By Thapelo Molefe
South Africa’s ambitious goal of achieving universal access to quality early childhood development (ECD) by 2030 is facing a major hurdle – a critical funding shortfall.
While the government has pledged R10 billion over the next three years, experts warn that without immediate private sector involvement and innovative financial mechanisms, millions of children will remain without proper early learning support.
Discussions at the Bana Pele 2030 Roadmap Leadership Summit on Monday made it clear that traditional subsidy models are insufficient to meet the growing demand. To truly transform the ECD sector, the conversation has shifted towards strategic financial partnerships, leveraging private capital and ensuring outcome-based accountability.
The R10 billion allocation announced during last week’s Budget is largely focused on operational costs such as subsidies, nutrition and practitioner stipends. However, Basic Education Department acting director for ECD, Janeli Kotze, highlighted a crucial gap.
“We’re covering operational costs, but what’s missing is the capital investment required to create new ECD centres and improve training. That’s where partnerships with the private sector and new financial instruments come into play,” she said during a panel discussion.
Many ECD practitioners remain undertrained and underpaid, leading to inconsistencies in the quality of services offered to children in vulnerable communities.
Education budget and policy analyst at the National Treasury, Spencer Janari, echoed this sentiment, stressing that strategic spending must be prioritised.
“It’s not just about throwing money at the sector. We need to ensure that each investment builds on the next, so we’re not left with fragmented, short-term funding that doesn’t yield sustained progress.”
Despite the planned subsidy increases, 800,000 children remain outside the ECD support system. The government’s goal is to reach 1.5 million children by 2027, but that still falls short of the department’s 2030 target of 2.3 million children.
“The funding must do two things simultaneously,” Kotze emphasised. “It must increase access for the remaining children and improve quality across the board. This is not sequential—we must work on both at the same time.”
The government has outlined a structured plan for the R10 billion allocation to ensure sustainable growth in the sector.
A substantial portion of the funds will go towards increasing subsidies for existing ECD centres, ensuring they can cover operational costs such as salaries for practitioners, food and nutrition for children and education materials.
Another priority is expanding access to underserved areas by funding new ECD centres in rural and underprivileged communities, providing the necessary infrastructure, learning materials and ensuring compliance with health and safety regulations.
Beyond infrastructure, a key focus will be on practitioner training and support, with significant investment allocated to upskilling educators through certification programmes, mentorship and ongoing professional development to enhance the quality of teaching.
Recognising the inefficiencies in subsidy distribution, the government will also develop a digital tracking system to streamline registration and funding allocation, allowing real-time monitoring of enrolment and expenditure.
Additionally, part of the funding will serve as an incentive to attract private sector contributions through co-funding mechanisms, such as social impact bonds and blended finance models.
Finally, the allocation includes provisions for nutrition and health programmes, supporting school feeding initiatives, health check-ups and sanitation improvements to create a safe and nurturing environment for young learners.
One of the strongest calls during the discussions was for private investment to catalyse the expansion of ECD programmes.
Ilifa Labantwana chief economist Laura Droomer championed the idea of an ECD Outcomes Fund, a blended financing model that would incentivise private investors by linking returns to measurable improvements in early learning outcomes.
“We need private funding to catalyse new practitioners into the workforce,” Droomer explained. “Match funding models, social impact bonds and public-private partnerships are all tools we must leverage to reach our 2030 goals.”
A proposed outcome-based financing model will allow investors to fund ECD programmes upfront and be repaid by the government and donors if specific educational and developmental benchmarks are met. This approach ensures accountability and impact-driven spending.
Additionally, match funding has been presented as a key tool to unlock larger investments. Under this model, private sector contributions will be matched by government funds, ensuring that every rand invested delivers a greater impact.
Experts also pointed to international models where social impact bonds have been used successfully to drive innovation and accountability in education funding.
Another key concern raised is the bureaucratic challenges preventing ECD centres from accessing subsidies. With a largely paper-based registration system, tracking and allocating subsidies efficiently has been difficult.
Many new practitioners struggle to register their programmes due to cumbersome processes, resulting in thousands of children missing out on much-needed early education opportunities.
Panellists agreed that a streamlined digital system that simplified registration was urgently needed to ensure funding reached new centres faster.
Without such reforms, even the additional financial injections will struggle to make an immediate impact.
They said developing a national ECD tracking system would provide real-time data on enrolment, funding allocation and programme effectiveness.
“There is no point in increasing subsidies if the system cannot efficiently distribute them,” Kotze noted. “We need a transparent, digitised system that allows for real-time monitoring and ensures every cent is being used effectively.”
Ilifa Labantwana CEO Zaheera Mohamed also stressed the need for a collaborative funding approach to maximise impact.
“We need to move beyond isolated investments. A unified, transparent funding platform will allow us to pool resources effectively, scale innovative solutions and ensure long-term sustainability,” she said.
Mohamed stressed the importance of a multi-sector approach, where private companies, philanthropic organisations and government entities worked together to create a long-term financial model for ECD.
The summit acknowledged that quality ECD for all is critical to help break the cycle of poverty in the country and promote long-term education, health and economic development.
INSIDE EDUCATION
