FUNDING OF HIGHER EDUCATION: MODELS FOR INNOVATIVE FUNDING OF HIGHER EDUCATION IN AFRICA – THE CASE IN GHANA M. Duwiejua & E. Newman National Council for Tertiary Education, Ghana 5/3/2015 NCTE, Ghana, at Lome_November_20141

Outline O Background O Our problem O What are we proposing? O Conclusion 5/3/2015 NCTE, Ghana, at Lome_November_20142

Background O Postcolonial period - corps of professionals to replace departing expatriate civil servants and managers. O State participation in higher education promotes access for needy students and other under-represented groups 5/3/2015 NCTE, Ghana, at Lome_November_20143

Constitution provides that: O “higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular, by progressive introduction of free education” O “the State shall provide educational facilities at all levels and in all the Regions of Ghana, and shall, to the greatest extent feasible, make those facilities available to all citizens.” 5/3/2015 NCTE, Ghana, at Lome_November_20144

Government has kept faith but in reality: O expenditure per student decreased from US$6,800 in 1980 to US$1,200 in O By 2004/2005, the average expenditure per student in 33 SSA countries stood at US$981. 5/3/2015 NCTE, Ghana, at Lome_November_20145

O The effect of this gross under-funding largely accounts for the under-performance of tertiary education as tools for development. 5/3/2015 NCTE, Ghana, at Lome_November_20146

Ghana tried to solve the problem with an education tax established 2000: Ghana Education Trust Fund (GETFund) - provides funding to supplement government efforts for the provision of educational infrastructure and facilities within the public sector from the pre-tertiary to the tertiary level. 5/3/2015 NCTE, Ghana, at Lome_November_20147

GETFund is supported with contributions equivalent to: “two and one half percent or such percentage not being less than two and one half percent of the Value Added Tax rate, as Parliament may determine out of the prevailing rate of the Value Added Tax”. 5/3/2015 NCTE, Ghana, at Lome_November_20148

THE PROBLEM 5/3/2015 NCTE, Ghana, at Lome_November_20149

Times have changed since Ghana now has: O 3 Colleges of Agriculture, O 11 Nursing Training Institutions, O 38 Colleges of Education, O 10 Polytechnics and O 10 Public Universities and O 63 Private Tertiary Institutions. 5/3/2015 NCTE, Ghana, at Lome_November_201410

Cost of education keeps rising. Currently, The education sector expenditure from 2009 to date accounts for approximately 30% of government expenditure. 5/3/2015 NCTE, Ghana, at Lome_November_201411

Government remains the sole funder of tertiary education O there is a huge financing gap as reported by Materu (2007) 5/3/2015 NCTE, Ghana, at Lome_November_201412

Another attempt to close the financing gap was the Akosombo accord in which : O Government – 70% O Students/parents – 10% O Industry – 10% O Institutions – 10% 5/3/2015 NCTE, Ghana, at Lome_November_201413

The country still needs additional funding. Over the last five years the Financing gap in higher education has been in the range of: O %, O %, O %, O %, O %). The funding gap of 79% indicated against 2012 is due to excessive demands of institutions to GETFund for infrastructure. This is a symptom of lack of discipline in the budgeting process which is a problem that needs to be addressed under the current circumstances 5/3/2015 NCTE, Ghana, at Lome_November_201414

Ghana needs to generate funding to: i. Provide equitable access to quality and relevant tertiary education in the numbers needed. We want to increase GER from 11% to 25% by 2020 ii. Deepen the institutional base for research in universities and specialised institutions 5/3/2015 NCTE, Ghana, at Lome_November_201415

iii. Strengthen the process of technology development on a much larger scale, as well as technology transfer between research centres and the business and agricultural sectors. 5/3/2015 NCTE, Ghana, at Lome_November_201416

Quality & Relevance should not be compromised: Unemployed Graduates hit the streets of accra – 19 May /3/2015 NCTE, Ghana, at Lome_November_201417

To meet these objectives, we have proposed how to: i. generate resources to fund tertiary education ii. allocate funds taking into account equity, efficiency, transparency and accountability. 5/3/2015 NCTE, Ghana, at Lome_November_201418

The process 5/3/2015 NCTE, Ghana, at Lome_November_201419

FUND GENERATION: Identified sources: O Government O Institutions O Consumers O Private sector 5/3/2015 NCTE, Ghana, at Lome_November_201420

1. Government: i. GETFund – Introduced TETFund ii. In order not to over-burden government, a fixed %age of the education sector allocation is recommended. The AU recommends 1% of GDP. iii. ODL is recommended – to supplement brick and mortar iv. PPP 5/3/2015 NCTE, Ghana, at Lome_November_201421

we need to plan for current enrolment at pre-tertiary At pre-tertiary, plans are in place to keep children in school and improve pass rate. In the medium term tertiary need to prepare to receive not less than 1m students p.a. 5/3/2015 NCTE, Ghana, at Lome_November_201422

2. Funding for Graduate and Undergraduate Programmes 1. Under-Graduate Programmes Strategies to enhance private funding for undergraduate programmes. i. Academic Facility User Fees - should increase according to the rate of inflation annually. ii. Residential Facility User Fees should cover the cost of maintenance of residential facilities. 5/3/2015 NCTE, Ghana, at Lome_November_201423

1. Under-Graduate Programmes iii. The enrolment quota of Ghanaian "fee-paying students" should increase from 5% to 15%. iv. Ghanaian fee-paying students should be charged the direct teaching cost, which is the cost required to run an academic department per student. 5/3/2015 NCTE, Ghana, at Lome_November_201424

1. Under-Graduate Programmes v. Foreign students should pay the full cost of tuition or instruction relating to the programme being pursued. vi. The enrolment quota for foreign students should be raised from 5% to 15%. 5/3/2015 NCTE, Ghana, at Lome_November_201425

Graduate Programmes O Graduate students should pay one and a half times the cost of undergraduate education in the different disciplines. O Foreign students will pay the full cost of postgraduate education. 5/3/2015 NCTE, Ghana, at Lome_November_201426

2. FUND ALLOCATION A diversified fund distribution model is recommended. The formula should ensure equity, accountability, transparency and efficiency in fund distribution. 5/3/2015 NCTE, Ghana, at Lome_November_201427

Recommended components of the formula are: i. Base grants: base grants should be based on full-time (FTE) equivalent students ii. Institutional Factor Grants : Institutional factor grants, are supplementary grants to small institutions or institutions with special need. iii. Performance Funding – this is to encourage compliance with policy objectives. 5/3/2015 NCTE, Ghana, at Lome_November_201428

Performance funding …cont’d Research output will be the basis to allocate research grants O Research publication units; doctoral graduates; and researched master graduates will be the main criteria. 5/3/2015 NCTE, Ghana, at Lome_November_201429

Research Fund O Source of funds O Legal frame 5/3/2015 NCTE, Ghana, at Lome_November_

Conclusion O The new funding arrangement is flexible and could be adapted to meet the changing national development and sector goals. O The recommended funding arrangement presents better and impartial means for allocating public funds to higher education institutions. O The fund allocation is tied to the quantum of work the institutions are expected to perform or have already performed. 5/3/2015 NCTE, Ghana, at Lome_November_201431

Conclusion O Finally, the new funding framework presents a transparent approach for allocating public funds to higher education institutions O THANK YOU 5/3/2015 NCTE, Ghana, at Lome_November_201432