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14 October 2020 | Story Prof Francis Petersen | Photo Sonia du Toit
Prof Francis Petersen.
It is a well-known fact that the South African economy was in deep trouble before the COVID-19 pandemic, with unsustainable levels of debt, a growing budget deficit, and an 8% projected contraction of the economy post the pandemic.  There is a clear realisation that the economy needs a recovery plan, with the significant expansion of productive employment opportunities for South Africans.  In fact, the Social Partners’ Economic Recovery Plan, coordinated by Nedlac, was developed to increase investor, consumer, and public confidence, and to turn the economy around in the short and medium term.  The plan provides specific interventions, and although the actions as specified are not new, it argues for ‘significant convergence among the Nedlac partners on what needs to be done to set our economy on a new accelerated, inclusive, and transformative growth trajectory’.  President Cyril Ramaphosa will present the plan to parliament this week.

The private sector, industry, and business are key components of the economy, primarily driven by manufacturing, financial services, transport, mining, agriculture, and tourism.  Although I believe that government can and should contribute to economic growth, the private sector, business, and industry are the components that will generate real growth in the economy.   Business for South Africa (B4SA) has pledged their commitment to work with the social partners to implement these action steps – and it needs to be emphasised that these interventions are not new!  However, the dilemma lies in the implementation of these actions in terms of inaction, urgency, and effectiveness.  Whether it is to address the energy crisis (more specifically, the security of energy supply), local manufacturing, supporting the recovery and growth of tourism, investment in the mining, agriculture, and infrastructure sectors, adversarial relationships, egos and political rhetoric needs to be replaced by collaboration, co-creation, and action.  


Lack of action threatens livelihoods

It is clear that the political, business, and societal spheres do not need more workshops, conversations, policies or plans – these are all available and known.  We need to build a capable state (which includes the architecture of the SOEs), introduce appropriate labour reform, corruption across all spheres of government, business, and social partners is unacceptable and need to be decisively addressed, policy and regulatory certainty and proper fiscal reform are required.  Why is it then so difficult to implement these if all stakeholders are in agreement, even if everyone is aware that lives and livelihoods are threatened every minute when these actions are not implemented?  Is it the lack of political will or lack of political leadership?  

Although B4SA also places emphasis on the implementation of these actions, I find the individual voices of industry, private sector, and business leaders absent. In my engagement with some of these leaders, they have stated that although their responsibilities are to their boards and shareholders, two sets of principles drive their business agenda: doing more with less (effectiveness and efficiency), and doing good while doing business (community upliftment through social performance), underpinned by a green focus.  Although international leaders in the mining industry, such as Mark Cutifani (Anglo American), Mark Bristow (Barrick), Mick Davis (ex-Xstrata), and many other business and industry leaders argue for foreign investment in South Africa, certainty in the country’s regulatory framework is required for this to materialise. 

A strong economy is also important for graduates 

It is obvious why the South African economy needs to recover, and that the existence of a strong private sector, industry, and business is critical in achieving this recovery.  From a higher education perspective, a powerful and effective educational experience is developed when academia and a strong private sector and industry work side by side.  Such a collaborative and co-created model results in breakthroughs and overall advancement of higher education institutions, business, and industry, and importantly – the students.  The continuous contraction of the South African economy further lends itself to the unemployment crisis, where the weak economic performance is not sufficient to create jobs in line with the population growth, which in itself presents a massive challenge for university graduates.  A strong focus on employability as part of the core business of a university, and the ability to equip graduates with the necessary skills to navigate the future world of work will remain crucial factors – not only now, but also in the coming years, and a relationship with a strong industry, private sector, and business is pivotal in driving this.

The financial model used in a South African (residential) university consists of three main income sources: (i) the state or government through a subsidy (the so-called ‘block grant’), (ii) tuition fees, and (iii) third-stream income (which is mainly a cost-recovery component from contract research, donations, and interest on university investments). The National Student Financial Aid Scheme (NSFAS) contributes to the tuition fees through a Department of Higher Education, Science and Innovation Bursary Scheme, providing fully subsidised free higher education and training to poor and working-class South Africans (recipients will typically be students from households with a combined income of less than R350 k per annum).  

Negative impact of COVID-19

The negative impact of COVID-19 on the income drivers of the university can be severe.  The subsidy from the state or government has already been cut, with potential further cuts in both the subsidy and specific earmarked funds. The pressure on income derived from tuition fees (that component which is not funded through NSFAS) will increase, as households would have been affected by the nationwide lockdown and the economy in deep recession, and a significant number of jobs would have been lost. The economic downturn, due to both COVID-19 and a sovereign downgrade by all rating agencies, has already negatively impacted local financial markets as well as the global economy. The multiplier effect of this would be that the value of investments and endowments would decrease, and philanthropic organisations and foundations would most probably reduce or even terminate ‘givings’ to universities.  Although industry, private sector, and business will re-assess their funding to universities, whether for research or bursary support, it is also an opportunity for such a strong sector to at least assist universities to ‘fill this financial gap’ in the short and medium term.  

Although, it is not expected that business and industry will just ‘fill this financial gap’ – institutions of higher learning need to argue and demonstrate a value proposition to these sectors.  COVID-19 has clearly demonstrated the focus of collaboration and co-creation among different stakeholders – these should be explored more concretely.  Should vice-chancellors (a representative of this group) not be part of BUSA or Business Leadership SA as a first step to bring higher education institutions and the different leaders of the economy closer?  Although COVID-19 has negatively impacted the financial position of the industry and business sectors, my assessment is that these sectors would recover faster than anticipated, but the effective and urgent implementation of a ‘state economic recovery plan’ is essential – every day that this implementation is stalled, it is affecting the country and its people severely.

Public-private partnerships key to economic growth

Government and the industry and business sector need to work together to foster economic growth – now more than ever.   The plans to achieve this are available – the implementation thereof, however, is lacking. A strong industry and business sector have major benefits for the country, among others, for the higher education sector. Let us not delay this further, political leadership needs to be decisive and the industry and business sector must continue to speak out – this sector is too important to be neglected.

Opinion article by Prof Francis Petersen, Rector and Vice-Chancellor of the University of the Free State and former executive of Anglo American Platinum.

News Archive

Position statement: Recent reporting in newspapers
2014-10-03

 

You may have read reports in two Afrikaans newspapers, regarding recent events at the University of the Free State (UFS). Sadly, those reports are inaccurate, one-sided, exaggerated and based not on facts, but on rumour, gossip and unusually personal attacks on members of the university management.

Anyone who spends 10 minutes on our Bloemfontein Campus would wonder what the so-called ‘crisis’ is about.

We are left with no choice other than to consider legal action, as well as the intervention of the South African Press Ombudsman, among other steps, to protect the good name of the institution and the reputation of its staff. No journalist has the right to launch personal and damaging attacks on a university and its personnel, whatever his or her motives, without being fair and factual. In this respect, the newspapers have a case to answer.

But here are the facts in relation to the reports:

  1. No staff member, whether junior or senior, is ever suspended without hard evidence in hand. Such actions are rare, and when done, are preceded by careful reviews of our Human Resource Policies, labour legislation and both internal and external legal advice. Then, and only then, is a suspension affected. A suspension, moreover, does not mean you are guilty and is a precautionary action to allow for the disciplinary investigation and process to be conducted, especially where there is a serious case to answer.
  2. At no stage was the Registrar instructed to leave the university; this is patently false and yet reported as fact. We specifically responded to the media that the Registrar does outstanding work for the university and that it is our intention for him to remain as our Registrar through the end of his contract in 2016.
  3. The Rector does not make decisions by himself. Senior persons, from the position of Dean, upwards, are appointed by statutory and other senior committees of the university and finally approved by Council. No rector can override the decision of a senior committee, and this has not happened at the UFS even in cases where the Rector serves as Chair of that committee. The impression of heavy-handed management at the top insults all our committee structures, including the Institutional Forum – the widest and most inclusive of stakeholder bodies at a university – which reports directly to Council on fairness and compliance of selection processes.
  4. In the case of senior appointments, Council makes the final decision. Council fully supports the actions taken on senior appointments, including a recent senior suspension. The fact that one Council member resigns just before the end of his term, whatever the real reason for this action, does not deter from the fact that the full Council in its last sitting approved the major staffing decisions brought before it. The image therefore that the two newspapers try to create of great turmoil and distress at the university, is completely unfounded.

Even if we wanted to, the university obviously cannot provide details about staffing decisions, especially disciplinary actions in process, since the rights of individuals should be protected in terms of the Human Resource Policies and procedures of the UFS. But that does not give any newspaper the right to speculate or state as fact that which is based on rumour or gossip, or to slander senior personnel of the university. For these reasons, we have been forced to seek legal remedy and correction as a matter of urgency.

Make no mistake, underlying much of the criticism of the university has been a distress about transformation at the UFS; in particular, the perception is created that white colleagues are losing their jobs. The evidence points in the opposite direction. Our progress with equity has been slow and we lag far behind most of the former white universities; that is a fact. More than 90% of our professors are white; most of our senior appointments at professorial level and as heads of department are still overwhelmingly white. Reasonable South Africans would agree that our transformation still has a long way to go and only the mean-spirited would contend otherwise. But based on the two Afrikaans newspaper reports, an impression is left of the aggressive rooting out of white colleagues.

In the past few years the academic standard of the university has significantly improved. We now have the highest academic pass rates in years, in part because we raised the academic standards for admission four years ago. We now have the highest rate of research publications, and among the highest national publication rate of scholarly books, in the history of the UFS. We have one of the most stable financial situations of any university in South Africa, with a strong balance sheet and growing financial reserves way beyond what we had before. We now attract top professors from around the country and other parts of the world, and we have the highest number of rated researchers, through the National Research Foundation, than ever before. And after the constant turmoil of a number of years ago, we now have one of the most stable campuses in South Africa. Those are the facts.

The UFS is also regarded around the world as a university that has become a model of transformation and reconciliation in the student body. The elections of our Student Representative Council are only the most visible example of how far we have come in our leadership diversity. Not a week goes by in which other universities, nationally and abroad, do not come to Kovsies to consult with us on how they can learn from us and deepen their own transformations, especially among students.

Rather than focus on what more than one senior journalist, in reference to the article in Rapport of 21 September 2014, rightly called ‘a hatchet job’ on persons and the university, here are the objective findings of a recent survey of UFS stakeholders: 92% endorse our values; 77% agree with our transformation; 78% believe we are inclusive; and 78% applaud our overall reputation index.  Those are very different numbers from a few years ago when the institution was in crisis.

This is our commitment to all our stakeholders: we will continue our model of inclusive transformation which provides opportunities for study and for employment for all South Africans, including international students and colleagues. We remain committed to our parallel-medium instruction in which Afrikaans remains a language of instruction; we are in fact the only medical school in the country that offers dual education and training in both Afrikaans and English for our students - not only English. We provide bursaries and overseas study opportunities to all our students, irrespective of race. And our ‘future professors’ programme is richly diverse as we seek the academic stars of the future.

We are not perfect as a university management or community. Where we make mistakes, we acknowledge them and try to do better the next time round. But we remain steadfast in our goal of making the UFS a top world university in its academic ambitions and its human commitments.

END

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