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...
