/ 21 January 2016

University libraries hard-hit by depreciating rand

University Libraries Hard Hit By Depreciating Rand

University libraries are being “crippled” as budgets struggle to keep pace with the plummeting rand.

For South African academics to compete with their international counterparts, they need access to the latest journal articles.

Academic output and research and development have been linked to economic growth and job creation, and library resources are pivotal to this knowledge generation.

However, university subscriptions to international journals – which are paid for in dollars, euros and British pounds – run into millions of rands, and that figure is inflating as the rand weakens.

The budgets come from university coffers, heavily subsidised by the department of higher education and training. But with the pledge of a zero fee increase this year, the budgets are likely to be casualties of the necessary belt-tightening – and if the rand weakens further, these smaller budgets will not go far.

The last six months of 2015 saw the rand depreciate sharply against the dollar – to some extent thanks to the surprise removal of Nhlanhla Nene as finance minister in late December, but mostly owing to the sluggish commodities market, the general strength of the dollar and China’s weak economic growth. This is part of a longer-term trend of rand depreciation.

“The problem is that the rand has been gradually declining for the past five years,” says Glenn Truran, director of the South African National Library and Information Consortium. “In 2015, the rand lost close on 40% of its value against the dollar, and most of our deals are in dollars, then euros, then [British] pounds. Libraries pay those bills directly, and we’re not privy to their budgets. [But] as far as we understand, they’re all in severe financial difficulties.”

Gwenda Thomas, executive director of library services at the University of Cape Town (UCT) says the weak rand is having a “huge effect” on the library’s collection and purchasing abilities.

“Our planning was done at R12.50 to the dollar for 2016,” she says. “But it [the rand’s depreciation] means that, when we paid the invoice, we paid at R16 to R17 to the dollar and R21 to the pound.”

This is only the latest blow to South Africa’s punch-drunk university libraries. In 2014, the South African Revenue Service enforced a 14% value-added tax (VAT) on electronic material – including universities’ journal subscriptions. Ahead of the enforcement of this tax, the national library consortium’s chairperson, Laila Vahed, says: “It is unlikely that libraries will be able to recover these losses from their relative institutional funds. This will hit libraries at previously disadvantaged institutions the most.”

While it is possible for institutions to recover this VAT, the money seldom finds its way back into library budgets, Truran says.

Additionally, international publishers raise their prices every year. Thomas estimates the annual inflation to be about 7% to 8%. This further truncates South African universities’ ability to purchase subscriptions and databases for their academics and students.

“We’re not privy to what library budgets are, but we are noticing a gradual decline in subscriptions. Everything has become so much more expensive that we [libraries] can only afford smaller collections,” Truran says.

Thomas confirms that this is the case at UCT. The continent’s highest-ranking university has trimmed R5-million off its library budget by cancelling more than 600 individual journal subscriptions and withdrawn from three publisher packages to negotiate smaller, less costly deals.

“For a research-intensive university like UCT, it’s very distressing,” Thomas says.

The benefit of subscriptions is that a university’s academics can access content as soon as it is published – otherwise they have to wait for the publisher to lift the embargo on the content.

These embargoes are between six and 48 months long. “It slows down the academic process [not having access to high-impact journals]. But if you don’t have the money to pay for the licence, that’s the consequence,” Thomas says.

Journal embargoes sometimes mean that local academics cannot access the articles of their colleagues, even though the research was paid for with South African taxpayers’ money.

Zeblon Vilakazi, deputy vice-chancellor for research and postgraduate affairs at the University of the Witwatersrand, says the institution is “already facing huge pressure” regarding journal subscriptions and library resources.

“The costs have gone entirely nonlinear. The greatest source of pressure … is that they have to be renewed at dollar rates,” he says.

Dr Elisha Chiware, head of library services at the Cape Peninsula University of Technology, says the library is feeling the pressure.

“We get a reasonable allocation [from the university for library resources],” he says, “but that allocation gets eaten up by the unfavourable exchange rate … It’s going to affect the amount of information resources that we’re going to buy for 2016.”

Asked about the enforcement of VAT on electronic resources, Chiware says it necessitated the cancellation of some subscriptions. “There are flagship databases that we use, and we’ve been able to continue the subscriptions to those ones because they are really critical – otherwise we would not be able to justify our existence within the university,” he says.

“But there were a number of resources that we identified as being underutilised and those become the first candidates for cancellation” and the library cut about 10 to 15 databases.

Chiware says there are a number of ways to mitigate the effects of the squeeze, such as identifying open access resources and using inter-library loans. Unfortunately, the remaining subscriptions have to be renewed this quarter.

“The variant [in what was budgeted for and what libraries will now pay] is going to be huge,” says UCT’s Thomas. “Universities will have no choice but to cut [library budgets] even further. It impacts [on] our research, teachers, students. It’s quite worrying.”

The department of higher education and training had not responded to questions at the time of going to print.