Abstract
The purpose of this article is to discuss the funding constraints as related to higher education in Tanzania. The article discusses also the trend of internal and external efficiency indicators. The funding constraints include: the low growth rate of GDP, balance of payment problems, inflation, devaluation of the shilling, absence of cost-sharing and resources mismanagement. Higher education is characterized by high unit costs, low capacity utilization and high teacher-student ratios and yet private benefits are high as compared to social benefits. Tanzanian higher education remains elitist and continues to serve a well-to-do minority.
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