The collapse of South Africa’s R15 billion skills development programme aimed at Youth Employment

By: Sello Theletsane

-Government Accountability in Question: ANG’s Unanswered Queries

On 11 April 2024, the former Minister of the Department of Employment and Labour (DEL) unveiled an ambitious “massification of skills development and job creation programme.” With a staggering budget of R15 billion, the initiative aimed to uplift 704,000 unemployed individuals. Spearheaded by the department’s agency, the Unemployment Insurance Fund (UIF), the programme’s scale and intent were unprecedented, promising to tackle rampant unemployment and pervasive poverty head-on. The ANC youth league president, Collen Malatji, may have been on the money when he characterised former Minister Nxesi – and by association his department – as the minister – of the Department – of Unemployment and Labour.

The programme’s launch was a grand spectacle. The former minister, accompanied by his Acting Director General, Ms. Onke Mjo, and the UIF leadership, embarked on a nationwide campaign, promoting the initiative in every province. These events, filled with media coverage and public enthusiasm, showcased funded partners and cohorts of beneficiaries donning branded T-shirts, and signing learner agreements amidst applause. The atmosphere was electric with hope; the government was poised to deliver training leading to jobs and entrepreneurship, with implementation set to begin on 03 June 2024. A substantial 30% of the beneficiaries, around 211,000, would be youth, marking a significant intervention in a Youth Month under democracy.

However, as the initial euphoria faded, a stark reality emerged. The department’s track record of implementation was, at best, lethargic, and at worst, abysmal.

On 19 June 2024, as part of this publication’s Youth Month focus, ANG staff sent a list of critical questions to the UIF’s spokesperson, Mr Trevor Hattingh, regarding the UIF-LAP Job Creation Funding Programme. These questions sought to probe the details of the expenditure, the status of funding agreements, and the commencement of training for beneficiaries. They also touched on the appointment and actions of Mr. Viwe Mlenzana, the PMO manager, whose role had become a focal point of controversy and dysfunction within the UIF.

The questions were as follows:

1. What was the UIF’s estimated expenditure on the 9 provincial launches of the LAP Job Creation Funding Programme, including the two additional follow-up events in Johannesburg and Kimberley?
2. How many of the 333 approved partners announced by the UIF during these launches have received Award Letters as of Friday, 14 June 2024?
3. How many of the 333 partners who received Award Letters have received a signed Job Creation Funding Agreement from the Acting DG as of Friday, 14 June 2024?
4. How many learners have commenced training across the country as of Friday, 14 June 2024, and how many of them will receive a stipend at the end of Youth Month on 30 June 2024?
5. Under what process was Mr. Viwe Mlenzana appointed, for what duration, and to perform what duties?
6. Please comment on the allegation that Mr Mlenzana has usurped the authority of both the UIF Commissioner and the LAP Acting Chief Director and that sidelining them has led to an adversarial and dysfunctional relationship between the LAP officials and the PMO that Mr Mlenzana leads. Further, please comment on the allegation that Mr Mlenzana operates far outside the confines of his duties to the extent that he is now the final authority on all LAP operational matters and that LAP officials must consult neither the Acting Chief Director nor the Commissioner.
7. Please comment on the allegation that Mr Mlenzana implemented a “Probity” process, which, in effect, is an irregular repetition of the due diligence assessment conducted by the LNAC as part of adjudication and before successful partners being recommended for the award by the Acting DG.
8. Please comment on the allegation that Mr Mlenzana has been irregularly visiting partners issued with Award Letters in an attempt to solicit from them the stipend payment function solely to benefit a dubious scheme to extract from the Job Creation programme an unfunded and belatedly conceived business opportunity for the benefit of a yet-to-be-identified service provider. Were the internal processes followed to approve the sourcing of an external stipend payment service provider?
9. Did the UIF draw any lessons from the NSFAS catastrophic student stipend payment fiasco that was also rushed through without proper planning, budgeting, and piloting of the outsourced payment solution?
10. Does it concern the UIF that the launches may have been incurred as fruitless expenditure in light of the paltry number of Job Creation Funding Agreements signed and learners actively in training after all that fanfare, media hype, and public mobilisation?
11. Was the promise of imminent implementation of the programme a fabricated falsehood in the interest of campaigning by the ruling party?
12. Does the UIF EXCO still convene and process the strategic matters with a bearing on the LAP Job Creation programme, and do the resolutions it takes require approval from Mr. Mlenzana to have effect?

Despite several attempts to obtain answers, Mr Hattingh’s responses were evasive, citing leave and subsequently failing to provide any substantial information. This non-responsiveness only fuelled suspicions and frustration among stakeholders, including opposition parties, learners, and funded partners. Accusations mounted that the former minister had used the programme’s launch for political gain, with no genuine intention or capacity to implement it effectively.

Anonymous sources within the department revealed a dire situation. Less than one percent of the intended first-year cohort of 232,000 learners had started training. Funding agreements were stalled, and the programme was in disarray. 

In a surprising development, the newly established Project Management Office (PMO) has overruled the LAP by imposing a “probity” process on all recommended bidders. Essentially, this probity is a due diligence assessment designed to verify a recommended bidder’s capacity to implement the award they were selected for. However, an absurdity arises as the LAP adjudication committee had already conducted due diligence on each of the 333 approved bidders before recommending them for the award to the Accounting Officer.

An unavoidable question now warrants posing: is the probity perhaps a smokescreen for buying time to source a company to manage stipend payments? This duplicate due diligence seems a fruitless and wasteful exercise, serving only to undermine President Ramaphosa’s lofty promise of accelerated delivery made in his Opening of Parliament Address. The real victims, however, are the 234,000 learners who languish in poverty, deprived of a life-changing training opportunity that would culminate in a job and a stipend to curb immediate hunger.

Allegations surfaced that Mr Mlenzana had overstepped his authority, undermining the UIF Commissioner and LAP Acting Chief Director, and instituting an irregular “Probity” process, duplicating due diligence already conducted by the LNAC. Furthermore, it was suggested that Mr Mlenzana’s actions included an attempt to outsource stipend payments to a third party, an unbudgeted scheme reminiscent of the NSFAS student stipend fiasco. This move raised fears of financial mismanagement and potential corruption, exacerbating the delays in the programme’s rollout.

The UIF’s internal strife and bureaucratic inertia had tangible human costs. While department officials continued to draw their salaries, the unemployed beneficiaries faced deepening despair. The grand promises made during the programme’s launch were rapidly unravelling, leaving the vulnerable, particularly the youth, in a worse state than before.

The situation has been exacerbated by recent developments. On July 13, ANG reached out to Acting Director General Onke Mjo to solicit feedback on the non-responsiveness of Mr Hattingh and to ascertain Mjo’s official position on the matter. The DG’s Personal Assistant responded with an email stating, “Good Day, This email serves to acknowledge receipt and will be brought to the attention of my principal.” Since this acknowledgment on July 15, we have heard nothing further.

It is troublesome that official requests to a government institution are treated in this fashion. It is even more concerning that both Mr Hattingh, as spokesperson, and Acting DG Ms Mjo see no need to respond to what is a matter of national concern.

It is thus safe to conclude that the attitude first exhibited by Mr Hattingh and subsequently confirmed by Acting DG Mjo defines the subculture and attitude of DEL leaders and staff. What then are we to make of accountability?

Several fundamental issues are raised by our enquiry, these include:

1. Grand Announcements vs. Poor Implementation: A historic R15 billion programme targeting 704,000 unemployed individuals was announced with much fanfare and promises. However, the actual implementation of this programme has been dismal, with less than 1% of the first-year cohort enrolled in classes as of the planned start date.
2. Delayed and Mismanaged Programme: The programme’s launch created significant expectations among the unemployed, but funding agreements were not processed, and key promises were not kept. This has led to frustration and disillusionment among the intended beneficiaries.
3. Internal Dysfunction and Tension: The UIF is experiencing internal strife between the LAP and PMO officials, leading to paralysis in implementation. This dysfunction has exacerbated delays and undermined the programme’s potential effectiveness.
4. Lack of Accountability and Transparency: UIF spokesperson Trevor Hattingh has failed to respond to inquiries, demonstrating a lack of accountability and transparency in addressing serious allegations and concerns about the programme’s execution.
5. Questionable Leadership and Decision-Making: The appointment of PMO manager Mr Viwe Mlenza and his actions, such as overriding LAP due diligence and proposing an unbudgeted outsourcing scheme, have raised suspicions about the legitimacy and effectiveness of the programme’s management.
6. Potential Misuse of Resources for Political Gain: There are accusations that the former minister used the programme’s launches for party political campaigning rather than genuine job creation efforts, casting doubt on the integrity of the initiative.
7. Impact on Vulnerable Populations: The failure to deliver on promises has left the vulnerable unemployed population, especially the youth, in a worse state of despair, highlighting the human cost of the programme’s shortcomings.
8. Disparity Between Officials’ Livelihoods and Beneficiaries’ Plight: While the officials responsible for the programme continue to receive their salaries, the intended beneficiaries suffer from delays and unfulfilled promises, reflecting a stark disparity in the impacts of the programme’s failures.
9. Potential SCM Process Subversion: There is speculation about the attempt to bypass standard SCM processes to appoint an external paymaster for stipends, raising concerns about governance and proper oversight within the UIF.
10. Erosion of Public Trust: The lack of responsiveness and the visible failures in the programme’s implementation contribute to an erosion of public trust in the Department of Employment and Labour’s ability to address unemployment and poverty effectively.

This ongoing enquiry exposes the tragic disconnect between grand political announcements and the grim reality of the poor as led down in implementation by officials. It is given that former minister’ Nexi’s vision of a transformative job creation programme is tarnished by inefficiency, questionable leadership, and potential misuse of public resources for political ends. The UIF’s silence and inaction speak volumes about the erosion of public trust and the urgent need for accountability and reform within the Department of Employment and Labour.