Are you looking for an MBA bargain? Then study in South Africa. If you think some of the programme fees here are eye-watering, overseas study could make you go blind.
A local MBA can cost you anything from just more than R100,000 to well over R500,000. That’s a drop in the ocean against what you’ll pay at a top international school. US research shows that the average cost of completing an MBA at a leading institution around the world in 2024 is $205,763. At the current exchange rate, that’s R3.66m.
Not surprisingly, US schools top the fees list. The Stanford MBA costs $260,709, followed by Columbia at $257,409, Berkeley Haas at $254,990 and Harvard at $245,002. Spain’s IE Business School is the most affordable world leader, at $90,432.
Of course, you — or your employer — may believe these costs are outweighed by the knowledge, kudos and career benefits of studying at a blue-chip school. The schools certainly hope so. At an MBA expo in Joburg last week, schools from the US, UK and Europe lined up to attract South African students.
The local-international fees gap was highlighted by a panel discussion at the expo. Standard Bank and Absa revealed that their preferred maximum MBA student loans were R500,000 and R750,000 respectively — enough to cover a South African degree. A representative of Prodigy Finance, a UK-based company specialising in people studying outside their home country, set the bar at $250,000.
Despite South Africa’s obvious value for money, and the fact that several local schools are internationally accredited, the country remains low on the list of desirable destinations for international business students, particularly those planning an MBA. Research by the UK-based Carrington Crisp company shows that just 2% of those questioned would consider South Africa.
The US topped the list of favoured study destinations, with 42%, followed by the UK at 32%, Canada 30%, Australia/New Zealand 26%, Germany 18%, France 14%, Italy 8%, and Spain and China both 7%. South Africa’s 2% placed it level with India and Latin America. The research was conducted on behalf of the European Foundation for Management Development, which runs the Equis international accreditation programme for business schools.
Foreign students who do come here — the University of Cape Town’s Graduate School of Business is a particular favourite — may find an unfamiliar MBA environment. For example, full-time programmes, on which international rankings are based, appear to be going the way of the dodo in South Africa (see table). The number of students starting full-time MBAs at participating schools this year is less than one-third of what it was four years ago.
Part-time MBAs are also going out of fashion locally. Instead, distance programmes — some with occasional face-to-face classroom time, and others wholly online — are ruling the roost. In 2020, when Covid struck, schools participating in our market research reported that only 37 students had begun all-online MBAs that year. In 2024, the number is 1,272.
The shift is not unique to South Africa. Even some US business schools have ditched full-time MBAs and are enrolling fewer part-time students.
Regenesys Business School academic affairs COO Elizabeth Moore says: “Many MBA students balance work, personal and family commitments, making distance learning appealing due to its flexibility, convenience and affordability. Technological advancements enable students to connect meaningfully with peers and faculty.”
The fact that the online MBAs are generally cheaper than contact ones — at Regenesys, the price gap is 25% — is also a drawcard. Moore says: “However, there is potential for a resurgence in full-time and part-time programmes if they can adapt to offer the flexibility and value that students now seek.”
Fulu Netswera, dean of the faculty of management sciences at the Durban University of Technology and founder of its business school, says there are some things that online programmes can’t copy. “Business schools need to focus on experiential learning, real-world case studies and fostering strong peer networks — strengths of in-person programmes that are difficult to replicate fully in a virtual setting.”
Peet Venter, academic director at Unisa’s Graduate School of Business Leadership (the only local school to offer both an MBA and a more specialised master’s in business leadership), says Covid forced programmes online and agrees that there’s little likelihood of a complete reversal. It’s true that a growing number of students want the personal contact and networking that MBAs used to promise, he says, but “I cannot see full-time and part-time numbers going back to where they were”.
Moore adds: “The decline in contact-based enrolments may [also] be influenced by difficulties faced by international students, who previously made up a significant portion of these programmes, but are now struggling to secure visas to study in South Africa.”
A problem with wholly online programmes, research shows, is that the “remote” nature of the education induces a lack of urgency among students. The overwhelming majority in full- and part-time programmes graduate within the stipulated time, whether it’s one or two years. In distance programmes that include “live” classroom sessions, the success rate is slightly lower. Take away the live element, however, and there is a 40% likelihood that you will take an extra year or two to graduate.
This failure to study properly is self-defeating, says Milpark Business School director Segran Nair. “For many people, an MBA is an opportunity to kick-start or accelerate their career,” he says. “The longer they take to graduate, the longer they defer their careers.”
The MBA’s capacity to mutate has enabled it to survive regular predictions that the degree is on its last legs. In South Africa, the number of business schools offering the qualification is actually growing. Boston City Campus is the latest to join the club. Cobus Oosthuizen, Milpark’s dean for 15 years before becoming Boston’s dean of postgraduate studies last year, says his new institution hopes to launch an MBA in early 2025.
Other schools are updating theirs. Nair, for example, says that from 2025, Milpark’s will include more emphasis on teaching leaders to be market disruptors, rather than going with the flow. It’s about preparing them for “real-world and practical challenges”.
At Durban, says Netswera, one increased emphasis is on digital transformation. In addition, “we have strengthened our focus on sustainability and social entrepreneurship, recognising the increasing demand for leaders who can balance profitability with purpose”.
Moore says: “Businesses want MBA graduates who are more than just academically skilled. They need leaders who can address real-world challenges such as quiet quitting [performing the minimum requirements of a job, with the least effort], employee disengagement, lack of innovation, burnout and difficulties in adapting to change or leading diverse teams.”
The accompanying tables show that most business schools offer a variety of MBA options, to meet differing market needs. The same applies to postgraduate diplomas (PGDs) in business administration — the stepping stone to a full MBA for students lacking the necessary academic qualifications.
As a master’s degree, the MBA should be limited to those with an honours degree or equivalent. The PGD fills that gap. Students can undertake it as a standalone qualification or as an immediate precursor to an MBA.
The Council on Higher Education (CHE), which sets MBA standards, allows schools to admit some students without academic qualifications. The degree is intended to teach practical business and management skills, so the CHE has opened the study door to people with the requisite business experience but not the academic qualifications. Many South Africans grew up without access to a conventional education.
In theory, 10% of MBA students at schools may qualify through this “recognition of prior learning”. In practice, says Morris Mthombeni, dean of the University of Pretoria’s Gordon Institute of Business Science, up to 50% of students at some schools qualify this way.
Even so, the “Going the distance” table shows that people applying for MBA admissions have less than a 50% chance of being accepted. Even when they are, many would-be students drop out because they can’t afford the fees or the time burden. The drive for study flexibility may have (almost) robbed the MBA of its reputation as a marriage breaker because of its former intensity, but it is still a major commitment.
In addition to more study format options, the range of MBA subjects — some compulsory (core) and some discretionary (elective) — is also adapting to market needs. The most common core courses remain finance/accounting, research, strategy, operations, leadership, marketing, economics, people management, innovation and international business.
Variations on these are also among the most popular electives, alongside entrepreneurship, business in Africa, change management, consulting, new venture creation and diversity and inclusion.
However, you don’t have to stop there. Elective options at various schools also include behavioural science, business in Asia and China, competitor analysis, sports management, integrated reporting, women in leadership and team building.
The last of these is something that most business schools seem unable to manage themselves. Since we first published South Africa’s Top MBAs in 2000 (in its early years it was called Ranking the MBAs), research has shown that most local business schools are lousy at team building with MBA alumni.
Contented alumni, particularly successful ones, are valuable. Not only can they sing the school’s praises and be visible examples of its transformative powers, but they can also add practical teaching experience in the classroom. Most important, for some schools, is their potential for donating or raising money for the school.
Harvard University reports that in 2022, its business school received $505m in bequests and donations, much of it from alumni. The income accounted for about 9% of operating revenue.
It helps, of course, that Harvard boasts many dollar billionaires among its alumni. In addition, the school’s 2024 employment report shows that 86% of 2023 MBA graduates received a job offer within three months of graduating, and that the median graduate salary last year was $175,000.
South African business schools can only dream of these numbers. Too many, though, appear to be doing nothing else. On average, schools here maintain contact with 65% of students who graduated in the past five years, 41% who graduated between six and 10 years ago, and 24% who graduated more than 10 years ago.
At certain schools, the numbers are much higher. At others, though, relationship figures of 0%, 1%, 5% and 10% show something is seriously wrong. All schools say they are addressing their alumni challenge. Clearly, words are not enough.
Business schools taking part in market research for this year’s MBA special edition were: Durban University of Technology Business School; Gordon Institute of Business Science at the University of Pretoria; Henley Business School Africa; Management College of Southern Africa School of Business; Milpark Business School; North-West University Business School; Regenesys Business School; Rhodes Business School; Stellenbosch Business School; Tshwane School for Business and Society at the Tshwane University of Technology; Turfloop Graduate School of Leadership at the University of Limpopo; Unisa Graduate School of Business Leadership; University of Cape Town Graduate School of Business; University of the Free State Business School; and Wits Business School.
Research was conducted by Lodestar Marketing Research.
— WHO’S WHO IN THE RESEARCH
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