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By Vision Reporter

Added 17th November 2009 03:00 AM

The increase of university fees and pressuring the Government to contribute more to the running of universities has been a bone of contention for many years. Until recently, attempts by public universities to raise fees have either met resistance from stu

The increase of university fees and pressuring the Government to contribute more to the running of universities has been a bone of contention for many years. Until recently, attempts by public universities to raise fees have either met resistance from stu

Prof. A.B.K. Kasozi’s model calls for a redefinition of the financial relationship among stakeholders who include parents, students, the state and society


The increase of university fees and pressuring the Government to contribute more to the running of universities has been a bone of contention for many years. Until recently, attempts by public universities to raise fees have either met resistance from students or the Government has stepped in to stop the move, yet funding to public universities has been on a downward trend. For instance, the Government has, in the last 10 years, contributed 0.3% of the Gross Domestic Product (GDP) compared to Kenya’s 0.9%. This is due to the many demands on the resource envelope.

However, Prof. A.B.K. Kasozi in his book, Financing of Public Universities: An obstacle to Serving the Public Good, suggests a diversified funding model that could bring down university fees in the context of institutional autonomy and accountability without burdening parents and the Government.

Kasozi suggests a shift from the current state-driven management style where universities are treated as part of the Government, to a diversified model. This model combines public funding, a loan scheme, an educational insurance fund, an educational lottery, philanthropic organisations, income generating activities, endowments, parents and the private sector.

The model calls for a redefinition of the financial relationships, governance and management of the university and its stakeholders which includes the state, parents, society and students.

The book identifies the major crisis of universities as insufficient funding in an environment of constant interference by external forces and occasional lack of accountability.

Kasozi says the mismatch of student numbers and facilities which has lowered education quality is the major manifestation of the crisis.

Under the new model, the universities would be given greater institutional and financial autonomy. The state would steer universities towards policy goals through a combination of incentives and accountability mechanisms.

The legal framework
Under this model, public universities should negotiate a new relationship with the state through a charter or other forms of agreement that are consistent with the public missions of those universities and the law.

The new relationship should provide for more institutional autonomy in return for higher levels of accountability on their financial and academic processes.

It would also call for an overhaul of the current legislations that treat universities as “government institutions” or departments.

The Government should then permit the development of a diversified funding model that would increase the number of sources of, and the amount of funds given to public universities. (See graphic) Further, the state should enable the development of intermediary bodies that would hold and distribute funds to public universities.

Their autonomous nature would protect funds from unnecessary government regulations while preventing universities from using funds for other purposes.

The intermediary bodies would assess the needs of institutions and collect and distribute resources to universities.

Sources of funding
The state
The Government would still contribute to public universities for development, recurrent, research and training funding, based on realistic unit costs, not on arbitrary figures.

State contributions would not go directly to institutions, but through the University Grants Committee, the National Council for Higher Education and the Loans Board or the National Research Foundation, on conditions agreed on by all parties.

Uganda could also raise its contribution to public universities from 0.3% to 1% to match regional levels. In Ghana, an education tax of 2.5% has been included in the Value Added Tax to finance public universities.

The Ghanaian tax body remits the said money to the Education Trust Fund, which distributes it to various institutions. This tax has upgraded Ghanaian universities to a world-class level. We could adopt a similar model.

Education insurance fund
Since the state cannot satisfy the financial needs of public universities, Kasozi suggests an education insurance fund. Here, parents may buy insurance for their children, say starting at the age of five years through an education insurance body. But the insurance should be used only for fees at tertiary institutions from the age of 18 to 25 and remitted to the institutions to which the child is admitted.

Like the motor third party, money used to purchase education insurance should not be refundable if the child is not admitted to a tertiary institution, drops out or dies before using it.

The National Education Lottery
The state or its agencies can organise a national education lottery for universities and colleges at regular intervals. This fund should be remitted to the University Grants Committee or a national council responsible for higher education for distribution to universities.

Philanthropic organisations
Charity organisations and individuals could be encouraged to pay to specific institutions or through the University Grants Committee.

Income generating activities
The various income-generating activities that many universities are already using would continue. These include private sponsorship, consultancies, hire of halls and hostels. Each university would organise various income-generating activities and would not be required to remit the money collected to the Government. Currently, monies generated by public universities are taken as part of government subvention.

Public universities should be encouraged to start endowments. These are the total value of an institution’s investments. In the US and Britain, some universities have endowments running into billions of dollars. For instance, Harvard University endowment stands at $26b (sh49 trillion) which is seven times Uganda’s 2009/10 national expenditure budget.

Profits from endowments are usually re-invested in stocks, treasury bills or real estate can be used to offer scholarships or finance projects. Some private universities, like Islamic University in Uganda and Uganda Martyrs University, Nkozi already have endowments. Public universities need to follow suit.

Households should also continue to contribute to higher education through fees, tuition and welfare components of education based on realistic unit costs. Those who cannot afford, but are qualified can, and should, access education by taking up a loan from a student loans board. This model envisages a strong loan scheme guaranteed by the state.

Kasozi’s suggestions must be given serious thought by the policy makers and all those who hold education dear.

To comment on this story write to Education Editor, P. O. Box 9815, Kampala, or


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