Commodification of education in SA – A dream deferred

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By: Siyabonga Hadebe

It has become a common sight to see parents struggle to find places for their children at Gauteng public schools. In an unprecedented step, the provincial department of education approached South Africa’s largest JSE-listed independent school operator Curro Holdings to accommodate Grade 1 and Grade 8 learners in 2020.

Gauteng cannot keep up with the rapidly rising numbers of students and fewer schools are being built to meet the demand. It is a crisis that place private education providers in the centre of everything. The government has to go begging to these private companies at a huge cost. The financial details between the Gauteng department of education and Curro are not yet known, besides that parents will get a 30 per cent discount on fees. But it is expected that government will pay millions of rands.

Education is very expensive in South Africa. It costs between R23,000 to R29,500 a year to attend an average government fee-paying school. Private schools charge anything between R60,000 and R500,000 per annum for one child. No wonder the likes of Curro and Advtech make so much money. Now with government asking Curro to come in and assist, the company shareholders will be even more wealthy.

But who owns these private companies that are now charged with the responsibility of providing basic education in South Africa?

We must appreciate that the least spoken about topic in politics is the ‘commodification’ of knowledge production in developing countries like South Africa. Access to free, quality and universal education has gained prominence in recent years following student protests at universities. However, these protests were limited in nature because they lacked a deeper understanding of the economic framework governing education as a whole, from kindergarten to tertiary level.

Young people comprise the largest percentage of the South African population of just over 58 million. A huge proportion of young people go to crèches, schools, TVETs and universities. Although many people receive education from public institutions, private education is preferred by the rich and middle classes. The basic education system in urban South Africa is now practically a ‘servitude’ for private companies. The implication of this is that most school-going kids from families that can afford go to privately owned schools.

But what is now even more concerning stemming from the current developments in Gauteng is that private education providers are strengthened even more. Less than adequate investment in public education infrastructure in all areas in the province and elsewhere means that the ordinary citizens are left with no other choice other than sending their children to private schools. Clearly, the public is in the messy of these white-controlled private schools.

It means that South Africa is a country under siege. From collapsing public infrastructure to underperforming state enterprises, legitimization of private capital in providing public services appears to be the part of the game of the day. Without concrete plans in plans on how to address the backlog, it means education in province like Gauteng, and maybe other places in urban SA, will be unchallenged territory for private education providers.

Private companies like Curro Holdings (market cap: R7.0bn), Spark (no data), Stadio Holdings (R1.55bn), AdvTech (R5.8bn), Pembury Lifestyle Group (R32.5m), etc. dominate private sector education in South Africa. All these companies promise “to address the shortcomings facing public education.” Census data in 2011 indicated that only an estimated 48% of students who begin Grade 1 actually complete Grade 12, with most learners dropping out of school in Grade 10 and 11. Educationist Professor Jonathan Jansen puts this figure at 38.9% following the release of the 2019 matric results this month.

A company such as Curro Holdings currently has schools across all nine provinces. University of Stellenbosch’s economics professor Johan Fourie in 2017 commented, “In the past four years, its share price has tripled.” These private education companies report staggering profits to show that education is a lucrative business in South Africa when it was supposed to have been free at the end of apartheid. In the run up to the 1994 democratic elections, former president Nelson Mandela and his African National Congress (ANC) promised “free quality education”.

The profits also mean that other firms are starting to notice and are entering this lucrative market.  As a result, these firms actively target the poor and the working class, which indicates that the entire South African education system is getting privatized at a rapid pace than ever imagined. Not only that, the state now willingly subjects itself to private capital to fill in the ever-increasing gap in its inability to perform one of its most important primary roles. The privatization of education amounts to a dream deferred for the black majority whose ideals are now hijacked by profits. Unfortunately, education is a useful tool extend the lifespan of apartheid policies.

Coronation Fund Managers, CitiGroup, Old Mutual Group and the Public Investment Corporation (PIC) are listed as some of the largest shareholders of Advtech. Professor Jansen himself serves on a predominantly white board. It is possible that many other prominent black and politically-connected individuals such as Douglas Ramaphosa (Curro and Stadio), Ketso Gordhan (Spark), Busisiwe Vilakazi (Stadio), etc. What is more disturbing is that the state is struggling to increase investment in public education but the PIC funds private education providers. This means that the state is directly complicit in the destruction of public in South Africa.

The subject of knowledge generation and at times consumption are heavily contested. The one who produces knowledge demands to be paid for his or her “work” – knowledge therefore has become a commodity like minerals, sugar or rice.
With the advent of economic neoliberalism, where markets are kings, knowledge appears to be also traded in the same space as other commodities. But the issue of the volatility of commodity prices draws so much criticism due to the impact they have on social outcomes.

For example, agricultural products are actively traded in spot and derivative markets with dire consequences. In spite of the fact that this piece is about education and knowledge creation, economic madness and quest for huge profits in agriculture will be used to introduce problems of ‘commodification’ of education and how education is currently being privatised before our eyes for the benefit of the wealthy. Under the pretext of poor public sector education, which is also privatised through school governing bodies, the private education system grows at a faster pace, and thus leaving the majority of the population destitute and without hope.

One is now compelled to question if the less than impressive investment in public education is a deliberate act to force private education down people’s throats over a long term. Not suggesting that there is a link, but Khutlo Tharo Secondary School (Sebokeng), Tokelo Secondary School (Evaton) and Katlehong Primary School (Kathorus) are amongst schools that were set on fire just in January 2020 alone. January is the first month of the school year, it is beyond anyone’s logic why criminals would target schools immediately before schools re-open.

It is a fact that the ‘invisible hand’ of free markets needs assistance for it to thrive.

Going back to the example of agricultural products and markets. Fluctuations in the value of agricultural products lead to uncontrollable increases in food prices and gnawing hunger in the world. Hence, food security is now a great concern for many countries, both developed and under developed. In 2011, for example, former president of France Nikolas Sarkozy commented that the French G-20 presidency prioritised food security by suggesting the removal of land and food production from the hands of speculators, and the mean machine of global corporations. In the end, the world’s leading economies dismally “failed to take the decisions needed to avert a looming global food crisis.”

Food price volatility and soaring food commodity prices remain a sad occurrence in our lives. Furthermore, rich countries cushion their agriculture and ensure sustainable food production through various economic mechanisms like subsidies to farmers and other types of “market protectionist” policies. However, poor countries do not have such capacities – hunger is on the rise because food production and land ownership are mostly under the control of foreign capital.

The problem does not end with schools. The post-apartheid government’s drive to improve access, equity, and redress past injustices in higher education in the 2000s has resulted in shambles. There is no empirical evidence to suggest that the merger of tertiary institutions resulted in either transformation, improved access, and quality overall. The tertiary sector faces exactly the same challenges as schools; thousands pass matric only to discover that there are not enough universities to accommodate them. Even in higher education investments have been rather slow – only two public universities have been built in the past 25 years.

With an estimated population of 58 million, South Africa has approximately 20 universities and 50 technical vocational education and training colleges that collectively have more than 264 campuses countrywide. Kabelo Khumalo maintains that tertiary institutions are not coping with the surging demand since there aren’t enough spaces. A document such as the National Development Plan states that 1.6 million students must be accommodated in higher education by 2030. But there are not new public universities that are in the pipeline besides private ones.

With schools churning thousands each year in fast growing population and no new public universities, private education providers are rubbing their hands in glee. Solidarity Union and Stadio Holdings, unbundled from Curro in 2017, have already announced plans to build private universities. AdvTech owns the likes of Rose Bank College, Varsity College, Vega School and Monash University. Its tertiary division boasts that it has 30 campuses across South Africa and the rest of Africa. Overall, South Africa had over thirty-five private universities at the end of 2019. Other companies that own universities are Educor, CTI Education Group (Pearson Education), Qalitas, etc.

Higher education department reported that the 26 public universities were “ready to accept over 200,000 new entrants in 2020.” From the 2019 NSC examinations results alone the number of candidates with bachelor passes is 186,058, and those who obtained a diploma pass is 144,672. It is obvious that the crisis present opportunities to private providers. Just like Curro, these institutions too will soon be asked to accommodate student overflows due to lack of space in public institutions. And more and more parents will send their children there considering the wave of protests that trouble public universities each year. There is a never a coincident in politics.

Large corporations are more concerned about servicing international markets and are not interested in local markets. The global economic infrastructure consisting of the World Trade Organisation and the Bretton Woods Institutions (i.e. World Bank Group and International Monetary Fund) ensure that the status quo is maintained. With their market capitalization and regional footprint, the South African private education providers operate like multinational corporations already. It is increasingly becoming difficult not to suspect foul play on the part of governments and their role in the poor state of education on the continent.

Private education has existed in our countries for many decades but it only covered a small segment of the population. It may then be argued that the expansion of private education in South Africa and beyond is not so much an outcome of ‘poor’ public education but forces of free market economics are at play. Both Advtech and Curro are presently spreading their wings to other parts of the continent, from Botswana to Kenya.

Commodification of education in Africa and elsewhere encourages entry of private capital, and growth of subtle privatisation of this important public good. Already, private schools are self-regulating through the Independent Examinations Board (IEB) and that is why Gauteng education MEC Panyaza Lesufi once expressed his frustrations by calling for a single examinations body in South Africa. But now, it comes as a surprise that he even considered Curro Holdings as a solution of last resort in efforts to solve the problem which has been simmering for years.