Keynote Address by the Minister of Higher education and training, Dr BE Nzimande, at the launch of the Walter Sisulu University-Saica B Com (accounting) re-accreditation project Nelson Mandela Academic Hospital, Mthatha
4 Oct 2012Programme Director
Walter Sisulu University Management
Walter Sisulu University Students and other Stakeholders of the University
Colleagues from SAICA and the Thuthuka Upliftment Fund
Senior Officials from the DHET
Members of the Media
Ladies and Gentleman
I want to start by thanking you for giving me the opportunity to address you at this auspicious occasion, where we are officially launching a very progressive partnership between the Department of Higher Education and Training (DHET), Walter Sisulu University (WSU) and the South African Institute of Chartered Accountants (SAICA).
The primary focus of the project is to ensure that the WSU’s Bachelor of Commerce (Accounting) degree gets accredited by SAICA, and in the process making graduates more competitive in South Africa’s economy. This is but one of several initiatives led by the DHET with the ultimate goal of transforming the higher education and training sector, and improving academic quality provision at particularly our historically black institutions.
Historical perspective on Higher Education
Over the past 18 years of our political transformation as a country, it is important to highlight that our post school system has undergone a major review, primarily to rationalise the system but also to rid it of remnants from the past. I will not bore you with the finer details of this transformation; suffice to say that in spite of all the interventions by the state in the sector, inequalities that reflect the past still remain among our institutions of higher education and training.
For example, historically black universities still remain relatively disadvantaged in terms of resources and quality of academic programmes. Graduates from historically black universities, especially black students, continue to find it challenging to enter the labour market. Recent research actually shows that black graduates find it a lot more difficult to find employment than their white counterparts. This research shows that 55% of Black graduates from Stellenbosch are unlikely to get a job in their first year after graduation compared to 12% of Whites from the same university. Similarly, from Wits University, 29% of Black graduates do not get jobs compared to 7% of Whites.
We don’t have similar statistics for college graduates but the situation is likely to be the same, as most black youngsters do not have the family and other connections into the labour market that is generally enjoyed by whites and the few, more affluent blacks. In general, across all spheres of society, deeply rooted and intractable historical inequalities still determine the patterns of poverty and wealth in our society. They also determine the patterns in which formal education is distributed, and therefore the patterns in which families reproduce educational achievement. The system continues to reproduce gender, class, racial and other inequalities of access to education opportunities and success.
The mandate of the DHET
The mandate of the DHET is to take forward the transformation agenda of government. Established in 2009, the department seeks to establish a post school system that will deliver skills needed to drive economic growth and social development. The post school system must also respond to a growing number of both young people and adults, it must provide different entry points into, and pathways through the learning system, it must provide quality learning wherever learning takes place – be it at a college, a university or in the workplace, and most importantly, it must provide easy pathways across the different learning sites.
Our future plans and intentions are captured in the Green Paper on Post School Education and Training, which was released for public comment earlier this year, and is now in the process of being developed into a White Paper. This policy will provide an enabling and overarching conceptual framework for the DHET, and provide the required guidance for the development of the system of post-school education and training in the country. We have received very valuable comments from education and skills development stakeholders. The department is now busy finalising the White Paper process which will effectively concretise our policy direction.
The WSU Re-accreditation Project
We are at the Walter Sisulu University today to witness yet another milestone in our ongoing and focused efforts to uplift historically disadvantaged institutions and communities, working hand-in-hand with key strategic partners. Over the next four years, the department is investing over R84-million in WSU’s Accounting department through the National Skills Fund (NSF).This investment will ensure that WSU receives the SAICA accreditation which will enable this institution to offer the B Com (Accounting) degree while at the same time maintaining teaching and learning standards that are consistent with the demands of the Chartered Accountancy profession. This initiative has been made possible through a partnership with the South African Institute of Chartered Accountants, the University of Cape Town and other industry partners.
Our relationship with SAICA dates back to 2002, at the onset of the skills development framework. We piloted a programme in the Eastern Cape that among other achievements led to the accreditation of the University of Fort Hare in the same academic programme. This was followed by further work in the KZN and Limpopo provinces, which also led to the University of Limpopo achieving SAICA accreditation for its B Com (Accounting) in 2011. Over a nine-year period, the department has invested over R236m into this programme through NSF grants; but in total the NSF has to date invested over R320 million towards effecting improvements and growing the accounting profession.
Funding support granted
Eastern Cape Thuthuka programme
R32 929 156.00
Eastern Cape Thuthuka programme -including Fort Hare SAICA Accreditation
R29 679 672.00
KZN and Limpopo Thuthuka Programme
R76 881 936.00
University of Limpopo Saica Accreditation Programme
R97 118 522.00
Walter Sisulu University-SAICA Accreditation
R84 402 790.00
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R321 012 076.00
SAICA, I am happy to say, realised through its own introspection that in order for the Chartered Accounting profession to effectively achieve its transformational objectives, a consolidated effort had to be made. This includes the active contribution of SAICA, all its members, member firms and companies, every higher education institution involved in training chartered accountants and every student enrolled for these programmes.
Thirteen of the fifteen universities in South Africa offering the B Com (Accounting) are accredited by SAICA and two historically black universities have embarked on the road to becoming part of this group of institutions. SAICA needs to be applauded for this forward looking and progressive approach to development. I however still of the view that SAICA still has to confront many issues in the pipeline of producing CAs, including pass requirements for the CTA as well as obstacles facing particularly black articled trainees in the field. We have to confront all these obstacles in order to ensure that every aspiring and capable accounting student is able to become a professional accountant.
The State of the Chartered Accounting profession
It is a true but sad fact that while South Africa has for the past 12 years been implementing the skills development strategies (NSDS 1 and II), we also continue to experience shortages of certain skills as a country.Depending on who you ask for answers to this problem, you will get very different and diverse reasons given. There are those who believe the problem lies with the tertiary institutions that are not producing sufficient throughput of the right quality graduates to enter and succeed in certain occupational professions.
Yet others believe that our basic schooling system does not adequately prepare learners for post school education. Not only are these debates lacking in explaining this anomaly, but they also provide inadequate information towards finding a solution to the problem at hand. It still remains a key priority to not only seek out but to also find means of increasing the pool of eligible students that enter and succeed in particular skills areas.
Output 4 of my performance agreement with the President of the country, relates to increasing access to high level occupationally directed programmes in needed areas, while Output 5 addresses the issue of increased research, development and innovation in human capital for a growing knowledge economy. Programmes such as the one we are launching today will significantly increase the pool of students entering the CA (SA) profession, thus contributing to the achievement of Output 4.
The latest statistics on the Chartered Accountancy profession indicate that there are about 34 418 Chartered Accountants (CAs) in South Africa. Out of this number, only:
- 1 100 are African females
- 1 339 African males
- 468 Coloured females
- 478 Coloured males
- 1 347 Indian females
- 1 936 Indian males
- 7 768 White females
- 19 852 White males
The country remains with a shortage of over 5 000 CA (SA) professionals, with the public sector faced with a vacancy rate of over 40% in the financial fields. According to a study by SAICA there were already more than 22000 vacancies in the fields of financial services and accounting as far back as 2008. Skills shortages at postgraduate and masters levels amounted to almost 6000 for immediately required accountants. Both the public and private sectors face an uphill battle in retaining qualified accounting staff. The SAICA survey, in which 15 government departments participated, further showed that 62, 3% of public sector organisations experienced problems in retaining financial services employees. This number has gradually been reduced to 40% but remains unacceptably high compared to the international vacancy benchmark for public organisations at 2.7%. Accounting professionals remain the group that organisations struggle the most to retain.
Economic development depends both on innovation and technology absorption. A shortage of high-level skills has been a hindrance for both innovation and technology absorption in South Africa. Investment in knowledge generation has substantially increased since 1994, to levels three times higher in real terms than they were in the mid-1990s (including investment from government and business). But skills shortages still limit our capacity to undertake research and development to compete in global markets.
About the WSU – SAICA project
As part of the Department’s interventions to transform the sector and effect positive change in line with the broader developmental imperatives of the country, we approved a proposal by SAICA to fund the Thuthuka capacity building initiative for the re-accreditation of Walter Sisulu University for a B Com (Accounting) programme.
This is intended to build the capacity of the University to provide this qualification in a manner that will make the beneficiaries (graduates) relevant to the market and economic growth of our nation.WSU was previously accredited by SAICA to offer the CA (SA) undergraduate programme. However, due to a number of historical events, including staff changes and insufficient focus on the programme, the accreditation was soon lost. However, there is still a great demand from both the community and the students to achieve accreditation again, but in a more sustainable manner.
To ensure sustainability, the project will specifically recruit and develop black CA (SA) professionals to lecture at WSU. In addition, the sharing of learning and teaching materials, capacity transfers with the University of Cape Town and strong partnerships between the public and private sectors will be adopted as part of the methods of delivering on this project. Experiences and partnerships will further be drawn from the University of Limpopo, on the basis of it being a recent recipient of accreditation under the SAICA programme.
It is important to remind all of us that the success and long-term viability of the programme will also depend on having significant numbers of students enrolling for the B Com (Accounting) programme. Through this project, 425 students will gain access to an undergraduate degree of a quality that was not available to them previously.The students will be supported throughout their undergraduate and postgraduate studies. They will also be provided with access to role models, receive life skills, study and workplace skills training and an introduction into employment opportunities. The intention is that only students from previously disadvantaged backgrounds will benefit directly from this project, in line with the demographic needs of the profession.
This programme serves to underline the importance of ensuring that the temporary administration of this university and the Administrator will have to succeed at all costs. The fact that we are launching this project in a university under administration is in itself proof that indeed we are beginning to significantly turn this institution around for the better. It is for this reason that we must thank Prof van Staden and his team for the very important advances they are making in this very important institution.
I would like to thank SAICA and its partners for the commitment and good work that they are doing, where they use their knowledge and resources to support Government in achieving the country’s growth and development goals. In doing so we are collaboratively improving accounting skills in all sectors of the economy. SAICA has further demonstrated commitment to the development and growth and transformation of the profession, through its many other initiatives, most specifically the Thuthuka project and other efforts within the public sector financial skills development environment. About a year ago I launched the Thuthuka Municipality Financial Management project whose purpose is to build Financial Management capacity in our struggling municipalities.
In conclusion let me also thank the students who will participate in the programme,for their support of government initiatives. They are the direct and primary beneficiaries but the programme will require them to also make personal sacrifices in order to succeed. According to the Labour Force Surveys (LFS)-the majority of people working in financial occupations have qualifications at NQF level 4 and 5 – matric or matric plus a diploma or certificate. Approximately 13% have first degrees while an estimated 15% have qualifications at postgraduate diploma level or above.
It is expected, according to baseline predictions, that the number of financial occupational positions in South Africa will increase to 401000 within the next 6 years. The total number of new positions expected to be created per annum by 2018 amounts to about 10000. This clearly indicates the number of accounting graduates that have to be produced at several levels by higher education institutions in the academic years building up to 2018. I can assure you that as the department, and I am sure the Thuthuka Programme, we commit to provide you with all the necessary support and resources through this journey.
Congratulations to WSU for this milestone and achievement!
I thank you.
Issued by: Department of Higher Education and Training
4 Oct 2012
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