Home News Covid-19 Has Negatively Impacted University Finances

Covid-19 Has Negatively Impacted University Finances


Covid-19 has changed the lives of everyone across the globe. Institutions of higher learning had to take major decisions to overcome some of their difficulties.

Financial sustainability and the Covid-19 pandemic are the top two risk factors that have put pressure on South Africa’s 26 public universities. This has forced the University of Pretoria to review its budgets and financial position and to be careful about its cost and growth strategy.

Our public universities have three main streams of income:

  1. The block grant and earmarked funds – the government subsidy.
  2. Tuition fees – the main source
  3. Donations, industry, partnerships, contract research, consulting services, and short courses.

Budget cuts in universities happened at a time when money is needed to bolster the infrastructure needed for online education, improve online pedagogies and strengthen student success initiatives.

Over R2.4 million was reprioritized from university allocations to support NSFAS – inevitably universities had to redo budgets, and review priorities and commitments.

Due to the economic impact of Covid-19, NSFAS looks set to fund even more students.

One of the biggest risks for universities is unpaid student fees, and this will continue to rise in 2021 and beyond.

Government funding for universities ought to increase.

Which strategies can universities utilize to triumph in such a dreadful time?

  • Universities have to utilize resources sustainably, diversify resource streams, contain and replace costs.
  • One of the key strategies the Covid-19 era has accelerated is the need to grow long-term, large-scale, sustainable transdisciplinary, and international collaborations and partnerships. Focusing on the impact of universities in society in addressing the Sustainable Development Goals, Agenda 2063.
  • One-world, one-vision collaboration hoists academic facilities to a whole new level, including teaching and collaborating across continents, using online platforms and video calling in real-time. Digitalization is an essential strategic resource for all aspects of university operations being progressive.
  • Digitalization is worth investing in as it produces digitally fluent students, adapting to the ever-changing job market. Sharing business services such as Information Technology (IT) with other universities is an option that should be considered.
  • Investment is required for environmental sustainability. Several universities are actively going green, including putting water-saving measures in place and supplementing the electricity supply with solar energy.
  • The many strategies we all adopt during these times cannot be based on “business as usual” approaches.
  • There is a wealth of opportunity in alumni social and business networks that universities can call upon to see us through, better and brighter, to the other side.
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