The KwaZulu-Natal education department faces a financial crisis that, according to media reports, will require an immediate injection this year of more than R3.4bn — more than 5% of the province’s education budget for this financial year.
KwaZulu-Natal is not alone. Other provinces face similar financial crises, imperilling the futures of millions of young people, especially those from poor families who are most reliant on public education.
Already, studies show a sharp increase in the number of pupils in “no-fee” schools, the type that are the hardest hit by budget cutbacks and have no other sources of funding.
The rush to no-fee schools is driven in part by the cost-of-living pressures on middle- and low-income families. Two factors explain these pressures: the slow pace of economic growth in the past 15 years and the spike in the cost of public services, specifically electricity and water, which has contributed to the sharp increase in monies owed to municipalities.
The crisis in education has implications for the country’s future economic growth and employment, and national and subnational government finances. This is because education is a critical enabler of economic growth and determinant of access to employment, making the education crisis a multigenerational tragedy.
The crisis exemplified by KwaZulu-Natal goes beyond basic education. Higher education is also facing difficulties, not only financial but also output. Despite a huge increase in spending on postsecondary education since the FeesMustFall unrest, only 30% of full-time undergraduate students who enrol for a three-year degree complete their studies within the allotted time.
Recipients of government financial assistance through the National Student Financial Aid Scheme fare even worse. About 44% take more than five years to complete their studies, and some never complete their degrees, even after staying at university more than five years, according to University of Stellenbosch economist Peter Courtney.
As Courtney points out, students’ poor performance at university is usually a result of poor preparation (in literacy and numeracy) of pupils at the basic education level.
The impact of all this on the country’s economy is starkly illustrated by the data used by Courtney. Quoting work by other economists, he says had SA’s outcomes been on par with the average achieved by its middle-income peers, the country’s economic output (measured by GDP) would be 23%-30% higher. Based on SA’s current GDP of more than R7-trillion, that would have meant an economy that was R1.6-trillion to R2.1-trillion bigger. If it were 30% bigger, GDP would be more than R9-trillion.
“The relationship between education and the economy also flows the other way: rising incomes and fiscal resources allow both households and government to invest more in education, and to broaden access to training and postschool opportunities,” wrote Courtney in a paper on education, inclusive growth and fiscal consolidation published by the Southern Africa-Towards Inclusive Economic Development project in February.
Families contribute to education in two ways. They pay directly for their children’s education and indirectly through investments that create an environment that is conducive to learning. Research shows a strong connection “between family incomes and education levels and the schooling outcomes of children”.
But what the KwaZulu-Natal education crisis shows is that none of these benefits will be realised soon. And the damage — to human development and economic growth potential — will be felt for many generations to come, creating a multigenerational vicious cycle of high unemployment, poverty and social unrest.
• Sikhakhane, a former spokesperson for the finance minister, National Treasury and SA Reserve Bank, is editor of The Conversation Africa. He writes in his personal capacity.
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