Sustainable Human Capital Investment:Towards An Effective Model Of Higher Education Financing In Tanzania

This dissertation,Sustainable Human Capital Investment:Towards an Effective Model of Higher Education Financing in Tanzania,is a critical study on the subject matter of higher education financing in Tanzania as it invigorates both the philosophy and the practice around it.Financing of higher education in Tanzania is considered a crucial factor in realizing the country's development vision.It is for these reasons that Tanzania has been financing its higher education since its inception,shortly after independence in 1961.Diminishing resource capacity and competing interests for government finance have plunged the higher education into financial doldrums.As a result,the higher education sector has been compelled to manouvre through various sources of financing in order to remain relevant to its role in economic development.Specifically,the study suggests alternative solutions as the current and future level of demand for higher education in the United Republic of Tanzania(URT)outweighs the ability of the economy to satisfy it under the current higher education financing framework.Tanzania is a developing country that relies heavily on agriculture,mining,fishing,tourism and a fledgling industrial sector for its economic development.There is no guarantee that such an economy will be able to sustain financing of its higher education sector at the expense of equally important sectors such as health,infrastructure,water and sanitation,to name but a few.The study notes that the successful implementation the Primary Education Development(PEDP)and Secondary Education Development Programs(SEDP)has been translated intoincreased numbers of students wishing to pursue higher education,exerting further pressure on the demand for higher education.Over a half of the Tanzanian population is aged 15-who have graduated from primary education--a fact which exerts huge pressure on the higher education sector.However,the current set up of higher education financing,which was developed before the expansion of the basic education,characterized by massive reliance on government financing,cannot guarantee provision of higher education to all those that need it.The study observes further in order for Tanzania to attain her objectives which are spelt out in the Tanzania Development Vision 2025,the Tanzanian higher education sector needs to generate a workforce with necessary skills and expertise vital for propelling faster economic growth and country's development.To realize this,an effective framework of higher education financing needs to be developed as the current one,the public finance model,has exhibited huge shortcomings.Furthermore,the study indicated the current model of Higher Education financing is inconsistent and inefficient making it highly unable to guarantee the desired outcomes i.e.human capital development,poverty reduction and economic growth.In order to explore and implement a corrective measure,which is an effective model of Higher Education Financing,the study examined empirical studies on the Higher Education Students Loans Board(HESLB).Most of the studies on HESLB,as a body mandated by law to provide financing for higher education,concentrated on its success,sustainability and effectiveness on loans issuance and repayment.None had focused on its performance towards human capital investment.This study sought to analyze and explain HESLB's performance in human capital investment,which has been operationalized in this study to imply financing of higher education.To that effect,the study retraced the development of Higher education financing from early days of independence in Tanzania to the inception and operationalization of the HESLB.The study raises four research questions aiming at probing for the creation of an effective model of higher education financing in Tanzania.The four questions address the fundamental subject regarding the establishment of an effective model of higher education financing in Tanzania.In bid to answer those questions,the study employed a mixed methods research design.The study concentrated on a 10 year period,from 2005-2015.This study,among others,examined enrollment,budget and actual expenditure trends in Higher Education in Tanzania with view to establishing their significance to sustainable human capital investment in Tanzania as well as the performance of the Higher Education Students Loans Board(HESLB)towards Human Capital Investment in the same time frame.Secondary data were collected from the Ministry of Education and Vocational Training(MoEVT)budgets from 2005 to 2015 from which trends of enrollment,budgeting and actual expenditure were critically analyzed.As for the performance of the HESLB in human capital investment,the study retraced the development of the higher education from the early days of independence to the inception and operationalization of the board.Then data on loan budgeting,allocation and repayment were collected analyzed and interpreted with view to answering the research questions on the performance of the HESLB.While the findings indicated an upward trend on both enrolment and financing of the education sector from 2005 to 2015,they also confirmed the initial assumptions for the existence of a glaring anomaly of the public finance model of higher education financing through its inherent inability to be self-sustaining.The findings further showed,performance-wise,the trends were still very low when compared with neighbouring countries as well as existence of a huge funding chasm in the budgets of the education Sector.The challenge lies on how to bridge the gap.Although the study observed a remarkable upward trend on resources allocated to the Ministry of Education and Vocational Training(MoEVT)and the Higher Education Students Loans Board(HESLB)for financing of higher education,it was still found to be insignificant when pitted against the country's GDP.The study suggested an effective model of higher education financing which,apart from incorporating some best practices from the public finance model,would inculcate a culture of reliance on other sources of higher education financing.The study observed that the Loans Board was still unable to sustain itself through education loan repayments were still minimal.This was interpreted as HESLB's little contribution to human capital investment.Since there were no indication of improved repayments,the study suggested the financing strategy of higher education in Tanzania for sustainable human capital investment be invigorated to ensure economic growth and development of the country.