NMMU’s Case for Change

Nelson Mandela Metropolitan University’s Vice-Chancellor, Professor Derrick Swartz, discusses finances, fundraising and the university’s value proposition in the current economy and #FeesMustFAll, transformation, decolonisation era

Within the context of South Africa’s current fiscal and economic condition we need to prepare ourselves for a situation where universities cannot rely on the required increase in state funding relative to the per capita costs for students, staffing, operational and capital expenditure costs. This poses pressing existential problems for our institutions.

The time has therefore come to re-create and re-engineer the structure of our University and how it functions, by fundamentally reworking our modes of operation. This is necessary to sustain a high volume, comprehensive University, to make better use of resources and to adapt to more focused and entrepreneurial forms of multi-mode educational delivery.



All South African universities are facing several major challenges:

  • Rising access to higher education – Enrolment growth has more than doubled – from 480 000 in 1995 to almost one million today, with over 80% black and 54% female. The figure continues to rise with pressure from students demanding access and with the National Development Plan and White Paper setting a target of 1.6 million students by 2030;
  • Ageing and insufficient infrastructure to accommodate the rising number of students, with the risk of overcrowding;
  • The current high dropout rates and low throughput rates;
  • A declining or slow growth in government subsidies to universities relative to our needs and student growth rate; and
  • A projected Reserve Bank GDP growth rate of 0.8%, while inflation is outside the target band of 3-6%.

All universities are heavily reliant on government funding through the Department of Higher Education and Training. NMMU, for example, is the largest university in the Eastern Cape, with 26 911 students. There is a notable increase on the 2015 figure of 26 300 students (22 511 undergraduates and 3 789 postgraduates).

NMMU received government funding of R766 million for its 2015 operational costs/total expenditure of R1.6 billion. The 2016 budget is R780 million in government funding (excluding the R36.4 million 70% shortfall assistance for the 2016 zero increase) for an estimated operational budget of R1.8 billion. This accentuates the problem of affordability.

Our needs are vast

As with all universities, our needs are vast. The #FeesMustFall campaign highlighted the major crossroads in tertiary education funding in South Africa that we are facing, and it is imperative to address this.

The capping of fees cannot continue in perpetuity, and universities have to face the reality that the government funding we require might not be adequate and we need to find ways of addressing our shortfalls.

At NMMU we unreservedly recognise the hardship faced by students coming from poor or less affluent backgrounds in paying university fees.

My view, as expressed in the document of the working group of Vice-Chancellors that I chaired to research the feasibility of free higher education, is that free university education for the poor in South Africa is feasible and should be introduced. The document was presented to the Minister of Higher Education and Training, Blade Nzimande, in 2012.

The definition of ‘poor’ is extended to include students from less affluent backgrounds and children of professionals such as nurses and police who currently do not qualify for NSFAS loans.

The extent of financial need in the Eastern Cape is highlighted by NMMU’s NSFAS statistics. Over the period 2011 to 2015, an average of 22% of NMMU students per annum received NSFAS funding. This is, on average, 5 770 students out of an average of 26 400 students for these years. The 2016 numbers are still being finalised.

Re-engineering NMMU’s financial and business model

South African universities are currently experiencing serious funding pressures in the aftermath of the fee increase freeze of 2015 and as a result of policy decisions in favour of in-sourcing of services. This has added approximately 800 employees to NMMU’s payroll.

In addition, government subsidy on which universities depend for a major part of income, has not kept up with real costs. The current economic downturn suggests the general lag in subsidy-cost ratios will probably remain a defining feature of the higher education funding situation.

We need to address NMMU’s overall financial structure as a matter of urgency.

From the beginning of May until 31 December 2016 the University Council has therefore appointed Dr Sibongile Muthwa, DVC: Institutional Support as Acting Vice-Chancellor in order to afford me special leave to focus on leading NMMU’s three strategic macro projects:

  • Re-engineering and re-gearing NMMU’s underlying macro-financial and business model, including its core revenue streams and cost structures;
  • Securing final approval for, and financial development in support of, NMMU's Medical School project; and
  • Establishing a sustainable business model for NMMU’s new Maritime and Marine Sciences Campus.

Long-term sustainability

It has become crucial to attend to these initiatives in light of needing to secure the long-term financial sustainability of NMMU. To achieve this we need to re-engineer the relationship between our cost structure and our revenue structure, including government income, subsidised fees and third stream income.

Our cost structure – both the fixed and variable costs - will have to be far more acutely managed, with a host of interventions that our Executive Director of Finance, Mike Monaghan, and others are currently looking at.

We will also need to look at optimising and diversifying our revenue structure, and, in addition to our traditional sources, we are going to need to boost our high volume, high yield academic programmes, such as our BCom and Engineering qualifications and find a way to manage the cost or our high volume low yield and low volume low yield programmes.

Relative to our funding subsidisation we will need to carefully position ourselves to maximise subsidy yield and maximise the opportunities we have in this regard as a comprehensive university. Our exceptional applied research capacity is a great asset for us and affords us a strong foundation for entrepreneurial development. As I have mentioned, we need to develop an entrepreneurial mindset throughout the University.

Unbundling the fundraising mechanisms

We are addressing several approaches to increase our bursaries and scholarships and support more students through university. Towards this, the NMMU Trust is currently being re-organised to fall under Council. The Trust will remain an independent legal entity but we are unbundling the fundraising mechanisms, so that all of them – including raising funds through NSFAS, bursaries, scholarships, SARChI Chairs and capital fundraising initiatives are run out of my office.

This includes, for example, fundraising for the new Medical School, Marine and Maritime Campus, and all the associated staffing and facilities.

The Trust will specifically look after the R280 million endowment of the University, which is managed by Investec, and work on growing this to R1 billion.

In a number of ways we are significantly building our capability for fundraising, to drive third stream income.

Better strategy for short learning programmes

We are also working on a better strategy for validating short learning programmes, consolidating our short-learning programme portfolio, being far better prepared to apply for short learning programme tenders in the marketplace and encouraging disciplines to develop appropriate short-learning programmes. We will also be more equitably distributing the revenue from our short-learning programmes.

Throughout 2016 NMMU will be hosting a number of fund-raising events, led by the staff and students at NMMU, including the SRC fundraising event #lapsforthejourney and the Vice-Chancellor’s #trailblazing4nmmu - finishing the journey

Climbing Machu Picchu – finishing the journey

One of the key issues that we have identified at NMMU is the number of students who drop out in their third year, as a result of a lack of funding.

Last year I climbed Mount Fuji solo to raise funds for academically deserving students in financial need. The campaign raised over R1 million.

This year, together with Chancellor Santie Botha, I am undertaking the 43km Inca Trail, which includes climbing Machu Picchu to raise funds for our third year students who cannot complete their diploma or degree because of a lack of funding. Walking with us is a group of 21 local and international fundraisers, comprising top leadership, management and friends of NMMU.

The campaign name #trailblazing4nmmu - finishing the journey is a metaphor for us helping students to finish their journey, and our group aims to raise R4 million..

The climb takes place from 1-4 September 2016 and each of the #trailblazers4nmmu are personally funding the costs of their climb. We will be working hard at fundraising the R25 000 needed to reach the target of fundraising for 160 students to complete their tertiary education.

A tertiary education contributes to the lives of young people in many, insurmountable ways, including the opportunity to develop themselves, achieve financial independence and stability, help to support their families, greater independence and self-confidence, contribute to society, inspire other young people to complete their education.

My view is that no society, no civilisation has ever been successfully built without present generations investing in the education of future generations. As South Africans we must find ways of augmenting our universities’ pressurised resources. My climb is part of this, and every single donation, from a few rand to more, is extremely important because it is about creating a strong culture of giving together for education, and coming together to create a more just and equal society.

#FeesMustFall, Transformation, Decolonisation

This brings me to the #FeesMustFall, transformation, decolonisation movement, which, I believe, offers a positive opportunity for us to reinvent and re-animate what it means to be a leading South African and African university in the world today; what it means to be more true to our mission to educate and emancipate and contribute to a more just and equal society.

It is a fascinating case for change that compels us to reassess our value proposition: what is our distinctiveness and our value as a university named after Nelson Mandela; what makes us the compelling choice of university for South African and international students?

To rise to this, we need to reassess our curriculum, teaching and learning practices, research and development, innovation, entrepreneurialism and the way we prepare our students for the world out there. If we do not do so we will not only lose credibility and legitimacy, we will lose touch with the generations seeking and requiring this.

A new and changing world

When students enter NMMU they need to enter a world that is cosmopolitan, heterogeneous and safe for all students and all genders; a place where people are expected to rid themselves of prejudices and preconceptions; a place where students will literally be discovering a new and changing world.

This is a world in which ever fewer students are going to get work in traditional companies, corporation, industries and institutions. With an increasing number of people getting degrees worldwide, the traditional employers who historically provided a reservoir of employment are not going to be sufficient. Graduates are going to need to build their own economies, businesses and innovations.

As universities we currently remain too focused on employability and we need to shift this mindset and be more focused on entrepreneurialism in order to nurture graduates who are equipped to create their own work opportunities and to help drive new frontier economies.

New growth areas

Emerging economies have historically been shaped around the urban centres. In South Africa, for example, our economy grew around the mining and financial complex of what is now Gauteng. We need to develop new growth areas, such as the oceans economy, renewable energy, agricultural and food production, and we need to ensure that growth is both centralised and decentralised to improve livelihood opportunities in both the urban and rural areas.

The key to this is young graduates with the education, skills and entrepreneurial mindset to develop small business, co-operatives and social enterprises, of which there are countless models of success in this country and worldwide.

As part of this we need to recognise the assets we have and develop the business opportunities they offer. The Eastern Cape, for example, has many of South Africa’s most pristine natural environments, and most attractive tourism, leisure and lifestyle assets, and yet we do not do nearly enough to showcase them, which is why the Western Cape is seen as the tourism mecca.

Entrepreneurs and innovators

NMMU students and graduates should want to be entrepreneurs and innovators; they should be driven to discover new solutions for our planet’s needs – from water to energy to poverty to food to decent green jobs to human emancipation.

Universities should be spaces of exciting, innovation thought where students learn to experiment with the wonder and capacity of their minds.

We need to think about what we are offering our students as the leaders of positive change for South Africa and the world, and what we can do differently.

EARTH University in Costa Rica (www.earth.ac.cr) for example, has a highly successful, innovative educational approach that prepares young people from Latin America, the Caribbean Africa and Asia, to contribute to the sustainable development of their countries and the creation of just societies.

EARTH offers a rigorous four-year undergraduate programme in agricultural sciences and natural resources management. It emphasises ethical entrepreneurship and environmental and social commitment, and offers an experiential curriculum that offers students the opportunity to run their own business, complete an international internship and work with members of diverse communities to address real problems.

The admissions process is highly personalised and all candidates are interviewed, both individually and in a group setting to assess qualities that are difficult to evaluate in an exam, such as leadership potential and values.

Re-creation and re-engineering of NMMU

The re-creation and re-engineering of NMMU would require a range of changes to our current approach, and a mixed mode of delivery.

If we do not pursue these changes, we risk the quality education and stature of NMMU declining over time and the brand being eroded. This will result in increasing numbers of students from South Africa and the continent selecting other institutions in South Africa and on other continents.

The options are ever increasing given that higher education today exists within a geographically boundless, internationalised space where students are far less restricted by their physical locale.

Three new approaches that we need to consider for our sustainability and growth are briefly discussed below:

Working students

We need to increase out reach to include non-traditional student communities over and above the current undergraduate target age group of 18 – 21 year-olds. We would need to look at increasing the number of programmes and short courses for students who are already working.

Focused academic programmes

We need to be more specific about the academic programmes that we offer, and make sure that we include a specific set of high-income-generating academic programmes, such as marine and maritime, medical, renewable energy, hospitality, earth stewardship science, that would give us the competitive edge in these and other fields and that would attract South African and international students, researchers and academics.

Blended learning

We need to increasing our blended learning and smart campus approach (a combination of face-to-face and online teaching) to access students in communities throughout the Eastern Cape, South Africa and internationally.

NMMU’s Blended Learning Teaching Development Programme is developing on this because we recognise that blended learning has become an increasingly important and exciting field for teaching and learning. It is all part of growing the creative commons in the global higher education sector and to make educational resources freely available to all people.

What we are currently doing at NMMU is to empower all our students to become computer literate, to understand how to use the internet, find information, and secure information. It’s an invaluable, empowering life skill in a world where the internet is this super-highway to the world and it is vital to be an information citizen and part of the worldwide digital population.

Invest in our society, in our civilisation, in our young people

It goes without saying that all these considerations will require our collective focus and commitment, incredibly hard work and astute financial management and policy-making to raise the finances we require. But the government and South African society at large must find a way to do this: to invest in our society, our civilisation and our promising young people who deserve their future. 

My attitude is that we must not be risk averse; we need to reinvent the manner in which universities are funded, and we need to take this further and re-examine how the global economic system has evolved. We need to support innovation and change. We have pockets of this, but overall our social and economic systems in South Africa and throughout the world are too conservative, too conventional and unsustainable.

We need to break through conventions that no longer serve the majority of people, we need to encourage disruptive innovations across our institutions and in all disciplines and faculties in order to fertilise the sustainability consciousness we require to survive.

Universities are indispensable in this process, they are precious; they are the living laboratories for the experimentation of new and radical alternatives. These alternatives must inspire and encourage our students to tackle the challenges of our time, to reinvent their world, our world at this crossroads time.