Some 60,7% of matrics passed the 2009 exams, which is just less than 2% down from 2008, Basic Education Minister Angie Motshekga said on Thursday.
Motshekga said that although the shift was marginal, it was very disappointing.
In 2008, 62,5% of matrics passed.
"Saying we are unhappy is too mild. We've had sleepless nights and agonised.
"The National Senior Certificate is an important indicator of the quality of our education system, and as a country, we cannot afford to allow our young people to achieve results that are in the main average or below average," she said.
KwaZulu-Natal improved its pass rate by 3,5% from 57,6% in 2008 to 61,1% in 2009, while the Eastern Cape stabilised at 50%.
Motshekga commended the results of these two rural provinces characterised by high rates of poverty.
"They have managed to buck the downward trend of the past years and... turn around," she said.
However, she expressed disappointment in the overall provincial results.
The pass rate in the Free State declined by 2,4% and the Western Cape by 2,7%.
In North West, the pass rate was down 0,5%, Limpopo saw a decline of 5,4% and it dropped 11% in the Northern Cape.
Mpumalanga, which also published its results on Thursday after doubt that it would be able to, had the poorest performance with a pass rate of 45,9%, a decline of 3,9%.
Motshekga said that the department would put steps in place to ensure that the system improved.
She said that subjects like mathematics, physical science and accounting needed to be given more attention.
All results for all provinces, including Mpumalanga which had been embroiled in a paper leaking saga, were published and available to students.
Following a "rigorous process", Umalusi, the quality assurance body for general and further education and training, found no evidence of a systematic problem in Mpumalanga, said Motshekga.
She said that the council's chairperson informed her on Wednesday night that he was satisfied that Mpumalanga's results were credible and could be released by the department. On Monday, Umalusi had decided to delay the approval of Mpumalanga results pending investigations.
Motshekga also announced that the Mpumalanga education department would be immediately reconstituted.
"We agreed that the national department will from 2010 assume responsibility for the administration of the National Senior Certificate examination process in Mpumalanga until necessary systems are in place," she said.
The South African Police Service special investigation unit, the Directorate of Priority Crime Investigation, known as the Hawks, had been called in to investigate the irregularities.
Motshekga said those found guilty of stealing and selling question papers were criminals and would be punished to the full extent of the law.
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