Public discussion about higher education funding in South Africa has been beset by numerous fictions and misunderstandings since the Fees Must Fall movement emerged in 2015. These have been compounded by the political opportunism of President Jacob Zuma and his advisors.
In mid-December 2017, with relatively little consultation or planning, Zuma announced that in 2018 free higher education would be provided to all new first year students from families that earn less than R350,000 per year.
Having participated in the 20-year review of South African higher education in 2013, advised parliamentarians on different funding proposals in 2015, and engaged with a report by the commission Zuma set up to examine fee structures, it’s become apparent to me that it is critical to debunk a number of prevalent myths around higher education funding.
The current public “debates” contain many myths or misconceptions about what free tertiary education would mean, ranging from the implications of free higher education proposals for poverty and inequality to the feasibility of funding such proposals. Unless these myths are unmasked the free higher education debate will remain misguided and likely lead to very different, negative outcomes.
In many respects, Zuma’s free higher education proposal is the worst kind of populism. It’s been sold as a radically progressive policy that can be achieved with no negative consequences. But it will actually do very little for the neediest South Africans. And it could have negative consequences for the stability and progressiveness of public expenditure.
Myth 1: Spending on higher education is about helping the poor
When the Fees Must Fall movement emerged, it insisted its fundamental demands were based on concern for poor South Africans. The movement argued that this group was effectively excluded from higher education or disadvantaged in their studies because they could not afford the fees and other costs of studying.
The idea that the movement for free higher education is based on a concern for poor youth is clearly absurd when you consider that only 5% of South Africans aged between 15 and 34 are students in universities, while 34% are unemployed.
A recent, comprehensive evaluation by South African and international academic economists for the World Bank, examined the effect of government spending and taxation on inequality. Using data on who pays taxes and who benefits from different kinds of public spending, it found that higher education was the least progressive of all social expenditure. It did the least to reduce inequality, since higher education benefits only a very small proportion of the population and those who do benefit tend to come from wealthier households than the vast majority of South Africans.
Myth 2: There are no consequences for increasing taxes or increasing borrowing
Even if higher education is not the most progressive way to use public money, some supporters of free higher education have argued that it could be more progressive than existing studies suggest – provided the money is raised from wealthier South Africans.
Strictly speaking, this is true. The problem is that supporters of Fees Must Fall have written about possible ways of raising revenue as if the money is effectively free. Proposals such as “double the skills levy on companies” or “increase income taxes” are empty; they fail to address the negative consequences of tax increases.
A higher skills levy, paid by firms to fund national training initiatives, means lower profits for firms and potentially less investment. Higher income taxes could lead to greater tax avoidance measures, shifts in how employers remunerate employees, or a reduction in people’s working hours. All these could lead to revenue decreasing. Such dynamics need to at least be taken into account when tabling such proposals. But this has not happened.
The result could be a reliance on taxes, like VAT, that are harder to avoid because they are paid by the vast majority of South Africans. There’s a perverse consequence to all this: “free higher education” could actually increase inequality.
This myth-making has recently been compounded by Zuma’s proposal and its advocacy by one of his advisors, Morris Masutha.
Myth 3: Free higher education will reduce youth unemployment and save on future social spending
Masutha claims that free higher education will “fund itself”, primarily by reducing future social security spending on social grants and government-built houses. He insists that abolishing fees will lead to higher economic growth.
Given the tiny proportion of poor youth who can access higher education through their basic education results, the claim about social expenditure is clearly false.
There is a positive relationship between higher education and economic growth. But the current proposal could only “pay for itself” if it produced dramatically more graduates and so increased their economic contribution. There is no reason to believe an effect of that scale is likely and no modelling has been provided to support such claims.
Myth 4: Zuma’s December 2017 proposal is the best way to help poor and needy students
Zuma’s proposal contains two extremely dishonest components: the definition of “poor and working class” students and the limiting of the policy in 2018 to new first year students.
It effectively proposes that in 2018 a first year student from a family earning R340,000 per year will get full government support. But a second year student from a family earning R130,000 will get no support. And a student from the R340,000/year family will get the same support as a student from a R20,000/year family.
This clearly doesn’t prioritise poor students.
A rough costing by the Department of Higher Education and Training in 2015 suggested that the threshold could be raised to R217,000 per year for all students. This would benefit more needy students and, at an estimated cost of R12.5 billion, been far more feasible than what Zuma has proposed.
Myth 5: Zuma’s proposal is feasible because it “only” costs R12 billion – R15 billion
Current estimates put the cost of Zuma’s proposal in 2018 at between R12 billion and R15 billion. Some commentators have suggested this cost will remain static in future. That is almost certainly false.
It would only be true if such funding was either not extended to students entering universities in 2019 or was taken away from the 2018 cohort. Neither scenario makes any sense. Instead, funding is likely to be extended to second years in 2019 and third years in 2020. That will likely lead to an annual cost of R40 billion or more.
An increase of R12 to R15 billion may be affordable. But a R40billion increase is an entirely different proposition.
Thousands of new students are being registered at universities right now. The 2018 Budget is set to be tabled next month with public finances under extreme pressure. Given this reality, it’s critical that all the myths surrounding “free” higher education are laid to rest.
Only then can difficult decisions be taken in the best interests of all South Africans. – Written by Seán Mfundza Muller, Senior Lecturer in Economics and Research Associate at the Public and Environmental Economics Research Centre (PEERC), University of Johannesburg
This article was originally published on The Conversation.
Roadmap For African Startups
Francois Bonnici, Head of the Schwab Foundation for Social Entrepreneurship, explains how African impact entrepreneurs will continue to rise.
Does impact investment favor expats over African entrepreneurs? If so, how can it be fixed?
There is a growing recognition all over the world that investment is not a fully objective process, and is biased by the homogeneity of investors, networks and distant locations.
A Village Capital Report cited that 90% of investment in digital financial services and financial inclusion in East Africa in 2015-2016 went to a small group of expatriate-founded businesses, with 80% of disclosed funds emanating from foreign investors.
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In a similar trend recognized in the US over the last decade, reports that only 3% of startup capital went to minority and women entrepreneurs has triggered the rise of new funds focused on gender and minority-lensed investing.
There has been an explosion of African startups all over the continent, and investors are missing out by looking for the same business models that work in Silicon Valley being run by people who can speak and act like them.
In South Africa, empowerment funds and alternative debt fund structures are dedicated to investing in African businesses, but local capital in other African countries may not also be labelled or considered impact investing, but they do still invest in job creation and provision of vital services.
There is still, however, a several billion-dollar financing gap of risk capital in particular, which local capital needs to play a significant part in filling. And of course, African impact entrepreneurs will continue to rise and engage investors convincingly of the growing and unique opportunities on the continent.
What are the most exciting areas for impact investing and social entrepreneurship today?
After several decades of emergence, the most exciting areas are the explosion of new products, vehicles and structures along with the mainstreaming of impact investment into traditional entities like banks, asset managers and pension funds who are using the impact lens and, more importantly, starting to measure the impact.
At the same time, we’re seeing an emergence of partnership models, policies and an ecosystem of support for the work of social entrepreneurs, who’ve been operating with insufficient capital and blockages in regulation for decades.
The 2019 OECD report on Social Impact Investment mapped the presence of 590 social impact investment policies in 45 countries over the last decade, but also raises the concern of the risk of ‘impact washing’ without clear definitions, data and impact measurement practices.
In Africa, we are also seeing National Advisory Boards for Impact Investing emerge in South Africa and social economy policies white papers being developed; all good news for social entrepreneurs.
What role does technology play in enabling impact investing and social entrepreneurship?
The role of technologies from the mobile phone to cloud services, blockchain, and artificial intelligence is vast in their application to enhancing social impact, improving the efficiency, transparency and trust as we leapfrog old infrastructures and create digital systems that people in underserved communities can now access and control.
From Sproxil (addressing pirated medicines and goods), to Zipline (drones delivering life-saving donor blood to remote areas of Rwanda) to Silulo Ulutho Technologies (digitally empowering women and youth), exciting new ways of addressing inclusion, education and health are possible, and applications are being used in many other areas such as land rights, financial literacy etc.
While we have seen a great mobile penetration, much of Africa still suffers from high data costs, and insufficient investment in education and capacity to lead in areas of the fourth industrial revolution, with the risk that these technologies could negatively impact communities and further drive inequality.
Businesses At The Heart Of A Greener Future
With every day that passes by it becomes more apparent that the Earth is deteriorating and time is running out to save it. Scientists have estimated that we have less than a decade to save the planet before it is irreversibly damaged, mainly due to climate change.
Businesses claim the largest percentage of global emissions (at approximately 70% since 1988, according to The Guardian) which is an alarming statistic, especially in a time when the planet’s well-being is being compromised.
Many large business corporations are hastily coming on board with operating sustainably by transforming their practices and placing business ethics at the forefront of their priorities.
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Last week, a round table discussion was held at the Fairlawns Boutique Hotel, Sandton hosted by Environmental Resources Management (ERM) – the world’s largest sustainability consulting firm. Their aim was to discuss how imperative it is for African businesses to get on board with sustainability.
“We have been talking about how to be sustainable for a long time but now it is time for us to do sustainability,” says Thapelo Letete, Technical Director of ERM.
An engaging and thought-provoking panel discussion ensued with representatives from ERM and mining companies, Anglo American and Gold Fields. They emphasized the importance of sustainability being recognized by investors, especially in mining and oil companies that rely solely on Earth’s natural resources.
Civil society has a colossal role to play in ensuring the sustainability of businesses. Due to the law of supply and demand in production, consumers are being urged to be mindful of their buying habits and to make sustainable decisions. These are as simple as minimizing the utilization of plastic straws by replacing them with metal or paper straws and reusable shopping bags and by recycling selected items.
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“Research suggests that socially and environmentally responsible practices have the potential to garner more positive consumer perceptions of (businesses), as well as increases in profitability,” according to an entry in Sage Journals published in May.
The advancement of science, artificial intelligence and the rapid growth of the technological industry make it an undeniable fact that the Fourth Industrial Revolution is underway. Many businesses across the globe seem to be well prepared for this change. However, businesses in Africa seem to be vulnerable.
“It is difficult to say that all businesses in Africa are prepared for it. It is not a country specific thing but it does vary across corporations. There will be businesses that are well prepared and businesses that are not so well prepared,” says Keryn James, CEO of ERM.
A large part of sustainability also relies on empowerment and equality. Sub-Saharan Africa has the highest number of female-owned businesses who contribute a large amount of money towards their respective countries’ GDPs. However, most of these businesses struggle with the issue of scaling.
“Women sometimes underestimate their ability and they don’t necessarily have the confidence that they should have about the value that their businesses present. Women often take less risks than men,” says James.
“The issue of scaling is one that we see globally. One of the issues are access to funding to support in the investment and growth of their businesses.”
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Going forward, the availability of mentorship programmes and skills development opportunities for women, especially black women in business should be encouraged.
According to a study done by the UN Women’s organization, an average of 3 out of 7 women score higher in performance when they are placed in senior managerial positions. Additionally, if more women work, the more countries can exponentially maximise their economic growth.
Women will be empowered when given the correct skills and opportunities to be able to run their own businesses independently which would ultimately lead to the scaling of female-owned businesses in Africa and sustainable development.
The Nedbank Capital Sustainable Business Awards aim to recognize the efforts of businesses that operate sustainably and to encourage other corporations who intend to adopt more sustainable strategies into their practices. Initiatives such as these prove that business value also depends on how sustainable they are.
It is clear that the prioritization of sustainability and accountability in businesses is the only way forward in the midst of this global crisis. With a combination of will and the rigorous work that African businesses have put into sustainability initiatives and strategies, it is easier to be optimistic about our planet’s wellbeing.
Ex-Google Staffer Says After Split With Chief Legal Officer David Drummond: ‘Hell Does Not Begin To Capture My Life’
Former Google employee Jennifer Blakely has written a scathing blog post with allegations about how her affair with chief legal officer David Drummond unfolded.
A former member of Google’s legal team who says she had a child with the company’s chief legal officer, David Drummond, has written a scathing blog post about the way that their relationship unfolded within the search engine giant, including that he issued “terrifying threats” to take custody of their child after initially refusing to pay child support.
In a Medium post, Jennifer Blakely says that she was inspired to detail her experience after an explosive New York Times story last fall put a spotlight on how the company shielded top executives from harassment claims and sparked massive employee protests.
“Looking back, I see how standards that I was willing to indulge early on became institutionalized behavior as Google’s world prominence grew and its executives grew more powerful,” Blakely writes.
“Women that I worked with at Google who have spoken to me since the New York Times article have told me how offended they were by the blatant womanizing and philandering that became common practice among some (but certainly not all) executives, starting at the very top.”
While her relationship with the married Drummond was included in the Times story and first reported byThe Information in November 2017, this is the first time Blakely has written about the experience herself.
Drummond is one of several current and former Google executives who has reportedly had relationships with employees or extramarital affairs, including Eric Schmidt, Sergey Brin, and Andy Rubin.
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Blakely alleges that after their relationship ended, Drummond had another relationship with a subordinate, which is against Google’s workplace policy. He is still employed by Google and made more than $47 million last year.
Blakely says that she started working in Google’s legal department under Drummond in 2001 and that after he told her that he was estranged from his wife, they began a relationship in 2004. She says the two had a child together in 2007 and that Google’s human resources department then told her that one of them had to leave the department.
She moved to sales, an area where she had no experience, and subsequently struggled with her work. Blakely alleges that after she ultimately left the company at Drummond’s urging in 2008, but that while they were living together in Palo Alto, he broke off their relationship via text message.
“‘Hell’ does not begin to capture my life since that day,” she writes. “I’ve spent the last 11 years taking on one of the most powerful, ruthless lawyers in the world. From that fateful night forward, David did things exclusively on his terms.”
She alleges that Drummond initially refused to see their son or pay child support, and then fought against her in a custody battle. While she says they ultimately reached a settlement and he began paying child support, she writes that “months or years” would go by when he wouldn’t see their son. In 2014, Drummond allegedly showed her an article about Eric Schmidt’s reported history of extramarital affairs during an argument, implying that the executive’s position granted him impunity.
“His ‘personal life’ (which apparently didn’t include his son) was off limits and since I was no longer his ‘personal life’ it was time for me to shut up, fall in line and stop bothering him with the nuisances or demands of raising a child,” Blakely writes.
Blakely’s story is the latest in a string of public posts from former Google employees highlighting issues with the company’s culture and policies (or their lack of enforcement).
One of the women who helped organize last fall’s protests, Claire Stapelton, recently wrote about her experience with retaliation, another employee detailed the disappointing way the company’s human resources department dealt with her harassment reports, and former senior engineer Liz Fong-Jones posted about “grave concerns” with the company’s decision making in general.
The outspokenness of Google employees exemplifies — and has helped spur — a broader activism in the tech sector that has seen workers speaking out against their employer’s internal policies and business decisions.
Blakely’s post also taps into the larger #MeToo movement which has drawn attention to sexual harassment and abuse in the workplace across industries.
“Until truth is willing to speak to power and is heard, there’s not going to be the sea change necessary to bring equality to the workplace,” she writes.
Neither Google nor Drummond immediately responded to a request for comment.
This story is developing.
-Jillian D’Onfro; Forbes
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