Address by Phumzile Mlambo-Ngcuka, Deputy President of the Republic of South Africa at the Ministerial Skills Indaba, Clairwood Racecourse, KwaZulu-Natal

Programme Director, Dr SZ Mbokazi
Premier of KwaZulu-Natal, Dr. Sibusiso Ndebele,
MEC for Finance and Economic Development, Dr Zweli Mkhize
MEC for Education, Ms Ina Cronje
Business leaders and academics
Honoured guests,
Ladies and gentlemen

Introduction

It is a pleasure to be here with you on the east coast. This Ministerial Skills Indaba allows us an opportunity to reflect on what we can do better and to use previous experiences to strengthen our strategies.

All of us are agreed on realising shared growth and making real socio-economic development for all our people. As we reflect on how our economy can and should, better the life of all South African citizens, we have to recall where we come from. Doing this will sharpen our focus as we move ahead.

Overview before and after 1994

In the period before 1994, the national economy was growing at a rate of less than 1%, income per person was falling, government deficit stood at close to 9% of Gross Domestic Product (GDP) and inflation was at its highest. However, at present, our country experiences high levels of economic growth. Since 2004 we have averaged a growth rate of over 4,5%, our GDP has notched up at a rate of 4,9%. Our ultimate target is to grow our economy at a rate of over 6% by 2014.

Even though our economy is growing at unprecedented levels, this has not translated to adequate employment creation and a shared development which addresses poverty. Part of the reason why we continue to face widespread unemployment among our people, especially the youth and women, is because of skills shortfalls.

It should trouble all conscientious everyone South Africans that youth constitutes 70% of the unemployed in South Africa. What lies ahead for a future of our country? This is a reason why government has allocated R600 million towards the recapitalisation of Further Education and Training (FET) colleges.

Accelerated and Shared Growth Initiative for South Africa (AsgiSA) objectives

We exist in a global economy where we need to compete economically and for this we need different skills at all levels and two, we are competing for a scarce pool of human resources, as well. This is why we as government have come up with the Joint Initiative of Priority Skills Acquisition (Jipsa), a component of
Accelerated and Shared Growth Initiative for South Africa (AsgiSA).

When Jipsa was launched in 2006, I said: "The most fatal constraint to shared growth is skills! And it should be noted that skills are not just one of the constraints facing AsgiSA but a potentially fatal constraints!"

I need to emphasise this point, skills are the biggest binding constraints to accelerating a growth of our economy and, more importantly, to sharing fruits of its growth. An additional challenge we face is of creating and generating employment at all levels of the private and public sectors.

A mandate of AsgiSA and Jipsa components are in these areas:

* macro-economic issues
* infrastructure programmes
* sector investment strategies
* education and skills
* second economy and small, micro and medium enterprises (SMME) interventions
* public administration and delivery.

These are challenges we have identified and which need swift action. Together with our social partners, we believe we can overcome the goals of halving unemployment and poverty alleviation by 2014. One major instrument to achieving this is enhancing skills in all levels.

Ladies and gentlemen, this is more so in this province which is one of the two provinces with the largest rural population. It implies the benefits of democracy have still to be felt by the rural population of KwaZulu-Natal. What we have here is a dual economy that poses challenges to the quality of life for large sectors of our people. The second economy challenge presents us with a situation where you find trapped most South Africans feel trapped and whose daily life revolves around joblessness, lack of education, HIV and Aids, crime and lack of hope.

Second economy challenges

Most of the rural populations exist outside of the benefits flowing from a first economy. As a consequence, most young people remain entrapped in the second economy, and without access to opportunity resort to crime and substance abuse. If we are to move forward, young people will need to contribute to our economy and our society and have a stake in our AsgiSA initiatives. If South Africa has a future, we have to empower our young people and our women.

It is of concern that there are people who reach the age of 35 without having worked. Economic growth which we celebrate is seemingly indifferent to these able-bodied young people. These young people can only sustain their livelihoods by depending on social grants to move beyond the mire of poverty and unemployment. They are therefore susceptible to passing their poverty and unemployment onto the next generation. We seriously need an actionable paradigm shift.

A major task for us is to mainstream the second economy to the first economy. Most importantly, we can do this through education and training. Education empowers a person with the requisite skills to better an individual's life. Our goal is to ensure that through education, training, mentorship and apprenticeship a young person in a rural area like KwaNongoma, Ixopo, Nquthu, Mahlabathini and Dumbe is enabled to move beyond the second economy.

As an example, I learnt that almost two million people of 35 years and above in this province are illiterate. Shortage of skills is related to literacy levels. I am glad that the KwaZulu-Natal province is to dedicate more than R100 million secured from the Labour department on literacy and basic skills development projects. I say power to the Masifundisane Campaign in its bid to enhance economic efficiency!

AsgiSA and Jipsa recommendations

Programme Director, the key recommendations of AsgiSA with regard to skills development are clear. One of the primary objectives of JIPSA skills development is in the area of vocational training. Further Education and Training (FET) is considered fundamental to improving the education and empowerment of our people. FET is significant tertiary institutions to equip learners for career-orientation with high-quality skills.

A person gains priceless life skills and work training to meet challenges with a practical know-how. Their importance of FET for a developing country like South Africa is immeasurable. Their advantage is that they are closely related to the industry and all the relevant stakeholders who require qualified and trained graduates. The education received is customised to meet market needs and therefore important for uplifting the South African economy.

Through integration of theory and practice a learner comes out of a FET institution armed with a meaningful qualification which can be readily applied in the workplace.

All sectors of government, business and civil society have recognised a need of promoting FET education to meet goals of increasing a pool of skilled and semi-skilled workers. For instance, in order to meet the needs of the 2010 FIFA World Soccer Cup, which is a South African and an African event, we seriously require skills for large-scale projects.

There are well over 400 000 students attending FET colleges. I am convinced the numbers should be higher to meet higher economic growth. To support such an objective, a bursary and student loan scheme has been announced by the Treasury.

AsgiSA and Jipsa is therefore a multi-stakeholder driven initiative, it focuses on the Quality Improvement Development, Support and Upliftment Project (QIDS-UP), that seeks to ensure that all primary schools have the basic requirements for quality education especially books and libraries -essential for developing reading skills. As government with our social partners we are making significant progress in career guidance programmes to ensure learners develop the necessary skills and exercise the best choices in order to increase their learning and earning opportunities.

This is especially important for poor learners and schools that have traditionally not had career guidance teachers. We strongly support the Dinaledi Project, which aims to double the number of mathematics graduates from 24 000 in 2004 to 50 000 in 2008. At present, 529 schools are participating in the Dinaledi programme.

Moreover, the intended outcomes of AsgiSA in the development of human capital are in the FET recapitalisation programme with major financial boost of R1,9 billion. Also FET colleges have been identified for 'preparing young for the working world in response to intermediate and higher-level skills requirements.'

There is also wide scope for co-operation and partnerships between colleges, the Sector Education and Training Authorities (Setas) and employers and to foster partnerships with industry'. I have to announce that the National Skills Development Strategy (NSDS) which is in its current second phase, is implemented in order to align skills development with economic growth, job creation and poverty alleviation strategies.

Ladies and gentlemen, these measures are set off to address high priority scarce skills. Jipsa has targeted intervention to address high level engineering skills in network industries, artisans, particularly those supporting the building industry, town and regional planning, management and planning in healthcare and education, cross-cutting skills in project management, financial management, Adult Basic Education and Training (ABET) and information communication technology (ICT) sectors, maths-science-ICT and language competence in public schooling, and skills in priority sectors of tourism, business process outsourcing (BPO), bio-fuels and so forth.

As government elected by the people, we cannot confront these skills challenges alone. True to the African philosophy of doing things through consultation, there has to be a collective interest and shared responsibility. We have to join hands to address binding constraints at all levels of government, national and provincial and with other key stakeholders in labour, business and academia. I
am pleased that in the audience at this skills Indaba we have a fair share of representatives from across the spectrum of South Africa.

Programme director, the fact is, public private partnerships (PPP) are crucial to effectively delivering on skills development. The transformation of our society from political freedom achieved in 1994 that is accompanied by economical enfranchisement in the 21st century requires a united front. While government at local, provincial and national levels is doing its part, mentorship and apprenticeship are part of corporate social investment (CSI).

In further support of FET initiatives, PPP are highlighted by the involvement and partnering of government, education and private companies. As was announced last year, five leading construction companies will assist in artisan training. At a risk of instigating sibling rivalry, let me mention them: Murray & Roberts,
Grinaker-LTA, WBHO, Group Five and Basil Read.

I would not be exaggerating by emphasising the importance of FET in alleviating skills shortfall. For most rural areas they are an accessible means of bettering a person's chances in life. This is so for the mere fact that they offer a relatively cheap education and training. It is encouraging that their access point is not cumbersome for rural folk who do not have material means to go to urban areas. They are spread across the length and breadth of the South African landscape.

Since there is financial support from both the private sector and government, there is no excuse for young people (and old) not to improve their lot in life by empowering themselves with vocational training. I would also venture to say that such a subsidised education opportunity presented by FETs is a stepping-stone to university and technikons qualifications.

There are international precedents we can learn from. The magnitude of FET is realised by highly developed societies like Switzerland, Germany, Australia and New Zealand. In these first-world countries, vocational training and education is a bedrock and foundation to their education structure! We should follow their example and make FET education a component of high school curriculum.

Hence in our goals, we want to produce one million highly qualified FET graduates in five-years. These are people who will beef up our economy and fill the ranks of the employed in large numbers. In this way, we can make strategic interventions into the second economy where masses of our people eke out a living.

Achievements of AsgiSA and Jipsa

Skills development and enhancement is a vital cog for shared economic growth. The needs of our growing economy require an increased government investment in capital formation backed very strongly by a skills base. In this regard, we can report that the AsgiSA and JIPSA programmes have had commendable success in their first year of operation. Of course, more needs to be done if we are to turn the tide.

Artisan training is beginning to gain momentum to finally reach an annual target of 50 000. Through the Umsobomvu Youth Fund (UYF) and the Independent Development Trust, just well over 4 000 unemployed graduates have been placed with companies, 97 practitioners with municipalities for project management skills. Career development placement programmes are slowly developing.

We have initiated international programmes with foreign country partners to place well over 700 women for training and experiential learning. I learn that a successful apprenticeship system through Setas has been reported by the Department of Labour by developing an average 5 630 artisan and 16 000 graduate learnerships in various occupations; allocated R316 million under the National Skills Fund (NSF) to 13 Setas. Moreover, this has been an efficient initiative as Setas revised their initial target to deliver 6 800 artisans in the 2007/08 service level agreements to 16 568.

Programme director, we also need to mention other action plans. I am pleased to learn the province is to assist the Minister of Education in her campaign on skills initiative for improving on passing maths at a higher grade and the adopt-a-school campaign by companies.

If the economy needs to produce 50 000 artisans, there is also necessity of encouraging learners to consider going to FET colleges to acquire practical skills and work-experience. I am worried that people have used social grants as an exit from poverty and unemployment. This is not sustainable in the long term. I am certain that FET colleges offer opportunities for young people to qualify as craft-makers and dress-makers for the tourism market.

As government it is our function to facilitate improving the intake of trainees through Setas. As a supportive measure, Higher Education South Africa (Hesa) is geared in its projects towards improving quality of skills and employability of candidates, University of Technology institutions requires experiential learning opportunities. Furthermore ladies and gentlemen, there has to be effective and efficient use of financial resources for skills development and enhancement.

The newly developed curricula to replace the country's 50 FET colleges are in line with AsgiSA. This curriculum to replace the N1-N3 models certainly complements the Skills Development Strategy. Skills remain the highest benefactor of the national expenditure budget, more than 18%.

Guidelines for further implementation

In assisting to address skills blockages, research is in progress conducted by Jipsa task-team in the following areas:

* effectiveness of Setas
* creating a lasting skills database and research information by South African Qualifications Authority (SAQA)
* identification of training capacity in private and public sectors
* a scan of training activities and gaps in private sector conducted by Business Unity South Africa (BUSA).

The take-up placement opportunities are to be increased for public sector workers. This is a great prospect to use PPP opportunities to improve quality of education. I am sure you are all familiar with the example of such public-private partnership through the Oprah Winfrey School of Excellence. This R12 million school of excellence located in the township of Shayamoya in Kokstad was built by both the KZN Department of Education with Ms Oprah Winfrey.

Conclusion

As a developing country, we have to recognise we exist in a global economy. As a result, we have to understand the dynamics of human resource development. This is a reality of the global knowledge economy. Programme director, failure in relation to enacting a national skills revolution is not an option. As a country, you will agree with such forums as the Skills Indaba, we have declared a war on skills development and retention. I am sure as I am that the sun will rise tomorrow, that this is a war we will win.

I wish you well and success in your deliberations.

I thank you.

Issued by: The Presidency
21 May 2007