When finance minister Enoch Godongwana delivered the 2026 budget speech one message came through clearly: South Africa cannot grow its economy without investing in skills.
Education and training remain the single largest area of government expenditure, accounting for nearly a quarter of consolidated spending over the medium term. That is encouraging. It signals policymakers understand a fundamental truth about economic development: the most sustainable way to build an economy is to equip people with the capabilities to drive it.
However, while the budget recognises the importance of skills development, the real question is whether our current approach is bold enough to meet the scale of South Africa’s unemployment crisis and the pace of technological change reshaping the global workforce.
From my perspective, after more than a decade working to help thousands of individuals transition into technology careers, the answer is complicated. The direction is right. The urgency, however, still falls short of what the moment demands.
Welcome focus on education and training
The budget made several important commitments. Government has allocated R155.8bn to post-school education and training for the 2026/27 financial year, including funding for universities, TVET colleges and skills programmes. The National Student Financial Aid Scheme (NSFAS) alone will spend more than R54bn to support more than 740,000 students from disadvantaged backgrounds.
These investments matter. For decades, access to education has been one of the most powerful levers of economic mobility in South Africa. Expanding funding for students and training institutions helps ensure talented young people are not locked out of opportunity because of their financial circumstances.
The most valuable skill may no longer be a specific qualification but the ability to learn new technical skills rapidly. This is where South Africa needs to rethink its strategy.
The budget also acknowledges the current national skills system is not delivering the outcomes the country needs. National Treasury has announced a comprehensive review of the skills development ecosystem, including the effectiveness of the sector education & training authorities (Setas) and the National Skills Fund.
This review is overdue. South Africa’s skills system was designed in the late 1990s for an economy that looked very different from the one we operate in today. Since then entire industries have been reshaped by automation, artificial intelligence (AI) and the rise of the digital economy. Yet the mechanisms we rely on to train workers have struggled to adapt.
The scale problem
The core challenge facing South Africa’s skills agenda is not simply funding. It is scale. The country has one of the highest youth unemployment rates in the world. Millions of young people are outside the labour market, not because they lack motivation or ambition but because they lack access to the skills employers need.
Traditional education models were not designed to retrain millions of people quickly. University degrees typically take three to four years to complete. Even vocational programmes can take years to deliver results. That timeline does not match the urgency of our economic reality.
At the same time the global economy is undergoing one of the fastest technological transformations in history. AI is changing how software is written, how businesses operate and how entire industries function. Jobs are evolving faster than most education systems can keep up with.
In this environment, the most valuable skill may no longer be a specific qualification but the ability to learn new technical skills rapidly. This is where South Africa needs to rethink its strategy.
Rethinking how skills are delivered
One of the most promising aspects of the budget speech is the acknowledgement that the current skills ecosystem requires reform. For years businesses have complained that training programmes are poorly aligned with the needs of employers. At the same time many young people complete qualifications only to discover that they are not considered “job-ready”.
Bridging that gap requires stronger collaboration between industry, government and education providers. In countries such as Germany and Switzerland dual-training models combine classroom learning with real workplace experience. The result is a pipeline of graduates who enter the labour market with practical skills that employers value.
The countries that succeed in this new era will be those that can train large numbers of people in digital and technical skills. South Africa has the potential to be one of those countries
South Africa has experimented with similar approaches through learnerships and Seta programmes. However, these initiatives have often struggled with bureaucracy, inconsistent quality and limited scale.
If the planned review of the national skills system leads to meaningful reform — simplifying funding mechanisms, strengthening industry partnerships and prioritising outcomes over processes — it could be a turning point, but reform alone will not be enough.
Rise of new learning models
Another important lesson from the global education landscape is that skills development is no longer confined to traditional institutions. Over the past decade new models of education have emerged that focus on intensive, practical training designed to move people into employment as quickly as possible.
Coding bootcamps, industry-led training programmes and online technical education platforms have demonstrated it is possible to equip people with high-demand skills in months rather than years. These models are not intended to replace universities or TVET colleges. Instead, they complement the broader education ecosystem by offering faster, more targeted pathways into the labour market.
We have seen firsthand how powerful these models can be. Over the past decade thousands of people have transitioned from having no background in technology to becoming employed software developers. Many of these individuals did not follow traditional academic pathways. What they needed was practical training, mentorship and exposure to real-world projects. As the economy becomes more digital, these kinds of scalable training models will become increasingly important.
Preparing for the AI economy
Perhaps the most important question raised by the budget is whether South Africa is preparing its workforce for the economy of the future. AI and automation will transform nearly every sector, from finance and logistics to healthcare and education.
The countries that succeed in this new era will be those that can train large numbers of people in digital and technical skills. South Africa has the potential to be one of those countries. We have a young population, a vibrant technology sector and a growing ecosystem of education providers focused on future-facing skills.
Unlocking that potential requires a shift in mindset. Skills development should not be treated as a slow-moving administrative function. It must become a national economic priority, one pursued with the same urgency governments apply to infrastructure and energy reform.
The path forward
The 2026 budget dpeech makes it clear government recognises the importance of skills in driving long-term growth. That recognition is an important first step. But if South Africa truly wants to tackle unemployment and compete in the global digital economy, we must move faster and think bigger.
We need a skills system that is more agile, more industry-driven and capable of reaching millions of people, not thousands. Ultimately South Africa does not have a shortage of potential. What we have is a shortage of scalable pathways that allow people to turn that potential into productive careers.
Solving that challenge will determine whether the next decade becomes one of economic stagnation, or one of opportunity.
• Moola is founder of online education company HyperionDev.
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