Cape Town – A bold skills revolution, a sweeping digital overhaul of colleges and universities, expanded private-sector partnerships, and a dramatic call to scrap NSFAS defined the Department of Higher Education and Training’s 2026 Budget Vote tabled in the National Assembly on 26 May 2026.
Minister Buti Manamela, delivering his first Budget Vote as Minister of Higher Education and Training, presented a R149.2 billion allocation for the 2026/27 financial year, rising to R468 billion over the Medium-Term Expenditure Framework. Flanked by Deputy Ministers Dr Nomusa Dube-Ncube and Dr Mimmy Gondwe, the executive leadership painted a picture of a post-school education and training system at a crossroads, under pressure to respond decisively to youth unemployment, digital disruption and economic stagnation.
Marking 50 years since the 16 June 1976 student uprising, Minister Manamela situated the budget in a generational moment. While the youth of 1976 fought for the right to learn, he argued, the youth of 2026 demand more, the right to skill, to innovate, to work and to participate meaningfully in the economy. The challenge facing the government, he said, is no longer access alone.
“Access without success is not enough. Success without employability is not enough. And skills without economic absorption are not enough,” he told the House.
Despite significant enrolment growth since 1994, the Minister acknowledged a persistent disconnect between education outputs and labour market outcomes. Employers report skills shortages while graduates struggle to find work, particularly in mid-level technical and vocational occupations.
Of the R149.2 billion allocation for 2026/27, R134.9 billion, or 90.4%, will go towards transfers and subsidies. University Education receives R100.1 billion, TVET colleges R14.7 billion, reflecting a 6.3% increase, and Community Education and Training colleges R3.3 billion, a figure the Minister openly described as indicative of structural underfunding. Skills levies are projected at R27.7 billion in 2026/27, while NSFAS funding is expected to grow from R48.8 billion in 2025/26 to R54.6 billion by 2028/29.
However, Minister Manamela cautioned that the public is less concerned with the size of the numbers than with what those numbers achieve. He framed the department’s programme as a shift from a transfer budget to a transformation budget, driven by what President Cyril Ramaphosa has called a skills revolution.
This skills revolution, as outlined by the Minister, rests on five pillars, occupational qualifications aligned to industry, workplace-integrated learning, apprenticeships and artisan development, regional industrial skills compacts, and direct employer participation. Twenty-four new occupational qualifications have already been introduced in TVET colleges in 2026, with a target of 30% of TVET enrolment moving into occupational programmes. Five regional industrial skills compacts will link municipalities, employers, colleges and SETAs to local economic development plans.
Digital transformation runs alongside this agenda. The department plans to rebuild the TVET management information system, expand the National Open Learning System, introduce online TVET and CET offerings, integrate digital career services to reach 250,000 clients, and embed artificial intelligence, data science and cybersecurity into curricula. For the Minister, digital reform is not about devices alone, but about building a system capable of tracking student pathways from enrolment to employment.
Deputy Minister Dr Nomusa Dube-Ncube approached the debate from a moral standpoint, asking what the country has done with its young people. She emphasised that the budget represents an investment in human possibility, particularly for working-class and poor students. While highlighting the department’s expenditure performance above 99% and its stable audit posture, she stressed that compliance alone is insufficient.
“Our objective is to build institutions worthy of public trust,” she said, adding that irregular expenditure and ethical breaches would not be tolerated.
Deputy Minister Dube-Ncube positioned universities as engines of national transformation rather than isolated centres of excellence. Through enrolment planning, performance compacts and graduate tracer studies, the department aims to better align university outputs with industrialisation and innovation goals. She also underscored internationalisation, expanding scholarships, strengthening research partnerships and positioning South Africa as a leading African hub of knowledge production.
Deputy Minister Dr Mimmy Gondwe delivered the most pointed intervention of the day, foregrounding youth unemployment among 15 to 24-year-olds at 60.9%. She described the crisis as a ticking time bomb and argued that the current skills development regime is failing to produce the employment outcomes the economy demands.
Deputy Minister Gondwe called for a fundamental rethink of the SETA system, proposing that industry be allowed to procure training directly from accredited providers, funded through tax write-offs. More controversially, she declared that there is no longer a need for NSFAS, arguing that the scheme has repeatedly failed and should be replaced with a decentralised model in which universities assess financial need and apply directly to the National Treasury for funding.
Her remarks stand in contrast to the Minister’s emphasis on stabilising and reforming NSFAS rather than abolishing it. For students who have experienced funding delays and administrative challenges, the debate over the future of student financial aid is likely to become one of the most closely watched policy questions in the months ahead.
Deputy Minister Gondwe also highlighted concrete partnerships with the private sector. Memoranda of understanding have been concluded with Old Mutual, Microsoft, Google and Takealot, with additional partnerships in the pipeline.
Community Education and Training colleges received particular attention. Deputy Minister Gondwe announced R5 million for infrastructure improvements at Emlandeleni Learning Centre in KwaZulu-Natal and R90 million for infrastructure and teaching and learning support across nine CET colleges. The National Literacy for Empowerment Campaign, targeting 3.8 million functionally illiterate adults with digital, workplace and entrepreneurial literacy, was launched in the Eastern Cape.
Across all three speeches, a common thread emerged, the urgency of linking learning to livelihoods. The department is finalising enrolment plans for universities and TVET colleges, conducting feasibility work for new institutions, including the proposed Ekurhuleni University, converting agricultural colleges into higher education colleges, and planning new medical and veterinary schools. A comprehensive TVET Turnaround Strategy is due by 30 September 2026.
Yet even as ambitious reforms are outlined, the broader economic context looms large. Low growth, weak industrial performance and limited absorption capacity continue to constrain job creation. As the Minister acknowledged, skills formation ultimately depends on an economy capable of absorbing those skills.
As South Africa approaches Youth Month and commemorates the 50th anniversary of June 16, the symbolism of this Budget Vote is powerful. But symbolism alone will not reduce a youth unemployment rate of nearly 61%.
The R149.2 billion allocated to higher education and training now carries a heavy expectation that it will not merely expand enrolment or stabilise governance, but create tangible pathways from classroom to career.