Funding dilemmas in tertiary education institutions: The case of internally generated revenue (IGR) in public universities in Ghana.

Abstract

Tertiary education institutions in Ghana have been enjoying full financial support from the state. However, recent national financial challenges have made fully-funded tertiary education unsustainable. The decision of the state to cut funding to tertiary education institutions was further fueled by the implementation of the Structural Adjustment Program (SAP) policy of the World Bank and its affiliate Bretton Woods institutions, as a condition for attracting international financial assistance to manage its fiscal imbalances. Public universities in Ghana which had enjoyed full state financial support were severely hit by the state subvention cuts. The aim of this study was to examine: ―funding dilemmas in university education institutions, with a focus on the management of internally generated revenue for the effective mandate delivery of public universities in Ghana. Using non-probability sampling, the following four public universities were involved in this study: the University of Ghana, Kwame Nkrumah University of Science and Technology, University of Education and University for Development Studies. This survey study used a mixed method approach whereby self-administered questionnaires and in-depth interviews were the techniques used for data collection. The four main theories which underpinned this study were: neo-liberal ideology, human capital theory, new public-management paradigm and resource dependence theory. The findings revealed that government appreciates the relevance of university education in the national development agenda. Subvention cuts to the universities however were informed by the national financial crisis coupled with competing demands for social services and infrastructural goods; and not because university education yields less productivity while promoting divergent views unacceptable to government, as compared to basic education. Since a university degree is perceived to enhance employment prospects that guarantee a middle-class life, parents are willing to contribute through cost-sharing to fund their children‘s university education. The acceptance of cost-sharing has led government to focus its financial responsibility on the payment of workman‘s compensation in the universities, with fund allocations inadequate to cover the salaries of all categories of staff. There are also delays in subvention payments which force some universities to contract with banks for loans at high interest rates in order to pay staff, and government does not pay the accrued interest. The universities‘ engagement in extensive Internally Generated Revenue (IGR) mobilization for supplementary funds has expanded the workload of its staff without corresponding direct benefits to the staff. The university profession has therefore become less attractive to many quality professionals who only accept temporary engagements at a higher cost to the universities, and government subvention does not cover such temporary engagement costs. The extensive IGR drive often shifts the universities‘ cost burden to their students, most of whom are funded by their parents. The results have been a reduction in university access to prospective students from poor family backgrounds which perpetuates inequalities in Ghanaian society. Furthermore, the findings reveal that state policy directives are issued to restrict the IGR mobilization efforts of the universities. Also, at different phases of leadership, the government has made several efforts to categorize universities among the revenue mobilization agencies. Consequently, in the 2017 fiscal year, the government issued directives requesting universities to pay 34 percent of its IGR into the consolidated funds to finance government projects. The adverse impact of the state funding cuts and extensive IGR drive has been increasing student enrollment in favour of the few more wealthy persons in society, and large class sizes with inadequate lecturers resulting in graduates with poor quality training. Finally, the IGR drive has eroded specialization in the universities who mount similar programs attractive to students who have the resources to pay. This has resulted in the training of more arts/humanities than science/technical graduates in the ratio of 60:40 percent respectively instead of the state policy of 60:40 percent for science and humanities respectively. The study recommends that the universities should lobby the Parliamentary Select Committee on Education to have government subvention payments for workman‘s compensation released at the beginning of every quarter to eliminate the necessity for contracting bank loans and accruing interest for workman‘s compensation. Government should insist that a specified percentage of IGR in the universities should be invested in academic infrastructure, including more lecture theatres for manageable class sizes to ensure quality delivery, instead of its decision to access funding from the universities for other government projects. The universities should take advantage of their existing large markets and team up with the private sector for public-private-partnership ventures in commercial farming, estate management, commercial consultancies and other activities to improve upon their IGR. This will minimize the rate at which their financial burden is pushed onto students which deprives many suitable prospective students of access to university education. The study concludes that the National Council for Tertiary Education (NCTE) Act 454, 1993 should be reviewed by government to equip it to be able to enforce its directives and sanctions appropriately instead of having the mere advisory role that it currently plays. This will be beneficial for the supervision of tertiary education institutions in Ghana.