alifications lead to fewer job opportunities are the fine arts and humanities, social sciences and health sciences.
The minimum requirement from employers in developing countries is basic literacy and numeracy (Godfrey, 2003). Reading literacy is particularly important in the labour market. Godfrey (2003) draws attention to the OECD’s 2000 report from its International Literacy Survey. The survey concludes that in the period 1994-1998, across 22 participating countries, people with higher levels of reading literacy are more likely to be employed and on average have higher wages than those with lower literacy levels. It can be concluded from this report and other supporting literature that the greatest variable that can positively influence the future employment prospects of young people is keeping them in school (Godfrey, 2003; McCarthy, 2008; Bhorat, 2001).
This raises important policy considerations that should be aimed at ensuring universal access to education and improving retention of young people in the primary to secondary school cycle. Targeted subsidies to address both these concerns can fall within the broader policy directive of improving access to educational financing as a development finance intervention.
Obtaining a grade 12 or Matriculation certificate falls sharply from being any sort of guarantee of a place in the job market. Further, young people who do not finish secondary school are twice as likely to be unemployed than to have a business or a job (McCarthy, 2008).
What is evident is that tertiary education is key to reducing youth unemployment. How then do we deploy a development finance perspective to this finding? Government and the private sector should have a concerted focus on ensuring that there are no financial barriers to education. The existence of the National Financial Aid Scheme (NFAS) is a step in the right direction but is largely insufficient in South Africa. With a paltry budget, a questionable lending model, and evident operational challenges, the NSFAS is never going to be the panacea for this challenge. However, the failures of the NSFAS to not negate the need for institutions that are established to finance individual skill acquisition. The key would be for these institutions to be structured such that they do not demand immediate collateral. In addition, they should advance loans to enterprises to develop training programs.
South Africa has attempted to fill the training vacuum through the establishment of the Further Education and Training (FET) colleges. This has proven to be a noble idea that has fallen short of its ambitious mandate. Concisely, FETs face multiple challenges such as a lack of clarity on the most effective programmes, funding, we