Assessing Public Expenditure on Higher Education in South Africa within the
Framework of the Global Higher Education Revolution
Table of Contents
Introduction
The Global Higher Education Revolution
2.1 Historical Context
2.2 Key Drivers
2.3 Global Examples
2.4 Challenges
The Global Higher Education Revolution in the South African Context
3.1 Historical Background
3.2 Current Landscape
3.3 Policy Framework
3.4 Challenges
Critical Assessment of Public Expenditure on Higher Education in South Africa
4.1 Comparative Analysis
4.2 Return on Investment
4.3 Effectiveness in Addressing Historical Inequalities
4.4 Access vs. Quality Dilemma
Recommendations
5.1 Enhanced Targeting of Funding
5.2 Quality Assurance Mechanisms
5.3 Long-term Sustainability
5.4 Alignment with National Development Goals
5.5 Technology Integration
Conclusion
References
1. Introduction
Increased access to post-secondary education or globalization of higher education or
massification of tertiary education, diversification of the institutions offering these and
changing status which has increasingly made research as a central activity has affected
systems of higher education globally. In South Africa these global trends have been
enhanced by significant public investment to increase enrolments for higher education
and upgrade the institutions’ standards. This assignment focuses on the spending of
public education on higher education in a South African context in light of the global
higher education revolution; it considers identifying whether this spending is warranted
and whether it supports the nation’s development goals as outlined by Cloete (2016).
The applicability of this assessment is especially important for the country that is trying
to move forward after apartheid and that still has many difficulties on its way towards fair
distribution of resources. Using the context of global practices and Southern African
context, this study seeks to provide insight to the debate on the part that higher
education can play in the transformation of the South African economy.
2. The Global Higher Education Revolution
2.1 Historical Context
Integration of higher learning institutions in the global arena has, therefore, undergone
several transformations in the last century. Universities evolved from being a means for
providing education to only selective society elites to educative structures that cover a
large part of the society. Trow (2007) describes this evolution in three stages: and within
such systems already distinguish the elite (up to 15% enrollment), mass (15-50%
enrollment), and universal (over 50% enrollment) forms of higher education. These
changes have come along the issue of diversification of institutions, financing of higher
education and the appreciation of the social role of higher education institutions.
2.2 Key Drivers
Several factors have propelled the global higher education revolution:
Technological advancements: In higher learning, the digital revolution has impacted
on teaching and learning, research, and administration (Selwyn, 2014).
Globalization: Globalization of economy has caused the need for globalized
educational qualification and enhanced mobility of students (Altbach et al. , 2009).
Knowledge economy demands: Kranhold LD, also, argued that as the economies in
developed nations transition to post-industrializing, more demands are placed on
academia to produce knowledge workers (hrimagen2005PowellDSnellman2004L).
Democratization of education: The civil political activism for rights for education has help
propel the general expansion of higher education system (Brennan & Naidoo, 2008).
2.3 Global Examples
The global higher education revolution has manifested differently across various
contexts:
China: They expanded very rapidly, or in terms of GMR as mentioned above, the
figures of GER raised from 3. 4 per cent in 1990 to 51 per cent by 2000 though such a
major increase is vital for gaining competitive advantage in the global market. 6 percent
in 2019 according to World Bank (2021). This expansion was mainly facilitated by the
economic liberalization and the government direction to skills and talent development.
Finland: Choose the policy of charging no tuition fee for domestic and EU students and
invested a great amount of public fund for research and development. This approach
has placed the Finnish universities among some of the best Universities around the
globe especially given that Finland is among the smallest countries in the OECD
(OECD, 2019).
United States: The health care policies revealed an emergence of what can be termed
as a ‘market dominant model’ that acquired more of privatization with the proliferation of
for-profit health facilities. This has therefore brought about issues on student loans and
quality of education (Cahalan et al. , 2018).
2.4 Challenges
The global higher education revolution has brought several challenges:
Funding pressures: That is, as the systems grow, the old funding practices are unable
to meet the demands and this results in discussions about costs sharing and its
effectiveness (Johnstone & Marcucci, 2010).
Maintaining quality with increased access: Growth in mass higher education seems
to tip social and institutional capacity, hence threatening the quality of education
(Altbach et al. , 2009).
Adapting to changing labor market needs: The higher learning institutions are in a
dilemma in terms of revising their program to meet corporate world needs while at the
same time keeping with the educational standards (McCowan, 2015).
Equity concerns: However, many countries see widening of the gap and continued
discrepancies of socio-economic status of students at the higher learning institutions
(Marginson, 2016).
3. The Global Higher Education Revolution in the South African Context
3.1 Historical Background
South Africa’s higher education system is a reflection of apartheid architecture with
profound effects to this day. Before as early as 1994, the system was marked with racial
discrimination, imbalance in resource distribution and colour barred Blacks from having
an opportunity in South Africa (Badat, 2010). To the above background, serious
attempts have been made after the demise of apartheid to reshape the higher education
geared by the principles of equity, redress, and development.
3. 2 Current Landscape
Since 1994, South Africa has made significant strides in expanding its higher
education system:
Enrollment: Students enrolment in public higher education institution also increased
from 495,356 in 1994 to 1 085 568 in 2018 (DHET, 2020).
Demographics: The enrolment of the black African students increased from 43% in
1994 to 76% in 2018 while the overall statistics as stated below.
Funding: Assuming that non-public expenditure will remain constant, public
expenditure at higher education as a share of the GDP was ever higher, starting from 0.
In fact SDWA 15% in 1998 and 1 percent in 2002 arguing that World Bank’s control
reducing from 68% in 1994 to 1. From 2 per cent in the FY 2018/2019 according to the
National Treasury (2019).
However, challenges persist:
Graduation rates: The dissertation reveals that the general graduation rates for 3-year
degrees are 58% meaning very high dropout rates (CHE, 2019).
Skills mismatch: Graduate skills are not properly guarded to the demands of the labor
market and this leads to high rates of graduate unemployment (StatsSA, 2019).
Research output: However, and as the NRF notes, South Africa’s research output and
impact are still less than ideal compared to many other emerging market economies.
3.3 Policy Framework
South Africa's approach to higher education has been shaped by several key
policies:
National Development Plan (NDP): Proclaims the nation’s desire for Increased
enrolment and graduation rates in higher learning institutions by year 2030 (NPC 2012).
White Paper for Post-School Education and Training: Describes an idea that post-
schooling system should be differentiated yet integrated (DHET 2013).
New Funding Framework for Universities: This framework was developed in 2004
and provides a mechanism of relating funding to national priorities and institution
performance (DHET, 2004).
National Student Financial Aid Scheme (NSFAS): Grants fee subsidies directly which
are accessed through means testing to students who require such assistance (NSFAS,
2021).
3.4 Challenges
Despite progress, South Africa's higher education system faces several
challenges:
Persistent inequalities: Equity based on race and socio-economic status is thus not a
thing of the past as Letseka and Maile pointed (2008).
Funding sustainability: Expansion of fee-free higher education for the poor and
working class in 2018 has put more pressure on the public resources (Wangenge-Ouma
& Cloete, 2018).
Infrastructure and capacity: Challenge: Lack of infrastructure and staff: Many
institutions, especially the historically disadvantaged ones are faced with challenges of
inadequacy of infrastructure and qualified staff (CHE, 2016).
Quality concerns: Fast growth has elicited concerns on how learning standards at
higher learning institutions are going to be maintained (CHE, 2017).
4. Critical Assessment of Public Expenditure on Higher Education in South Africa
4.1 Comparative Analysis
When comparing South Africa's public expenditure on higher education with
other middle-income countries, several observations emerge:
Percentage of GDP: That is at 1. The spending for public expenditure on higher
education as a percentage of their GDP is 2% for South Africa, while the middle-income
countries’ average is 0. 8%, some of the counterparts are Malaysia with 1. 9 % and
Brazil with 1.
Per-student expenditure: South Africa’s per-student expenditure, ($5.085 in PPP),
outstrips a number of middle-income nations but is highly below OECD average
spending of ($15,656) (OECD, 2019).
Share of education budget: Tertiary education consumes approximately 27% of South
Africa’s education budget which can be classified as relatively high when compared to
global standards (National Treasury, 2019).
It can be deduced from this comparative analysis that, after relative weight of
investment in higher education has been calculated, there is fairly big investment made
by South Africans but quantitatively it might still not be adequate enough to counter the
hurdles faced as well as align with the NDP goals.
4.2 Return on Investment
Assessing the return on investment (ROI) of public expenditure on higher
education in South Africa reveals a mixed picture:
Economic growth: Investment in higher education literature shows that investment in
higher education enhances economic growth in South Africa with the approximation
showing that every percent increase of the stock in higher education translate to an
equivalent of 0. A target of increasing the GDP per capita, by 85% was set and has
been achieved is that stated in the current literature by Ntshoe and De Villiers (2013).
Social mobility: Education remains to be an important avenue through which people
change their status in societies by on average, graduates earning 2. Five folds higher
than the high school educated individuals (StatsSA, 2019). However, considerably high
students’ dropout rates negate the foregoing vantage ware effects.
Innovation: Authorities in South Africa have also invested in improving the research
level in higher education to production of articles that stood at 3,617 in 2000 and
reaching 25,371 in 2018 (DHET, 2020). Nevertheless, research translation that is
transferring of research into commercial innovations is still difficult.
Skills development: Even though, the higher education system has delivered a greater
number of graduates, the persistent skill demand-supply gap indicates that the return on
investment in terms of fulfilling the demand of the labor market is far from ideal (HRDC,
2018).
4.3 Effectiveness in Addressing Historical Inequalities
The effectiveness of public expenditure in addressing historical inequalities
presents a nuanced picture:
Access: Much improvement has been done regarding the improvement of accesses for
the deprived groups. Black students’ enrollment in higher learning institutions has risen
significantly since 1994 (DHET, 2020).
Success rates: Even now, there are gaps in the completion of the types of courses for
different student characteristics; times have changed but gaps have not. The current
statistics shows Black African students drop out rates is lower that the White students in
almost all fields of study (CHE, 2019).
Institutional disparities: HDIs as have been mentioned remain struggling in as much
as issues to do with infrastructure, staffing and research when compared to their
counterparts even with the increase in the funding (Leibowitz & Bozalek, 2014).
Financial aid: Thus, NSFAS has increased the opportunity for low-income students,
however there are issues regarding NSFAS funds and the support it provides to the
students beyond the tuition (NSFAS, 2021).
4.4 Access vs. Quality Dilemma
The rapid expansion of South Africa's higher education system has brought the
access vs. quality dilemma into sharp focus:
Massification effects: This has increased the enrollment and it has really stretched the
institutions’ resources, which may dilute the quality of education offered (CHE, 2016).
Academic staff: There has been a rise in student to staff ratio and there are doubts
whether it is possible to recruit and retain capable academicians (HESA, 2018).
Graduate employability: There have been changes in access however there is loss as
to the quality &relevance of provision in terms of producing graduates with employable
skills (HRDC, 2018).
Research quality: However, the visibility and the number of citations, South African
publications are still below the international standards in many fields, and though there
is an overall trend of a reasonably steady increase in the number of publications in the
global output (NRF, 2020).
5. Recommendations
Based on the critical assessment of public expenditure on higher education in
South Africa, the following recommendations are proposed:
5.1 Enhanced Targeting of Funding
Due to the many disadvantaged factors that individuals have to deal with, review the
methods of means testing to include other conditions aside from financial status.
Linked to this is the creation of a performance-based funding component for institutions
and this will require institutions to pay extra attention and enhance access and success
for those who are marginalized.
Develop a specific grant to improve facilities and equipment in HDI’s, to promote the
already mentioned changes.
5.2 Quality Assurance Mechanisms
Enhance the role of the CHE in supervision and enforcement of quality standards
across the Institutions.
This should involve a national graduate tracking system to follow their employment
status and this information can then be used to influence curriculum inputs.
Start conducting external academic programme reviews at least every four years, with a
particular focus on Teaching Matters and Student Matters.
5.3 Long-term Sustainability
Engage additional sources of funding like the endowment funds and collaboration with
industries as back up in cases where government funding is insufficient.
Introduction of phase-in funding approach as a way of reducing the dependence on a
homogenized funding system that does not distinguish institutions that have different
roles in the provision of tertiary education (for instance, research Caliber versus
teaching oriented institutions).
Establish guidelines for cost-sharing in advancement of maximum enrollment in higher
learning institution while ensuring sound financial plans of the future.
5.4 Alignment with National Development Goals
Introduce the skills forecasting at the national level in order to increase the demand of
the higher education output.
Propose measures for funding university research and create the necessary incentives
for carrying out research pertinent to the state’s needs, for example, climate change,
food scarcity and renewable energy.
The scope is to improve coherence of education routes for learners by enhancing
relationships between Universities and TVET colleges and industry.
5.5 Technology Integration
Support the project of an online platform targeting a National audience as an additional
stream of income apart from the conventional universities.
Grant money to universities on how they could integrate both the traditional online and
face to face teaching style.
Create the national digital skills program that will help all students and staff to use
educational technologies with efficiency.
6. Conclusion
A review of South Africa’s public expenditure on higher education in the context of the
global revolution in higher education shows a system in contestation with two
contradictory processes of growth. Despite the improvements that have been observed
over the last few decades, there are still problems in the quality of, relevance, and
continuity of education for All.
The recommendations formulated in this assessment focus on intervening these
challenges through calling for allocation of proper funds, improved quality assurance
mechanisms, realistic and viable funding sources, greater orientation toward the
national developmental objectives, and proper integration of technologies. The following
recommendations should be adopted, and their adherence will need the support from
the government, institutions and the industry players.
With higher education enrollment rates still in their infancy in South Africa the NASM is
tasked with the challenge of opening doors while ensuring that the quality of those
doors is not compromised. In so doing, it can use its higher education system for its
larger purpose – for the country’s development and as a tool for social change.
The process of reforming and growth of South African higher education can never be
said to be over. Nonetheless, if South Africa is willing to apply strategic investment,
refine and commit to tackling those systematic barriers, then it can create higher
education system that can be an example for other developing country nations and
propel South Africa to a status of the equitable national development.
7. References
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Framework: How Government Grants are Allocated to Public Higher Education
