South Africa’s plan to fund free higher education weakens Rand

In a bid to provide free tertiary education for its lower-income students, the government of South Africa is considering a range of budget that involves slashing social grants that serves as the main source of income for 17 million people; a third of the population.

A drop in the country’s currency on Thursday has been linked to rumour making rounds on President Zuma’s intent to announce the plan for free tertiary education in the country.

South Africa’s rand was down 0.78% against the dollar at 14.2650, after earlier trading more than 1% weaker on the day at 1419 GMT.

In the previous year, students and activists on several South African universities had biolently protested against fee increases that caused many Higher Education institutions to temporarily close their doors, as well as demanded for free tuition; one of other tensions in a country marred by obvious income disparities.

The South African government spends 4.7% of revenue, equivalent to 0.75% of GDP, on Tertiary Education and Training. The country’s 26 public universities, which can comfortably accommodate 500,000 students, are under-funded and overcrowded with a total enrolment of 985,212 students.

The plan that was devised by Zuma’s future son-in-law, Morris Masutha, to introduce free tertiary education to South African citizens include slashing the budgets for housing, infrastructure and the armed forces to make R40-billion available for the 2018 academic year.

Masutha had earlier this year estimated the cost of free education to be between R6.5-billion and R7.5-billion a year.

He also proposed tuition fees‚ accommodation‚ meals‚ transport and all study material be paid by the government.