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South Africa’s higher education subsidy plan could considerably harm its economy (World Bank)

Thursday, 24 January 2019 16:59
South Africa’s higher education subsidy plan could considerably harm its economy (World Bank)

(Ecofin Agency) - South Africa’s subsidies for higher education could negatively affect its economy, World Bank indicated this week.

According to the Bretton Woods institution, the new plan to increase investments in education to 2.5% of GDP by 2022 is not viable. Therefore, the $12 billion investments planned in the sector could put “unnecessary” pressures on the economy. In addition, the high cost of the programme could make the goals, which is to double university enrolment by 2030, “unsustainable”.

In a fiscally constrained environment, it will be critical that the government’s higher-education policy does not impose unnecessary burdens on the national budget”, World Bank indicated in statements quoted by Bloomberg.

In December 2017, during the economic crisis, former South African president Jacob Zuma announced that the school fees of students from households whose revenues is equal to or below ZND350,000, would be removed.

World Bank invites South Africa, which is barely out of recession, to encourage distance-learning (to save funds) and leverage private investments to “reduce the burden on public funds”.  

Let’s note that this year, the Bretton Woods institution expects South Africa’s economy to grow to 1.3% and to 1.7% in 2020.

Moutiou Adjibi Nourou   

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