If #FeesMustFall how do we fund universities? Africa Empowered's Vuyo Jack has a plan
Chairman of Africa Empowered investment company Vuyo Jack has outlined an equity funding system which he says will see the country resolve the current fees conundrum and deal with unemployment.
Speaking at media briefing in Johannesburg on Wednesday‚ Jack proposed the nation building fund which he said was neither a government nor a private sector fund.
He said the fund would be structured as a donation and would tap into enterprise development funds and Black Economic Empowerment (BEE) ownership schemes.
“The biggest amount would be around the BEE ownership schemes so when you look at the ownership targets of all companies‚ there is a 3% that is targeted for broad-based BEE schemes‚” said Jack.
He said listed companies had a R13-trillion market capitalisation‚ and just a little bit of that would make a big difference.
“If you ring-fence 3% of all these stakes you could be able to raise in the short term about R100bn and you can have a long term goal of raising R300bn and the reason for that is that it is low hanging fruit that companies need to be able to do this‚ for them to be able to do business and to contribute towards their BEE score‚” he said.
Jack said the fund would be structured as a donation.
He gave an example of a company with a R100bn dividend yield‚ saying with the Johannesburg Stock Exchange dividend rates being 10% that company could have an annual basis of R10bn without increasing its capital and touching its endowment.
He said the donation would affect the shareholders of companies but not the balance sheet and if the economy and the companies grow‚ then the profit will also increase.
The fund would have various sub-funds which would include a residential and research sub-fund‚ managed by fund managers who understand management principles and their social impact.
The research sub-fund could result in new jobs or business opportunities‚ and the residential sub-fund could allow people to use their homes as residences which would allow them to create job opportunities‚ said Jack.
However he said students who will be receiving the funding as a grant will be expected to give back once they complete their education by working in the public sector for two years and the private sector for another two years.
Jack said the idea could yield results as early as next year‚ but students had to go back to class while engagements about the proposal continued between the private sector‚ institutions of higher learning‚ the government and student leaders.