Enrol more students in relevant courses to reduce inequality - World Bank

South Africa needed to enrol more students in the post-school education and training (PSET) sector for it to address the skills gap that is prolonging inequality in the country.

That's according to the 12th South Africa Economic Update report released by the World Bank in Johannesburg on Tuesday.

"The importance of acquiring skills to enable SA's youth to find jobs and earn higher wages, thereby alleviating poverty, income inequality and joblessness, makes the policy to enrol more students in tertiary institutions a must. But in an environment of weak growth this is a challenging proposition which requires making some difficult trade-offs," said the bank's country director for South Africa, Paul Noumba Um.

The report noted that for SA to address the inequality gap, it needed to raise graduation rates and improve the relevance of skills specific to the needs of the local labour market.

The country also needed to strengthen the quality of education in technical and vocational education and training (TVET) colleges, community colleges, distant education institutions and historically disadvantaged universities. This, according to the report, would increase enrolment and expand admission capacity in a "sustainable manner".

"Notwithstanding the long-term need to fundamentally improve the basic education system, enrolling more students in PSET is a major imperative," the report read.

Raising PSET enrolments was a key ingredient of a policy package necessary to sustainably reduce the country's record high youth unemployment.

"Since 2010, labour force surveys show that more than 50% of the population aged 15-24 is unemployed - the highest in the world. To tackle this, the authorities see increased PSET enrolments and graduations as a central part of a policy package that also includes active labour market policies, tax incentives, public works programmes and support for entrepreneurship,” the report said.

According to the report, SA’s gross enrolment rate (19%) lagged most peers.

"Easing the budget constraints of the poor could contribute to higher student enrolment," said the report.

"As in many other sub-Saharan countries, it is likely that low-income South African families lack information on studying opportunities, whether on admission processes, support schemes and levelling programmes, overestimate the opportunity cost of studying and the risks of not graduating, and underestimate its returns," the report noted.

The report suggested a need to revisit the National Student Financial Aid Scheme (NSFAS).

"Even though, intuitively, keeping tertiary education free for all is seen as the best way of promoting equity, empirical evidence shows that free tertiary education is highly inequitable, unless the country has a progressive income tax system, as is the case in Nordic countries."

Former president Jacob Zuma announced in December 2017 that the government would introduce fully subsidised‚ free higher education and training for poor and working-class undergraduate students.