Revenue Generation Strategies in Sub-Saharan African Universities

Abstract

This paper explores revenue generation strategies in Sub Saharan African (SSA) Universities. It argues that almost all higher education systems in SSA countries are increasingly under pressure due to rising student populations and mounting costs of teaching and research activities. The study attempts to analyze the enablers for and barriers to revenue generation within SSA universities. A resource dependence theory complemented by a stakeholder theory was used as a theoretical lens of the research. These theories promote that any action of the focal organization is aimed at acquiring resources from its environment. Universities, as active actors in the environment, may implement various strategies either to comply with the environmental demands in ways close to their individual mission, to avoid and/or alter these demands. A case study method grounded in a qualitative research approach was employed in this study. Four universities in three African countries; viz., Haromaya University and Adama Science and Technology University from Ethiopia, Jomo Kenyatta University of Agriculture and Technology from Kenya, and Nelson Mandela Metropolitan University from South Africa were selected using purposive sampling technique. The case studies were based on interview checklist with open-ended questions and desk review. A content analysis, an analysis at the individual case study university, and a comparative analysis across the case study universities were employed as techniques for data analysis on the basis of the research model derived from the theories. A rich set of data was obtained from almost 70 interviews held with university staff (from senior university leadership to frontline actors) and documentary evidences. The study has shown that with varying levels of success, the case study universities have all diversified their revenue structure by formulating adaptation and altering strategies. The proportion of external revenues in the Kenyan and South African universities even exceeds the recurrent budget from their respective national governments. The case study universities acquired resources from a variety of sources, of which tuition fees obtained from students were prominent one. In particular, one can observe a diversification in the courses offered; particularly in social sciences, business, and management, because these had relatively limited investment requirements and were also greatly in demand from students. In order to link up with outside organizations and groups, a number of academic and administrative units were set up. The case study universities have alsoimplemented incentives and professional approaches towards revenue generation in order to deal flexibly with the demands from (potential) stakeholders. This study identified a number of enablers for and barriers to revenue generation within and outside the universities. Externally, the types and nature of stakeholders, the regulatory framework, and funding and incentive schemes influence the capacity of universities to generate revenue. In particular, the limited degrees of financial and staffing autonomy granted to the universities negatively affect revenue generation efforts. Another barrier is lack of a research capacity at the Ethiopian and Kenyan case universities due to the limited or almost full absence of research funding. In the case of South Africa, however, we see a range of targeted support funds for research, including funds for graduate students and rewards for research publications. Internally, leadership commitment to revenue generation, internal governance and management processes, absence of sufficiently qualified and motivated academic staff and professional managers, and inadequate non-human resources of the universities influence revenue generation. Big obstacles are the lack of sufficiently qualified personnel and research infrastructure. With the exception of the South African case study university, I must conclude that the case study universities have not yet diversified their revenue base to a level of ensuring financial sustainability. Finally, this study provides some policy and legal recommendations that will help universities in Sub-Sahara Africa improve their revenue generation abilities and increase their financial sustainability.