By: John Botha - Joint CEO, Global Business Solutions

South Africa’s businesses pay billions in skills levies, but the Services Sector Education and Training Authority (Services SETA’s) administration signals a crisis that could derail our economic future.” This retains the original intent but adds urgency. This is not simply a story about governance; it is about whether South Africa’s skills system delivers value for the billions of rand in levies collected every year.

Employers, both large and small, contribute 1% of their payroll through the skills development levy with the expectation that funds will be used to develop critical workplace skills. When a SETA is placed under administration, questions about accountability, transparency, and value for money move to the front of the boardroom agenda.

A credibility gap

SETAs collectively manage approximately R20 billion in levies annually, according to Department of Higher Education and Training reports. When one of the largest is placed under administration, the risks to both business confidence and job creation are profound. In recent years, reported delays in Services SETA grant disbursements have left training providers unpaid for months, forcing some to suspend programmes and leaving learners stranded midway.

The Services SETA covers some of the country’s most labour-intensive sectors, including retail, hospitality, motor trades, staffing services, and professional services. These industries rely heavily on a steady pipeline of trained employees. When learnerships stall or internships collapse, companies feel it immediately in their operations.

For big corporates, the issue is strategic. They need qualified people to adapt to new technologies and remain competitive in global markets, as well as certain BBBEE initiatives for their transformation strategies. For small businesses, the loss is even more acute. Many depend on subsidised learnerships and internships to bring in talent affordably. When those pipelines dry up, the costs of hiring and training escalate. Young jobseekers, eager for opportunities, are left in limbo when learnerships stall.

The reality is that trust in the SETA system has been fragile for years. Delays in funding approvals, administrative inefficiencies, and poor governance have often left employers feeling short-changed. The Services SETA crisis risks deepening this trust deficit at a time when confidence in the economy is already low.

Why business should pay attention

This is not just a government matter. Employers need to engage directly with the administrator and insist on clarity about how levy funds will be safeguarded and redirected. The private sector cannot afford to sit back. If the Services SETA fails to stabilise, the credibility of the entire levy system will be undermined and calls for more radical alternatives to SETAs will only grow louder. Industry bodies and policymakers must join employers in demanding answers to restore trust in the system

A chance to reset

Handled correctly, administration could be a turning point. Three priorities stand out:

• Forensic accountability: Businesses need to see a clear accounting of what went wrong, and consequences for those responsible.
• Competence in governance: Board and management appointments must reflect technical expertise and sector knowledge, not political patronage.
• Stronger oversight: The Department of Higher Education and Training must move from reactive crisis response to ongoing, proactive monitoring.

Looking ahead
The skills pipeline is the lifeblood of competitiveness. When the Services SETA falters, the entire levy system is at risk. If the levy system fails, South Africa’s businesses; and jobs pay the price.

In an economy battling slow growth and high unemployment, employers cannot be expected to carry the costs of training alone. The levy system was meant to be a partnership between government and business. When it fails, productivity and competitiveness are directly at risk.

From my perspective, the Services SETA administration is not just a bureaucratic shuffle. It is a signal to business leaders to demand more from a system they pay for. The question is whether this crisis will lead to meaningful reform or just another cycle of breakdown and patch-up.

South Africa’s economy does not have the luxury of another decade of skills failures. This must be the moment when levy money translates into real skills, real jobs, and real competitiveness.