The World Bank said the nascent scheme would absorb a much higher proportion of the country’s budgetary needs. Photo: Reuters

JOHANNESBURG – The World Bank yesterday warned that the projected fiscal outcome of the new education financial aid scheme would balloon to more than R170 billion in the next five years and cast doubt on South Africa’s capacity to meet its White Paper enrolment targets.

The Washington-based lender said the nascent scheme would absorb a much higher proportion of the country’s budgetary needs. 

The bank said the Post-School Education and Training (PSET) allocation could increase from R65bn in 2017/18 to R172bn in 2022/23, or from about 1.4 to 2.5 percent of gross domestic product (GDP).

It said that under the scheme, increasing public TVET admission capacity by 10 percent would cost an additional 0.05 percent of GDP and an additional 0.10 percent to increase university admission capacity by 10 percent. The lender said these numbers mean that the White Paper targeted may prove to be extremely challenging within South Africa’s medium-term fiscal framework.

Programme leader Sebastien Dessus said countries that faced acute public resource constraints never achieved rapid growth in enrolment by following the traditional model of building and funding new public universities within budgetary resources. 

“Our analysis shows that spreading enrolment growth across a variety of PSET institutions and delivery modalities both public and private can achieve higher enrolments in a financially manageable way from a public resources perspective,” Dessus said.

Former President Zuma in December 2017 announced a new policy that allowed first-time students from families earning less than R350 000 would receive financial support for undergraduate or TVET studies.

National Treasury said last year that post-school education and training would grow at a faster rate over the medium term from R94.2bn in 2018-2019, to R110bn in 2019-2020, and then rise to R119.4bn in 2020-2021 and R126.8bn in 2021-2022.

The World Bank urged South Africa’s government to diversify the PSET sector from a mostly government funded university-centric model, encourage private sector participation through the adoption of simpler accreditation rules similar to that for public institutions, and ensure greater equity in supporting students.

Paul Noumba Um, World Bank country director, said in an environment of weak growth trade-offs were required to bring in more young people in the post-school sector. 

“The importance of acquiring skills to enable South Africa’s youth to find jobs and earn higher wages – thereby alleviating poverty, income inequality and joblessness – makes the policy to enrol more students in tertiary institutions a must.”