The emergence of the previous chairperson of the Human Resource Development Council (HRDC) as the President of South Africa signalled a new hope that can only bode well for the country. Many take for granted the fact that the challenges facing South Africa can never be resolved by government alone. The events of last year, which saw an unexpected change of guard at Treasury and the plummeting of the rand, raised eyebrows about the relationship between government and the private sector. Harsh words were exchanged across society and this left a bitter taste in the mouths of many investors.
The incident also heightened the risk of a financial downgrade that we don’t need as a country. It is in this context that President Cyril Ramaphosa unveiled a key part of his economic turnaround plan. It targets a massive turnaround in foreign fixed investment, which fell from ZAR76 billion in 2008 to a pitiful ZAR18 billion in 2018.
To spark the fixed-investment campaign, the president has conscripted four ambassadors from the business sector into national service. Their directive is to travel the world and encourage foreigners to inject capital into South Africa, helping the country reach an ambitious five-year target of US$100 billion in fresh fixed investment.
This intervention, together with the dialogue between business and government is heartening. In a typically South African way, we saw all sides rising to the occasion, facing the world in Davos and then coming back home to continue the collaboration. Investors, while reading all of these as good signs, are now waiting with bated breath to see how the human capital development will respond.
It is natural for the relationship between capital and government to be laced with tension but equally, it is clear there is a lot of common ground and goals that should underpin the relationship. The education and training sector is a key area in this regard. This necessitates that the public sector produces the skills the business community requires. On the other side, the private sector has to hire the graduates churned out by relevant institutions.
One can imagine that education and training must have topped the agenda. This is an obvious area where a future reservoir of skills can be built to shield us from rough times. We have 24 universities, 50 Technical and Vocational Education and Training (TVET) colleges and thousands of listed and unlisted companies with significant turnover. The collaboration between these companies and the relevant SETAs [Sector Education and Training Authorities] can easily produce a Marshall Plan that can envisage a financial plan for each of the universities and TVETs.
Through creative public/private partnerships, surely all students can be funded, even before we resort to blanket free education based on limited state resources. Surely the amount of money that should be spent on skills development and CSI in the private sector can be properly directed to ensure that not only universities but also TVET colleges are sustainably funded. With the amount of money that the private sector has not released for investment, there should be no reason why primary schools are not equipped with top-of-the range science laboratory equipment and libraries to ensure our future workforce and, for that matter, assets – our children – are exposed from the outset to the best.
A cursory analysis of what business spent on CSI for education reveals a staggering amount that extends into the billions. According to the Kaelo and Trialogue reports on CSI Spending on Education, such spend has multiplied since 1994, underlining the fact that business consciousness for expenditure on education has heightened tremendously. The difficulty is poor co-ordination and lack of common investment strategies in education between the private and public sectors, and within the private sector itself. This results in ‘pet projects’ guided merely by the interests of some CEOs without considering the impact in the long term.
On a few occasions, communities not involved in the setting up of laboratories and libraries end up looting and burning these facilities due to the lack of ownership/consultation. Another undesirable scenario is a tick-box investment, where educational investments are not placed in the right places or not according to community or industry needs. The worst example I have come across is where a government department denies or reduces budgets to schools that have received private-sector help, further impoverishing those schools when the private-sector funding dries up. This lack of common purpose between business, government and communities is what sits at the heart of the current lack of resources for education – not the absence of resources.
At the merSETA [Manufacturing, Engineering and Related Services SETA] in 2018 alone, millions of rands have been made available for higher education and training initiatives as part of the SETA’s contribution to education resourcing. MerSETA challenges all stake-holders to do something concrete to ensure funding is not left to government alone.
MerSETA believes better partnerships can be struck between government and the public sector to rescue education. Mentorship and apprenticeship must now be made mandatory for business because, despite it being an obvious bridge to deal with the skills deficit, it doesn’t always occur naturally to companies to make it an essential part of their DNA. And so in these meetings, where commitments are made, this solution has to feature very strongly to create an environment in which more – not fewer – young people can be absorbed into the job market to gain experience at all levels.
Until this is declared a crisis, I doubt anything will happen to change the current skills impasse where experience is needed by those who have not had the opportunity to be gainfully employed.
During a crisis, such as this, there may be a temptation to ‘reinvent the wheel’, but the solutions for economic development have been with us for a long time. What is lacking is often the political will for business and government to team up rather than see each other on opposite poles of the economy.
It is clear, therefore, that we did not need the students’ revolt to come to an agreement that investment and access to higher education will in the long run save the economy.
Government has laid a good basis for collaboration and the rebuilding of trust between government and business. In many ways, it has provided detail on how government intends to create a conducive environment to ensure less wastage and increased opportunities for growth. Business must now play its part in revisiting its attitude towards investment without being forced by legislation. Opening its doors for young people to learn on the job must be a good start.