Critical government departments are nearly insolvent in South Africa

The Minister of Basic Education, Siviwe Gwarube, says several Provincial Education Departments are at risk of becoming insolvent this financial year. 

After assuming office in 2024, the Minister launched a financial review of all nine provinces at the end of the year.

The analysis revealed that the education sector is facing extreme financial strain amidst a decade of chronic underinvestment by the national government.

Public funds were often redirected to bail out struggling state-owned enterprises, which was made worse by poor financial management at the provincial government level.

“Without urgent intervention and robust financial planning, several Provincial Education Departments risk becoming insolvent before the end of the current financial year,” said Gwarube.

“There is no room for complacency. The choices ahead are difficult and, at times, painful—but they are necessary to preserve the integrity and sustainability of our public education system.”

The minister has instructed all Provincial Education Departments to work closely with their respective Provincial Treasuries to ensure they have actionable financial recovery plans.

Completed recovery plans must be submitted to the department before the next Council of Education Ministers (CEM) meeting on 21 July 2025.

She added that all MECS and Heads of Department must account for their performance in key service delivery areas, such as

• The timely disbursement of statutory school payments, including school allocations;
• The restoration or continuity of basic services at affected public schools, such as electricity, water, security, learner transport, and the National School Nutrition Programme;
• The appointment of educators and managers to funded vacancies in public schools; and
• The identification and removal of ghost employees from provincial payroll systems.

The department will provide technical support and oversight to Provincial Education Departments.

Although the sector is under immense pressure, several provinces are experiencing escalating financial challenges, particularly KZN.

Gwarube has thus met with the KZN MEC for Education, Sipho Nhlamuka, the MEC for Finance, Mr. Francois Rodgers, and the Office of the Premier to discuss the province’s growing challenges.

She also told Director-General, Hubert Mathanzima Mweli, in consultation with National Treasury, to explore interventions to address the largest urgent service delivery challenges. 

Major changes on the table

Outside of the financial initiative from Gwarube, she is also looking to improve education standards by changing the matric pass mark.

In a recent parliamentary Q&A, she revealed the department is looking to form a council to investigate how South Africa can improve its education standards, which includes reviewing the so-called ‘30% pass mark’.

She said that the decision to adjust the pass mark requires careful consideration. She said the National Education and Training Council (NETC) will focus on evidence-based policy making.

The call for nominations for NETC members closed in January, and it will focus on providing expert guidance on reviewing NSC pass requirements, among other things.

“Any potential changes to pass requirements or curriculum structure must be evidence-based, internationally benchmarked, and aligned with South Africa’s developmental needs,” she stated.

Educators and stakeholders have argued that the current 30% pass mark has long been controversial, as it undermines students’ academic potential and the actual value of a Matric Certificate.

Education analyst Dr Jonathan Jansen said that a low pass mark fails to equip students with the skills and knowledge to succeed beyond school.

This is a key reason for the increasing dropout rates at universities, as students cannot meet the higher academic expectations.

Professor Mary Metcalfe, an education specialist, added that a 30% pass mark means that the understanding of essential subjects is minimal, affecting the overall education standards.