Students at the Cida City Campus  in Lyndhurst, Johannesburg. Picture: SOWETAN
Stu­dents at the Cida City Cam­pus in Lyn­d­hurst, Johan­nes­burg. Pic­ture: SOWETAN

CIDA City Cam­pus, South Africa’s first uni­ver­sity that does not require stu­dents to pay fees, faced the threat of being liq­ui­dated next month if did not pay R20m it owed cred­i­tors, act­ing exec­u­tive direc­tor Mar­tins Mbah Njah has said.

The insti­tu­tion has been under busi­ness res­cue since Decem­ber 2012, but has yet to raise money it owes the City of Johan­nes­burg, the South African Rev­enue Ser­vice and suppliers.

The dead­line for set­tling the debt is March 25.

The truth is that if Cida doesn’t have the money by March 25, we will be liq­ui­dated, or we will have to make another plan with our cred­i­tors,” Mr Njah said on Thurs­day of last week.

Clo­sure of the insti­tu­tion would end the aca­d­e­mic lives of 750 stu­dents from poor com­mu­ni­ties and leave 86 employ­ees with­out jobs.

Cida was founded in 1999 by social entre­pre­neur Taddy Blecher as South Africa’s first “free university”.

The insti­tu­tion is reg­is­tered as a not-​for-​profit organ­i­sa­tion and started offer­ing a three year bach­e­lor of busi­ness admin­is­tra­tion (BBA) degree in 2000. It gave schol­ar­ships to stu­dents from fam­i­lies that earn R40,000 a year and less. The schol­ar­ships cov­ered tuition, books, accom­mo­da­tion and meals. More than 1,800 stu­dents had grad­u­ated since the insti­tu­tion was established.

Cida raises money from donors, and Investec is one of its past spon­sors. Bil­lion­aires Richard Bran­son and Oprah Win­frey have also donated.

Its finan­cial trou­bles began after Mr Blecher left it in 2007.

Mr Njah said some of its spon­sors left with Mr Blecher, who now runs the Mahar­ishi Insti­tute, while oth­ers changed their cor­po­rate and social invest­ment goals. Poor man­age­ment, a high turnover of exec­u­tive direc­tors, and a poor pass rate were some of the problems.

Stu­dents were required to pass 75% of their courses or 11 courses out of 15 for the BBA pro­gramme to renew their full scholarship.

Mr Njah said Cida had appealed to the City of Johan­nes­burg to write off the R8.7m owed for munic­i­pal ser­vices, but had not received a pos­i­tive answer.

Sturns Busi­ness Res­cue Prac­ti­tion­ers’ Rob Dev­ereux, who was appointed Cida’s res­cuer, could not be reached for comment.

The Depart­ment of Higher Edu­ca­tion and Train­ing said it did not fund pri­vate higher edu­ca­tion insti­tu­tions such as Cida.

The insti­tu­tion retains accred­i­ta­tion for its pro­grammes with the Coun­cil on Higher Edu­ca­tion, but its finan­cial prob­lems would mean los­ing lec­tur­ers, which were one of the main require­ments to keep the accreditation.

Mr Njah said staff had not been paid in the past eight months.

The col­lapse of Cida also raises ques­tions about the fea­si­bil­ity of free uni­ver­sity edu­ca­tion in South Africa. The gov­ern­ment has resisted calls to make uni­ver­sity edu­ca­tion free. Instead it pro­vides loans and bur­saries to poor students.

It would not be appro­pri­ate to pro­vide free uni­ver­sity edu­ca­tion to all, includ­ing the richer classes, because this would not lead to increased access for the poor,” said Depart­ment of Higher Edu­ca­tion and Train­ing spokes­woman Kefilwe Makhanya. “South Africa oper­ates on a cost-​sharing model for higher edu­ca­tion, where stu­dent fees, sub­si­dies from gov­ern­ment and funds from donors are com­bined to enable uni­ver­si­ties to func­tion effectively.”

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