Skills training scheme under review

A multimillion-dollar scheme designed to address South Africa's skills shortage and make inroads into the high unemployment rate is under review and is expected to be streamlined by 2010.

The Sector Education and Training Authorities (SETAs) were established in 2000 as a result of the Skills Development Act, promulgated two years earlier, which divided the economy into 24 sectors, each with a SETA overseeing the development and quality control of relevant skills.

South Africa boasts the continent's largest economy, contributing nearly a quarter of Africa's total GDP, but official unemployment is pegged at about 25 percent, while unofficially it is estimated at around 40 percent, with 60 percent of those unemployed never having had a job.

The SETAs are seen as a method of changing the generally low-skilled workforce into a more skilled one, thereby increasing economic growth to meet the government's target of 6 percent, and halving unemployment by 2014. The low number of skills in South Africa has been cited one of the main stumbling blocks to generating growth and reducing unemployment.

The annual expenditure of the SETAs - about R5 billion (US$715 million) - is raised by a 1 percent levy on company payrolls collected and distributed by the South African Revenue Services.

Each SETA, which has representatives of government, business and labour on its board, acts as a broker in redistributing 80 percent of the monies to training and learnership programmes in its sector, while the remaining 20 percent is handled by the National Skills Fund (NSF), which disperses the monies to increase skills deemed a national priority.

Corruption and fraud

The skills development scheme has been plagued with allegations of corruption and fraud, prompting South African labour minister Membathisi Mdladlana to tell a conference this month that "For the first time since we established SETAs, last week I had to put one of them under administration ...

"As we celebrate the great strides we have made, and honour some of our shining examples, we similarly cannot pretend that these developments are not taking place under our noses."

Earlier this month the labour department placed the embattled Media, Advertising, Publishing, Printing and Packaging SETA under administration and suspended its board. According to media reports, a decision by National Skills Authority (NSA) chairman Sekete Moshoeshoe as to whether three more SETAs should be put under administration is pending.

In his speech Mdladlana accepted that the number of SETAs should be reduced - in line with proposals by the ruling African National Congress (ANC) party -"as we have no excuse to continue shooting in the dark, as we have previously being doing."

It has also become increasingly clear that the social pact agreed to between government, business and labour was either to premature or simply not feasible

Mdladlana, quoting the ANC policy document, said, "'In the case of SETAs, in particular, it has also become increasingly clear that the social pact agreed to between government, business and labour was either too premature or simply not feasible.'"

The National Industrial Policy Framework, launched in August this year, put manufacturing as the driver of the country's development. According to the ANC policy document, the SETAs should be reduced to five economic clusters, identified in the policy framework as: natural resource-based, downstream beneficiation of natural resources, advanced manufacturing, and labour-intensive businesses and services.

Paul Lundall, an independent analyst of social relations between education and work, told IRIN the SETAs' "foundations are quite wobbly" and had "an uneven success rate", with finance SETAs being "very successful", while the record of manufacturing SETAs was "appalling".

He said it was difficult to pinpoint why there was such a disparity, but attributed the success rate of the relatively small concentration of companies such as banks and accountancy firms in the finance sector to their being able to provide more focussed mentoring and leadership skills, as opposed to the multiplicity of companies in the manufacturing sector.

The manufacturing sector's great array and varying size of companies meant that smaller businesses could be paying the 1 percent levy and then "see it as just some form of tax", without enjoying any of the benefits.

The suggestions that the number of SETAs be reduced have not found favour in the upper echelons of the training authorities. According to a report in Business Day, a South African financial daily newspaper, the CEO of the Local Government, Water and Related Services SETA, Sidwell Mofokeng, said reducing the number of SETAs to five would not address the inefficiencies of the system and could lead to a bloated bureaucracy.

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