Setas derail skills development and job creation

Sector Education and Training Authorities (Setas) are not fit for purpose to identify South Africa’s skills shortages, current and future skills needs of the economy, train the unemployed, unskilled and low-skilled, or to improve the skills of those currently in employment.

There has to be a greater urgency to rapidly develop and improve the country’s skills base, which must include pivoting the Setas, among the critical entities mandated to perform this task.

There are 21 Setas. The Department of Higher Education and Training’s own 2024 assessment of Setas identified systemic governance, financial management and performance challenges. The department’s report rated the overall performance of Setas as “less than 40%”. 

Setas are poorly run. Mismanagement of funds is endemic. “Some of the Setas struggled to account for anything”, according to the March 2025 parliamentary committee on higher education.

As a case in point, in the 2023 financial year, the Services Seta had overcommitted the organisation for R4-billion – funds it did not have, and were not budgeted for. 

High administration costs

The Setas’ administration costs are high. The performance, financial management and governance failures of Setas are because of a failed oversight ecosystem, including ineffective management by the Department of Higher Education and Training to which Setas report, failure by the National Skills Authority (NSA), which also has an oversight role over Setas, ineffective Seta boards and inadequate parliamentary oversight.

Appointing politically connected, incompetent and poorly skilled board members and top executives has been one of the main causes of the problems at Setas. Parliament also has had poor oversight over the Setas until recently, when the dodgy board chairperson appointments were exposed. Civil society organisations, business and trade organisations must hold Setas accountable. 

Read more: Fired minister Nkabane’s Seta panel existed in name only, MPs conclude

The NSA, which was supposed to advise the higher education minister on a National Skills Development Policy and on the governance of Setas, has also clearly failed.

The NSA is supposed to monitor the governance and performance of Setas, assessing their effectiveness in governance, strategic oversight and financial management. However, the NSA has been ineffective in doing so. There is a lack of a governance firewall between the authority and the Department of Higher Education and Training. 

In March 2025, the parliamentary committee asked the then higher education minister why her political adviser was nominated to sit on the board of the NSA, over which the minister provided oversight, a clear conflict of interest. The minister responded that her political adviser would resign on appointment to the NSA board.

There is a lack of accountability by Setas because of political appointees on boards and management. The parliamentary committee on higher education was told in March 2025 that some people were nominated “to sit on boards although they might not possess the requisite skills. You would only hear these people speak when there were battles about awarding tenders. If there were discussions about the strategic framework of the Seta, they did not contribute.” 

Failed governance and financial mismanagement

At the same time, many Seta board members are remunerated disproportionately lavishly. For example, the Media, Information and Communication Technologies Seta spent R1.6-million on the board chair in one year, with most of it on expensive hotels and car rentals for the chairperson.

The March 2025 parliamentary committee on higher education heard that another Seta chairperson – the committee did not name the Seta – apparently stated he would stay only at the luxury Michelangelo Hotel in Sandton, and accrued R1.1-million in subsistence and travel in one year.

Seta boards used to be called accounting authorities. Currently, the Skills Development Act allows the minister to appoint the chairpersons of the accounting authorities of Setas in consultation with the NSA. This is set out under Section 111A of the Act.

It compels a transparent board nomination process. The Act requires a Seta’s CEO to call for nominations from key stakeholders, including organised labour, employers, professional bodies and bargaining councils. 

Currently, the composition of Seta boards consists of up to six members from organised labour, six members from organised employers and two additional members from government departments, professional bodies or other organisations involved in skills development.

Read more: How Services Seta blew R163-million and broke SA’s skills promise

Seta boards, particularly chairpersons, have been dominated by politicians, or former politicians or their associates and relations, or by trade unionists, who may not have the governance skills, the understanding of the skills needs of industry or the understanding of the workings of state institutions.

Political appointees – without real-life experience of industry, or with little understanding of the running of complex organisations in order to play an effective oversight role over Setas, or who use Setas as an employment opportunity – have undermined the governance of Setas.

Appointments as chairs and board members of Setas have been opaque. In the controversial, and now withdrawn, recommendations for new Seta chairpersons by former higher education and training minister Nobuhle Nkabane, included ANC Chairperson Gwede Mantashe’s son, Buyambo Mantashe, former ANC KwaZulu-Natal premier Nomusa Dube-Ncube and ex-ANC KZN provincial deputy chairperson Mike Mabuyakhulu. 

A political playpen

Many appointments to state entities, including Setas, are determined at the ANC’s deployment committees first, before they are pushed through the formal government nomination structures. It may not be surprising if the controversial list of recent Seta board chair nominees, now withdrawn, could probably have come from the ANC’s deployment committee, and then forwarded to former higher education minister Nkabane to process through the formal government system – and that Nkabane, when fired, could have been the fall person for a probable ANC deployment committee decision. 

The governance structures of Setas must be overhauled, including the way boards and management are appointed, the number of board members and the composition of boards. Appointments to boards and management of Setas must be professionalised and depoliticised. The Department of Higher Education and Training should play only a coordinating role in appointments, serve as administrative support for independent panels and not make any appointments.

Expert board nomination panels must be truly independent of the Higher Education and Training Department and government departments, and must have real-life industrial expertise to assess potential board members. Members from the department must not be part of the independent selection panels.

The nomination process itself must be reviewed to make it truly independent and make certain it is not captured beforehand to ensure that only ANC-approved candidates reach the final nomination process. The Skills Development Act must be amended to guarantee that the appointment process is more transparent, to entrench the idea of independent panels that are neither associated with the Minister of Higher Education and Training nor with the governing party.

As a rule, government ministers must play only supporting roles in nomination processes for board appointments of state entities under their jurisdiction. Sadly, there has up to now been little transparency in the nomination and appointment processes followed by ministers in the appointments of boards in entities under their jurisdictions. 

There must be a separate review of the processes that ministers follow in making board appointments of entities under their jurisdictions. This must include how decisions are made on how to constitute nomination panels, who are part of nomination panels, and the processes followed in making appointments. 

Active politicians, trade unionists and public servants should not be appointed to Seta boards. Employees from the Department of Higher Education should also not be appointed to boards. There may be a case to appoint individuals from specialist government departments or entities that understand the skills demand of the economy, such as Statistics South Africa. 

The majority of Seta board members must be specialists, including those who understand the skills demands of the specific economic sector, combined with those with the governance skills of auditing, law and real-life management of organisations. The number of board members on Setas must be reduced to eight or 10. 

Dysfunction throughout

Setas are not properly aligned with other critical state institutions managing the economy, such as Statistics South Africa, the Department of Labour, the National Treasury and the Department of Trade and Industry. They are also not connected to other higher education institutions and industry-based training institutions. 

The current model of Setas being solely state-led is not appropriate. In the current state-led skills development model, the Cabinet has a Human Resources Development Council (HRDC), chaired by Deputy President Paul Mashatile. The HRDC is supposed to come up with a human resource strategy that looks at the skills needs and skills development strategy for SA, including what Setas should do to develop the country’s skills. The Higher Education and Training Minister is the secretary of the HRDC. 

There are provincial HRD councils and local government HRD councils, which are supposed to send reports to the Higher Education and Training Minister about the skills training needs in the provinces and municipalities. 

Out of their reports, a Master Skills Plan is developed by the Higher Education and Training Minister. Many provincial and municipal HRD councils are dysfunctional – and have been unable to send through reliable skills needs assessments to the Cabinet’s HRDC.

This process has failed to deliver a relevant skills development strategy for SA because the underlying structures and information on the country’s skills needs on which the process depends are flawed. There needs to be better alignment between Seta training programmes and the skills needs of the labour market.

Setas have been dominated by ANC individuals who are ideologically opposed to genuinely involve business in the economy. However, to properly assess the skills level of the economy, and to come up with economy-relevant skills development, it is essential that Setas are managed in close partnership with business, trade and professional associations.

Industry-relevant skills training can only happen in an ecosystem of state, private, non-profit and public education institutions working closely together. DM

William Gumede is Associate Professor, School of Governance, University of the Witwatersrand and author of Restless Nation: Making Sense of Troubled Times (Tafelberg).