, although a strike is looming as civil servants are demanding a hike.

"In response to the many appeals from parents and students during budget consultations to operationalise the Students Grant and Loan Scheme, I am accordingly allocating US$25 million, which will be matched by an even bigger amount from cooperating banks," said Zimbabwe's Finance Minister Tendai Biti in his 2012 budget statement.

"The Barclays and ZB banks, on their own, are contributing some US$20 million and US$10 million, respectively, towards the students loan scheme."

However, members of the parliamentary committee raised the issue of problems associated with financing grants with proceeds from diamond sales as well as shortcomings of the loan scheme being rolled out by financial institutions.

"1) The grant and loan scheme will be financed by diamonds revenue; as such they can only be operationalised upon the receipt of the revenue, meaning delays in disbursement will negatively affect students' welfare. 2) Sustainability of the private banks' students loan scheme: there is the issue of collateral security, interest rates issues, and repayment period," reads part of the lawmakers' report.

"The high unemployment rate (90%) might delay the servicing of the loans. Failure to service the loans may lead to the collapse of the system as the fund must revolve. The committee recommends that the conditions of the loans be relaxed to suit all deserving students."

In the national budget, the finance minister also provided funds to construct one hall of residence at each state-run university, to combat overcrowding at the institutions.

For example, the National University of Science and Technology can only accommodate 104 students, compared to demand of 4,000. Midlands State University, which enrols 6,000 students, can only offer accommodation to 200.

There is a further US$24 million available for higher education under the government's cadetship support scheme. The scheme financially assists disadvantaged students in return for which they work for the state for a specified period of time while their qualifications remain in the possession of government.

However, the cadetship scheme has faced problems in recent times as the government has failed to provide employment for graduates, forcing the authorities, for example, to announce a plan to release qualifications for nearly 10,000 nurses who failed to be absorbed into the country's hospitals and clinics.

Related links
ZIMBABWE: Parliament wants fair student loan scheme
ZIMBABWE: Student grants scheme suspended
ZIMBABWE: Government restores student grants