speech about unemployment in south africa

Ramaphosa addresses South Africa’s unemployment in nation address

As the country faces one of highest jobless rates globally, South African president pledges ‘to leave no one behind’.

Cape Town, South Africa – President Cyril Ramaphosa has pledged “to leave no one behind” in addressing the country’s high unemployment rate in his sixth State of the Nation Address.

The yearly speech took place on Thursday at Cape Town City Hall, instead of the usual location of Parliament, for the first time in its history.

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The venue changed after a fire on January 2 gutted the Parliament building, causing the roof of the New Wing housing the lower chamber National Assembly to collapse. A 49-year-old man has been charged in connection with the fire.

Africa’s most industrialised nation has one of the highest unemployment rates in the world. As of the third quarter of 2021, the latest data available, it had a 34.9 percent unemployment rate.

In his speech, Ramaphosa acknowledged the country needed “fundamental change and reforms” to revive its economic growth.

“COVID-19 has exacerbated the divide between those who are employed and those who are unemployed. Last year our unemployment rate reached its highest recorded level,” he said.

The president said the problems with the South African economy were both “deep” and “structural”.

“Where electricity supply cannot be guaranteed, when our railways and ports are inefficient, when innovation is held back by a scarcity of broadband spectrum, water quality deteriorates in our municipalities and where we live. Companies are reluctant to invest and the economy cannot function properly.”

To address this, the African National Congress (ANC) leader promised “far-reaching structural reforms” that will modernise industries to unlock investment, grow the economy and create jobs.

“We know, however, that even with the best business environment and much faster rates of economic growth, it will take time for the private sector to create enough jobs for the millions of South Africans who need them. Our intent is to leave no one behind,” he said.

He pledged to create better livelihoods by prioritising infrastructure projects in energy, roads and water management.

Ramaphosa also said South Africa’s transition into a green economy would create jobs in mining minerals that help provide clean energy, as well as green hydrogen, solar and wind.

The country’s global business services sector is on track to create 500,000 new jobs over the next few years, Ramaphosa added.

He also touted the country’s growing hemp and cannabis sector, which he said could create more than 130,000 new jobs.

The wide-ranging speech that lasted nearly two hours saw the president addressing areas from gender-based violence to state corruption. A shadow hanging over the ANC is the State Capture inquiry into corruption and fraud in the public sector, including in former president Jacob Zuma’s government.

The Zondo Commission was launched in 2018 to look into the allegations, and the inquiry published the first two out of three reports into the scandal in January and February.

“While the definitive conclusion has yet to be delivered and will be at the end of this month, the first two parts of the report make it plain that there was indeed state capture. This means that public institutions and state-owned enterprises were infiltrated by a criminal network intent on looting public money for private gain,” Ramaphosa said.

“We must now do everything in our power to ensure it never happens again,” he added.

Ramaphosa said he would present a plan of action by June to respond to the commission’s recommendations and he pledged to bring the criminals involved to justice.

South Africa saw its economy ravaged by deadly riots last year that swept across Gauteng and the eastern province of KwaZulu-Natal, causing more than 25 billion rand ($1.7bn) worth of damage and killing 337 South Africans. Some private security companies were found to be involved in the unrest.

Ramaphosa said he would be making several leadership changes in a number of security agencies to strengthen the country’s security structures and take heed of the recent report into the riots, which concluded there was poor coordination between the state security and intelligence services.

‘Very significant shift’

South African political analyst Daniel Silke told Al Jazeera in his speech Ramaphosa identified core areas in business and governance “that require attention”, but whether they can be implemented is another question.

“The big hope certainly from an economic point of view this year is that the government does open its doors a lot more to the private sector,” he said.

“Now what was emphasised in the first part of the speech was this very issue and in fact, Ramaphosa emphasised correctly – that now is the time ultimately for the private [sector] to drive job creation.”

Silke said the speech marked “a very significant shift” from the ANC’s previous stance, because it acknowledged the party’s “failure of the state-centred approach to business” and was more welcoming of the private sector.

Bianca Chigbu, a lecturer and economic sociologist at the University of Fort Hare, was more sceptical.

“As Ramaphosa said, businesses create jobs but we know that such businesses prefer cheap labour and, therefore, will employ immigrants due to their willingness to accept lower wages. Their idea of leaving the responsibility of job creation in the hands of businesses will be futile and the locals will be disadvantaged,” Chigbu told Al Jazeera.

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The struggle of unemployment: A South African perspective

South Africa achieved independence in 1994, but years later, there has been little improvement in the general populace’s poverty levels. While the country remains one of Africa’s strongest economies, statistics indicate that close to 50% of the population lives in poverty. (Based on south African government poverty measure where the upper bound poverty line is approximately $70 per month.)

The covid-19 pandemics have exacerbated the issues of poverty in the country. South Africa has one of the highest infection rates in Africa and more recently has been dealing with a mutated version of the virus that has since been christened the South African variant. Lockdowns and covid 19 restrictions have pushed many out of employment, and businesses have been forced to shut down. Estimates indicate that close to 1million people may fall below the poverty line.

According to a World Bank Report , the inequality of apartheid lives on. The report indicates that inequality of opportunity is extremely high in the country. 

To compound issues, unemployment among youth stands at more than 50% , substantially higher than comparable countries.

South Africa’s economic issues run deeper. The economy is not growing enough to absorb its youth and reduce the trends in employment. Compounded by the lack of equal access to education and other services, the youth are not adequately set up for employment.  Part of the challenges stems from the inadequate capacity generated in the manufacturing industry. 

The manufacturing industry has grown no more than 1% from 2010 to 2018. Manufacturing jobs are usually low skills mass jobs that absorb a large portion of employable young people. As such, the lack of traction in the manufacturing sector has added to the employment woes that the country faces. 

While the manufacturing sector has not shown significant growth, the financial sector has shown considerable improvement. However, this sector is primarily a high-skill industry and cannot cater to meaningful employment.

This is given the fact that the bulk of this unemployed group consists of medium to low skilled employees. 

The employment statistics released by the countries statistics agency remained bleak. 

Statistics South Africa reported that the unemployment rate was at 32.5% in the last quarter of 2020. This means that up to 7.2 million people were out of employment. This figure was higher than the 30.8% reported in the second quarter of last year.

What are the leading causes of unemployment in South Africa? 

The country’s background and apartheid-induced inequality have created a legacy system of inequality. To date, black people in the country face an unemployment rate quadruple that of their white counterparts.

This can in part be attributed to the country’s legacy of apartheid that created a system of inequality that excluded black people from the education system. This gave rise to a perpetual vicious cycle in which this class of people has not been adequately reintegrated into the quality education segment. 

The inequality can also be in part a direct result of a failure to address the systemic issues of inequality plaguing the country. Some of the structural challenges include the high university fees, for example. The fee structure excludes a sizeable chunk of the population from receiving higher education. 

As the levels of education decrease, the unemployment levels rise significantly. 

Like the rest of Africa, South Africa also has a very young population. As such, more and more people flock into the labor market, which has no capacity to absorb large numbers. Coupled with the low education levels, this creates a large unskilled labor pool. 

Another factor contributing to unemployment is trade unionism. South Africa has an active trade union culture. Lobbying for higher wages, especially in an economy facing slow growth levels, may reduce new employment levels. 

It is important to note that reports have indicated some waves of xenophobic attacks on foreign nationals working within South Africa’s borders. It has been reported that some of these attacks have been linked to the dire unemployment situation, which has seen locals blame foreign nationals for taking their jobs. However, this situation wanes investor confidence even further, indirectly contributing to increased unemployment. 

How can stakeholders improve employment levels? 

An attempt to solve the urgent problem of unemployment involves addressing the education system. An adequately funded education system accessible to all regardless of background will help improve the young disadvantaged children’s skills.

Roping in private education institutions that provide high-quality, low-cost education, as is the case with institutions like Bridge International Schools in East Africa, can improve quality education. 

Further opening up the economy to encourage entrepreneurship through access to funding, government support, and promoting entrepreneurship within the education system may help open up the economy to allow for economic growth sufficient to cater to the ballooning population levels. 

An all stakeholder approach to addressing chronic inequality will help focus further towards improving equality as defined by socio-economic status to help open up access to opportunities. 

The fragile state of the economy

Going forward, there is a need to adapt to the new normal while seeking solutions to address the fragile state of the economy. According to the Bureau of Economic Research, the economy remains weak, as evidenced by a drop in business confidence. As businesses battle with the effects of covid 19, including dwindling demand, operational challenges, they continue to struggle to operate viably. 

As if to pour paraffin on an already burning situation, the looming threat of the coronavirus remains on the horizon. There has been a slow rollout of the vaccines, which has led to fear that gatherings and movement over the Easter season may become super-spreaders of the virus. The result would be a rise in the infection rate that may force the government’s hand to tighten lockdown restrictions once again. 

The start and stop cycle that businesses find themselves stuck in is of significant concern. The lack of certainty not only plummets investor confidence but also contributes to the unemployment issues. As long as businesses cannot find their footing, they remain hardpressed and can not create the employment level necessary to absorb the growing numbers of unemployed South Africans. 

In conclusion, the South African unemployment rate remains high. In the midst of the covid-19 pandemic, South Africa remains one of the continent’s highest affected countries and continues to grapple with finding solutions. 

The economy remains volatile. In unprecedented times like these, the unemployment issues in South Africa remain highly problematic. 

Read also: Unemployed and underprivileged hit hardest by S.Africa’s declining GDP

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Evelyn is a finance and business content writer with a passion for business news in Africa. Her expertise is in analyzing African equities and telling the truth when it comes to doing business on the continent!

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Home » News » South Africa » Politics

By Siyanda Ndlovu

4 minute read

16 Feb 2022

‘Unemployment, state of SA’s economy gives me sleepless nights’ – Ramaphosa

'it concerns me a great deal," the president says..

President Cyril Ramaphosa says unemployment and the poor state of South Africa’s economy is giving him “a torrid time”.

Ramaphosa said this in a Q&A session with journalists on Wednesday just after responding to the opposition’s State of the Nation Address (Sona) debate.

“What keeps me awake at night, and I am seriously kept awake, it is the state of our economy that keeps me awake, state of unemployment. It is very difficult to countenance 11 million people out of work who are not economically engaged in any activity.

“That is enough to keep me awake at night and it concerns me a great deal,” the president said.

Ramaphosa’s Sona last week was largely focused on the measures the government was taking to enable faster economic growth and the creation of employment.

Former Joburg Speaker now SARA premier candidate for Gauteng

ALSO READ:  Ramaphosa’s views on job creation is ‘blame shifting’, says Groenewald

He said that this was because “fixing the economy is our most pressing challenge at this moment, and is essential to progress in almost every other area of life.

“Our focus on the economy does not, however, diminish the importance of the many other areas of government’s work.

“Many of these issues have been raised in the debate and will be dealt with in greater detail in upcoming budget votes and public engagements by ministers.”

While the Sona focused on growth and employment, millions of South Africans face the immediate challenge of feeding themselves and their families.

It is estimated that food poverty affects some 5.5 million households.

Gatvol South Africans slate Sona on social media

Ramaphosa said that without monthly grants for children, the elderly and persons with disabilities, many people in South Africa would face destitution.

“We know that grants have provided an effective system for income redistribution and poverty alleviation, in a society with unacceptable levels of inequality.

“Given the scale of unemployment and the impact of the pandemic, the interventions we are undertaking to create jobs will take many years to reach all 11 million South Africans who are unemployed.”

He said this were some among other reasons that the government took a decision to extend the R350 Covid-19 grant to March next year.

READ MORE: Ramaphosa’s Sona is not a blueprint but a wish list, says Buthelezi

“We are extending for another year precisely to reach these people and to stave off hunger. We are doing this within a fiscal environment that has been badly worsened by the pandemic.

“We need to do so while making sure that we do not further weaken our macroeconomic position and that we do not allow our debt service costs to further crowd out social spending.

“As a country, we nevertheless need to fill the gap in social protection to achieve a minimum level of support for those who cannot find work.”

Ramaphosa said that finding a sustainable, affordable and effective solution must be one of the central pillars of the renewed social compact that the government has undertaken to build.

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Unemployment: is there a way forward?

Reducing unemployment should be the top priority of government.

Unemployment is South Africa’s biggest problem. And it’s not just a matter of statistics: every one of the 6.1 million people who are unemployed at present has a story to tell.

We’ve tried to tell a few of those stories over the last two weeks, and we’ve published analyses by economists of the causes of the problem and possible solutions.

More than one in four people who want to work cannot find any. Officially, unemployment has increased over the past decade from 21.5% to 27.1% of the working-age population, one of the highest rates in the world. If you take into account people who have given up looking for work, the unemployment rate is even higher; 37%.

In manufacturing alone, some 300,000 jobs have been shed over the past decade.

As Minister of Finance Tito Mboweni said in his budget speech, South Africa is a small, open economy. South African manufacturers compete against not just each other but against the whole world. In the clothing and textile industry, for example, the number of people employed has declined from about 150,000 in 1996 to less than 80,000 in 2016 . South African manufacturers struggle to compete with those in China, Bangladesh, and increasingly even Lesotho, where garment workers are paid very low wages.

Should wages in South Africa be lower in order to compete? Some economists argue that rising wages in South Africa have come at the expense of job creation.

But others warn that in many families a single wage earner supports many unemployed adults, and in the absence of a better social security net, these wages are critical to household survival. Though South Africa does have a sophisticated social grants system, the grants are very low, and many people — who are not disabled or elderly or parents — get no grant at all.

The solution does not lie in agriculture or mining. Farm jobs have stagnated over the past decade, and mining — the industry on which our economy was built — has shed 65,000 jobs. This has happened while mining output has increased; part of the reason for this being automation.

One thing economists agree on is that poor education policies are a big part of the problem. There are in fact jobs available in South Africa — if you’re qualified. Only 1.7% of the country’s unemployed are graduates. Many of these graduates have been absorbed by the financial sector, which has created over 620,000 jobs since 2008.

What does seem to be clear is that major interventions are necessary. The status quo is not creating jobs. Even in periods when South Africa’s economy was growing much faster than the 1.5% predicted for 2019, job creation was not fast enough to mop up unemployment.

Unemployment destroys people’s health and self worth. Finding ways to fix our biggest problem should be the top priority of government.

More about Our biggest problem

• Eastern Cape traders shut down by municipality over festive season 10 January 2024
• Waiting and hoping the whole day for work 26 February 2019
• Reconsidering South Africa’s approach to waste pickers 22 February 2019

Next:  Blind Zimbabwean loses refugee status after identity muddle

Previous:  Police evict CPUT students from admin building

Manufacturing: the answer to job crisis

Dear Editor

South Africa is geological in the perfect situation for the building and repairing of ships and marine vessel. As the word has realized that the economics of scale does bring with it profits, most of the canals build in not deep enough to have these vessels to pass when loaded. Moving oil from Eastern to Western countries is done pass the entire South African coast.

South Africa has one of the largest iron ore deposits and the infrastructure to produce world class metals essential to the marine industry. The problem is that there is no envision nor ambition from leaders to develop or drive manufacturing in this country.

Sincerely Gerhard 4 Mar 2019

© 2019 GroundUp. This article is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License .

You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.

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Tackling youth unemployment: What works, what doesn't

Youth unemployment is one of South Africa’s most intractable challenges, made worse by COVID-19. Prior to the pandemic the unemployment rate (including people who had given up looking for work) was just under 70% for people aged 15 to 24 .

A year later the rate had increased to 74% – despite government investments. So it is crucial to understand what interventions are working. But how do we evaluate whether youth employment programmes are successful, particularly when unemployment is caused by the structure of the economy ?

The obvious answer, of course, is whether a programme results in a young person getting employed.

This is logical and easy to measure. It can easily be linked to the release of funding to programmes. And it allows for programmes to be compared. This was done in a systematic review of 113 programmes internationally .

However, as we have explored in several recent studies, there are a number of drawbacks to relying solely on job placement as an indicator of successful intervention. Doing so misses out on outcomes that are equally important, or more so, amid high structural unemployment.

Together, these studies show that job placement alone is an insufficient goal and measure of the success of youth employability programmes.

These lessons are particularly important in economies that have been severely affected by the COVID-19 pandemic, where youth employment recovery will take time.

Inadequate measure of success

We make this argument based on several studies. The first looked at long-term employment outcomes of 1,892 youth between 18 and 25 who participated in youth employability programmes over the period 2017-2018. These are programmes run by NGOs, business and the state. They typically include technical and soft skills training.

The proportion of participants who found jobs and stayed in them over time was just 28% – somewhat better than a matched sample from the quarterly labour force survey data , but still low. But we also found evidence that programmes had other important outcomes. These included a continued positive orientation to the labour market, and improved self-esteem and self-efficacy – important attributes for managing the protracted transition to work in a low growth economy.

The second involved analysis of the quarterly labour force survey and general household survey data to understand the nature of young people not in employment or in education and training. It found that while many such youth have never worked, a significant portion find themselves in and out of work without making much longer-term progress.

The third study draws together several qualitative studies conducted in the past 10 years. It shows that young people are frustrated by the constant cycle of finding and taking up training and employment opportunities, without making progress towards a longer-term career.

Together, these studies show that job placement alone is an insufficient goal and measure of the success of youth employability programmes. Four reasons for this argument emerge from these studies.

First, job placement says more about demand than supply. A young person’s ability to find a job doesn’t depend only on their skills but also on whether the labour market is creating sufficient demand for employees. No matter how well a programme trains and supports a young person, if there are limited jobs, young people are unlikely to be employed.

Second, if a programme is getting young people into jobs even though job numbers are not growing – as in South Africa – these placements may be at the expense of other work seekers.

Individual programmes can get people into jobs while the overall youth unemployment rate stays stagnant or rises. In the context of a rapidly contracting economy in the COVID-19 era , this is a particularly important argument against job placement as the only measure of a programme’s success.

Third, using this single indicator takes attention away from longer-term pathways towards sustainable livelihoods. Many jobs in South Africa, especially at entry level, are insecure, part time or casual. There’s a risk of disregarding whether a job is decent and has prospects for learning and career development.

Young people typically do not stay in jobs . This is either because the job is not a good fit or is for a short term only. Other barriers, such as transport costs, also account for why they are unable to stay in jobs.

Qualitative and quantitative evidence shows that young people find jobs that are typically short lived, before having to look again for their next placement. Policymakers should consider whether these short term experiences add up to something longer term – or there’s a risk of perpetuating the cycle of underemployment.

Finally, and perhaps most importantly, evaluating programmes on the basis of job placement alone underestimates the multidimensionality of poverty . Evidence repeatedly shows how many barriers and challenges young people face as they leave the education system and begin to find their way towards a job, and perhaps even a career.

Evidence repeatedly shows how many barriers and challenges young people face as they leave the education system and begin to find their way towards a job, and perhaps even a career.

These barriers are not only related to the labour market or education system. They also include issues such as food insecurity, income poverty, and care responsibilities , among others. Each of these limit the ability of young people to look for work.

These interrelated challenges influence young people’s ability to take up training or job opportunities.

Taken together, these challenges require far more intensive support than simply training and placing a young person in a job.

Alternative approaches

It is crucial that funders, policy makers, and programme developers invest in more intensive support that can help young people meet the challenges they face in seeking work. They must also insist on measures beyond job placement as indicators of success. International evidence bears this out. It shows that across 113 programmes reviewed, multidimensional programmes that seek to provide more comprehensive support to youth are more effective than those that offer training only. They are particularly successful when they target the most vulnerable youth.

Further, our research recognises the crucial contribution such programmes play in keeping young people connected to opportunities, and reducing social exclusion and social drift. This is when young people become increasingly disconnected from the labour market, training opportunities and positive social inclusion, which in turn can have negative consequences on mental health.

Given this evidence and the fact that South Africa is facing a stagnant economy for some time, it is crucial that funders, policy makers and those working on youth employment interventions evaluate and invest in programmes on the basis of their ability to keep young people positively oriented towards the labour market. The programmes should help improve their employability, even if the young participant is not yet able to find an actual job.

Outcome indicators that can more adequately measure these factors include enhancing job search resilience, promoting self-esteem and self-efficacy, and reducing discouragement .

There are ample reasons to move away from evaluating employability programmes on the basis of employment outcomes alone. Rather, a range of indicators should be used to track whether young people remain engaged, believe in themselves and keep trying to find a job. This, while developing the personal attributes that will make them attractive to future employers.

Each of these outcomes is more difficult to measure than a simple count of job placements. But it’s not impossible.

Lauren Graham, Associate professor at the Centre for Social Development in Africa, University of Johannesburg, University of Johannesburg; Ariane De Lannoy, Senior Researcher: Poverty and Inequality Initiative, Southern Africa Labour and Development Research Unit, University of Cape Town, and Leila Patel, Professor of Social Development Studies, University of Johannesburg.

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November 15, 2019

The Fourth Industrial Revolution: Impact on unemployment and inequality in South Africa

By makhethe makamase.

The Fourth Industrial Revolution (4IR), a concept reconstructed by Founder and Executive Chairman of the World Economic Forum, Prof  Klaus Schwab , elucidates the increasing merger of technology with the physical and biological spheres, thus indefinitely altering how humans interact with their surroundings and amongst themselves. This phenomenon has subsequently been placed  at the centre of various economic and political agendas. South African President, Cyril Ramaphosa, in his 2019 State of the Nation Address (SONA), emphasised the urgency of equipping the nation for the fourth industrial revolution and the necessity to adapt and embrace the various opportunities it presents. However, according to Prof Schwab “organizations might be unable to adapt; governments could fail to employ and regulate new technologies to capture their benefits; shifting power will create important new security concerns;  inequality  may grow; and societies fragment”. This commentary piece seeks to provide an overview of the fourth industrial revolution from a South African perspective and its impact on the country’s biggest challenges of inequality and unemployment.    

The establishment of the Presidential Commission on 4IR was announced in the SONA (2019).  The commission consists of thirty members comprised of prominent individuals from various sectors with relevant knowledge and skills to advance the nation’s 4IR mission. New partnerships such as the African Fourth Industrial Revolution Centre (SAFIRC) to be hosted by the Council for Scientific and Industrial Research ( CSIR ) will equally serve to strategize, plan, create and regulate policies towards advanced 4IR technologies in the pursuit of national and pan-African development objectives. Despite the optimism portrayed by the current government on 4IR, potential for disappointment especially for the poor and unemployed youth is irrefutable. The commitment to generate over two million jobs in ten years through  government and private sector  cooperation as stated at the SONA (2019), was ostensibly contradicted in his 25 years of democracy speech at the University of Johannesburg when President Ramaphosa informed the nation to brace themselves for  mass job losses  and furthermore acknowledged the lack of progress by government in job creation.

South Africa’s total unemployment rate recently reached  29.1% . However, when factoring in discouraged job seekers and the economically inactive population the number escalates to nearly 40%. This is especially severe when factoring in that over  50%  of the youth are unemployed. Approximately ten million people are unemployed, seven million are actively seeking employment and about three million are unemployed, despondent and stopped seeking jobs. The majority of South Africans (mainly black) are impoverished and the inequality gap has significantly increased since 1994. The top 1% controls 70% of the  country’s wealth , leaving the bottom 60% with only 7% of the wealth. Rural areas, townships and informal settlements occupied predominantly by poor black people have less or no infrastructure, meaning electricity and access to technological resources amongst other services are a challenge. Competition for resources and increasing marginalisation of the poor has resulted in cases of social unrest, which manifest in forms of violent protests and xenophobic attacks amongst other imminent issues.   

The large scale retrenchments in the banking sector serve as one of the first and major examples of 4IR’s implications on human labour in South Africa. In March 2019, Standard Bank announced a closure of 91 branches nationwide and in June 2019, the number had increased to 104 branches closing and the loss of  1200 jobs . In July, Nedbank announced an estimate of 1500 job redeployments or retrenchments, while Absa is in the process of restructuring its operations processes. In September 2019, the Johannesburg Labour court interdicted what would have been the biggest bank strike since 1920, led by the The South African Society of Bank Officials (Sasbo), the Finance Union supported by the  Congress of South African Trade Unions (Cosatu) – who are equally threatened as human labour becomes obsolete in some areas. The strike was expected to have 30 000 to 40 000 participants.

According to the World Bank, South Africa’s net wealth distribution is one of the most unequal in the world. Though South Africa – alongside Kenya and Nigeria – has been globally recognised as an emerging  technological hub  with the potential to transform and increasingly integrate their society with the rest of the world and benefit from 4IR, a quarter of its population (13.8 million) is living below the poverty line at  less than R19 a day  which does not cover basic food and certainly not other living expenses. A people centered development approach and public participation towards building social and human capital is vital. The empowerment of people through skills and access to resources in different sectors will enable their economic participation and curb the impact caused by fading jobs and slow economic growth. A response mainly from government at this pivotal moment is crucial as President Ramaphosa stated that “the promise of our nation’s birth will forever remain unfulfilled” if the country fails to adapt and not take advantage of the 4IR.

Ms. Makhethe Makamase is a Research Assistant at the Institute for Global Dialogue (IGD) associated with UNISA. Her views do not necessarily reflect those of the IGD.

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Speech by Minister Jeff Radebe during the launch of Youth Month   //

Minister Blade Nzimande: Deregistration of the Educor colleges

Statement by the minister of higher education, science and innovation, professor blade nzimande on deregistration of the educor colleges.

Programme Director, Mr Veli Mbele; Chairperson of the Council on Higher Education; My special advisor, Mr Nqaba Nqandela; DDGs Present; Members of the media; Fellow South Africans

Over the past few days, my Department has been receiving a flood of media queries on our decision to cancel the registration of four Educor institutions, namely, City Varsity (Pty) Ltd, Damelin (Pty) Ltd, Icesa City Campus (Pty) Ltd and Lyceum College (Pty) Ltd.

We have also noticed that the overwhelming media and public interest in this matter. In response to all this, we thought we should call a media briefing, which would afford us the space and time to take the nation into confidence on the reasons for our decision to cancel the registration of the colleges I have mentioned.

Most importantly, we also thought that we should use this opportunity to outline the steps we have taken to deal with the compliance failures of these institutions and explain the steps we have taken in order to safeguard the interests of students and all other affected groups.

We must also state that, in addition to receiving an unusually high number of media queries on this matter, we also noticed that most of the media queries we received from the various media houses, were almost identical.

We therefore thought that, given the sheer volume of these media queries, their similarity, the intricacies of this matter and the imperative of communicating a coherent message, the most realistic approach would be to host a full media briefing.

Legal obligation As it relates to the legal obligation of my Department, the Higher Education Act of 101 of 1997, as amended, empowers my Department to, among others;

• To provide for different categories of registration of private higher education institutions and the associated rights to extend the power to award diplomas, certificates and confer degrees to private higher education institutions; and 
• To provide for the withdrawal and revocation of qualifications by public or private higher education institutions.

In line with the objects of the Higher Education Act, in 2016, I repealed the 2013 Regulations for the Registration of Private Higher Education Institutions and published new ones.

The new Regulations outline the application process, requirements for registration, responsibility of an institution and the appeals procedure that must be followed by individuals or entities that wish to register a private higher education institution.

Further to this, the Higher Education Quality Committee (HEQC) of the Council on Higher Education (CHE) is responsible the for the accreditation of higher education programmes.

Cancellation of the registration of the Educor institutions In line with these legal prescripts, on 26 July 2023, the Director-General, in his capacity as the Registrar of Private Higher Education Institutions, cancelled the registration of the following Educor Institutions-

• City Varsity (Pty) Ltd; 
• Damelin (Pty) Ltd;
• Icesa City Campus (Pty) Ltd; and
• Lyceum College (Pty) Ltd.

These cancellations were carried out in accordance with the 2016 Regulations for the Registration of Private Higher Education Institutions and the applicable sections of the Higher Education Act.

Failure to comply More specifically, these four institutions failed to comply with the following requirements of the Act and Regulations:

• Fulfil the requirements for registration contemplated in Section 57(2)(b) of the Act; and
• Discharge its responsibilities as required by Chapter 6 of the Regulations.

In particular, the Educor institutions have failed to submit their annual financial statements and the tax clearance certificates for the 2021 and 2022 years, as proof of their financial viability. We are now moving into the 2023 cycle.

The four Educor institutions were required to lodge an appeal with the Minister on or before 26 September 2023. They then requested an extension to 28 February 2024, and are now seeking a further extension.

In addition to failing to submit evidence of their financial viability to the Department, the four Educor brands can be deemed as dysfunctional and this is mainly measured against the daily complaints and grievances received from students, most of which remain unresolved.

In addition to this, the following serious issues were brought to my attention as Minister: The Higher Education Quality Committee has withdrawn the accreditation of some programmes for City Varsity (Pty) Ltd, Damelin (Pty) Ltd and Lyceum College (Pty) Ltd.

Misrepresentation on Student Numbers Educor (Pty) Ltd claims to have 50 000 learners in the system. This information is incorrect since the 2022 annual reports indicate the breakdown of student enrolment as follows: Table 1: Student Enrolment Institution Student Enrolment 1. City Varsity (Pty) Ltd                         540 2. Damelin (Pty) Ltd                             4 012 3. Icesa City Campus (Pty) Ltd            145 4. Lyceum College (Pty) Ltd                 8 399 Total:                                                    13 096

Complaints received from Students For some time, the Directorate has been receiving many complaints from students against the Educor institutions, most of which remain unresolved. These complaints relate to the following- 

• Poor quality of teaching and learning;
• Lack of proper administrative support;
• Poorly qualified staff;
• Corruption and bribery;
• Lack of response for requests for refunds;
• Lack of professionalism;
• Exploitation of poor students;
• Non-payment of staff salaries; and
• Under-payment of staff salaries: 

Complaints Received from Students on INTEC College (Pty) Ltd,Damelin Correspondence College (Pty) Ltd and SETA accredited programmes.

These complaints extend to the other brands such as INTEC College (Pty) Ltd and Damelin Correspondence College (Pty) Ltd, which fall under the jurisdiction of the Quality Council of Trades and Occupations (QCTO). The QCTO has not been able to restore stability within these two institutions and students continue to be exploited.

These complaints also extend to the offering of the Sector Education and Training Authorities (SETA) accredited programmes. The SETAs have not been able to restore stability with the Educor institutions and students continue to be exploited.

Complaints Received from Students on Central Technical College These complaints extend to their registration as Private Colleges. Our Directorate: Registration of Private Colleges has already issued these institutions with a notice of intent to cancel registration. In November 2023, the Department’s examination section suspended the exam centre registration for the site in Pretoria approved to Central Technical Colleges since staff members did not turn up for invigilation and many students have been left stranded.

Sudden Closure of Sites leaving Students Stranded  The sites of some institutions closed suddenly for reasons of failure to pay the rent, staff salaries and/or the municipality. These are the following:

• City Varsity (Pty) Ltd at Braamfontein: Closed because staff withdrew their services for non-payment of salaries and students were left stranded;
• Damelin (Pty) Ltd: The sites at Braamfontein, Port Elizabeth, Cape Town, East London closed suddenly since they were in arrears with the municipality and rental and students were left stranded; and
• Lyceum College (Pty) Ltd: The only site was closed due to an eviction order by the landlord for failure to pay the rent and students were left stranded.

Allegations of Corruption On 08 January 2024, our Directorate: Registration of Private Colleges wrote to these four Educor institutions and requested them to respond to a list of allegations of corruption against them. To date, they have not responded.

Concern regarding students and the way forward  All stakeholders are expressing some sort of concern for the affected students. In this regard, the following must be noted:

• Educor will be given a phase out period in which to phase out pipeline students;
• Educor would have to reimburse students where it is due;
• The latest numbers of enrolled students as per the 2022 annual report is 13 096, not 50 000, as Educor claims;
• One challenge for students is the transfer of credits considering the RPL and Credit Accumulation Transfer policy; and
• Another challenge could be students repeating some modules or paying extra fees.

Conditions attached to the cancellation of registration I now wish to conclude by outlining the conditions and obligations that the decision to cancel their registration imposes on these four Educor institutions:

• The cancellation of the registration of City Varsity (Pty) Ltd will take immediate effect;
• As of the date of this letter, City Varsity (Pty) Ltd must not enrol new students on any year of the programme;
• City Varsity (Pty) Ltd must phase out pipe-line students by 31 December 2023;
• City Varsity (Pty) Ltd must submit a teach-out plan which includes Items (a) to (f) below to both the Department and the CHE, within 2 weeks of the date of this letter;
• The teach-out plan must also include the number of learners in the pipeline and when learner records will be uploaded onto the National Learner’s Records Database; 
• The teach-out plan must indicate that returning students who did not complete the programme within the stipulated time will not be admitted post 31 December 2023 and that they would need to complete their programme at another institution; and
• Students must be informed accordingly.

Obligations of an institution on the cancellation of registration An institution that has been notified by the Registrar that its provisional registration has lapsed in terms of Regulation 17(3) or that its provisional registration or registration has been cancelled in terms of Regulation 17 must-

• inform its students within 14 days from the date of the Registrar’s notice that its registration has lapsed or been cancelled and notify the students of the arrangements that will be made to safeguard their interests in terms of this regulation;
• issue to each enrolled student a copy of his or her academic transcript as contemplated in regulation 25;
• reimburse or compensate any enrolled student who has a lawful claim on the institution as a consequence of its ceasing to operate from funds established as contemplated in regulation 12(2);
• make adequate arrangements for affected students to complete their programmes at a comparable public or private institution;
• cease operating before or at the end of the academic year, and any institution that fails to comply is guilty of an offence in terms of section 66 of the Act.; and
• ensure that no new students are enrolled after the date specified by the Registrar. 

In conclusion, there is not much information available about the current leadership structure at Educor and there is no credible evidence to suggest that the management of Educor is working to improve or correct some of the serious governance and compliance failures I have referred to.

What we are seeing instead are students and staff being left stranded and we wish to urge the affected staff to seek the assistance of the Labor Court and the Commission for Conciliation, Mediation and Arbitration. 

Under these circumstances and with the information at our disposal, it would be unconscionable to maintain the registration status of these four private institutions and allow ourselves to become complicit in gross governance and compliance failures.

Most concerning, by doing so, we would be failing as the Department in our obligation to protect the rights and dignity of students, who simply wanted to acquire an academic qualification with the view to improve their lives and that of their families.  

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