Funding Tertiary Education

21st August 2016

There have been renewed threats of closing down our Universities in support of the #FeesMustFall campaign. With this in mind, Peter Bruce's said the following in the Sunday Times today (21st August 2016): " What I do know is that the JSE All Share indes rose 1.3% on Thursday. That is an increase in wealth , in a day of almost R100 billion, a fraction of which, if it were somehow pooled, would solve the fees problem and a host of others. But business is the devil, isn't it? Why bother talking to capitalists? What do they know?"

It turns out that Peter's figures are rather accurate. At a market capitalization of R7317 billion, a 1.3% increase amounts to R95.121 billion which is indeed "almost R100 billion"

In the National Treasury's 2016 Budget Review we were told (on page 77) that "The number of students enrolled in higher education institutions is projected to increase from 1 million in 2015/16 to 1.1 million in 2018/19, and the number of postgraduates and doctoral graduates from 48 300 and 2 060 to 56 600 and 2 500, respectively, over the same period." At a cost of R50k per undergraduate student per annum, 1.1 million students translates to 55 billion rand: well within the R95 billion with which the JSE capitalization increased on Thursday. This makes the R16.3 billion for short-term funding for higher education look small in comparison.

This figure for the The Market capitalisation of the JSE is R7317 billion as of the 29 July 2016 according to http://www.ftse.com/Analytics/FactSheets/Home/DownloadSingleIssue?issueName=J203 

Just to provide the context, The South African GDP for 2015 was about R4,073,000,000,000 or R4073 billion (page 42 of the Full Review) and the total budget was R1463.3 billion for the 2016/2017 financial year. Full Review