Budget 2024: Is it time to measure the return on investment in education?

Finance Minister Enoch Godongwana is expected to announce allocation for the departments of basic education and higher education, File Picture.

Finance Minister Enoch Godongwana is expected to announce allocation for the departments of basic education and higher education, File Picture.

Published Feb 19, 2024


By Edwin Naidu

Ahead of the dreaded 2024 Budget, which is again expected to bring bad news for debt-laden South African consumers, the time has come to consider whether the country is getting bang for its buck, particularly regarding education.

Anecdotal evidence shows that billions are spent on education with little good to show for it. It does not inspire confidence when a third of the nearly one million matriculants annually join the unemployment lines.

This has been a pattern since the birth of democracy. It worsens when you consider that only 30% of 250,000 graduates find jobs yearly. Thus, there is a growing narrative that we churn out matriculants and graduates in large numbers for unemployment.

Considering the massive investment in education, are these the types of returns we should celebrate? According to the World Bank, in 2022, public spending on education as a share of the Gross Domestic Product (GDP) for South Africa was 6.2 %.

GDP measures all economic activity of a country’s companies, governments, and individuals.

Public spending on education as a share of the GDP of South Africa went up from 4.4% in 2003 to 6.2% in 2022, growing at an annual average of 1.93%. Breaking it down further, last year, the Budget for Basic Education was R309 billion. At the same time, the Department of Higher Education received R133bn, and the Department of Science and Innovation a paltry R10.9bn.

Considering its tiny budget, there has been tremendous output from the department, particularly the sterling work of its science bodies led by the robust National Research Foundation (NRF) and the energetic Academy of Science of South Africa (ASSAf).

Innovation has been high on the agenda via numerous initiatives, including efforts by the Science Granting Councils Initiative, driven valiantly by the NRF to strengthen science throughout Africa.

While the investment in science promotion is paying off, the massive outlay on primary education and the tertiary sector has had different results. Are schools and tertiary institutions producing learners and students capable of taking their place as future leaders?

The government must do due diligence on the billions it spends. In last year’s Budget speech, Minister of Finance Enoch Godongwana mentioned the word education just three times.

Of course, he has much more under his hat as the country has a budget deficit, spending more than it collects in taxes.

South Africa’s budget deficit was R288.9bn in 2023. Additionally, a government beset by corruption, led by many complicit in it, does little to dispel the notion that the country is in trouble. Few expect Godongwana to bring good news when he unveils the Budget.

What is guaranteed, however, is that the government will dish out more for education and skills development, as well as social grants, bearing in mind that elections are around the corner. A sweetener for the electorate must be on the cards.

However, annually, it has become a route to yap about how much government is setting aside for its various functions to keep the State afloat. Lip service, too, will be paid to corruption.

How many times have you heard the word zero tolerance on corruption? But nobody in the current or previous administration has paid the price for state capture during the Gupta years.

Governance has been a significant challenge at institutions of learning, with the University of South Africa and the University of Cape Town in the news last year amid ongoing internal strife.

Some of the Sector Education Training Authorities (SETA), the Insurance SETA, have adopted an arrogant tone in dismissing corruption claims against it, ignoring the fact that 500 learners have not received accreditation, meaning they cannot work.

Furthermore, corruption allegations levelled against them being probed by the Public Protector have yet to get a squeak out of the Minister of Higher Education, Science Innovation, Dr Blade Nzimande.

The Minister has a penchant for announcements requiring the National Treasury to throw money at problems he seems incapable of solving.

More than a decade ago, academics conducted a study investigating the returns to education in South Africa between 2010 and 2012. It found that the returns to schooling on average are estimated at 18.4%.

While this estimate was high compared to many other African and Western countries, it suggests considerable gains to be had if there is an increase in educational attainment among the South African population.

Indeed, a fresh study is needed. But one that considers whether the country’s investment in education is reaping the desired rewards. This should be done at the behest of the Minister since he is the one announcing who gets what from a budget the country cannot afford.

After all, It does not make financial sense to dish out billions to Basic Education and Higher Education annually for the poor returns we have witnessed.

A relative who spent many years working abroad before returning to his beloved South Africa said: “At the same time, it is good to be back home; the government does little to make it conducive for citizens with high taxation, poor service delivery, Eskom struggling to keep the lights on with an ineffectual Minister of Power at the helm, potholes under the watch of a non-existent Transport Minister, and questionable delivery from many in President Cyril Ramaphosa’s Cabinet.”

Ordinary South Africans get far less than they deserve from our government, which appears to be out of touch with its citizens.

The words of Allan Gray’s head of the Group Savings and Investments, Shaheed Mohamed, should warn of the difficulties ahead – and the need to get what you pay for, if you can afford it.

He said parents could expect little relief in 2024, with reports suggesting that fee hikes for South African schools would be above general inflation.

Mohamed raised the issue of families concerned about the country’s education quality, with many investing offshore to access premium international education opportunities.

According to cross-border specialist Sable International, an average of 11,000 South Africans study abroad annually, with reports indicating that college tuition fees in the US are between $32,000 and $ 60,000 (approx. R587 800 to R1.1m) a year. The UK could cost a year between $ 14,100 and $ 38,000 (approx. R259,000 and R698,000).

Sadly, the majority can only dream of such opportunities being blessed with an education system that spits one out after 12 years of schooling into a varsity sector, which is unwelcoming, not to mention beset by challenges over its chief funding agency, the National Student Financial Aid Scheme.

Godongwana may open the purse strings for education but do little to fix the persistent problems. Indeed, this is irresponsible. But he’s not alone when it comes to inaction about the woeful status quo. Under Ramaphosa’s watch, we are fed a narrative about an imaginary Tintswalo, while the reality is an education system that equips people with unemployment.

* Edwin Naidu is a communications professional and an education editor.

** The views expressed do not necessarily reflect the views of Independent Media or IOL