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01 September 2020 | Story Dr Cecile Duvenhage

Opinion article by Dr Cecile Duvenhage, Lecturer in the Department of Economics and Finance, University of the Free State

Awards and bailouts

The World Travel Awards recognised the state-owned enterprise (SOE), South African Airways (SAA), as Africa’s leading airline – every year from 1994 to 2015. However, behind the scenes, the flag carrier has repeatedly been given lifelines thanks to government guarantees. The last year that the SAA made a profit was in 2011.

Over the past decade, more than R16,5 billion in taxpayers' money was spent on bailouts for the airline. In the February 2020 budget, the government set aside R16,4 billion, of which R11,2 billion was for SAA’s debt-servicing costs. 

The SAA has been fighting for its survival since it entered into voluntary business rescue in December 2019 and is facing liquidation after specialists were appointed at the end of April 2020 to try to save the airline.  

How did SAA end up in this mess?

After the government deregulated the domestic airline industry in 1991, SAA lost its national market share (of 95%), especially to Comair and FlySafair. The airline was also hit on its African routes, where Ethiopian Airlines started to erode its competitive position. Theoretically speaking, deregulation breaks the market power of a monopoly, and inefficiency will put you out of business in a competitive environment. 

Add the component of poor management and suspect tenders (pertaining to the former SAA chairperson Dudu Myeni’s plan to buy several Airbus planes, sell them to a local company, and then lease the planes back), and debt starts to snowball. Additional poor management decisions include the desperate saving measures on essential expenditure, which led to the buying of ‘fake parts’. Unnecessary sponsorships (ATP tennis), given a tight budget, reflect poor management decisions by SAA. 

Surely, the weak rand played a role in the profitability of SAA, but also for the competitors who managed to survive due to efficient management. 

So, what are the cards on the table? 

The cards include liquidation, foreign direct investment (FDI), and a rescue package under Section 16 of the Public Finance Management Act (PFMA).

The liquidation of the airline will reduce future ongoing operational losses but will require the payment of creditors who rely on the so-called ‘implicit guarantee’ of ongoing funding by the state. Thus, debt claims cannot be avoided, as would be the case with conventional companies. Besides, there is no consensus regarding the liquidation cost – ranging from R2 billion to R60 billion.

Another card is the ‘restart’ of a new SAA, with a smaller international network. This airline needs to be financed by new investors, which might include large international airlines. In this case, the SA government will hold a minority stake, which requires a change of legislation to allow larger GDI into SA airlines. In attracting FDI, the SAA could be revived as a smaller international franchisee airline in cooperation with a larger international airline.

A further card is the option of using citizens’ pension as a business rescue package for the SAA under Section 16 of the Public Finance Management Act (PFMA). 

Section 16 of the Public Finance Management Act

The purpose of the PFMA is “(t)o regulate financial management in the national government and provincial governments; to ensure that all revenue, expenditure, assets and liabilities of those governments are managed efficiently and effectively; to provide for the responsibilities of persons entrusted with financial management in those governments; and to provide for matters connected therewith.”

In terms of Section 16 of the PFMA, the Minister can authorise the use of funds, including the National Revenue Fund (NRF), to finance expenditure of an ‘exceptional nature’ which is currently not provided for and which cannot, without serious prejudice to the ‘public interest’, be postponed to a future Parliamentary appropriation of funds.  

Thus, Section 16 allows the Minister of Finance to sidestep normal budgetary appropriation processes in an emergency to make money available for items of an ‘exceptional nature’ or unforeseen circumstances.

Exceptional and short-term orientated

Exceptional is synonymous with abnormal, atypical, and extraordinary. However, the improvement of the financial position of SAA through recapitalisation has been constantly on the government’s agenda since the February 2017 budget. Four months later (1 July 2017), the National Treasury published a media statement titled Government transfers funds from National Revenue Fund to South African Airways. The argument was that the SAA needed to be recapitalised to allow the airline to pay back its commitment to Standard Chartered Bank, thereby sidestepping a default.  

How exceptional is inefficiency and poor management over a period of ten years, and how biased would such a transfer decision be towards public interest (that favours transparency and accountability), can be asked?

According to the July 2017 media statement, “default by the airline would have prompted a call on the guarantee, leading to an outflow” (take note: not will lead to an outflow) from the NRF and possibly resulting in higher awareness of risk related to the rest of the SAA's guaranteed debt.

The statement also adds that several options have been explored and given the nature of the problems at the SAA, Section 16 of the PFMA “had to be used as the last resort”. According to Minister Mboweni, the government is currently also considering several options, including that the government retains a percentage of the issued share capital in the new airline, finding private equity or strategic partners to take up shareholding in the new SAA, or approaching international or local funding institutions. Of course, local funding institutions include the National Revenue Fund.


Thus, the government may – and possibly already has – partly fund the recapitalisation of the airline using the NRF. Accusations from the Democratic Alliance (DA), an opposition party, state that the former Finance Minister, Malusi Gigaba, used R3 billion of emergency provisions to recapitalise the SAA in 2017.

The DA recently requested confirmation whether the SA Minister of Finance, Tito Mboweni, had again made ‘unlawful’ use of Section 16 in committing to provide and disburse public money for the SAA’s restructuring. The DA also asked the court to interdict SAA and its rescue practitioners (Siviwe Dongwana and Les Matuson) from using the money by any means. The application for the interdict has in the meantime been withdrawn, given the government’s commitment not to use Section 16.

Minister Tito Mboweni’s cards

Although Mboweni indicated that he would protect the efforts of those “who work day and night to make a success of this country”, he is up against a loaded team of government, SAA, and rescue practitioners. The minister expressed a preference for closing the SAA down, but Cabinet has given its backing to a business rescue plan.

The minister recently said that he did not authorise the ‘use’ of funds from the NRF for emergency funding, although he did not exclude the possibility of approaching ‘institutions’ to invest pension funds for this purpose. 

The impact and implication of using NRF

What is in a name, a rose by any other name would smell as sweet? What is in a name, ‘using’, ‘investing’, or ‘mobilising’ pension funds? Do you smell a rose or a rat? Either way, it still boils down to the possibility of ‘getting access’ to the pension funds of hard-working SA citizens to bail out a straggling, poor-managed SOE.

Looking at the poor track record of the SAA and the bleak future of aviation in general (due to the global recession and impact of COVID-19), would an individual, conservative investor opt to invest in SAA? Only political allies making a political decision in their best interest, or aggressive investors being promised high returns on their investment, will take the bait. 

My next concern – will the new, restructured SAA be able to generate profit to remunerate the invested ‘institutions’, given that it currently has only five planes to fly? 
For a start, was the R3 billion emergency allocation (dated back to 2017) retrieved and paid back to the NRF? Hill-Lewis, representing the DA, argued that if the SAA had spent the funds (of 2020), the country and the public purse will be irreparably harmed. Thus, the money may not be retrieved, which will lead to anarchism in the country.

Most parties agree that the SAA remains a strategic asset to South Africa and to its role as the flag carrier, where it assists as an economic enabler with benefits across a wide range of economic activity. However, the parties do not agree on the finance model regarding the bailout of the SAA.

The new SAA needs to generate high profits in a competitive environment to be efficient and cost-effective in its management. Thus, the money need not be forthcoming from a future stream of ‘already recruited’ pension contributions of so-called ‘institutions’. If the latter is indeed the case regarding the generation of income, it reminds me of the activities associated with a pyramid scheme.

SAA, please do not fly us to doom.

News Archive

Official opening: UFS towards 2010
2005-02-04

2005: The UFS towards 2010: Sustaining change, innovation, renewal and transformation

Download speech! (Pdf-formaat) (Word format)

Understanding our journey from the old to the new: further thoughts on managing change and continuity

Address by the Rector and Vice-Chancellor at the
Official Opening of the UFS, Friday 4 February 2005

‘n Jaar gelede het ons ‘n simboliese staptog onderneem vanaf Grey Kollege na die UV Hoofgebou. Dit het ‘n 100-jaar reis vanaf ons verlede na die hede gesimboliseer. Ons het ‘n goeie Eeufeesjaar gehad, ‘n jaar vol feesvieringe, belangrike akademiese en ander geleenthede, en die erkenning van die bydraes van die vele mense wat hierdie Universiteit help bou het.

Today also marks the 5 th anniversary of the launch of the Turnaround Strategy in February 2000. In these 5 years many things have changed, most of them for the better.

But the journey is still continuing and always will - because we must always strive for something better.

Daarom is vandag ‘n belangrike punt in ons reistog as universiteit, ‘n oomblik om te fokus op die volgende vyf jaar – teen die agtergrond van 100 jaar sowel as 10 jaar van demokrasie en transformasie.

1. Robustness and the need to sustain change

At the opening of the UFS a year ago I reflected on its 100 year history and noted how, in very dramatic fashion, this history signals how much a university can and often must change, but also that it does so amidst its continuity of existence as a university – as part of the centuries old and worldwide university tradition of critical reflection and scholarship. At the same time it signals that this University, like others in South Africa , has a significant role to play in shaping our new nation: it always had such a role and especially now this university must continue to play such a role. It must always be part of society, part of the community, an engaged university – critical and engaged.

I also argued that we must focus on going “from good to great”, and that we must firm up our foundations for a great, robust university. I defined robustness as being “strong and vibrant, vigorous, able to withstand shocks and turbulent times, able to withstand competition and tough times (whether of an academic, financial, social or political nature). I said that if we want the UFS to continue to be a very good university and become a great university, we must work hard to ensure that it is a robust university in all respects: academically (with high quality staff, good intellectual and disciplinary depth, low vulnerability to staff turnover, high research integrity and research depth) but also administratively, financially, with regard to diversity and equity, regional engagement, and in its national and international leadership role.

Our understanding of the term robustness carries one danger: the element of being staid and stolid, unresponsive, unable to adapt. Obviously that is not a characteristic we as the UFS want to have. Robustness in a fast-changing world requires the adoption of a continual change-mode, being agile and fast-moving, innovative, pre-emptive, and so forth.

Dit beteken niks anders nie as dat daar voortdurende transformasie moet wees – al is dit ‘n woord wat ietwat kontensieus of minstens vaag in sy betekenis geword het.

How do I then understand transformation? Simpy put, as a process of continual and persistent becoming:

  • becoming a truly South African university of excellence, equity and innovation
  • becoming a high quality, equitable, non-racial, non-sexist, multicultural, multilingual university and place of scholarship … for South Africa and Africa .

Hierdie omvattende definisie van transformasie dek vele dimensies en aspekte van ‘n universiteit, insluitend akademiese praktyke en fokus, finansiële aspekte, personeel- en studentekwessies, institusionele kultuur, gemeenskapsbetrokkenheid, ‘governance’, en so meer.

Naas die spesifieke Suid-Afrikaanse sosio-politieke situasie, het die veranderinge in die internasionale wêreld van hoër onderwys wat entrepreneuriese en innoverende benaderings vereis het vir universiteite om te oorleef as sterk sentra van akademiese aktiwiteite, ook nie minder geword of weggegaan nie.

We must therefore continue to transform and re-engineer the UFS into a highly pro-active form. We must cultivate an ingrained habit of change, we must build a sustaining foundation for an always self-renewing, robust university.

Before we get to the particular job ahead, let’s consider where we are now.

2. Status report: where are we now?

Where are we now on this journey from Grey to Gold? How have we changed and transformed (during “10 years of democracy”) in the process of … “becoming a non-racial, multi-lingual, multi-cultural, robust, engaged university that abides by the ideals of excellence in scholarship, in teaching, learning, research and service learning”?

We have already gone through a number of phases of transformation.

Transformation phase 1 : Introduction of parallel-medium teaching, large changes in student demography, the initial appointment of senior black managers.

Transformasie fase 2 : Akademiese en navorsingshervitalisering saam met die finansiële draai (wat so baie dinge moontlik gemaak het), groei in studentegetalle, voortgesette veranderinge in die samestelling van die studentekorps en -leierskapstrukture, die aanstelling van persone uit die aangewese groepe (Billike Indiensname), meer inklusiewe bestuurstrukture, en veranderinge in institusionele kultuur.

Transformation phase 3 : Incorporation element of transformation: Qwaqwa and Vista Bloemfontein campuses (although all expectations have not been met), significant change in staff composition in departments; accompanied by regular appointment of senior black and female managers, further changes in institutional culture; a pioneering approach to community service learning and research (engagement).

If we were to write a report card for the UFS now, what would it say?

Draaistrategie doelwitte (2000-2004)

Die oogmerk is dat voldoende finansiële beweeg­­ruimte beskikbaar sal wees om deurlopend genoeg te kan belê in:

  • topgehalte personeel,
  • uitstekende akademiese fasiliteite en toerusting,
  • wêreld­gehalte navorsing,
  • kwaliteit onderrigprogramme en -tegnologie,
  • topklas biblioteek- en inligtingsbronne, en
  • hoë-gehalte strategies belangrike steundienste.

Kortweg: in kwaliteit, in die wetenskap en in die mense van die universiteit (sonder om begrotingstekorte te hê of gereeld rente-inkomste te gebruik).

Let’s consider a few key elements of becoming a new and better university, i.e. elements of transformation. (This is not a comprehensive list.)

a) Academically (teaching and learning, research, service learning)

  • Growth in student numbers
  • Numerous new and innovative learning programmes.
  • Increasing number of community service modules
  • Increase in research outputs and NRF-rated researchers, research directorate
  • More engaged research
  • Return and appointment of high-quality academics from other universities
  • Much better academic facilities, lecture halls, research equipment, IT, library resources, labs, offices

    Negatives :
  • Academic staff overload.
  • Feelings of being underappreciated, underpaid. (Staff morale becoming a problem again?)
  • Still lecture hall and lab capacity problems
  • Research equipment backlog
  • Staff development still insufficient
  • Still problems with throughput and success rates, preparedness of students.
  • Diepte van intellektuele vorming en intellektuele diskoers

    b) Finansieel: Die UV het steeds elke jaar aanwendbare fondse/surplusse van R60 - R80 miljoen. (Ander universiteite moet begin terugsny; by UV is die afplatting korrek geantisipeer en geabsorbeer in die begroting). Dit word gebruik vir strategies-belangrike prioriteite, en maak ‘n groot verskil in die kwaliteit en funksionering van die universiteit.

    Daar is ‘n gesonde balans tussen sleutelelemente van volhoubaarheid en hoë-gehalte akademie en steundienste; ‘n gesonde bestedingspatroon (een van die vernaamste doelwitte van die Draaistrategie), genoeg besteding op duur en kapitaal-items (biblioteek, IT en PCs, duur toerusting, geboue en fasiliteite).

    Personeelbesteding en lopende besteding is goed onder beheer, en daar is geen sistematiese oorbesteding meer nie.

    c) Staff remuneration and working conditions

    Since 2000: Above-inflation increase in general remuneration levels: 18,2% (= real increase in standard of living of staff).

     
  • Important to recognise this achievement, the result of everybody’s hard work.
  • The aggregate extra earnings of staff (above inflation) since 2000 amount to more than R75 million (+ R14.1m in benefits; 2005 included).

    Several groups are even better off, e.g. lowest paid workers and professors after an additional structural correction. Professors: 27% above-inflation increase (on total remuneration package) since 2000.
     
  • In terms of paying staff well, this implies significant progress. It will be ideal if we can continue this process, but unfortunately it will depend on many external factors like subsidy levels and enrollment capping by government, as well as possible natural declines in student numbers. (A gradual decrease in the number of school leavers eligible to apply to the UFS in the next 10 years is possible.) Extended ‘merit’ scales for many academic and support service post categories, available to individuals with superior merit and performance.

    Expanded promotion possibilities (nobody excluded, e.g. white males):

    Illustration of dramatic increase in promotions to associate professor and full professor during the last 6 years:

    To associate professor:
    First 3 years (1999 – Dec 2001):          9
    Last 3 years (Jan 2002 – Jan 2005)      37 (four times as much)

    To full professor:
    First 3 years (1999 – Dec 2001):         7
    Last 3 years (Jan 2002 – Jan 2005)     31 (more than four times as much)

    Creation of new post category of senior professor

    Gesamentlik beteken dit alles daar is en was aansienlike geleenthede vir akademiese personeel sowel as steundienspersoneel om hul inkomste en hul lewenstandaard betekenisvol te verhoog.

    (Baie van hierdie dinge is ook tekens van ‘n nuwe era van differensiasie op grond van meriete.)

    Growth in staff numbers: Increase in SLEs for academic staff from 500 in 2000 to approximately 600 in 2005 (at the time of rationalisation in the 1990s the goal was 480).

     
  • Ongeveer 20% meer SLEs PLUS ongeveer 20% styging in vergoeding bokant inflasie (lewenstandaard)
    Capital expenditure since 2002 to improve workplace conditions: Academic staff (offices, laboratories, lecture facilities): R34 million Support staff (including public and reception facilities): R25 million

    d) Operationally / Support services
     
  • Growth in support staff of more than 50 SLEs to 315 (from 263).
  • Growth in professionalism of support staff
  • Capacity bottlenecks have been addressed and are being addressed (these are instances of some of the “problems of success”…)
  • PeopleSoft installion complete, final fine-tuning in process in this huge asset-replacement project
  • Registration process in 2005 went exceptionally smooth due to wonderful team-work

    Negatives:
     
  • New systems create adjustment and practical problems
  • Support staff overload
  • Still some problems with service orientation
  • Staff development still insufficient

    e) Employment Equity
  • This is one of the most crucial areas of concern.
  • Almost R14 million has been set aside in the past 5 years for this important strategic priority.
  • Every opportunity to employ senior black and female managers has been utilised (DVCs, deans, deputy deans, directors, deputy directors)
  • Academic staff: numbers increasing, but still unsatisfactory progress, although the incorporations have helped a great deal An important step was the provisional approval of the Employment Equity Policy by the Executive Management this week, to be finalised within a fortnight Key elements in compiling a university-wide Employment Equity Plan already in place

    f) Institutional culture
  • Promotion of multilingualism via new language policy (although its application not always easy, requires innovative thinking…)
  • More diverse (‘culturally-representative’) building names
  • Moshoeshoe project towards a shared sense of history
  • Multicultural sensitisation workshops
  • Social contract workshops: building a sense of shared values for a multicultural workplace, to create a sense of belonging
  • But still a strong sense of alienation amongst black staff.

    g) Qwaqwa and Vista incorporations
  • Many good things about Qwaqwa, but still problems remaining, both regarding the sustainability of the campus and with regard to operational issues.
  • Especially Vista staff are beset with uncertainties about their future, which is not good for staff morale. The strategic reconfiguration of both these campuses requires urgent further attention this year.

    h) Governance and management
  • Significant improvement in the integration of strategic planning and budgeting processes, right down to faculty and support service department level
  • Inclusive governance and management structures at all levels
  • Still perceptions of non-transparency
  • Management integration of Qwaqwa and Vista campuses much better, but still have problems

    i) Studentelewe
  • Studentefasiliteit (veral Thakaneng): R26,5 m (nie alles uit UV sentrale begroting gefinansier).
  • Student- en voetgangervriendelike kampus, wandelpaaie, ens. (slegs R0,5 m)
  • Hoofkampus koshuise was die laaste jare vol
  • Qwaqwa koshuise word dramaties opgradeer
  • Opgradering van hoofkampus sportfasiliteite (onder meer ‘n Astro hokkieveld in 2005)
  • Meer inklusiewe joolaktiwiteite
  • Meer inklusiewe intervarsity en ander sportaktiwiteite

    Maar:
     
  • Studentelewe op die hoofkampus steeds hoofsaaklik in “twee wêrelde”
  • Qwaqwa sport facilities very inadequate
  • Vista pipeline students feel ‘out in the cold’, unavoidable decline in student life for pipeline students

    3. Op pad na 2010: die uitdaging van volgehoue verandering en transformasie
    By ‘n ingewikkelde instelling soos ‘n universiteit is daar altyd talle probleme, uitdagings, frustrasies en irritasies. Dit is nou maar eenmaal deel van wat ‘n universiteit is, maar ook ‘n groot deel van wat ‘n universiteit so ‘n besondere plek maak.

    Maar as ons terugkyk na waar die UV 5 na 10 jaar gelede was, dan dink ek dit sou korrek wees om te sê ons is baie, baie beter daaraan toe as 5 jaar gelede – en ook baie, baie beter geposisioneer om ons rol as ‘n leieruniversiteit in die Suid-Afrika in die 21ste eeu te speel as wat ons 10 jaar gelede was.

    All in all, the UFS has handled the first phases of transformation with distinction, commitment and responsibility. It has shown remarkable maturity and, yes, robustness. And all of us can be proud of it.

    Maar daar is baie meer om te doen. En ons moet dit aanpak, sodat ons oor 5 jaar met trots kan terugkyk op wat ons bereik het, en nie in ‘n verleentheid is omdat ons belangrike geleenthede nie raakgesien en aangepak het nie.

    I have stated above my conviction that, for the UFS to continue on its chosen path of excellence, equity and innovation, of becoming a great and robust university, it must continue to change, staying ahead, being pre-emptive and agile, adapting and transforming – whilst all the time remaining true to its intrinsic nature as a university and place of scholarship (i.e. change amidst continuity). Continued “relevance and excellence” requires continuing adjustment to changing circumstances.

    Put simply, there are two constants for the UFS:
    • We will and must always remain a true university.
    • There will always be change and transformation.
    The need for sustaining change, comes from several fronts.
    • As noted above, the international higher education environment and landscape is changing as fast as ever, and we have to continue to adapt to that. The need for entrepreneurial and innovative approaches to survive as strong centres of scholarship, has not gone away.
    • Die nuwe nasionale hoër-onderwyslandskap het baie verander, en dit sal aanhou verander, wat nuwe uitdagings maar ook geleenthede sal bied. Finansiële beperkings van die Regering sal steeds die ontwikkeling van universiteite wat nie toenemend finansieel selfstandig word nie, strem.
    • External expectations in political and community (and business) circles are that universities should continue to change and transform – and at a quickened pace. There is increasing impatience with the pace of transformation (though perhaps sometimes narrowly understood) at universities. Let there be no doubt about that.
    These and other imperatives in our environment that impact on our institution are inescapable. In the light of this reality, the Executive Management engaged intensively at a recent summit about the challenges ahead. The management confirmed the current set of strategic priorities for 2005 - 2007:

    • Excellence
    • Equity, diversity and redress
    • Financial sustainability
    • Regional engagement and co-operation
    • Outward thrust
      Howeve
      r, the Executive Management also expressed a strong realisation that the UFS should launch a next phase of transformation.
       
    ‘n Volgende fase van transformasie moet aangepak word.

    Towards a Transformation Plan

    The EM clearly indicated its comprehensive understanding of transformation, which encompasses all the priorities noted above, and which should be spelt out clearly in a transformation plan for the UFS, to give the transformation process greater clarity and greater focus.

    Transformasie word dus verstaan as ‘n proses met ‘n verskeidenheid fasette wat uitnemendheid in alle sfere van die universiteitslewe verseker, en wat heelwat meer moet omvat as bloot stappe om billike indiensneming te bevorder.

    Hoewel laasgenoemde ‘n kritiese element van enige transformasieplan sal en moet wees, moet die plan ook areas soos die volgende insluit:
    • institusionele kultuur, houdings en waardes;
    • studente- en koshuiskultuur, tradisies en sosiale interaksie;
    • uitnemendheid, waardes en praktyke in die werkplek;
    • akademiese uitnemendheid, kultuur, metodes en fokus (veral onderrigmodus, kurrikula en navorsingsfokus).
    Slegs dan sal ons werklik vordering kan maak op die pad na ons gestelde ideale van uitnemendheid, billikheid en innovering.

    So ‘n volgende fase van transformasie vereis ‘n wel-deurdagte en samehangende transformasieplan, binne die konteks van die UV se strategiese beplanningsraamwerk, wat duidelik die doelstellings, die proses en die tydraamwerke uitspel.

    A Transformation Plan Team will be appointed within weeks to compile a coherent and comprehensive transformation plan in consultation with staff, students, alumni and other stakeholders.

    Today I would like to announce the co-ordinators of this Team. They are prof Teuns Verschoor and dr Ezekiel Moraka. After consultation they will propose team members, for eventual approval by Executive Management.

    The Team will have a deadline to present the plan to Management and the University Council. The plan, which will be integrated with the strategic planning of the University and existing transformation initiatives, must then be implemented by the relevant faculties and departments.

    The EM also considered the need for something like a UFS ‘charter’ which would be a constitutive framework for the transforming UFS, spelling out its overarching goals, values, principles and important rules. Such a charter must preferably be generated as a product of the current ‘social contract’ process.

    Although the final Transformation Plan will be the product of an inclusive consultation process, it should at least comprise existing transformation projects such as the Employment Equity project and the social contract process, as well as additional projects and elements proposed by the Task Team in a coherent and focused whole.

    We also must consider support for staff involved in these transformation steps, including appropriate staff development, capacity to support transformation processes, flexible and supportive administrative practices, stress management support and other ways to handle the possible extra load of transformation.

    Our goal is simple: best-practice transformation, and nothing less . It is the job of a good university to show intellectual leadership, also in the field of transformation. Key phrases in this endeavour are: transformational entrepreneurship, innovative transformation; transformation for excellence.

    Engagement: the African context
    An important aspect in the discussion at the management summit – and to be considered in the academic element of the Transformation Plan – was the issue of the African context: of the university in Africa , for Africa , of the African university. Whilst the latter can be a controversial concept, I believe that we have to deal with it and give content to it.

    It has been said that the issue is all about universities serving the needs of Africa and the aspirations of all the people of this continent. I would argue that a constructive way to think about this is to be found in the concept of an engaged university – something I have been arguing for some time: that we must be an engaged (and critical) university. (Obviously this is related to our thinking about community service learning and research.)

    The engaged university bridges the gap between itself and the surrounding community. This happens in several areas of the “scholarship of engagement”.

    Betrokkenheid in leer en onderrig
    Gemeenskapsdiensleer
    “Betrokke onderrig”: kurrikula wat plaaslike Suid-Afrikaanse en Afrika-probleme en omstandighede reflekteer.
    “Betrokke” volwasse leer": geleenthede vir lewenslange leer, professionele ontwikkeling en so meer (vergelyk Burton Clark se ‘extended periphery’), wat ook nuwe mense in aanraking bring met die universiteit.

    Engagement in research
    This is all about development-oriented research, community service research, and social transformation research, which can and should involve social as well as natural sciences. It involves new methods and styles of research:
    • Policy-oriented and practice-oriented, implementation-driven
    • Interdisciplinary
    • Team-based
    • Partnerships with community organisations
    • Multicultural, multilingual research teams
    • Living with, and searching for, multi-dimensional answers to complex problems. Integrating a range of perspectives to understand the challenges of development and underdevelopment” (Botes 2004)
    • Post-graduate curricula to reflect local (South) African community conditions and problems
    • Involving adult learners with particular life experiences
    • Using indigenous knowledge in concert with other scholarly analysis
    • Getting involved in grassroots development work, dirtying your hands, but gaining scholarly insights into the dynamics of development and underdevelopment as well as into possible policy responses.
    • Transfer of knowledge to the poor
    • Start learning from the poor and the disadvantaged.
    There is no reason for this not be world class research. And there is money in it and for it. Interdisciplinary and transdisciplinary (engaged) research focused on a range of social problems offer a rich lode of opportunities for entrepreneurial initiatives, for earning third stream income.

    This engaged university model can truly ‘reconcile the idea of a university, which is perceived to be universal, with the specific demands of being African … and involves championing “Africanness” to the wider world while continuing to educate and develop scholars who are critical (and) analytical” (to quote Makgoba’s dream).

    It produces a different kind of scholarly knowledge that does “reflect an African reality” (Makgoba) and the African condition, that does promote and establish an “African consciousness” in our universities and scientific work, that does flow from “Africa as a primary source of inspiration” (Makgoba) and displays a clear “African-rootedness” in our scientific and scholarly work.

    This can be a constructive way of contextualizing the UFS as a university of excellence in Africa and for Africa . Our transformation efforts should seriously deal with this matter.
    • In this context there is a great need, and many opportunities, for partnerships with the Central University of Technology (CUT), but also provincial government, local governments, notably Mangaung Local Municipality , in pursuing these engagement projects.
    Student life
    By now it has become a cliché to say that we exist as a university because of our students. Yet many people, parents, alumni, staff, and the students themselves are beginning to ask critical questions about the educational experience here at the UFS.

    The most important question they are asking is: Are we producing graduates who are able to cope with our changed and changing world?

    Een van die werklikhede van die wêreld en van die demokratiese Suid-Afrika is diversiteit en multikulturaliteit. Ons as universiteit het ons verbind daartoe. Maar die vraag is: wat is die werklikheid op die grondvlak van studentelewe?

    The observation is that on the main campus in effect we have “two campuses” – one white and one black, separated in the classrooms and in the residences. This was certainly never our intention and is an unintended consequence of our parallel-medium policy (which allows for classes in Afrikaans and in English) together with the current hostel placement policy which gives students freedom of choice of which hostel they want to live in.

    Die huidige koshuisplasingsbeleid is die resultaat van belangrike onderhandelinge in die oorgangstyd van 1997/8. Dit is tyd, na 8 jaar, om weer daarna te kyk. Die situasie is nou baie anders as in in daardie jare. Studente kom nou uit ‘n ander omgewing as in 1997, baie is gewoond aan gemengde skole en skoolkoshuise. As hulle op hierdie kampus kom, moet hulle onverwags kies tussen hoofsaaklik wit of hoofsaaklik swart koshuise.

    ‘n Intensiewe konsultasie- en besprekingsproses sal eersdaags op die kampus geloods word oor die plasingsbeleid. Studente en studenteleiers sal uiteraard direk en intensief betrek word. Eintlik is dit die studente wat die leiding moet neem in hierdie hersiening van die beleid, met die verskillende studenteleierskapstrukture en gesagsliggame. Die koshuishoofde is net so ‘n belangrike groep om hier met innoverende idees na vore te kom.

    Furthermore, can we say that we prepare the students to be the intellectual leaders of tomorrow if they do not engage in cross-cultural academic discourse and debate, learning to understand and handle diverse viewpoints and approaches? We need to be innovative in the way we design teaching modes and learning situations, given a parallel-medium language policy, so that greater contact with students from other language, cultural and socio-economic backgrounds can enhance the teaching and learning experience.

    Voortgesette studentetransformasie kan ook lei na ‘n hersiening van studentetradisies (jool, intervarsity, koshuisgebruike, ens.) Weer eens sal daar ‘n goeie konsultasieproses wees. Ek sou raai dat die kampus uiteindelik sal besluit om sommige tradisies en gebruike te behou, sommiges te staak, en om talle nuwes uit te dink – veral as ek dink hoe kreatief studente kan wees.

    4. Conclusion
    The Executive Management has sent out a strong signal that the transformation process at the UFS remains a matter of urgency. This same sense of urgency must reach all staff, students and other stakeholders so that they can support the transformation process.

    Echoing our sentiments at the launch of the Turnaround Strategy, I want to say: we have reached a historic moment in the life of the UFS where innovative thinking and bold steps yet again are necessary because ‘failure is not an option’.

    Dit is nodig om te verseker dat die UV, as ‘n honderd jaar oue universiteit, doelgerig voortgaan op die pad wat hy gekies het om die toonbeeld van ‘n suksesvol transformerende uitnemende en billike universiteit te word en te wees, ‘n universiteit wat verbind is tot nie-rassigheid, nie-seksisme, multikulturaliteit en meertaligheid in die proses van die bou van ‘n nuwe Suid-Afrikaanse samelewing.

    In hierdie sin vergestalt die transformerende UV as universiteit die ideale van die demokratiese Suid-Afrika en die Grondwet. Die UV moet ‘n lewende en helder voorbeeld word en wees van wat ‘n ware Suid-Afrikaanse (en Afrika-) universiteit is.

    Hierdie transformasie moet omvattend en deeglik wees, en bou op die grondslag en prestasies van die verlede, maar ook duidelik enige nalatenskap van diskriminerende en uitsluitende elemente in die UV se verlede erken en uitwis.

    We must embrace transformation and the South African and African context by unpacking it, understanding it, researching it but finally taking ownership of it. We must also get beyond the rhetoric of transformation; we must give intellectual content to it in a way which derives from the intrinsic nature of the university.
    • Obviously we should also not underestimate the complexities of transformation and of building a new society, given our complex history and the legacies of poverty, underdevelopment, colonialism and apartheid.
    Essentially we must nurture a common sense of belonging which is more than “merely accommodating”. We must create an entirely new institutional culture with non-dominance as norm and values which reflect the various dimensions of culture of the multitude of cultures present at an institution, creating a sense of belonging for all, white and black.
    • This means that this should not be an (‘Afrikaans’) university where whites merely ‘accommodate’ or ‘tolerate’ blacks.
    • At some time in the future the majority of staff at this University will be black. When that will be, nobody knows. (Some observers, including some Vice-Chancellors, say 15-20 years.) Likewise that shouldn’t be a (‘black’) university where blacks merely ‘accommodate’ or ‘tolerate’ whites.
    • Phase 4 of our transformation is about getting beyond “merely accommodating” and getting to true inclusivity, the University becoming something really new in many respects.
    • It is about creating a sense of belonging for all, to answer the question: “Is there place for me here?” It is about creating a truly South African university where everybody will have a place.
    • It is about addressing the fears of integration, the fears of white staff who are afraid that they may lose their jobs due to affirmative action.
    • It is about addressing the frustrations of black staff who experience alienation and insufficient space to work and live.
    • It is about taking non-racialism seriously (black and white): literally unlearning old habits of racism, discrimination and racial thinking patterns.
    • It is about taking multiculturalism and multilingualism seriously – black and white.
    Hierdie proses gaan weer eens nie sonder omstredenheid of konflik wees nie, ons gaan nie altyd alles dadelik 100% reg kry nie. Maar sover het die UV nogal ‘n goeie baanrekord met veranderingsbestuur.

    This University handled earlier phases of transformation with aplomb. It handled them with responsibility, dedication and distinction. Let’s do the same for the next phase.

    I really want to ask line-managers for their support. It is essential to make a success of these challenges, also convincing your staff to take ownership of this process and of making it work.

    Similarly the leadership and innovativeness of the residence primes and residences wardens are critical.

    It is a question of leadership to take us into the uncertain future in a responsible way. Let’s do it – together.

    Let us fortify our foundations for a great and robust, ever-changing university.

    Modimo o hlohonolofatse yunivesithi ena.

    Khotso Pula Nala


    In Deo Sapientiae Lux

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