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Study urges local millionaires to sponsor Education

Publishing Date : 16 September, 2019

Author : UTLWANANG GASENNELWE

A recent study titled: “Education financing research report at national level; the case of Botswana”, released this week has recommended that the rich people in Botswana should sponsor the education sector in the country.


Having analysed the Botswana context and based on other experiences in the country the study came up with some innovative options to provide additional resources to the education segment.“Some of these ways are taxing multi-millionaires; putting a levy on the mining sector, as well as increasing Official development assistance (ODA) support, and curbing illicit financial flows in the mining sector to make more resources available as government revenue,” study posits.


According to the study, Botswana has about 5 Multi-Millionaires; Abdul Satar Dada who owns Associated Investment Development Cooperation (AIDC), he is worth US$50 million. There is also Gulaam Husain Abdoola, owner of Turn Star Holdings, worth US$25 million; then Chandrakanth P Chauhun, from Sefalana Group and is worth US$12 million; as well as Ramachandran Ottapathu, Chief Executive Officer of Choppies who owns 19.5% in Choppies valued at US$60 million.


In addition there is Farouk Essop Ismail, Deputy CEO of Choppies who owns Far Properties worth US$35 Million and also 14.6% in Choppies worth US$45 million. Alexander Forbes, one of the Billionaires and philanthropist of the world states that‚ business was originated to produce happiness and not to pile up money.


Therefore, “these 5 rich people in Botswana and any upcoming rich persons could be taxed in a manner that their taxes are made special to meet education needs in the country,” study highlights. The study came with the recommendation after finding that the education financing model in Botswana is heavily dependent on government providing the resources.


Although government has provided resources to education sector above 20% and 6% of Botswana Gross Domestic Products (GDP), the resources are not adequate due to growing needs of the sector; resources to education sector are provided through a number of channels or line ministries creating coordinating challenges. It states that other than financing the sector from pubic resources, the sector does not have other innovative financing models. “Experiences of financing needs at the tertiary level have led to the education sector to begin to search for new innovative financing mechanisms as dependency on public resources is not sustainable,” it stresses.


Study suggests Botswana should also introduce education Levy

In addition to taxing millionaires, the study points out that Botswana is probably the only country in Southern Africa that has an alcohol levy imposed to generate funds for rehabilitation of alcoholics and to meet alcohol related ill health in public hospitals. Introduced in 2008, the levy rates have been increased over the years and over 1.2 billion Pula has been collected. Although the inception, management and its utilization has been a borne of contention in the country, resources have been generated that could go a long way to deal with effects of alcohol consumption in the country.


Borrowing a leaf from this and knowing well the importance of education to the country and that it is amongst the top five government priorities, the study states that “an education levy could be imposed also on certain commodities such as alcohol or fuel just to generate additional resources for education.”

Freezing up some portion of foreign reserves for education

According to the Reserve Bank of Botswana, foreign reserves are assets held by the Bank of Botswana in foreign currencies. The reserves are accumulated mainly through surpluses on the balance of payments together with increases to the value of existing foreign currency investments. The report states: It is important for Botswana to maintain adequate foreign exchange reserves to be able to meet the demand for foreign currency to pay for imports of goods and services on an ongoing basis, as well as meet other international payment obligations, including the costs of servicing international debt.  


“Much as the Botswana government has such reserves aimed at meeting import needs of the country as well as making sure that the country does not suffer from economic shocks, some of the reserves could be used to meet domestic needs such as financing education with the ever growing needs in the sector. The education sector can request special provision from the MFDP so that it could have the education budget increased,” it states.


The bank states that as at the end of 2014, the reserves had increased by 16.7 percent from P67.8 billion recorded a year earlier, due to net foreign exchange inflows and the depreciation of the Pula against major international currencies. The reserves were sufficient to cover approximately 18.5 months of imports of goods and services. As of April 2015, the reserves were P89.4 billion, the equivalent of 20 months of import cover.


Cost Sharing arrangement crops again

Most technicians in the study were of the opinion that much as the Botswana government provides 99.1% of financing to basic education services, this is not sustainable in the light that domestic resources are dwindling due to a number of reasons ranging from loss of revenue as some players in the private sector are shutting down operations in Botswana; there is also a growing need for financing to other social sectors such as health.


“It was therefore suggested that a cost-sharing model be introduced whereby parents and guardians who are well-to-do, should be able to meet costs of footing education for their wards and those that are not able to meet such costs can them be taken under government support programme fully,” it posits. Currently parents and guardians do not pay school fees for basic education but only at senior secondary level. Although this came out loud and repeatedly from many technicians, they were also quick to indicate that this will require political will to be implemented.


Botswana’s Key Education Priorities are articulated in the: National Policy on Education; the Revised National Policy on Education; the new Tertiary Education Policy; the National Vocational Training Policy; the National Credit and Qualification Framework; the Maitlamo Information Communications Technology (ICT) Policy, Vision 2016 (now Vision 2036), and the Science and Technology Policy, together with other government policies.


Current funding sources of education in Botswana

Meanwhile, current funding sources to the education sector in Botswana are: public resources through the National Budget; through Overseas Development Assistance (ODA) as grants and technical support from development partners; from the private sector and from parents and guardians of students through school fees and development fund payments.


The study looked at the financing model used for the last 8 years between 2010/2011 and 2017/2018 assessing existing financing documents, policies and their relevance and ability to provide education to persons in the hardest to reach areas of the country as well as to what extent the existing model is able to mobilize resources to adequately finance the sector.


It was conducted for the Botswana Coalition on Education for All (BOCEFA), with support from Open Society Initiative for Southern Africa (OSISA) through Africa Network Campaign on Education for All (ANCEFA) whose broad aim was to determine and suggest the best possible efficient and innovative education financing model for the country looking at the country context. In the study, Government officials were interviewed especially those from the Ministry of Finance Planning and Development; the Ministry of Basic Education (MOBE) Corporate services, the Ministry of Tertiary Education and Research and the Human Resources Development Council.

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