This report notes that South Africa's much anticipated economic rebound in 2018 did not occur. A number of exogenous factors contributed to this poor growth performance. However, South Africa's growth challenge is deep-seated and largely structural. To grow faster and sustainably, the economy will need to be more inclusive, requiring the participation of a greater share of the population mainly through job creation. Furthermore, persistent inequality of income and of opportunity will continue to raise pressures for redistribution of limited resources that are drawn from a small tax base. At th
... Show more
This report notes that South Africa's much anticipated economic rebound in 2018 did not occur. A number of exogenous factors contributed to this poor growth performance. However, South Africa's growth challenge is deep-seated and largely structural. To grow faster and sustainably, the economy will need to be more inclusive, requiring the participation of a greater share of the population mainly through job creation. Furthermore, persistent inequality of income and of opportunity will continue to raise pressures for redistribution of limited resources that are drawn from a small tax base. At the Presidential Jobs Summit and the South African Investment Conference held in October 2018 agreements were made on actions that are expected to enable job creation and to attract higher levels of investment, including interalia, education and skills interventions. However, the policy agenda of expanding the Post School Education and Training (PSET) sector clearly illustrates the trade-off between maintaining fiscal restraint and addressing key structural constraints that may be costly to the treasury.
This report begins by looking in detail at recent economic developments, both globally and in South Africa. It then examines the promise of encouraging PSET enrolments through financial support to students, the fiscal and quality challenges of expanding tertiary education, the short-term outlook for the PSET system, and improving comprehensively the PSET system over the long term. International experience offers some options for South Africa to solve the trade-off between supporting more students and encouraging higher enrollment. This includes diversifying PSET from the publicly-funded contact university-centric model towards: a PSET sector more centred around technical, vocational and lifelong training; a revamped distance learning model; more private sector participation; stronger controls and incentives to encourage better quality; greater reliance on labour market observatories to guide students and PSET institutions in their selection of curricula; more fiscal incentives to mobilising resources; a larger use of risk sharing mechanisms; and better regulation of tuition fees.
Edited excerpts from publication.
Show less
