Governance and financial management capability as determinants of financial sustainability in private schools in Lusaka Province, Zambia

Abstract

Governance and financial management capability are widely recognised as foundational organisational prerequisites for financial sustainability, yet their specific effects on private schools in sub-Saharan African developing country contexts remain empirically underexplored. This study examines the influence of governance and financial management capability on the financial sustainability of private schools in Lusaka Province, Zambia. The Tuckman–Chang Financial Vulnerability Model and Governance as well as Bowman's Financial Capacity Framework and governance guided this research. Using an explanatory sequential mixed-methods design (QUAN→qual), quantitative data were collected from 272 valid survey questionnaire responses drawn from school owners, principals, bursars, and accountants at private primary and secondary schools across the six districts of Lusaka Province. The study employed two-stage stratified random sampling guided by Yamane's formula at a 5% margin of error and 95% confidence level. Qualitative data were gathered through 15 purposively selected semi-structured telephone interviews. A Financial Sustainability Index (FSI) was computed using Principal Component Analysis (PCA), yielding a mean FSI of 0.53 (SD = 0.202), indicating moderate but fragile financial sustainability across the sector. Strikingly, the governance and financial management capability construct recorded very low mean scores across all seven items, ranging from 1.76 to 1.86 on the five-point Likert scale, reflecting substantial and pervasive governance deficits in the private school sector. Exploratory factor analysis confirmed a strong single-factor structure for the governance construct (KMO = 0.928; chi-square = 1,482.52; p < .001; eigenvalue = 5.11; variance explained = 72.94%). Pearson correlation analysis, supported by bias-corrected bootstrap estimation, revealed a moderate, positive, and statistically significant relationship between governance and financial management capability and the FSI (r = 0.449; p < .001; BCa 95% CI: 0.22–0.68). Multiple regression analysis confirmed governance and financial management capability as a significant and independent predictor of financial sustainability in the full model (R² = 0.37; F(7,264) = 21.96; p < .001). Critically, moderation analysis demonstrated that both regulatory intensity and market competition significantly moderated the governance–financial sustainability relationship, with regulatory intensity positively moderating and market competition negatively moderating the effect. Qualitative findings strongly corroborated these results, with participants consistently identifying structured governance arrangements, transparent financial reporting, regular budget monitoring, and accountability mechanisms as practices most closely associated with better financial sustainability outcomes. The study concludes that strengthening governance and financial management capability in private schools is both an urgent necessity and a high-return institutional investment for improving financial sustainability in Zambia's private education sector. This study recommends that private school proprietors and administrators should prioritise the development of formal financial governance structures, even in small and resource-constrained institutions.