Stats SA has released the financial statements of universities in South Africa for 2015, showing that half of the country’s major institutes are in the red.
South Africa’s Higher Education Institutes (HEIs) showed a surplus of R820 million in net change in the stock of cash for the 2015 financial year.
Cash receipts from operating activities amounted to R63 billion and cash payments for operating activities amounted to R54 billion, resulting in a net cash inflow from operating activities of R9 billion over the reporting period.
However, while the group reporting shows a positive cash position for higher learning as a whole, the picture is vastly different when looking at individual universities.
Excluding private universities, South Africa has 26 HEIs – 20 universities and six universities of technology – half of which showed a net cash deficit in 2015.
While the University of Pretoria, UCT and Unisa show a stronger financial position, Rhodes University, UKZN, the University of Johannesburg, and Wits University – whose students are seen as leading the charge of Fees Must Fall – show that they can ill-afford to incur any more losses.
The net change in stock refers to the university’s cash position after balancing all cash flows from operating activities and financing activities.
Tuition fees, which have been at the centre of the Fees Must Fall campaign – where students have been calling for free education for all – account for 34% of all money universities get, amounting to R21.5 billion in 2015.
A further R26.8 billion comes from the state in the form of grants – while a further R4 billion is gained through donations.
Tuition fees fall about R10 billion short of covering universities’ staff costs – which amount to R31.4 billion. Were these funds to fall away completely, universities would need to find that amount elsewhere.
Stellenbosch University alone benefited from R1.13 billion in donations in 2015, which helped it stay afloat in the financial year.
The financial position of the country’s top institutions are at risk of getting worse with students demanding free education.
According to Stats SA, the annual increase in tuition fees over the last decade has been 12.7% per annum – with 2015’s average increase at 9.8%, 2016’s increase at 0%, and 2017’s increase at no more than 8%.