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Article: Re-assess Policy on Private Sector Education

By Hassan Saudin

The on-going rift between the Government of Tanzania and owners of private schools over the government’s decision to regulate and dictate tuition and other  fees charged by private schools in the country calls for an urgent need on the part of the  government and parliament to re-assess and re-define the role of government in private education. 

Without denying the fact that regulation is crucial to enforcing government policy designed at meeting specific goals, there are now strong indications that the government’s decision to dictate fees and other charges by the private schools and institutions of higher learning will only do more harm than good.

On the outset, an apparent goal of such a policy is to make private education more accessible to the masses but a critical assessment of such a policy and the current approach only suggest that such a stance will only lead to making the sector unattractive and unjustifiable from investment perspective which will potentially lead to depriving Tanzanians of that alternative. The broader implication is the potential diminishing of Tanzania’s reputation as a preferred investment destination of choice in the region. One fact is obvious, no private investor is going to offer quality education without a decent return on investment.  

Cost of service delivery significantly varies from school to school depending on factors such as what the school offers in terms of academics and extra curriculum activities, standard of facilities, strategy on staff recruitment and retention and so on, this is a universal reality. The decision by the government to come up with nation-wide fees completely contradicts this reality and only creates an environment that encourages private schools to focus on cost cutting at the expense of quality education.

With the emergence of a growing Tanzanian middle class, families are willing and able to pay a premium for quality education. The government needs to accept the fact that Tanzanians are capable of making rational decisions and comparisons on whether or not fee charged by the private schools are justified or otherwise. Depriving parents of such an option will only encourage parents who believe in investing in quality education to send their children to neighboring countries, a decision that could cost the country not only revenues going into the sector but also talent because upon graduation companies are quick at grabbing employees from top notch schools.

On building contributions charged by schools, the education Minister questioned the justification of imposing such fees arguing that if schools are issued with a license it implies that they already have a building. Owning a building does not necessarily mean that it is free of any encumbrances such as rent, mortgage or an expectation of a reasonable return to investors. Even in the developed countries it is normal for jurisdictions that run government owned schools to charge an extra tax aimed at paying off financial obligations tied to buildings, the tax alternative for the private sector is obviously fee. The government’s reputation as a facilitator of private investment is seriously impaired when an official at cabinet level makes such remarks which are fundamentally flawed from financing standpoint. Such comments only manifest and reinforce a hostile attitude.

One of the most profound challenges facing investors considering Africa as an investment destination, Tanzania included, is unpredictability of the political and business environment. This position will only cause local and foreign investors to be inclined towards investing in projects with a short-term outlook at the expenses of long-term projects that come with a long term tax base. Long term development calls for long term investments and long term investments is feasible if the government is fairly stable on matters that have a huge impact on investor bottom-line.

There is no lasting political gain out of such a hostile policy even though in the short term citizens might be led into thinking that such a policy translates into more accessibility for the masses, in the long run no investor will provide any service at a loss. There is no political incorrectness by accepting the fact that some people will afford private education and others will not, this is the reality even in the developed world.  A meaningful solution to our education crisis will be achieved when the government focuses on coming up with programs that improve the quality of public education that empowers Tanzanians to compete on the global marketplace, make public education more accessible and find strategies to contain the cost of service delivery per student, while at the same time work with the private sector to offer an alternative.

In the developed countries today, the partnership between some governments and the private education providers is in such harmony that governments come up with plans to supplement the private sector, this is because such governments recognize their fundamental obligation to educate its citizens regardless of what schools they choose to attend. For example, communities can set up charter schools fully funded by tax revenues, voucher systems that mandate governments to pay non-government schools a pre-determined formula per student enrolled into those schools, this is basically a business model in which governments fulfill their minimum obligation to its citizens and allow schools to charge for extras, in some cases tax payers get to choose to what schools they want they taxes allocated. An explicit feature of all these examples is the flow of public funds to the private sector. The feasibility of such programs in a country like Tanzania is debatable but the least that the Tanzanian government can do is not to frustrate the private sector. 

As things stand today, it would make a lot of sense for the Government to invite the private sector to the negotiating table not only to discuss the indicative fees but to objectively contemplate the merit of such a policy in the first place. By doing so the government will demonstrate that it listens and considers investors in the private education sector as true development partners. Investors assess the environment by looking at how the government handles testing situations and not what the government claims when promoting Tanzania as an investment destination of choice.

Hassan Saudin

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