Funding Universities

East Africans love Uganda but Uganda has not gone ahead to exploit that by drawing financial advantage from it. Makerere is seen and talked about by many people in East Africa and indeed in many parts of Africa. It is spoken about with fondness as one of Africa’s greatest academic institutions. Unfortunately Makerere too, like Uganda has not gone ahead to exploit that advantage it has as a result of its history and performance. If you are in Kenya and you say you are from Uganda, some of the words they will use in talking to you are like “sebbo” ‘Kabaka” and’ Matooke” and I have noted that they say these words with a lot of interest and as people with potential to visit Uganda if the opportunity was there.

Uganda is increasingly losing opportunity to become an education hub in the region and the main reason is how the Uganda’s higher education sector is funded. There have been many articles about funding high education. This is my modest contribution to that debate.

Worldwide there are different funding models and they are essentially three of them. One is government where government takes responsibility for the infrastructure and the running costs of the education system. Two, is where education is funded purely on a private basis. Three, is where education is funded through something called endowments or donations by others to support the institutions. Of course there may be a combination of these various types but usually there is a dominant feature. Before we discuss funding of higher education in Uganda and most specifically universities, we can take a close look at these funding models

Funding education through a completely private system has been with us from time immemorial. Indeed some of the best schools worldwide are private schools and some of the best universities are private universities. Some of them are religious based others are completely private. I believe Eton in the UK is one such school. To attend such an institution, you must be financially endowed. These are schools for stinking rich people where money is not the issue. Of course these types of institutions are few because the world has more poor people than wealthy ones.

Schools funded by endowments or through philanthropic initiatives, are not very common in the developing countries. The United States is probably the best example where wealthy people give large sums of money to schools and universities to fund their activities. This is not common in the developing countries because there are no such wealthy people. Nonetheless, there are such practices for instance, the Madhavani group in the 50s and 60s used to donate funds to schools for the development of facilities like libraries.

The third model is that of government. Countries that ideologically have socialistic orientation or use the world welfare states have tended to have government to be the major funder of the education system.  In this case, government takes responsibility to fund infrastructure and even running expenses of the institutions. As stated, there could be a variation of these different models depending on the circumstances on the countries involved.

Looking at funding of universities, these models are in practice with variants in different countries.  Globally most successful private universities are in the developed countries.  Universities that are funded by endowments are primary in the U.S and today universities like Stanford, Harvard have billions of dollars donated to them which they use to fund their numerous activities.  Indeed many entrepreneurs donate large sums of money or construct buildings in universities which these universities use for their activities. This kind of funding model is not common in developing countries. As I suggested earlier, one of the challenges, there are no such entrepreneurs in these countries. In Uganda, our leading entrepreneurs including the Madhavani, Mukwano, the late Mulwana, Wavamunno, Alam Abid and a few others. I do not think they have been able to make enough money to be able to donate large sums of money billions of shillings to the cause of education. The word alumni are frequently used in support of this model. Universities are expected to rally their alumni to find money to fund the university operations. Unfortunately, there are very few alumni with a type of resource that can fund infrastructure or operations of universities. The alumni of Makerere University, our biggest and most prestigious university are usually able to give a cheque to a few best students a year. If they have done anything substantial and may have missed what that is.

Uganda has about 30 universities, government universities are about 6, religious founded universities are about 4 of them and the rest funded privately.  Most of these universities are on record going to government to seek assistance and indeed some of them have received generous grants from government. The majority however operate using tuition fees paid by students. Of course this is not a viable method of funding for a university, especially for infrastructure.  The consequences this is that many of private universities are operating in secondary school buildings, private houses, and such infrastructure that doesn’t define a university. I know the National Council for Higher Education has some stringent requirements, unfortunately if it enforces them it will close all the universities including the government ones. 

The model left is that of government funding. In many countries worldwide especially those that are socialist or those that got scared of the word socialist and use the world welfare state, government has been a key funder of university education. Governments have provided the infrastructure and paid salaries of professors, and funded their research. These universities have excelled, there are hubs of knowledge, everybody who teaches there has a PhD and funds for research are readily available. These universities are contributing to generation of knowledge

Many developing countries Kenya, Tanzania, India have followed the model. Funding for their universities is available from government and indeed they have institutions with excellent structures. Unfortunately Uganda is not in this group. It seems nobody cares what is in their institutions. Of course there is an attempt to but it cannot rival what Kenya does. These countries fund infrastructure and basic salaries. They have modeled themselves on socialist and welfare state in the developed and middle income countries. There has been tremendous change and improvement in literacy levels in these countries

We visited Kenya as a group of MUBS Council members to look at a number of things in Kenyan universities. One important point we took out was if you have a strategic plan that has been accepted and involves construction of buildings, government will provide you the money as and when you want it! Looking closely at our various universities, government has committed itself to start new universities and indeed it has committed some funds for capital development. Unfortunately it is never enough to put up infrastructure that is modern and can be bench marked even regionally.

Case study of MUBS

MUBS had a very humble beginning as a department of commerce as Makerere University in the 1980s and then turned into the Faculty of Commerce with only 2,000 students and one degree programme a Bachelor of Commerce. The Faculty then proposed the commencement of privately sponsored students into the university system. These students used the existing capacity at that time. The Faculty had space for the 800 but had over 200students who studied up to 1pm every day. The space was ingeniously used to be more than the quadruple the number of students over a 5 year period. These students were simply contributing to funding of education by paying tuition fees that went to meet variable costs. As the number increased without funding from government, the small component of the money was allocated to capital expenditure.  In a short while MUBS planned to construct a building which it would fund over a 5 year building form saving on the small surplus that it produced from the fees paid by private students. By moving into a new campus in Nakawa, MUBS financial liabilities increased. The bigger campus needed many facilities to maintain and worse still operating in very old premises that had very high maintenance costs. Because Nakawa had bigger capacity, MUBS increased its intake but it also increased expenditure on maintenance of existing infrastructure.

At some stage MUBS proposed to government to borrow commercially shs. 45 billions  for new infrastructure this would increase capacity and modernize it. MUBS would then pay this money for a period of 6-8 year period. Unfortunately this has never come to pass. Government hasn’t given it the authority to borrow. In these circumstances, MUBS would not on its own fund its infrastructure from recurrent revenues unless if there were some arrangements in some kind of loans that would be paid in future revenue.

MUBS gets some funding from government and may have the capacity to fund infrastructure from borrowed funds but definitely while it is not a university. it is usually grouped among universities in the country. However among this group of institutions it is least funded. Unlike other institutions that have donor funding, MUBS has not had much donor funding that has been geared towards infrastructure. After years of begging, MUBS was availed funds to build a library.!  Of course MUBS had to make some contribution from the funds it generates internally.

Business courses are most popular in this country and indeed worldwide. MUBS has been able to generate some substantial funds from private students but this is not adequate. If MUBS funding model is not entirely viable, this funding model is not ideal. MUBS would be viable with funding from government, infrastructure, research and salaries.

If I were to make some recommendations on funding education in Uganda, I would say UPE and USE are the right policies to be pursued, this should be studied and improved to increase its efficiency and lowering costs. There after government should fund science at all levels in the country with some emphasis on funding of the vocational institutions. Government should fund institutions of higher learning and primarily science based but should take specific interest in infrastructure. If government commits itself to an institution which should be justified through various processes not simply a political decision it should ensure that the institution has got adequate and high quality facilities. If government had done this, it is possible that Uganda would be a hub in higher education. it is not surprising the private schools have become the key players in primary and secondary level education and it is possible that even in higher education those who get the formula right will dominate the sector throwing out the government owned institutions. No individual or alumni in Uganda can make substantial contribution to education. It will be the role of government to fund the education for the foreseeable future.