Download the Annual report 2011 - Unisa

UNISA ANNUAL REPORT 2011
ANNUAL FINANCIAL REVIEW 2011
Unisa continues to be in a sound financial position with total income
8% higher than in 2010. There were, however, mounting challenges
as was evidenced by the fact that total expenditure during 2011 increased
by 15% and that investment-related income declined sharply
compared to 2010. Income from interest and dividends decreased by
1% while the fair value adjustment decreased by 54%. Should the investment-related
income be ignored, the good news is that total income
increased by 16%, which is one percentage point higher than the increase
in expenditure. Total investments have grown by 9%, while other non-current
assets net of depreciation and fair value adjustments, increased by 23%
over the previous year.
Economic overview 2011
Unisa functions within the broader South African economy and therefore national economic trends
should be kept in mind when analysing the university’s 2011 financial position. Following the
slump in domestic economic activity during 2009, as characterised by the contraction of 1.5% in
the Gross Domestic Product (GDP), the South African economy started to recover in 2010 as
shown by a GDP growth rate of 2.8%. This recovery gained momentum and broadened further
during 2011 when a 3.1% GDP growth rate was reported.
This improvement in production manifested to a large extent in relatively strong household
income growth, but disappointingly did not translate into a similar growth rate in the number
of jobs. Indeed, there were some 800 000 fewer people employed in 2011, compared to the
first quarter of 2009. Subsequent to the reporting date, continuous high unemployment led
to a further downgrading of the country’s economic outlook by international rating agencies.
Ironically, those who continued to receive an income from various sources on average enjoyed
a healthy increase in their income portfolios as reflected by the 5.1% increase in real disposable
income of households. The increased disposable income in turn contributed to a real
increase of 4.9% in household consumption expenditure.
As the economy gained momentum, so did price inflation. Whereas a year-on-year inflation
rate of 3.5%, which is near the bottom of the Reserve Bank inflation target band,
was experienced during December 2010, the comparable rate for 2011 was 6.1%, which
is above the Reserve Bank inflation target band. The biggest price increases during this
period were experienced with respect to cost items impacting Unisa directly, namely
electricity (17.4% year-on-year increase) and fuel (26.4% year-on-year increase).
Household expenditure on services comprises almost 50% of total household
expenditure. This expenditure includes spending on education. It expanded by a
real growth rate of 4.2% in 2011.
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