Cutbacks a concern for South African vice-chancellors’ body

The looming cuts in higher education spending by the South African government, estimated to be about ZAR5 billion (about US$260 million), announced in the budget by Finance Minister Enoch Godongwana in February, will add to the growing pressure on one of Africa’s biggest and most robust higher education sectors, according to Universities South Africa (USAf) chairperson, Professor Francis Petersen.

USAf represents the vice-chancellors of South Africa’s 26 public universities.

The cuts, which have been anticipated since last year, come in a context in which the South African government is facing severe budgetary challenges. Universities were already hit hard during COVID-19 when they experienced a reduction in some higher education grants to cover costs related to the pandemic.

They are also operating in a context in which more funds go to student financial aid than to the block grants used for the running of the entire public higher education sector, and are paying millions of rands to keep their lights on as the country’s electricity provisioning continues to be volatile.

Elsewhere on the continent, higher education institutions have also been experiencing deepening financial pressures that are being fuelled, among other factors, by the growing demand for higher education as a greater number of school leavers qualify for higher education, and by the expectation of students that governments will help to subsidise their studies.

At the same time, government expenditure on key aspects of higher education, such as research and development, including the infrastructure needed, remains low.

In South Africa, Petersen said, tertiary education spending would increase on average by 3.7% over the next year or two, inflation is about 4.9% and the year after it is expected to be around 4.6% so, in real terms, the government’s subsidy will decrease.

Coupled with the ongoing student funding challenges, including a new accommodation crisis, recent staff and student protests at some institutions, the financial blow in the budget has exacerbated another troubled start to the academic year.

Petersen said the government’s National Student Financial Aid Scheme (NSFAS), which provides bursaries to students in financial need, is also expected to receive reduced funding, according to the budget, while student number recipients may increase.

Whereas the minister announced an additional ZAR25.7 billion (US$1.3 billion) in the budget for the education sector for the carry-through costs of the wage increase over the medium term, severe cutbacks are looming which will lead to delays in infrastructure development.

In the 2024-25 financial year, ZAR53.6 billion was allocated to NSFAS while ZAR47.7 billion was set aside for university transfers. In addition, ZAR28.6 billion was earmarked for skills development institutions; ZAR19.4 billion for education administration and ZAR13.6 billion for technical and vocational education and training.

In the budget allocation, it stated that spending in the post-school education and training sector would grow by 2.5% over the medium term. As a result, student enrolment growth may be affected by reductions in subsidies to universities and NSFAS over the Medium-Term Expenditure Framework period, which stretches over three years.

Infrastructure spending will be brought in line with the ability to spend across the sector. The sector will focus on raising the quality of services provided by post-school education and training institutions, including improving the throughput rates at tertiary institutions.

Briefing delayed

Petersen told University World News that the Minister of Higher Education, Science and Innovation, Dr Blade Nzimande, normally briefs vice-chancellors on the impact of the budget on the tertiary sector following the announcement but, with national elections set for 29 May, this meeting may not happen.

Petersen said his high-level analysis reveals that there may be more money on the surface but, when it is compared against inflation, it would show a decrease in real terms for universities and NSFAS.

“A more detailed presentation by the minister will give us a sense of the reallocation in the budget,” he said.

“But the concern is really about infrastructure; forget about new infrastructure, we are thinking about maintaining infrastructure. So that’s a concern that I think comes out of the budget,” Petersen added.

The University of the Free State vice-chancellor said that, worth noting is that the subsidy allocation over the three-year period for universities will probably move in that period to just ZAR50 billion (which goes to universities), while NSFAS will get more at about ZAR51 billion.

“In three years, you will find that your NSFAS allocation is going to be larger than the subsidy allocation to universities. And, for me, that’s not a good message, because the subsidy is meant to operate universities and to make sure that universities are providing quality education. If you cut infrastructure and efficiency, you will find that a lot of the money is directed into student funding.”

Petersen said that, in terms of managing a tertiary institution, one needs to have a quality plant and technology, while physical and digital infrastructure are together important, with human capital key.

“And that is where the strikes of UCT [the University of Cape Town] and UP [the University of Pretoria] are quite crucial and critical to watch. That is important to be able to deliver quality education,” he said.

Protests

Whereas the start of the academic year in South Africa is often characterised by student protests over access and financial issues, the start of the 2024 year has also seen both student and staff protests.

Student protests have been reported at Nelson Mandela University, the University of KwaZulu-Natal, North-West University and at the Eastcape Midlands College in Makhanda. The protests have been over funding, accommodation and student services.

Other protests have been reported on the campuses of the University of Pretoria and the University of Cape Town.

At UP, one person has been arrested for alleged public violence after an altercation between protesting employees and law enforcement officers.

Workers affiliated with the National Education, Health and Allied Workers’ Union have been on strike demanding a 7% wage increase. The institution is offering a 4% pay hike, reports TimesLive.

The University of Cape Town Employees Union, the university’s largest union, representing professional, administrative and support service employees, had a march during which it called for a further 1.5% increase for 2023, bringing the total increase for last year to 7.5%. It also wants a 7.5% increase for 2024, and immediate payment for performance awards for June 2022 to May 2023. reports GroundUp.

The way forward

Petersen said there was a large focus on universities to think differently in terms of how they manage their finances, considering cutbacks. “With these sorts of figures [in the budget], you can’t only rely on government, we have to think about not only trying to diversify income streams but also try to look more critically in terms of offerings, whether certain offerings should stop and whether, as a sector, there should be shared services models.”

For example, Petersen said cybercrime was affecting the entire sector – instead of institutions financing their responses individually, why not consider scales of economy by having one consolidated response for all?

“Universities have to work together with government and the private sector to find solutions to address the challenges that face us,” he said.