Wednesday, October 28, 2020

Bursaries scheme recovery rate less than 5 percent

When she appeared on Btv a few years ago and stern-faced, she warned that those failing to pay back their student loans would be severely dealt with, the former Permanent Secretary in the Ministry of Education and Skills Development, Grace Muzila, didn’t look like she was making an empty threat. Actually she was and there is proof from New York.

 

“The beneficiaries are expected to pay back the loan portion of their sponsorship as soon as they become employed. According to the TEF, however, the recovery rate is less than 5 percent,” says a World Bank report referring to the Department of Tertiary Education Financing which is more commonly known as DTEF here at home.

 

Under various administrators at different times, the Ministry has continually announced that it has found a solution to the problem of beneficiaries who don’t pay back the government. Part of the difficulty that the ministry has to contend with is of beneficiaries studying abroad who don’t return home upon completion of their studies. However, at one point it was stated that an international company had been engaged to track down anyone anywhere in the world. The less than 5 percent recovery rate that the World Bank mentions in its report is clear indication that such company never did business with the government.

 

To be fair to Muzila though, the failure of the loan recovery programme, as that of many more programmes across different ministries, could be a result of lack of continuity that characterises the civil service. Officials are routinely moved around government ministries and departments and out of the public service at a time when they play an important role in the delivery of certain programmes and projects.

 

With a reorganized bursaries scheme that came into effect in 1995, the government awarded students grants and loans to pursue their tertiary education. The beneficiaries are expected to pay back the loan portion of their sponsorship as soon as they become employed.  The sponsorships pay for tuition fees, books, equipment, living allowance, warm clothing, medical fees, insurance, and other costs. The programme pays tuition and other fees directly to the institution, while a cash allowance is given to the student. The average annual cost per student studying in local institutions varies between P36,000 (arts) and P63,000 (computing). For overseas study, the annual cost varies between P479,000 and P547,000. The annual allowance for those studying within the country is P1,420 per month for 12 months, which is equivalent to twice the food poverty line or twice the minimum wage in manufacturing.

 

Botswana dedicates a large part of its GDP to social protection, and it is one of the few countries in Africa that fully funds social-protection programs out of its own resources. As a share of GDP, this spending has been declining in recent yearsÔÇöfrom a high of 6.1 percent in 2009/10 to 4.4 percent in 20012/13. Sponsorships and scholarships for students in tertiary education account for 1.4 percent of GDP. Sponsorships and scholarships, which grants benefits based on merit and not needÔÇöaccounts for nearly half (45.3 percent) of total social-assistance spending.

 

The bank estimates that if scholarships and sponsorships were excluded from social-assistance spending, however, it would drop to 1.7 percent of GDP, which is 23 percent lower than the average for middle-income countries. Compared to other African countries, Botswana’s social-protection spending is above average for both social insurance and social assistance. While generous, representing six times the average consumption of the poorest 20 percent, scholarships go to a very small number of poor households.

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