The Sector Education and Training Authorities (Setas) have largely failed to provide the skills the South African economy needs and should either be closed down, allowing companies to do skills training directly, or should be handed to business to run.
The Organisation for Economic Co-operation and Development (OECD) this week reported there is a vast and growing mismatch between jobseeker skills and available jobs in South Africa, which is one reason economic growth has stagnated.
Setas, as they are currently set up, do not have an understanding of the changing economy or the capacity to provide the new skills needed. The digital economy and the rise of artificial intelligence and robotics means that many traditional skills are no longer relevant. These new technologies develop so rapidly that many skills strategies can quickly become obsolete.
There are 21 Setas. Training may be happening, but it is the wrong kind, misaligned with the country's needs. Most Setas do not have the capacity for high-level labour market research on the real skills needs of the economy.
Many on the boards and in the management of Setas are political appointees with very little understanding of the sectors they are involved in or the skills training needed, meaning they are poorly run and governed — like many state entities.
Setas consistently report mismanagement of funds, procurement irregularities and corruption. Contracts are given to politically connected training entities, some of which have been set-up simply to win the contract — without the capacity, knowledge or competence to provide skills training a lot of the Setas lack trainers with real-world industry experience.
So not only is the funding for training misdirected, the Setas are poorly managed, wasteful and corrupt. Many do not have the capacity to analyse their sector-specific skills needs or interpret research data and therefore cannot do the appropriate skills development training aligned with the demands of the labour market. Setas often issue five-year plans for skills development, but they are rarely met and are misaligned to the real needs of the economy.
To assess the skills needs of the economy, Setas must work closely with industry, but this is rarely the case. Many of the political appointees are ideologically hostile to business, meaning it is difficult for them to work collaboratively to upskill South Africa.
Setas, like many government entities, report rosy targets achieved in their annual reports, which are far removed from reality. This means they often feed unreliable data and information to national skills planning processes. Other state entities responsible for providing skills data are sadly also ineffective because of cadre deployments, lack of competence and corruption.
There is no proper oversight over Setas, and there is a lack of accountability because of political appointees on boards and in management
Setas are not aligned with other critical state institutions managing the economy, such as Stats SA, the department of labour, the National Treasury and the department of trade & industry. They are also not connected to higher education institutions and industry-based training institutions or employer associations.
There is no proper oversight over Setas, and there is a lack of accountability because of political appointees on boards and in management. They report to the department of higher education. The department has failed to hold Setas accountable. By appointing politically connected, incompetent and poorly skilled board members and top executives, it has been one of the causes of the problems. Parliament also has had poor oversight over the Setas until recently, when dodgy chair appointments were exposed. Civil society and business organisations have consistently complained about the ineffectiveness of the Setas.
They have been such a lucrative patronage system for many, over so many years, that there is fierce political resistance to reform. It would be better to close them down and let firms do the training if the Setas cannot be reformed. Alternatively, business, in collaboration with business associations — which are better placed to identify the skills demands of the economy — should take over the running of Setas.
• Gumede is professor of practice, School of Governance, University of the Witwatersrand and author of Restless Nation: Making Sense of Troubled Times (Tafelberg)
For opinion and analysis consideration, e-mail Opinions@timeslive.co.za
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