By Primarashni Gower | This article was originally published by the University of Pretoria and appears here in an abbreviated format.
The University of Pretoria (UP) and its value chain contributed R39 billon to the South African economy through the procurement of goods and services in 2016. In a recent study titled The contribution of the University of Pretoria to the South African economy, independent research company Quantec Research found that in 2016 UP’s employment constituted 0.5% of total employment in Tshwane. UP, its suppliers and their suppliers added R7,6bn (or 7%) to Tshwane’s GDP.
According to Johan Riekert of Quantec Research, “[UP] is a major employer in the Tshwane region, and contributed 1.5% of the highly skilled employment base in the city.”
The total formal jobs supported by UP’s operations and student expenditure amounted to 10 561 jobs in 2016, of which around 55% were highly skilled jobs, 41% skilled and semi-skilled jobs, and 4% unskilled jobs. The operations of UP and its suppliers, as well as the purchases by households deriving their income from these institutions, supported 27 300 jobs in Gauteng and 43 400 in South Africa.
The study was based on an input-output model, which represents the interaction between industries, households and government in the South African economy. The model simulates the multiplying effect of each R1.00 spent by UP as it cycles through the economy. In this way the impact of UP and its suppliers (direct and indirect effects) and household spending by people involved with these institutions (induced effects) on output, employment and taxation can be quantified.
“When UP’s entire value chain is added, the University is a net tax contributor – when the University’s economy-wide tax impact is considered, UP’s value chain generated more tax than the value of the government’s subsidies,” said Riekert.
The report cited statistics from the Department of Higher Education and Training (DHET) that from 2001 to 2016, UP cumulatively contributed 10% of all graduates in South Africa; 23,8% of Gauteng-based and 33.9% of Tshwane-based graduates.
Riekert said, “When considering this in the long-term, the University has contributed significantly to the knowledge base of South Africa. Graduates from the UP between 1930 and 2016 account for 18.5% of all living graduates in Gauteng; and 12.5% of all graduates nationally.”
Further, the university made a significant contribution to the national economy through its capital expenditure, the payment of tax, employment of staff, the use of suppliers and subsequent employment creation, as well as the consumption expenditure by students, leading to an ultimate contribution of R39bn to the South African economy.
He explained that while the University does contribute significantly to the regional and national economy, its impact is more far-reaching. In the long-term, UP also contributes to the knowledge base (human capital) of South Africa and the social capital (physical, intellectual and cultural resources) of the country. Both the human and social capital is vitally important for a thriving, diverse society.