Master of ceremonies, Mr Nthato Selebi
Project director of the Thuthuka Bursary Fund
Chairpersons or representatives of all donor funds, including the National Skills Fund which now falls in my department, the Department of Science and Technology, numerous private partners and Sector Education and Training Authorities (SETA's) and in particular Finance, Accounting, Management Consulting and other Financial Services (FASSET)
Executive President of the South African Institute of Chartered Accountants (SAICA), Mr Matsobane Matlwa
Chairman of the Thuthuka Bursary Trust Fund, Mr Sizwe Nxasana
Vice-chancellors and deputy vice-chancellors
Students and recipients of Thuthuka funds
Ladies and gentlemen
The Thuthuka project is an important initiative that serves as a strategic lever for the transformation agenda of the South African Institute of Chartered Accountants in particular and the accounting and auditing professions in general. Thuthuka has established a platform and enabling conditions for young learners to continue pursuing their dreams to become chartered accountants.
Together with many other professions and vocations, the profession of chartered accountancy is critical to the economic, social and cultural development of the country. It has the potential to play a broader leadership role in skills development in the country.
The profession itself is facing numerous challenges especially given the immediate skills requirements and the image of the profession in South Africa in regard to its professional demographics. The transformation of the financial sector is a formidable challenge and essential to the broad efforts to transform the economy and our society.
Latest statistics from SAICA reveal that we still have some distance to travel before we see black and previously disadvantaged people having meaningful representation in the accounting profession. These statistics reflect that black Africans make up only 4.8 percent of the total number of chartered accountants in the country, with women making up less than two percent.
Skills research recently commissioned by SAICA indicated that in total, 22 030 vacancies exist in accounting posts of all levels. Of that, 5 400 accountants at the level of chartered accountant are needed. In 2007, accounting and advisory firm, Klynveld Peat Marwick Goerdeler (KPMG), prepared a document to determine the shortfall in the number of postgraduate students required by the auditing profession.
This document indicated that in 2006 there was a shortfall of 528 graduates and in 2007 a shortfall of 460. The shortfall in 2008 was calculated at 1 600 graduates. A similar shortfall is apparent in financial services entities such as banks that provide the alternative avenues to qualification as a professional.
Big ideas and large scale skills development initiatives are required to tackle the current skills shortage challenges that South Africa is experiencing. What will be the stimulus for a sufficient and sustainable base of relevant and representative skills? This is an important question that must be asked as we look for ways of stimulating growth in scarce skill areas.
Transformation in the accounting and auditing profession can only be achieved through the consolidated efforts of all stakeholders; private firms, higher education institutions, students, government departments including the Department of Higher Education and Training (particularly the skills development branch), the Department of Trade and Industry and the Department of Science and Technology, organisations such as SAICA and Association for the Advancement of Black Accountants of Southern Africa (ABASA), FASSET and numerous private citizens who are passionate about the future of the profession. Each of these partners, to various degrees, has accepted the responsibility to increase skills development programmes to such an extent that it is being rolled out across the nation.
The impact of the Thuthuka programme which, by the way in isiZulu means "to develop" is commendable. Growing from one provincially based project, it now manages more than 16 projects that include eight universities where annually between 250 to 300 black (African and Coloured) students are reading for an undergraduate Bachelor of Commerce Accounting degree.
The Thuthuka intervention is one of a range of initiatives by professional organisations to invest in the development of human and institutional capacity, so as to increase our scarce and critical skills pool. The challenge however remains to expose young people to a variety of career opportunities so that they could make informed decisions about the career paths they choose.
Moreover, the labour market should work in sync with us so that we are made aware of where we are lacking in terms of skills shortages; the quality of our graduates and in meeting the imperatives of transformation of our society.
The Thuthuka programmes have also proved to be very successful. The result of the programmes and bursary scheme such as the Thuthuka Bursary fund and the Education Upliftment programme is evident in the number of potential candidates reached. I am aware that more than 1 000 students have benefited since its inception in 2002.
To fully appreciate the impact of the Thuthuka intervention, a comparative analysis is necessary. The national average throughput pass rate of African students studying towards a chartered accountant qualification is 22 percent. The throughput pass rate for Thuthuka students in 2007 for the first year was 88 percent, second year 83 percent and third year 67 percent. This was well beyond expectations.
In 2007, of the first group of Thuthuka students to write the professional qualifying exam, an astounding 73 percent passed well above the national average rate of 66 percent for first time candidates and the 54 percent average for first time African candidates. The following year (2008), not to be outdone by the previous class, the second group of Thuthuka students achieved a pass rate of 80 percent in the qualifying examinations (again above the national average of 75 percent and the average for African first time candidates of 63 percent for 2008). This is a success story of what is possible when we work together. Together, we can do more!
Talent is not enough. Even though these talented young people often work hard, they do face a barrage of challenges. Most of them, if not all, have limited or no financial means to make their dreams a reality and for many, it is their first encounter with the world of work. With changes in the workplace, expectations are growing that graduates should acquire larger volumes of work with high levels of responsibility early on in their careers. Many of them have not been prepared for this. We have to assist students to move between the world of learning and the world of work.
The key priorities are to expand access to higher education, increase financial support for poor students, expand access to structured workplace learning, increase training in scarce and critical skills through learnerships and other learning and developmental programmes. The twin challenges of high unemployment and critical skills shortages must be addressed, but there are no instant solutions.
It needs long term interventions that delve deep to reach the core of the problem and then develop sustainable solutions. Strategic partnerships between government and its' social partners is of the utmost importance. The growing list of stakeholders supporting the Thuthuka initiatives is a testimony to the impact of the Thuthuka projects on the economy as a whole. SAICA is also working towards introducing Thuthuka programmes at all SAICA accredited universities to grow the pipeline of students studying towards qualifying as chartered accountants.
Funding for poor students to gain access to quality higher education remains a critical challenge for my department. It has been pointed out by the recent National Student Financial Aid Scheme (NSFAS) review that the demand for access to high level skills training programmes outstrips the funds available to support needy students. This committee report, which I released in March 2010 for public comment (due 30 April 2010), makes recommendations on government's commitment to progressively introduce free education for the poor up to undergraduate level.
I have said on previous occasions and I repeat here; in order for transformation to permeate beyond narrow Black Economic Empowerment (BEE), business needs to lend a helping hand to open the corporate world to young graduates and novices. There are a number of ways to achieve this, including assisting higher learning institutions to raise capital for chairs and mentorship programmes that can convert graduates into qualified professionals.
It is also my view, ladies and gentlemen, that the academic profession, particularly in commerce, is still largely untransformed and that there too few black academics who are able to teach as they are poached by the private sector. Of great concern is the low level of participation and success of black students in particular fields of study like accounting, natural sciences, engineering and in research and postgraduate studies.
This is particularly important as we must urgently develop the next generation of academics and researchers. Therefore initiatives such as ABASA's Nkuhlu Subvention Fund which promotes the integration of black people into academia need to be applauded and replicated. In this context, I also wish to commend the good cooperation between ABASA, which through its Nkuhlu Subvention Fund, ensures that historically disadvantaged universities are accredited and are therefore able to produce black accountants, including chartered accountants, from especially the rural areas; and SAICA, which creates the pipeline of students through the Thuthuka Scheme.
This cooperation was aptly demonstrated recently when there was a challenge with funding for Thuthuka and as a result of the efforts of ABASA; my department came to the party through the National Science Foundation (NSF). Such cooperation can only augur well for the learners, for the profession and for our country in general. Indeed working together, we can do more!
Our skills deficit and transformation challenges also require that we think outside the box in terms of how we optimally use our post-school system to produce entrants to the workplace. To this end, our government and my department in particular is working towards an integrated education and training landscape with skills development as a central pillar of our job creation and human resource development programmes.
We encourage you to work with our universities to ensure that the programme is sustained and improves its success rate. The Department of Higher Education and Training looks forward to an active working relationship with you to develop critical and scarce skills and transforming our economy.
I am pleased to report that I have asked SAICA to develop and submit to us a three to four years proposal so that we could have more structured rather than ad hoc cooperation. In addition we also agreed recently that we need to engage other professions to look at the successes of the SAICA-Thuthuka model.
One very positive thing about the Thuthuka programme is that it is proof that despite existing deficiencies in our schooling system, especially in maths, science and accounting, it is still possible to identify young poor student who can be trained successfully as chartered accountants. We also invite engagement and input on how to employ the resources of business and government strategically to promote racial and gender equity.
Once again, congratulations on the success of your project.
I thank you.
Enquiries:
Ranjeni Munusamy
Tel: 012 312 5555 or 021 465 5513
Cell: 072 571 2812
E-mail: munusamy.r@dhet.gov.za
Issued by: Department of Higher Education and Training
20 April 2010
