Why Budget 2018 gets a C for addressing education crisis

2018-02-25 21:00
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Cape Town - The education of South Africa's youth has been highlighted as one of the top three national priorities in Finance Minister Malusi Gigaba's 2018 budget speech.

Soria Hay, head of corporate finance at Bravura, says that, while Budget 2018 gets an A for the commitment to fee-free higher education and training for South Africa's disadvantaged youth, it deserves a meagre C for inefficiently responding to the burning issues at the heart of South Africa''s education crisis.
 
Fee-free higher education
 
The 2018 Budget Speech has made good on the commitment towards fee-free education by proposing an implementation plan that will guarantee access to higher education and training for all South Africans who qualify, based on merit rather than class position. Government is committed to spending over R1trn on education in the next three years.
 
Post school education and training will be the fastest-growing spending category in the 2018 budget, with an anticipated annual average growth rate of 13.7%.

A budget allocation of R57bn in the medium term for fee-free higher education and training will be dispersed as R12.4bn in 2018/19, R20.3bn in 2019/20 and R24.3bn in 2020/21. There is also the inclusion of a R10bn provisional allocation made in Budget 2017.
 
Fee-free higher education and training (including university and TVET colleges) will be implemented in a phased approach aimed at first-year students from poor and working-class families, with a total family income below R350 000 per annum. The roll out will continue into subsequent years until all years of study are covered.

Allocation to basic education
 
In terms of basic education, a total of R792bn in aggregate will be spent on basic education over the medium term. Within this, the education infrastructure grant will allocate R31.7bn over the medium term and will include a R3.8bn allocation to the school infrastructure backlogs grant in order to replace 82 inappropriate and unsafe schools, and to provide water to 325 schools and sanitation to 286 schools.
 
A further R21.7bn over the medium term will be set aside to provide daily meals to 19 800 schools (9 million learners) through the national school nutrition programme grant. And 39 000 Funza Lushaka bursaries will be disbursed over the next three years via the National Student Financial Aid Scheme, at a cost of R3.7bn earmarked for prospective teachers in priority subject areas such as mathematics, science and technology.

Furthermore, to support effective curriculum delivery over the medium term, R15.3bn is allocated to provide printed and digital content to teachers and learners. This includes the provision of 183 million workbooks and textbooks, teacher support, and increased access to information and communication technology.
 
But Hay questions the merit of these allocations.

"Alarming statistics and reports on the state of basic education point to the need for far more aggressive management of teacher training and classroom efficiency. Allocations do not significantly account for this," cautioned Hay.
 
Basic education system broken
 
Budget 2018 states that fee-free education will contribute towards breaking the cycle of poverty and confronting unemployment, as labour statistics point to the lowest rate of unemployment for tertiary graduates.  
 
Hay says that, while the budget quite rightly considers tertiary education in the light of the development of the youth as being critical to SA's economic recovery and long-term health, it falls short in acknowledging the fact that the primary and secondary education systems continue to let down SA's children.

"While a substantial 70% of the R1trn budget has been earmarked for basic education, it is arguable whether the specific allocations will hit the right marks to meaningfully change the prospects for the majority of school-going children," says Hay.
 
"It is widely acknowledged that the basic education system in SA is completely broken."

Hay cites an article that appeared in The Economist last year, which highlighted the fact that SA has the most unequal school system in the world with the widest gap in the world between the test scores of the top 20% of schools and the rest of schools.

The article went on to quote a study undertaken in 2007 where maths teachers of 11- and 12-year-olds sat tests similar to those taken by their class. As many as 79% of teachers scored below the level expected of the pupils. The average 14-year-old in Singapore and South Korea performs much better.
 
According to a ranking table of education systems drawn up by the Organisation for Economic Co-operation and Development (OECD) in 2015, South Africa ranked 75th out of 76 based on its overall education system.
 
In 2014, only 36.4% of those who began grade 1 in 2002, matriculated in 2014. And in 2015, Basic Education Department statistics in 2015 reflected 1.2 million learners registered for Grade 1, but only 790 000 learners in Grade 12.

The Department of Higher Education report in 2015 indicates that a vast 47.9% of university students did not complete their degrees, with black students holding the highest drop-out rate. As many as 32.1% enrolled students leave within their first year. This points to an alarming drop-off rate, which Hay says costs the taxpayer billions of rand with no outcome.  
 
"South Africa's historic spend on education (6% of GDP) is an appropriate percentage of our budget compared to other developing countries, if not slightly higher. Brazil spends 5.8% of GDP on education, India 3.3% and China around 4%. Yet, it seems that few countries spend as much to so little effect. The issue of quality remains highly problematic," says Hay.

Accommodating all the additional students
 
"But let's take a step back for one moment. As a result of the fee-free education programme, the anticipated number of tertiary students able to benefit in 2018 will include 340 000 university students and over 420 000 full-time equivalent students at TVET colleges. This means that by the end of 2018 around 760 000 students will have benefited from higher education and training."   
 
University student numbers are already near capacity. Plans have been in place to grow the current number of universities (26) that accommodate about 1 million students in order to ensure the inclusion of a further 500 000 students by 2030.

These plans, developed prior to the fee-free education commitment, could be severely impacted by fee-free education, leading to a fresh exclusion discourse based on access rather than cost.  
 
Hay says that an important aspect of university education is to fuel research and innovation capability, which drives economic growth and competitiveness. She suggests that it is time for government to prioritise the areas and industries where they want students to focus on given that the country needs specific skills in order to grow our economy and ensure inclusive growth.   
 
Hay cautions that, despite government's commitment to inclusivity in education based on merit and not class position, there are numerous risks that have not been accounted for.

"Principles, theory and strategy are important aspects and Budget 2018 can be applauded for a strategic pointing in the right direction. But details of how to ensure access to higher education and training for the fee-free education recipients, coupled with how best to allocate funds in basic education to guarantee sustained improvement in education, are glaringly absent," says Hay.

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