Johan Fourie's blog

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Posts Tagged ‘Cricket South Africa

Can private schools save South Africa?

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NorthernAcademy

When I was an Economics student 12 years ago, the academic literature we read, by South Africa’s leading economic thinkers and social scientists, were lamenting the poor performance of the then South African school system. There was little doubt that what needed to happen was to improve the quality of the schools for the 80% South Africans who were still stuck, despite massive transfers of resources to these schools, in a system that had been crippled by apartheid-era policies.

Fast-forward to today.  A generation has now passed through the system, and there has been almost no improvement. Of 100 Grade 1-students that go to school, only 37 can hope to pass matric. With teacher trade unions opposing policies that might improve teacher quality, our Minister of Basic Education seems paralyzed. Corruption often means that budgets are either unspent or spent inefficiently. There is little hope that things will soon improve.

But there is an alternative. Over the last few years, private schools have become an alternative for middle-income families that want a better future for their children. Take Northern Academy in Polokwane, run by the JSE-listed Curro Group. Despite school fees that are around R21000 per year, with a similar amount for boarding, the school has more than 5000 students, 111 classrooms and 66 hostels. In the 2016 matric exams it was the top-performing independent school in the province.

Curro now has schools across all nine provinces. In the last four years, its share price has tripled. Its profit motive means that it must satisfy its client base: if it performs poorly by employing poorly-qualified teachers, its clients will go elsewhere. That is the miracle of the market-system that Adam Smith identified: profits are a way to signal that a firm is doing something right. If profits fall, the firm better improve its products or services or it will go out of business. If profits rise, like in the case of Curro, other firms will notice and enter the market, offering their own product and service which they hope will eat into the profits of the dominant firm.

One fear is that Curro will monopolise the market, charging fees that allow them to earn monopoly profits. This is unlikely in the education sector, though, as there are few barriers-to-entry. Consider the SPARK schools, with tuition also around R21000 per year, that have opened since 2013 in Gauteng and the Western Cape.

A second fear is that a well-run private school system will create further divisions in a country characterized by high levels of inequality; those that are able to afford the high school fees of good education will stand to benefit vis-à-vis kids from poor households forced to attend poor-quality public schools. This is likely to happen if private schools are limited to those that can afford to pay for them. But they need not be.

In Sweden, where equality-of-opportunity is almost a religion, more than 10% of kids are enrolled in private schools. A major education reform in 1992 allowed primary and secondary schools to receive public funding based on the number of students they have enrolled. These schools are not allowed to discriminate or require admissions exams, and they are not allowed to charge parents additional school fees. (They are allowed to accept donations, which are often used to expand school facilities or offer financial support for the poorest students.)

Anyone can start a for-profit school in Sweden. Many offer an alternative curriculum, or provide a service to international, religious or language groups. Others are designated sports or artistic schools. The point is simple: if a public school is not providing the services its community wants, an entrepreneur with the ability to identify a gap in the market will step in to deliver a better service.

This is what we need in South Africa too. The 2017 Budget allocated R243 billion to the Department of Basic Education, which is 16% of our total consolidated spending. With 11.2 million school-going kids in South Africa, that is slightly more than R21000 per kid.

What if every parent in South Africa received a government voucher of R21000 per student which they could deposit at any school they want, public or private? A larger amount could be given to those living in rural areas, and possibly those living in previously disadvantaged areas. This empowers parents to choose the schools which they believe will serve the interests of their kids best.

There are concerns with private education too, of course. One would want to make sure that facilities are of good quality, that teachers and curricula meet certain standards, and that there is some security that students’ interest will be served if a company that provides these services goes into liquidation. But those concerns pale in comparison to the atrocious outcomes of the current school system, where facilities are often non-existent and teachers unqualified.

Imagine the opportunities this will create for entrepreneurs. A community leader in an area with poor public schools can now take the initiative, appoint educators from within the community and use the vouchers to pay their salaries. Imagine Cricket South Africa partnering with an entrepreneur to build a chain of elite cricket schools, with CSA providing the facilities and coaches and the vouchers paying for high-quality education.

An important research literature suggests that mother-tongue education is critical for student success: with a voucher system, if there is a demand for secondary education in Sesotho in a specific community, expect an entrepreneur to spot the gap. Another concern for the near future is the dearth of university-trained teachers: private school chains will have an incentive to fix this, either by training their own teachers on the job, or by investing in teacher training colleges.

We need a new plan for education. I’d hate to see my colleagues 12 years from now write papers still lamenting the poor state of the South African education system. We keep throwing money at a problem that cannot be fixed by money alone. The Basic Education budget grew 7.3% in 2017. If we continue doing this, we are likely to fail a second post-apartheid generation.

*An edited version of this first appeared in Finweek magazine of 23 March.

This is how to transform cricket in South Africa

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Rabada

What South Africa’s first match against Zimbabwe in this year’s Cricket World Cup made abundantly clear, is that Zimbabwe’s national cricket team is much more representative of their country’s demography. Not one ethnically black (or ‘African black’) player was in South Africa’s starting eleven; our country’s demography (roughly: 80% ethnically black, 9% Coloured, 9% white and 2% Asian/other) is nearly the exact opposite of our national team demography (in the last Test match: 9% black, 18% Coloured, 64% white and 9% Asian/other). That is disappointing after two decades of democracy.

But it’s not as if there’s many black players clamoring for selection: Aaron Phangiso is the only ethnically black player in the group, and he will find it difficult to replace our incumbent spinner, Imran Tahir, who has become an ODI wonderkid. The pipeline is also pretty empty: I don’t know whether Kagiso Rabada, a right-arm fast bowler that destroyed Australia in the semi-final of the u/19 World Cup last year and ended the tournament as the highest South African wicket taker, will be a star Protea bowler one day. All I know is that he has the potential to be a star, which is why the national selectors thought it wise to select him for the national T20 side, only to be smashed by Australia. Let’s hope he learns, hopefully with his self-belief and confidence intact, and that he isn’t pushed too hard too fast.

Unfortunately, Kagiso is the exception rather than the rule. Since the democratic transition in 1994, very few ethnically black players have played in the Test side; Makhaya Ntini being the only one that could keep his place for an extended period of time. Of course, this is not a problem unique to cricket; the current Springbok side is as white as what it was in 1995 when it won the World Cup for the first time. But cricket’s failure to grow ethnically black talent seems to be particularly acute.

No one is disputing the fact that we need more black players to be selected for the Proteas. I think it is fair to say that Makhaya Ntini was a favourite not only among black fans; he was a favourite to all because he was entertaining and hard-working and brilliant. Yet no more Ntini’s have come through the system. I’ve written before on why that is. To summarize: cricket is expensive, in terms of time and resources. It is incredibly difficult for a young kid from an impoverished background to have access to good coaching, facilities and family support that will allow him to compete on a level playing field against richer kids. In South Africa, the poorest 80% of the population is almost entirely black. And because cricket skills are developed from a young age, black kids in poor schools simply cannot compete against their wealthier white compatriots. It is also why, if you really want to change the system, you have to start in school.

Which is exactly the opposite approach Cricket South Africa has taken. Last year, the University Sport South Africa (USSA) Cricket Week enforced quotas for different race groups. Each team had to field 3 ‘players of colour’, one of which had to be ethnically black. Teams struggled to fill the quota, some having to field only 9 players because they could not meet the quota requirements. In 2015, the quotas will increase to 4 players of colour, 2 ethnically black. In 2016, it will be 6 players of colour, three ethnically black. It is impossible to see, given current trends, how most universities will be able to adhere to these requirements without 1) putting players without the required ability at risk of injury and 2) without discouraging good players from playing cricket.

Quotas are useful when there is evidence of racism: if there are enough black players that can be selected but coaches or managers choose to ignore them. Such racism is irrational because coaches are supposed to pick the best players to win the tournament, and if they discriminate against black players then they hurt their own chances of success. In such an environment, quotas would force racist coaches to pick the black players instead of the inferior white players.

I doubt that this is what is happening at universities, though. In my discussions with university managers and players, they spend an inordinate amount of time scouting for black talent. The few black players that are available are headhunted by all universities, with promises of bursaries and free tuition. And in some cases, the really good ones, like my Masters student and former Stellenbosch captain, Omphile Ramela, are drafted to the provincial side, where quotas also mean that those coaches are frantically looking for even more promising black players.

Let me phrase this in terms of economics. Racial quotas shift the demand curve for black players, but does nothing about the supply side. The only way you shift the supply side, as any first year Economics student should know, is by improving technology and thus productivity. So the standard response to ‘how do we get more black kids in sport’ is not ‘force teams to play them’ but ‘build better facilities in schools’.

Yet we are clearly not building better facilities in schools, or providing better coaching, or, at least, we are not doing it fast enough. And yet, politicians and, in most cases, fans (myself included) want to see faster progress. A different answer is clearly needed.

So, Cricket South Africa, here is my suggestion: allow the private market to develop black talent. Economists know that the best way to ensure a steady supply of any good is to get the incentives right. And to get the incentives right, in this case, would require some financial support. Instead of a quota at the USSA Cricket Week, allow teams to pick any player they want to. But for every ethnically black player they field, pay them R500 000 (or R100 000 per match). For every Coloured player, pay them R250 000 (or R50 000 per match). If all teams pick only black players, Cricket South Africa would need a maximum budget of R50 million to stage the tournament. Do this every year for at least 10 years. (To ensure that universities play to win, give an additional R5 million in prize money.)

What is likely to happen? University coaches will react to these incentives swiftly. They will realise that it can be incredibly lucrative to field a team with several black players. They can therefore plan to invest their future earnings today; spend the next two years finding black players, nurturing and developing them (an expensive exercise), offer them bursaries (even more expensive), and fielding them in three years’ time. Intermediaries – good development coaches with an eye for talent – will realise that if they invest in black young kids with potential, universities will be willing and able to buy these players from them: expect the creation of numerous (profitable) cricket academies around the country that will improve access for black kids to better facilities and better coaching.  The result is that a much larger pool of black talent will emerge, allowing provinces to pick and choose and the national team to prosper.

R500 million over a ten year period is a lot of money. But I suspect not more than R200 million will be needed, as good white players will still be selected (especially if there is a financial reward for winning). If the government (perhaps with the help of sponsors) are serious about transformation in sport, they need to put their money where their mouth is. And because much of the money will go into bursaries, this type of spending has large positive externalities too.

Quotas, although easy to enforce, won’t solve the shortage of professional black cricketers. If we want to produce a Makhaya Ntini or Kagiso Rabada every year, a well-funded system that gets the incentives right is the only viable alternative.

Written by Johan Fourie

February 20, 2015 at 08:01