By Johnathan Paoli
The Portfolio Committee on Higher Education has expressed deep concern over the deteriorating state of the National Skills Fund (NSF), following a briefing held this week.
Committee chair Tebogo Letsie said the committee was particularly troubled by the fund’s persistent challenges, which hindered its ability to address South Africa’s critical skills shortages and high youth unemployment rate.
“The committee emphasised that, in its current state, the NSF is ill-equipped to make a meaningful contribution to addressing South Africa’s skills deficit,” Letsie said.
During the briefing, the NSF presented its audit action plan, outlining steps to address issues flagged by the Auditor-General in the 2023/24 annual report.
However, the committee remained unconvinced that the NSF was effectively resolving its systemic deficiencies.
A key concern raised was the significant underspending of R3.7 billion during the 2023/24 financial year.
Committee members found this particularly alarming given the country’s high youth unemployment rate and the urgent need for upskilling and reskilling young people.
Letsie stated that such financial inefficiencies rendered the NSF incapable of making a meaningful impact on South Africa’s skills development efforts.
Adding to the committee’s dissatisfaction was the absence of the NSF’s accounting authority and the executive leadership from the department at the meeting.
The chair deemed this lack of accountability unacceptable, raising questions about leadership commitment to addressing the fund’s persistent governance issues.
One of the most pressing concerns was the mismanagement of skills development funds, particularly the practice of depositing payments into business accounts instead of the designated interest-bearing accounts of Skills Development Providers (SDP).
The NSF argued that rural-based SDPs often faced difficulties in opening such accounts, but the committee dismissed this explanation as insufficient and unjustifiable.
Letsie condemned financial irregularities within the NSF, highlighting unauthorised payments made to Medirwe Investments, which was appointed project manager to train hundreds of unemployed youngsters how to run a poultry farm. The project is reportedly in limbo.
He said that despite having clear guidelines and procedures for funding skills development, the NSF has allowed payments without following due processes, and that the misappropriation of funds intended to upskill and re-skill young people was deeply troubling.
The committee also criticised the department for redeploying officials implicated in the Nexus Forensic Report on the plundering of the NSF to other directorates within the department instead of holding them accountable.
He warned that such actions undermined transparency and set a dangerous precedent for governance within state institutions.
In response to these concerns, the committee resolved to summon the Higher Education and Training Minister Nobuhle Nkabane along with the director-general Nkosinathi Sishi to provide a comprehensive account of the NSF’s challenges and corrective measures.
Furthermore, the committee plans to formally request that the minister engage with President Cyril Ramaphosa to expand the mandate of the Special Investigating Unit to include an in-depth probe into the NSF’s projects and expenditures.
It reiterated its commitment to ensuring transparency, accountability and effective governance within the NSF.
Letsie emphasised that immediate corrective action was necessary to restore public confidence in the fund and to ensure it effectively fulfilled its mandate of addressing South Africa’s critical skills shortages.
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