BRIAN KANTOR: University of Cape Town in trouble — but not yet for financial reasons

The University of Cape Town (UCT) has been in the news for all the wrong reasons. A suspended, now paid-off, vice-chancellor; police invited onto campus to prevent further disruption of classes by defaulting students barred from readmission; and an academic community threatening strike action.

It was the latter dispute that led me to fear for the financial state of my alma mater and investigate. The numbers show UCT’s assets amounted to an impressive R15.6bn in 2021, up from R10.1bn in 2016. Yet many of the buildings and much of the equipment will have little resale value, if they could be sold at all.

It is the liability side of the balance sheet that is truly impressive. Almost all of it can be regarded as equity capital called “accumulated funds”, gathered over many prudent years. They increased from R8.4bn in 2016 to R12.3bn by 2021. There is almost no debt on the balance sheet and the provisions for future employee benefits, pensions and medical aid are minimal — R64m in 2016 and R127m in 2021.

Investments held by UCT have increased from R4.8bn to R8.9bn over these five years. Interest and dividend income have stabilised at about the R360m level. Donations have doubled — from R373m in 2016 to R761m. It may therefore be either comforting or discomforting to recognise that the current financial state of UCT will not stand in the way of its Vison 2030, or  “…the drive to rethink the UCT undergraduate curriculum in the light of decolonial theory perspective….”, to quote a university council report.

The revenue line on the income statement calls for attention, though. It reveals large and increasing dependence on earmarked contributions from the central government — enough dependence to cause the finance committee with oversight of financial sustainability to warn, given the role the university plays in funding its students, that “...the level of government funding is not sustainable over the medium to long term given the economic challenges faced by the country”.

The danger lies with the important cohort of about 19,000 undergraduates whose income-advantaged parents pay fees, who could easily be lost to private universities or universities online or abroad that have the quality of instruction as their most important objective.

One is struck by just how strongly and directly involved the government is with the university, providing much funding with explicit direction as to how it is to be utilised. I would suggest that academic freedom at UCT — its right to decide what to teach, how to teach, even the number of students it enrolls and the staff it employs — has been severely compromised.

No apparent opposition to this is revealed in the council reports. The most enthusiastic support for government policy is to be found in the council’s 2021 transformation plans for the academic community: “UCT has been addressing the challenge of increasing the number of black South African academics on its academic staff for at least the past 10 years ... with the designated groups (including black South Africans, women and persons with disability) still underrepresented at the level of associate professor and professor”.

New measures, including specified targets or quotas, have been set to forcefully tackle the numbers by race objectives. But how do the overrepresented by pigmentation professors respond to the knowledge that UCT would prefer them replaced? Their early retirement or departure to institutions that offer more love and comfort is surely encouraged, providing yet another case of the squandering of SA’s human capital, perhaps the scarcest and most valuable of it.

How will UCT students or researchers hope to benefit from this racial profiling and departure from meritocracy? A growing proportion of the UCT student and staff body is clearly not supportive, refusing to identify themselves by race — 26.7% of the student body in 2021 compared to 13.9% in 2016. This makes transformation possible, but not measurable.

• Kantor is head of the research institute at Investec Wealth & Investment. He writes in his personal capacity.