Monday, January 9, 2023

EDUCATION MINISTRY HEADING DOWN A SLIPPERY SLOPE

 The education ministry’s plan to regulate school fees in private schools is baffling because it goes against the spirit of the sector’s liberalization and is curious given our history with price controls.

A statutory instrument is in the offing to put caps on school fees from pre-primary to tertiary levels for all schools.

One can imagine that the move is in response to parents’ complaints about rising fees, especially last year when inflation jumped to its highest level in eight years.

It is ironic that the ministry would even consider regulating private school fees at all.

"When the NRM came to power in 1986 the need for more widespread provision of education services were clear. Less than half the school going children were in school, a number that had to be increased dramatically as a long-term investment in the future of the country...

The introduction of UPE in 1997 more than doubled enrollment.

However, prior to this government opened the doors to private institutions, which have been critical in providing education. At last count private schools accounted for 40 percent of the enrolled students in the system.

This is not the first time calls for fees to be controlled by government have been voiced, but the government has swatted back such calls.

The logic as I understood it, was quite simple. The government does not have the resources to provide universal education and therefore coopted the private sector to help in this endeavor.

The private sector recognized the opportunity and have been quick to take advantage. The explosion in private schools is an indication that it is a lucrative enough market in which to play.

There was reasonable certainty that if an investor committed funds, he could cover his costs and have some profit left over from the school fees they charge. Going by the competition, school owners could only charge so much, otherwise they would collapse due to more inexpensive competition.

Over the yeas investors in the sector have found an equilibrium, with fees shifting depending on economic circumstances.

The government on the other hand continued to struggle with provision of quality education in its schools and those parents who could opted for private education.

"One of the major byproducts of this increased private sector participation is that our education is biased more than ever towards passing exams and away from building well rounded, upright citizens of the country....

It makes sense. The most objective way to measure success and therefore to market ones school is by showing that they can churn out academic successes. So many schools do not bother with extracurricular activities – many don’t have a blade of grass to call their own. Though some argue that this is down to a failure of the education ministry’s inspection and enforcement of regulation concerning the setting up of schools.

However, if government enforced all the standards, it is arguable whether there would be as many private schools as they are now, as meeting all these requirements may make the investment unviable given the fees the market currently allow.

This last point is interesting because it suggests that schools are actually charging less than they should. A business man will do just enough to earn a margin on the costs of the business. So, if he can cheat on standards he can get better margins.

Relatedly the private sector is in education because there is a gap in the sector, both in terms of number and the quality of schools. The quality of education anywhere is determined by the public schools, the better they are the less likely there are to be private schools and the few that are there will be charging a premium...

Given government’s inability to keep pace with the growth in the school going population, controlling prices will cause the very thing that they fear – higher school fees.

This is how it will come about. You control fees and some businessmen will decide the sector is no longer viable and drop out. Best case scenario, they will sell to other businessmen who want to try their luck, worst case scenario they will repurpose the building for other uses and that would be a school lost.

In the worst-case scenario that will mean more students in fewer available schools. The disparity between supply and demand would widen, which in normal times would force an increase in school fees. But because government will have put a cap on fees, schools will find all sort of ingenious ways to charge more.

Invariably there will be some proprietors who would rather not play cat and mouse with government and fall by the wayside, further aggravating the demand-supply balance. All the while you can bet that government schools will not be getting better able to sponge up these kids who have no schools to go to.

"In the end the very thing the ministry is hoping against – runaway school fees prices, will come to pass and for much poorer quality service...

 


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