The Chairperson of the BANKSETA Board
Board Members
Management and Staff of the BANKSETA
Honoured Guests, including those who have come from abroad
Ladies and Gentleman
I’d like to begin briefly by telling you about my Department, the Dept of Higher Education and Training (DHET). It was established after the last election in 2009 after the old Dept of Education was split into the Department of Basic Education on the one hand and the DHET on the other. The DHET took over the responsibility for universities, the FET colleges and adult education institutions as well as responsibility for the levy-grant institutions, i.e. the SETAs and the National Skills Fund. In addition, the department is also responsible for regulatory and quality assurance institutions such as the South African Qualifications Authority (SAQA), the Council for Higher Education (CHE) and the Quality Council for Trade and Occupations (QCTO).
My aim, still only partially realised, was to mould these institutions into a single, coherent, coordinated and well-articulated post-school system which offers quality education and training. The various institutions and institutional types should cooperate in such a way that they strengthen one another and work towards the common goal of an educated and skilled population and workforce.
In addition, it is essential for educational institutions to build closer links with employers in both the private and public sectors since much training that should be provided is for people who are in employment. But it is also essential for employers to become involved in training processes by providing workplace opportunities for Work Integrated Learning for students who do their theoretical education at colleges or universities, especially universities of technology. We therefore see workplace-based training as an essential part of the post-school system.
We, as a country are in a difficult situation that we are resolved to tackle with determination. Researchers have informed us that there are today over 3 million South Africans between the ages of 18 and 24 who are not in employment, education or training. There is almost certainly an even larger number over the age of 24. This is a waste of terrible of human potential and a potential source of great social stability. It should be a source of great concern to all of us, whether we are government Ministers or officials, industrialists or trade unionists, bankers or shopkeepers, artisans or professionals, teachers or preachers.
The post-school education and training system (and indeed the education system as a whole) obviously has a central role to play in tackling the problem. It must and will be expanded, its quality must and will be improved. Of course, education and training alone cannot, by themselves, generate economic growth or guarantee employment. The complex relationships between the extent of economic growth, the structure of the economy, government policies, policies of public and private sector employers and the match between the skills needed by the economy and those of the workforce all affect job creation.
Yet, it is true that in a modern economy, economic growth and development depends on relevant knowledge and skills being available. Our plans contained in the National Development Plan, the New Growth Path and the Industrial Policy Action Plan and Integrated Rural Development Plan all depend on an expansion of a skilled workforce. It is no exaggeration to say that education and skills development are crucial to the future of our country and our people.
The vision of an integrated post-school system that we set out in our Green Paper on Post-School Education and Training that I release earlier this year, and which will be refined in our White Paper that will be ready early next year, I believe provides an ambitious but realistic way forward.
SETAs obviously have a crucial role to play in building a successful and effective post-school system. Although they are constituted by the main workplace-based role-players (employers and workers or employees), SETAs must develop close working relationships with the major education and training providers: colleges and universities, particularly the public institutions. This is now starting to happen. We also want SETAs to focus their training activities on the provision of full occupational or professional qualifications rather than on short courses – although there is still obviously still a need for the latter to keep workers abreast of new developments in their areas of work.
SETAs are uniquely placed to play a role in bringing educational institutions and employers together, to promote and fund partnerships between them. College or university programmes that are educating people to enter particular trades or professions need workplaces for their students to get workplace experience and training; and employers often need assistance to get theoretical training for their employees. One of the important roles of SETAs is to facilitate these and other mutually beneficial partnerships.
The value of practical experience for young people who are setting out on a career cannot be over-estimated. Research shows that young people with some workplace experience invariably find it easier to get jobs. The lack of opportunities for work-integrated learning also results in students getting all their theoretical training, but still not being able to qualify.
The transformation of our country through the creation of a more equitable society and the provision of opportunities for previously disadvantaged people has training at its core. Providing appropriate education and skills development opportunities to blacks, women and the disadvantaged is essential if they are to able to participate properly and centrally in the running of the economy in general and of this banking industry in particular. There has obviously been some progress in this regard as the race profile of the sector has shown a significant shift.
In 2000, the first Banking Sector Skills Plan recorded 19% Africans, 14% Coloureds, 8% Asians and 59% Whites as employees in the sector. By April 2011, the number of Africans was up to 41%, Whites down to 29%, 12% of employees were Asians and Coloureds comprised 17% of employees. In 2011, the banking sector employed 1 895 people with disabilities which, while still not really impressive, is apparently also a significantly larger number than previously. Of course these are overall statistics and say nothing about the level of employment of the various groups. Recognise that I could be wrong, but I suspect that overall previously more advantaged groups, especially whites, still dominate senior positions. Nonetheless the banking industry must be given credit for the progress that has been made. I expect that the BANKSETA has played a role here – I certainly hope so – and that it will continue to making a contribution towards making the banking representative of the South African population.
SETAs can expand opportunities for initial professional training for youth with academic potential but insufficient funding – or to help institutions to strength their capacity to provide training in key areas where it is difficult to develop scarce and critical skills. A recent, good example of this is provided the BANKSETA which recently which, in partnership with the University of Zululand and the South African Institute of Chartered Accountants (SAICA), embarked on a programme to assist previously disadvantaged students to enter the Chartered Accountancy profession. 50 students have been fully funded for the duration of the programme and will be followed by a further intake of 100 students over the next three years.
This programme is providing opportunities to bright but poor, black youngsters to embark – with financial, social and academic support – on a career in a scarce and critical skill in a part of the country where such training was previously unavailable. In addition, BANKSETA has supported the University of Fort Hare Financial Markets Programme since 2009 by means of bursaries and economics capacity building. These and similar programme contribute importantly to building the skills of our people.
Of course skills need to be built not only for professionals and managers and BANKSETA has a role at all skills levels, from clerks to senior executives. One of the biggest skills shortages in our country is that for mid-level skills and we expect all the SETAs, the colleges and the universities to tackle this challenge with vigour.
The BANKSETA has a particularly big responsibility in our country at this time. Banks are at the heart of the financial sector and the financial sector is, for better or for worse, at the centre of the economy. A study commissioned by the World Bank, published in March 2012, notes the extraordinarily rapid expansion of the financial sector in South Africa in the first decade of this century. In 2008 this sector was responsible for 13 per cent of GDP as opposed to 6 per cent only four years earlier, in 2004. This suggests a rapid growth of a demand for skills which, I assume, has been met from somewhere.
Although I do know that some skills, including IT skills, have had to be imported, I am not under the impression that this importation has been massive. I expect that the BANKSETA must have a hand in assisting the banking industry to meet the demand for skills.
I expect that the education and training provided by the SETA in partnerships with the banks have been largely been imparting skills and knowledge with regard to financial analysis, accounting, IT, management, laws and regulations, the business environment, and so on. I believe that we should not leave unquestioned the assumption that these are enough. Bankers, being at the centre of economic activity, are very powerful people and should be able to use their power responsibly. In order to do this, they need to have a deep understanding of society that they live in. This, I believe, requires some knowledge of sociology, politics, and even social philosophy, as well as an understanding of economics as a social science (as opposed to only a tool for business).
Banks as important economic actors and shapers of our society have greater responsibilities than is often realised by most people. We should not forget that the global financial crisis which hit the world in 2008 and is now making itself felt once more was largely the creation of greedy bankers who had lost touch with the real economy. An overweening confidence in their invulnerability, as well as mounting greed had driven banks to irresponsibly make large loans and to develop derivatives which had lost touch with reality. Very large banks had obviously lost any understanding of the social impact of their actions – or possibility they had lost a sense of social responsibility – that is, they just didn’t care.
South African banks have largely been unscathed by these developments and have been praised for this by the media and by financial sector economists. This praise may be well-earned, but I can’t help believing that more praise is actually due to the South African state – in the form of the Banking Regulator who prevented our banks participating in many of the excesses. However I remain extremely concerned about the rise in unsecured loans and lending. Just as I am particularly concerned about lack of lending for productive activity and more lending for consumption.
This issue for the BANKSETA, however, is this: What are the implications of the global financial crisis not only for banking but for banking education? I hope that your will give this some thought over the coming period and that you will also find time for some discussion on the issue at this conference. As important as it is to train our people in the traditional banking skills, the issue of how to teach business ethics (and specifically banking ethics), should also not be ignored.
In addition the BankSeta and the banking industry as a whole has a responsibility to train and support co-operative banks as very important sources of funding for the poor, SMEs and other co-operatives. In addition, it is absolutely essential that you support consumer education so that we protect our people from unscrupulous activities that are still very prevalent in the banking and financial sectors. I am shocked though not surprised by the discovery of the dti that a small area like Marikana has about 12 micro lenders. This is a sign of a heavily indebted working class (as well as possibly) reckless lending which in itself put further stress on workers.
I wish you a successful conference and trust that your deliberations will be useful and will leave this conference better prepared to tackle the challenges that face you. The country is depending on you to ensure that this important industry develops the people that will enable it to play its rightful role in developing our society and providing decent living conditions for all our people.
I thank you.
Keynote Address by Dr B.E. Nzimande MP, Minister of Higher Education and Training, 5th International Banking Conference
