Zuma free education promise could strain budget, fan protests

FILE PICTURE: Students of various institutions and organisations during a protest. Picture: Christine Vermooten

If implemented, the free education proposal will add pressure on South Africa’s budget, say economic analysts.

President Jacob Zuma stirred a hornet’s nest with his sudden pronouncement of free higher education for the poor last month, raising fears of chaos at universities now facing a barrage of applications from thousands of hopeful students who have just finished high school.

The government will likely have to foot most of the bill for the exercise, adding pressure on a national budget already straining at the seams and possibly pushing its sovereign credit rating further into junk territory.

Access to tertiary education remains an emotive issue in South Africa since the end of apartheid rule more than two decades ago, with children from mainly black poor households struggling to access limited funding for tuition through programmes like the National Student Financial Aid Financial Aid Scheme.

In the wake of nationwide protests by university students demanding free education over the last couple of years, Zuma last month promised the government would extend fully subsidised free higher education to “poor and working class” students from 2018.

The presidency said the government would increase subsidies to universities from 0.68 percent to one percent of GDP over the next five years, but gave no details on the roll out.

The National Treasury has also been largely mum on the plan, save for a brief statement soon after Zuma’s announcement, when it said it was “reviewing the details of the higher education proposals, as well as possible financing options”.

It said any amendments to existing spending and tax proposals would be announced in the main budget speech to parliament in February.

If implemented, the free education proposal will add pressure on South Africa’s budget, already saddled with a  revenue shortfall of nearly R51 billion rand, economic analysts said.

“It was reckless for the president to announce free education without really showing a financial that is step by step in terms of how it’s going to be funded,” Johannesburg-based independent economist Thabi Leoka told ANA.

“This also comes at a time when we’ve breached the fiscal ceiling that we set out. It is a very tight balancing act for the National Treasury and we have to ask ourselves, is it worth it?”

The governing African National Congress has little room to back out of the undertaking however, with the radical leftist Economic Freedom Fighters (EFF) already urging prospective poor students who might have given university a miss to show up in person at campuses to apply for places.

This is in spite of universities warning that their enrolment plans and targets for 2018 are already in place, and their resources can  only allow them to consider applications lodged online before the end of 2017.

Under the banner Universities South Africa, the institutions said in a statement this week they were concerned that Zuma’s announcement came without an accompanying implementation strategy and roll-out timeline.

Other critics, including the main opposition Democratic Alliance, have condemned the free education promise as  opportunism by Zuma to score points for his beleaguered ruling ANC in the face of an economic downturn blamed on its mismanagement.

“Zuma’s announcement was ostensibly made without consulting National Treasury or the Department of Higher Education and Training. It merely served as a tool of cheap politicking, aimed at scoring points … in an attempt to salvage the legacy of his failed presidency,” DA higher education spokeswoman Belinda Bozzoli said.

The EFF’s call for walk-in registrations was also ill-considered as it contravened universities’ registration procedures and places undue strain on their systems and resources, Bozzoli added.

“Given the precedent for walk-in registration processes to turn violent, these calls place students’ safety at risk,” she said.

Business lobby groups have also expressed concern over the plan, with the Banking Association of South Africa calling it “a way of fooling South Africans by adopting unaffordable populist policies in the name of the poor without the ability or even the political will to deliver”.

The National Union of Metalworkers of South Africa, the biggest single trade union in South Africa with more than 300,000 members, has applauded Zuma’s decree, but warned this week that the government must not divert funding from other social programmes to pay for free education.

“We wish to remind Zuma that genuine free education does not mean shifting state resources from other pressing social needs in order to offer grants to a portion of working class and poor students,” it said.

“The sustainability of free education will come from resources obtained by the state from a combination of massive nationalization as well as by imposing a hefty tax on the rich.”


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