16 universities in South Africa in financial distress

The Democratic Alliance has established that as many as 16 out of the 26 universities in South Africa (62%), will face financial distress in the 2017/18 year.

It follows a reply to a DA parliamentary question which highlights the extent of the financial crisis faced by universities across the country.

Specifically, the DA noted that the aggregate deficit across these 16 universities is projected to be R3.97 billion for the same financial year.

The universities in question, ranked in order of deficit size starting with the largest, are:

  • Walter Sisulu University
  • University of Limpopo
  • University of KwaZulu-Natal
  • University of the Witwatersrand
  • Tshwane University of Technology
  • Rhodes University
  • University of Fort Hare
  • Cape Peninsula University of Technology
  • Central University of Technology
  • Vaal University of Technology
  • University of Cape Town
  • University of the Western Cape
  • Mangosuthu University of Technology
  • North West University
  • University of Johannesburg
  • University of Venda.

The extent of the financial distress is based on modelling conducted by the Council on Higher Education (CHE). “This is most likely attributable to the protracted underfunding of our university sector for more than two decades,” said Prof Belinda Bozzoli, DA shadow minister of Higher Education and Training.

The DA said it identified that R2.73 billion in the 2016/17 budget could have been transferred to assist poor students as well as give universities enough subsidies to pay the bills.

“The ANC rejected these proposals and directly contributed to the dire financial position universities are now facing,” Bozzoli said.

Parliament’s portfolio committee on higher education has heard that 19 universities could become dysfunctional in 2018 if a 0% fee increase is carried over for a second year.

South African president, Jacob Zuma, announced in October last year that tuition fees would not be increased for 2016.

The Sunday Times reported that Zuma has also ordered finance minister Pravin Gordhan and higher education and training minister Blade Nzimande to implement students’ demands for a zero-percent increase in university fees for 2017.

Nzimande however, told Parliament on Wednesday that a second consecutive fee increase could be devastating.

The Council for Higher Education (CHE) indicated that if the zero-percent fee increases continued, about 19 universities would become dysfunctional in 2018, Nzimande revealed.

If the increase was to be based on the Consumer Price Index, currently at 6%, about 10 universities would be rendered dysfunctional, he said.

“As yet, no decision has been taken on university fee increases and thus there is no need to threaten closing institutions of higher learning,” committee chairperson Connie September said.

Bozzoli said that while ‘a terrified ANC’ does nothing but form a larger of pronouncements without solutions around Luthuli House, the DA has been looking for a way forward, making submissions to the Commission for Higher Education.

“The DA will continue seeking a long term solution to the problem of affordable quality higher education. Sadly, the longer the ANC waits to take responsibility for this catastrophe, the more difficult the solution will be.”

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16 universities in South Africa in financial distress