I start with a question today which says, is higher education a business? I hear a growing number of professionals advocate that it’s not, and I have to let you in on a little secret – I couldn’t disagree more.

Higher education is a unique type of business to be sure, but it is absolutely a business. It’s just that the product sold is different from other products we always buy from the market, and another question says, why is it that this product (higher education) doesn’t follow the law of demand in Rwanda?

Statement from the law of demand

The law states that the more the demand the more the company will raise the cost of that product that is in high demand so they make more money. If demand goes down they will drop prices as much as possible to remain even to try to get demand back up. That’s what it’s all about plain and simple. If prices decrease that means the demand is diminishing.

Let’s look at the evolution of higher education product in Rwanda if it follows the law of demand?

Kigali institute of Science and Technology was founded in 1997 with the specific goal of supporting the applied sciences and helping advance Rwanda’s information and communications technology industry.

The largest university in Rwanda, the Université Libre de Kigali (ULK), was the first private
University to grant its own degrees and Founded in 1996.

Rwanda’s higher education system has improved dramatically since the genocide, expanding in
Enrollment more than ten-fold in the year 2000.

By 2004, this rate had doubled to 200, but One barrier to entry is the cost of higher education but the. Survivors Fund, a non-governmental organization that supports genocide survivors with services including education, budgets between $450 and $900 for each university
Student it supports. These costs are prohibitive for the vast majority of Rwandans unless they can

Receive government or private support.

Compared with its neighbors, Rwanda’s education system is doing quite well, with some caveats.

Rwanda’s gross primary enrollment is better than most sub-Saharan countries, although it is

Somewhat inflated by the presence of older students who are repeating grades or entered late.

Let’s see compare higher education as a product in 2004-20014 and see if it has followed the law of demand as tuition remains constant, can we call it a perfect competition? I don’t know just read and get the truth.

National University of Rwanda (NUR)
, Kigali Institute of Education (KIE),
Kigali Institute of Science and Technology (KIST)
Kigali Health Institute (KHI)
School of Finance and Banking
Higher Institute of Agriculture and animal husbandry (ISAE Busogo)[
Rwanda Teachers College (RTC)
Tumba College of technology (TCT)
Umutara Polytechnic (UP)
Integrated polytechnic Regional Centre Kicukiro Campus (IPRC )
Institute of Legal Practice and Development (ILPD)
Catholic Institute of Kabgayi (ICK)
Kigali Independent University (ULK)
Institut d’Agriculture, de Technologie et d’Education de Kibungo (INATEK)
Institut Laique adventiste de Kigali (INILAK)
Adventist University of Central and East Africa (AUCA)
Institut d’Enseignement Supérieur de Ruhengeri (INES)
Catholic University of Rwanda (CUR)
Kigali Institute of Management (KIM)
Byumba Polytechnic (IPB)
Protestant Institute of Arts & Social Sciences (PIASS)
Rwanda Tourism University College (RTUC)
Mount Kenya University Kigali Campus (MKU Kigali)

When we follow the projection above there has been a big change and an increase in the number of higher learning, institutions in Rwanda since 2004-2014 today but my question remains is this perfect market competition or imperfect market competition.
Lets watch on the changes of Tuition fees on higher institutions in Rwanda from 2004-2014 and compare with the law of demand?

Students planning to enroll in public universities in the 2013-2014 academic year have a reason to smile as the government has reduced tuition fees in all tertia¬ry institutions, going down from Frw 850,000 to Frw 600,000 per year.

“The new policy was aimed at enabling more students in public tertiary education to pay afford-able tuition fees and minimize the possibility of losing students who may drop out of public higher learning institutions due to cost,” explained the State Min¬ister for Primary and Secondary Education, Dr Mathias Hareba¬mungu.

At the same time, however, the government has changed the selection criteria of students to access bursary loans. Stu¬dents in Ubudehe category 1 and 2, which include the most vulnerable students, shall re¬ceive 100% government sup¬port in the form of loans for tu¬ition fees and living allowances while those in categories 3 and 4 will receive 50% of the tuition fee but no living allowances. Stu¬dents in categories 5 and 6 whose parents or family are financially well-off will have to fully cater for themselves.

The new policy is aimed at enabling more students in public tertiary education
He noted that before taking a final decision, Mineduc officials visited higher-learning institu¬tions to discuss the issue of re¬ducing the tuition fees.

“While determining the new education policy in our public higher institutions, we also put into consideration the current tuition fees structures in other East African Community mem¬ber states” Harabamungu said.

The amendments also include the harmonization of the regis¬tration and caution fees to Frw 50,000 in all institutions. Ac¬cording to Harebamungu, some public institutions have been charging students different registration and caution fees at Frw 30,000 and Frw 50,000 respectively.

It seems the measures have been generally well received by students. Benon Mugabo, a senior six leaver who is planning to join the National University of Rwanda, welcomed the reduced tuition fees saying which he said will help more vulnerable stu¬dents to get access to education through government sponsorship.

However, he called upon the ministry of education to come up with mechanisms and strategies aimed at also harmonizing tuition fees at private universities and other institutes of higher learning.

How education business has not been considered a business product as such?
I realize many take offense at the notion that education is a product, but bear with me it’s very untraditional. A student isn’t paying for a diploma or swiping their credit card for a trinket.

Students enroll at an institution seeking an education, and as institutions of higher education, we provide that opportunity.

The difference from a traditional business is that institutions of higher education (at least most of them), don’t seek to create a profit in their fee schedule.

They seek to make enough revenue to pay for current and continued operations, and future growth (new buildings, programs, etc.).

While many folks don’t like to talk about it, revenue is what allows universities to do what they do best – educate and promote development.

However, without a properly structured business model for producing enough revenue to pay for salaries, facilities, programs, etc, any institution of higher education will struggle budgets will be cut, projects delayed, and personnel released (or not re-hired).

It seems the notion that education is a business is offensive to many in education, and I can’t for the life of me understand why maybe that M.E.D – MBA combo has clouded my logic?

Could it be that some professionals are simply too far removed from revenue producing operations to see and feel their impact?

I deal with divisional budgets on a near daily basis. Those budgets must be allocated properly so that the division can accomplish its goals of developing our students.
We must keep in mind that the money doesn’t arrive in those budgets by magic and it takes considerable effort to properly structure the business model (revenue acquisition) of the university to meet the operational needs of each department (expenses).

Now I think it’s important to acknowledge the business operations of the University, however the really important piece is this.

The operations are properly structured so that the institution can carry out its mission. If the business plan isn’t solid, then the ability to shape a quality education for our students will be compromised.

I always appreciate diversity of opinion, so if you think I’m a horribly out of touch administrator with a distorted MBA paradigm, I promise we can still be friends.