Economic Update

Published 03 Apr 2013

Education reforms are being seen as key in trying to ensure that economic growth embraces a reduction in South Africa’s disparity and unemployment. Poor schooling remains one of the weak links in the economy, despite government efforts to address the problem by allocating the largest share of funds to education in both this and last year’s budget.

While a number of South Africa’s universities have impressive academic reputations, primary and secondary schooling indicators are less encouraging and produce an oversupply of unskilled labour. This, in turn, contributes to high unemployment, which reached 24.9% at the end of 2012 according to Statistics South Africa.

The country’s education issues were described as “a critical problem” by the Organisation for Economic Cooperation and Development (OECD) in its 2013 Economic Survey of South Africa published in March.

The OECD noted the substantial progress made in economic and social development since the first multi-racial elections in 1994 but added that average educational outcomes remained low. The organisation urged South Africa to combine the substantial investment it had made in education with reforms, saying this would help ensure resources were utilised most effectively and provided good value.

Test results published in December reflected the survey’s findings and showed that pupils in the upper grades at school performed particularly poorly. In the tests, which were taken by 7m students at schools across the country, the average six- or seven-year-old first-grade pupil achieved 68% in mathematics and 58% in their first language, while ninth-graders, aged 14 or 15, managed just 13% and 43%, respectively, in the same two subjects.

The youth wing of the ruling ANC party said it was “appalled” by the results, while the basic education department admitted to being “deeply, deeply disappointed” with classroom performance overall.

Education department spokesman Panyaza Lesufi Lesufi acknowledged the test results were disappointing but added the sector had also witnessed positive developments, including a narrowing of inequality and high levels of attendance. Other improvements, he commented, included better grades among younger students.

Professor MS Makhanya, principal and vice-chancellor at the University of South Africa (UNISA), told OBG that further improvements would be evident over time. “For example, in the past, the big issue was about basic language teaching, and over time, test scoring improved,” he said. “Now it’s about maths and sciences, which will also get better.”

The OECD’s recommendations for developing education include shifting the balance of spending in favour of essential infrastructure and teaching materials, with a focus on the most disadvantaged schools. It also proposes recruiting more teachers and strengthening training for head-teachers, who, it said, should then be made more accountable for their school’s performance.

Other recommendations from the OECD include the introduction of reforms to vocational education and training, including apprenticeships to tackle youth unemployment, which runs at around 50% and is seen as one of the country’s most pressing social and economic challenges.

Improving complementarity between the needs of the job market and school curricula is crucial to ensuring employability. However, training is expensive and providing internships and apprenticeship programmes can come at a high costs. To help encourage this, the OECD suggests awarding tax credits to companies taking on trainees, while pointing out that streamlining administration and greater use of public-private partnerships (PPPs) could both be beneficial.

The government has already upped spending to the education sector. Education is set to receive R232.5bn ($25.4bn) from the R1.06tn ($115.7bn) 2013 budget, making it once again the top recipient. From the allocation, R1bn ($109m) will go towards recruiting teachers, around R700m ($76.4m) to technical secondary schools and up to R8bn ($873.4m) on infrastructure, funded in part by an education infrastructure grant.

The budget also includes money for expanding bursary schemes and establishing no-fee schools. In his budget speech, given at the end of last month, Finance Minister Pravin Gordhan suggested an employment tax incentive, operating on a sliding scale for young, first-time workers which would replace the controversial youth wage subsidy proposed last year.

Generous funding is already translating into progress in some areas of schooling. Combined with reforms and time, targeted investment could be instrumental in helping South Africa turn around its record of under-achievement in basic education provision.