Financing Public Higher Education in Tanzania: Towards a ...
Financing Public Higher Education in Tanzania: Towards a New Model and Implications for Development and Retention of the Next Generation of Academics
By
Johnson M. Ishengoma (PhD)
University of Dar es Salaam
Faculty of Education
Department of Educational Planning and Administration
P.O. Box 35048
Dar es Salaam, Tanzania
E-mail: ishe2004@jishengoma@
Paper presented at the University Leaders’ Forum: Next Generation of Academics, Accra, Ghana, November 22nd -25th 2008
Financing Public Higher Education in Tanzania: Towards a New Model and Implications for the Development and Retention of Next Generation of Academics[1]
Johnson M Ishengoma
University of Dar es Salaam
1.0. Introduction
The current system of financing (public) higher education in Tanzania is flawed and lopsided to such an extent that it has generated controversies, partisan debates among different stakeholders and crises in higher education sector as manifested by perennial students’ strikes in public higher education institutions and budget deficits. The Tanzania government-despite of the existence of cost sharing in higher education policy for the past 15 years and its limited financial ability to finance public higher education because of many competing needs- still shoulders the burden of financing both public and private higher education through disbursing interest free loans and grants through the Higher Education Students’ Loans Board (HESLB) and the Tanzania Education Authority (TEA). The current system of financing public higher education is in dire need of being revisited to avoid further looming crises in the higher education sector.
This paper attempts to provide an alternative sustainable model for financing public higher education in Tanzania in the context of development and retention of new generation of academics. The paper focuses on financing public universities and university colleges. The major thesis of this paper is that while the Government has the responsibility of financing higher education because it is also the beneficiary (among many beneficiaries) of higher education products or outputs, its financial ability is limited because of many competing and compelling needs, compared to higher education. This situation calls for a new approach to financing higher education in Tanzania to make it a shared responsibility instead of the current unsustainable approach.
The paper is organized into four major sections: section one is an introduction; section two briefly introduces some basic facts about higher education in Tanzania; section three discusses the current system or mode of financing higher education in Tanzania and problems associated with this current system; and section four introduces an alternative approach or model to financing public higher education in Tanzania including establishing a Higher Education Banks (HEDUBANK). There are no conclusions or recommendations in this paper.
2.0. Basic Facts about Higher Education in Tanzania
Tanzania with the current total population of around 37.6 million people has ( as of November 2008) a total of total of 44 higher education institutions distributed as follows: twelve (12) public universities and university colleges/institutes; 21 private universities and university colleges; and eleven (14) non-university higher education institutions (including technical colleges, but excluding non-university institutions in Zanzibar), most of these currently offering degrees in professional fields. In 2006/07 total student enrollment in both private and public universities and university colleges and institutes was 49,967, with public universities enrolling a total of 39,218 students or 78.4% of the total students. Private universities, despite of the fact that they outnumber public universities, enrolled a total of 10, 749 (21.5%) of the total student population. Table 1 below shows a list of Tanzania Commission for Universities (TCU) recognized universities and university colleges in Tanzania as of April 2008, including their geographical location which has an implication for their financing.
Table 1: TCU-Recognized Public and Private University Colleges and their Geographical Location, 2008
|Public Universities/University Colleges and Institutes |
|Institution |Location |
|University of Dar es Salaam |Dar es Salaam |
|Ardhi University |Dar es Salaam |
|Muhimbili University of Health and Allied Sciences |Dar es Salaam |
|Open University of Tanzania |Dar es Salaam |
|Sokoine University of Agriculture |Morogoro |
|Mzumbe University |Morogoro |
|University of Dodoma |Dodoma |
|State University of Zanzibar |Zanzibar |
|Dar es Salaam University College of Education |Dar es Salaam |
|Moshi University of Cooperative and Business Studies |Kilimanjaro |
|Mkwawa University College of Education |Iringa |
|Institute of Journalism and Mass Communication |Dar es Salaam |
|Private Universities and University Colleges |
|Hubert Kairuki Memorial University |Dar es Salaam |
|International Medical and Technological University |Dar es Salaam |
|St. Augustine University of Tanzania |Mwanza |
|Mount Meru University |Arusha |
|University of Arusha |Arusha |
|Muslim University of Morogoro |Morogoro |
|Zanzibar University |Zanzibar |
|St. John’s University of Tanzania |Dodoma |
|Teofilo Kisanji University |Mbeya |
|Aga Khan University Tanzania Institute of Higher Education |Dar es Salaam |
|Tumaini University Dar es Salaam College |Dar es Salaam |
|Iringa University College |Iringa |
|Makumira University College |Arusha |
|Kilimanjaro Christian Medical College |Kilimanjaro |
|Stefano Moshi Memorial University College |Kilimanjaro |
|Mwenge University College of Education |Kilimanjaro |
|Weil University College of Health Sciences |Mwanza |
|Sebastian Kolowa University College |Tanga |
|Ruaha University College |Iringa |
|University College of Education Zanzibar |Zanzibar |
Source: Adapted from Tanzania Commission for Universities (2008) Guide to Higher Education in Tanzania, 2008 Fourth Edition. Dar es Salaam: TCU pp. iii-iv.
Despite the liberalization of the higher education sector, participation and admission rates and general gross enrollment ratio in higher education in Tanzania are still low compared to neighboring and other SADC countries implying the low capacity of the higher education sector to enroll more students because of limited funding. Table 2 shows available data on gross enrollment ratios in higher education in Tanzania and in some other selected African countries for the year 2004.
Table 2: Gross Enrollment Ratios in Higher Education for Selected Sub Saharan African Countries, 2004 (%)
|Country |Gross Enrollment Ratio |
|Tanzania |1.0 |
|Kenya |3.0 |
|Uganda |3.0 |
|Burundi |2.0 |
|Rwanda |3.0 |
|Mozambique |1.0 |
|Botswana |6.0 |
|Angola |1.0 |
|Lesotho |3.0 |
|Zambia |2.0 |
|Swaziland |5.0 |
|Namibia |6.0 |
|South Africa |15.0 |
|Zimbabwe |4.0 |
Source: GUNI (2007) Higher Education in the World 2007 Table IV 1.5 pp. 383-384
3.0. Current Higher Education Funding Formula/Model and Its Limitations
Financing of public higher education in Tanzania in the context of cost sharing policy is (ideally) supposed to be a shared responsibility between different stakeholders and beneficiaries of higher education products. But practically this is not happening. The Government-despite its declining financial ability to finance public higher education- is not only financing public higher education institutions through subventions to cover recurrent and capital development budgets; but is also financing tuition-dependent private higher education institutions (the majority of these have disguised for profit motive manifested by the high tuition fee they charge- through providing interest-free loans to cover tuition fee and related cost to students enrolled in private universities and those enrolled in privately sponsored programs in public universities through the Higher Education Students’ Loans Board (HESLB) and the Tanzania Education Authority leading to inequities in higher education financing. Despite of the existence of a plethora of beneficiaries of higher education products, their contribution to higher education remains insignificant mainly limited to welfare costs.
Table 3 shows trends in Government financing by source from 2000/01-2005/06. Data presented in Table 3 shows that while domestic revenue increased by 55% from 2000/01-2005/06, during the same period Government finance registered consistent deficits between revenue and expenditure implying the Government’s inability to adequately finance critical sectors including higher education and also inability to control its expenditure. The consistent deficit pattern between government revenue and expenditure also explains why Tanzania continues to depend on donor financing for education, health and infrastructure and why public higher education institutions consistently receive less funds they request from the Government for both recurrent and capital development budgets (See Table 5).
Table 3: Trends in Government Finance by Source, 2000/01-2005/06 (TZS mill).
|Financial Year |2000/01 |2001/02 |2002/03 |2003/04 |2004/05 |2005/06 |
|A. Domestic Revenue |929625 |1042945 |1217517 |1459303 |1773710 |2066752 |
|1. Tax Revenue |827789 |938478 |1105746 |1342798 |1615248 |1895967 |
| Import & Excise Duty |250397 |266322 |293695 |352320 |350532 |419260 |
| Sales Tax (Local & Imports) |0 |0 |0 |0 |0 |0 |
|VAT |301983 |351894 |424338 |548572 |731597 |837912 |
| Imports |182143 |208675 |249854 |315958 |439796 |496361 |
| Domestic |119840 |143219 |174484 |232614 |291801 |341551 |
| Income Tax |194013 |219852 |276050 |366651 |465455 |549074 |
| Other Taxes |81396 |100410 |111663 |123500 |132040 |157555 |
| Refund Accounts |- |- |- |-48245 |-64376 |67834 |
|2. Non-Tax Revenue |101836 |104467 |111771 |116505 |158462 |170785 |
|B. Total Expenditure |1307214 |1462767 |1989538 |2516943 |3248352 |4035114 |
|1. Recurrent |1020961 |1118156 |1488641 |1780115 |2017490 |4035114 |
|2. Development |286253 |344611 |500897 |736828 |1230662 |1385183 |
| Local Funds |35069 |50236 |95662 |133041 |239651 |370038 |
| Foreign Funds |251184 |294375 |405235 |603787 |991211 |1015145 |
|C. Deficit/Surplus (A-B) |-377589 |-419822 |-772021 |-1057640 |-1474642 |-1968362 |
Source: Adapted from the United Republic of Tanzania (2006) The Economic Survey 2005. Dar es Salaam: Ministry of Planning, Economy and Empowerment p. 74
Despite the declining ability to finance public higher education, the Government remains a major source of funding; followed by external donors. Table 4 shows sources and amount of funding recurrent expenditure for the University of Dar es Salaam Main Campus, the former University College of Lands and Architectural Studies (UCLAS) and Sokoine University of Agriculture (SUA) from 2001/2002-2005/06.
Table 4: Sources and Amount of Funding for Recurrent Expenditure for UDSM, UCLAS, and SUA, 2001/02-2005/06 (‘000 TZS).
|Institution |Year |Sources of Funding |Total |% Contribution by Source |
|UDSM | |Govt. |EXD |INC |
|Main Campus |2000/01 |26,971,097,194 |22,295,585,316 |82.6 |
| |2001/02 |23,950,500,000 |12,962,933,600 |54.0 |
| |2002/03 |22,703,220,309 |13,112,908,820 |54.7 |
| |2003/04 |29,442,119,596 |16,869,293,885 |57.0 |
| |2004/05 |30,142,200,195 |17,861,103,881 |59.0 |
| |2005/06 |44,524,155,229 |28,416,449,520 |64.0 |
| |2006/07 |76,600,000,000 |28,800,000,000 |38.0 |
|UCLAS |2000/01 |4,211,566,222 |2,587,680,510 |61.4 |
| |2001/02 |4,060,795,959 |2,829,670,520 |69.6 |
| |2002/03 |4,927,370,176 |2,842,827,422 |57.6 |
| |2003/04 |4,002,679,505 |3,078,483,303 |77.0 |
| |2004/05 |4,601,509,400 |3,508,311,103 |76.2 |
| |2005/06 |5,103,194,896 |3,375,885,576 |66.1 |
| |2006/07 |5,209,246,445 |3,503,421,145 |67.0 |
|MUCHS |2000/01 |12,306,194,720 |6,072,368,200 |49.3 |
| |2001/02 |13,862,429,628 |6,072,368,300 |43.8 |
| |2002/03 |10,903,237,118 |6,204,186,800 |56.9 |
| |2003/04 |11,391,441,768 |6,824,605,480 |60.0 |
| |2005/06 |6,345,249,546 |4,448,233,700 |70.1 |
| |2006/07 |14,484,458,344 |7,681,458,144 |53.0 |
Source: Adapted from UDSM (2006 & 2007) Facts and Figures 2005/06, 2006/07 Dar es Salaam: UDSM pp. 164-165; 168-169
Data in Table 5 shows that the Government approved slightly above half or at times less than half of the funds requested by the UDSM for its recurrent expenditure for all six years surveyed consequently forcing the University to streamline its budget to cope with budget deficits. The University is now considering adopting unit cost budgeting as a long term strategy of dealing with perennial budgetary cuts. The above situation of inadequate funding of public universities by the Government due its financial limitations calls for new model or approach to funding higher education in Tanzania. In section 4 below we propose a new approach cum model for funding public higher education.
4.0. Towards a New Model/Approach of Financing Public Higher Education in Tanzania
Although in the Tanzanian context it is almost impossible to propose a viable model or framework for financing higher because of intense and deliberate politicization of financing of higher education and because of the entrenched mindset of “free higher education” among the majority of Tanzanians, unfortunately including the educated, this paper proposes the market model which seem to have been successful in Kenya and Uganda higher education sectors. The market model for higher education financing is proposed in the context of two major trends that have characterized the changes in higher education sector in Tanzania since the 1990’s when the Government liberalized the provision of higher education: these are some limited privatization of public higher education and the emergence of the private higher education sector.
The market model also advocated by Oketch (2003) and Lamptey (1994) stresses the injection of the market principles and market driven approaches into the financing of higher education to make it completely self-financing. While Oketch views marketing model of financing higher education in terms of financial diversification and partial privatization of public universities; Lamptey advocates for the adoption of the contemporary marketing concepts of product, price, place and promotion (the 4 P’s) in higher education.
The market model for financing public higher education in Tanzania is justified when we consider higher education sector to be composed of market segments and therefore it can be marketed using an effective marketing mix through opening up dialogue with potential markets ready to finance higher education because they are beneficiaries and consumers of higher education products.
In the context of Tanzania the market is also justified in the larger context of the market economy which has been adopted since late 1980’s in wider context of improving the efficiency, accountability and quality. This proposed model is guided by three principles: shared costs, equity and human resource development.
While the market model of financing higher education has been criticized and branded as academic capitalism driving universities into entrepreneurial competition (Levidow, 1998); the model if cautiously adapted can turn around the finances of Government and donor dependent public higher education institutions. The model has worked at Makerere and Nairobi universities and there is no reason why it should not work in Tanzania’s public higher education institutions. The components of the proposed model are summarized in Table 6.
Table 6: Proposed Model for Financing Public Higher Education in Tanzania
|Market Segment in Rank Order |Financing Mode |Cost/Budget Item |Level of Financing in % |
| | | |(Annually) |
|1. Higher Education Institutions|Revenue diversification and |1,2, & 4 |1=5% |
| |privatization of services; | |2=5% |
| |contracted research & | |4=100% |
| |consultancy; sale of patents; | | |
| |enrollment of privately | | |
| |sponsored students | | |
|2. Students and their Parents |Cost sharing |3 |100% |
|3. Government |Direct subventions to HEIs; |1, 2 |1=95% |
| |introduction of an education | |2=95% |
| |levy | | |
|4. Private Sector/Potential |Direct donation to responsible |1 |Variable |
|Graduate Employers |institutions, student and | | |
| |professorial chairs | | |
| |sponsorships; sponsorship of | | |
| |contracted research | | |
|5. External Donors |Direct grant to higher education|1 |Variable |
| |institutions, faculty, | | |
| |departments, bureaus etc. | | |
|6. Financial Institutions and |Creation of Higher Education |Variable |Variable |
|Banks |Loans Bank to replace HESLB. | | |
| |Students and their parents can | | |
| |borrow money to pay for tuition | | |
| |and related costs at a market | | |
| |interest rate | | |
|7. Alumni |Direct donations to institutions|1 & 3 |Variable |
| |to establish Endowment & Trust | | |
| |Funds | | |
KEY: 1=Capital Development; 2=Direct Training Costs; 3=Students; Direct Costs; 4=Other Administrative and Personal Emoluments Costs.
4.1. Towards the Establishment of the Higher Education Bank: A New Financing of Higher Education Strategy
One of the critical components of our proposed model is the establishment of the Higher Education Bank (HEDUBANK) by private investors to replace the Higher Education Students Loans which appears to be ineffective and offers interest free loans which are unrealistic in the market economy in which the higher education sector is operating. This proposed Bank can give loans to higher education institutions at an interest rate to be determined. Currently, there is one private commercial bank (Azania) which provided limited education loans to parents.
The idea of an education bank has worked very well in Nigeria. The Nigerian Education Bank (EDUBANK) was established in 1993 after the Nigerian Student Loans Board was resolved due to its gross failure in recovering student loans amounting to NGN 400 million (US$ 3.34) by the time it was dissolved (Ishengoma, 2002: 16). The roles of the Nigerian Education Bank are: (a) to serve as intermediary in Nigeria’s credit market; (b) harness private sector resources for the funding of education; and (c) take over part of the government’s educational funding responsibilities.
The specific functions of the Nigerian Bank are: (a) student lending; (b) lending for publishing books; (c) leasing educational equipment; (d) project financing; (e) funds mobilization; and (f) provision of advisory services for educational purposes (Chuta, 1998: 426). The Bank is fully subscribed to by the Federal Government of Nigeria. The Bank also provided loans to university faculty for sabbatical leave and attendance at conferences abroad and for book publishing.
The proposed model supported by a special higher education bank is definitely an ideal and a viable strategy for financing of higher education in Tanzania to develop and retain the next generation of academics and for stemming both internal and external brain currently adversely impacting capacity building and human resource development in public higher education institutions in Tanzania.
References
Chuta, E.J. (1998) “New Dimensions in Educational Financing: The Nigerian Education Bank,” Higher Education 35, 433-433
Global University Network for Innovation (GUNI) Higher Education in the World, 2007. New York. Palgrave McMillan.
Ishengoma, Johnson M “Tanzania” in Pillay, P (Ed.) Forthcoming. Higher Education Financing for Access and Equity: Case Study of Seven African Countries.
Ishengoma, Johnson M (2002) “Financing of Higher Education in the Federal Republic of Nigeria: Developments and Trends.” State University of New York at Buffalo, Center for Comparative and Global Studies in Education, International Comparative Higher Education Finance and Accessibility Project.
Lamptey, Alice S (1994) “Financing Higher Education in Africa: A Marketing Perspective,” Dakar: UNESCO, BREDA Series No. 5
Levidow, Les (1998) “Marketing Higher Education: Neo-Liberal Strategies and Counter Strategies,” available at
Oketch, Moses O (2003) Market Model for Financing Higher Education in Sub Saharan Africa: Examples from Kenya.” Higher Education 16 (3) 313-332.
Tanzania Commission for Universities (TCU) Guide to Higher Education in Tanzania 2008. Fourth Edition. Dar es Salaam: TCU.
United Republic of Tanzania (URT) (2006a) The Economic Survey 2005. Dar es Salaam: Ministry of Planning, Economy and Empowerment.
____________________________ (2006b) Basic Statistics on Higher Education, Science and Technology. Dar es Salaam: Ministry of Science, Technology and Higher Education.
University of Dar es Salaam (2007) Facts and Figures 2006/2007. Dar es Salaam: UDSM
_______________________(2006) Facts and Figures 2005/2006. Dar es Salaam: UDSM
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[1] This paper draws from a book chapter titled “Tanzania” in Pillay, Pundy (Ed.) Forthcoming. Higher Education Financing for Access and Equity: Case Study of Seven African Countries. Ford Foundation, Sizanang Center for Development and Research and the Center for Higher Education Transformation.
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