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This article provides an update on the Special Edition of the Journal of Vocational Education and Training 57, no. 3, 2005, which focused on the launch of the National Skills Development Strategy (NSDS) in South Africa. The analysis here evaluates the impact of the first phase of the NSDS, which ran between 1 April 2001 and 31 March 2005. The discussion highlights many of the successes and challenges facing skills development in South Africa. Central amongst these are: (i) a lack of political will to ensure the success of the 'integrated' approach to education and training formally adopted in South Africa after 1994; (ii) severe governance problems with regard to the management of Sector Education and Training Authorities (SETAs), including financial mismanagement and fraud; and lastly, a multitude of operational problems, making the rollout of the NSDS an extremely difficult and complex task.