Debt servicing squeezes SA’s investment in education

Setlogane Manchidi | image supplied

Debt interest payments are expected to consume 16.5% of the consolidated government budget by 2025/26, up from 11.1% in 2018/19.

Education funding growth overshadowed by debt costs

The 2024/25 budget allocates R329.2bn to basic education, representing a modest 4.9% increase. However, the growth in education funding is overshadowed by the rapid rise in debt costs.

In 2021/22, for every R100 spent on servicing debt, the government allocated R154 to education and culture. By 2025/26, this ratio is expected to fall to R119, signalling less fiscal space for education.

Setlogane Manchidi, head of CSI at Investec, says: “The growing imbalance points to a clear budgetary trade-off: funding debt over development.

“Despite this fiscal squeeze, South Africa remains one of the world’s biggest spenders on education as a percentage of GDP, but spending more isn’t translating into better results.”

STEM education: a gateway to economic opportunity

The focus on maths and science education is especially critical given the link between STEM skills and economic opportunity. Tumelo Mabitsela, CEO of Kutlwanong Centre for Maths, Science and Technology, said:

“A quality maths and science education is not just about academic success, it’s about access to the economy. It’s about building engineers, coders, data scientists, doctors, entrepreneurs, and innovators. It’s about powering the industries that will define South Africa’s next chapter.”

Urgent call for investment and reform

Manchidi added: “Every rand spent on interest payments reduces resources available for teachers, learning materials, and school infrastructure.

Without urgent reforms and greater investment, the rising debt burden could undermine education and jeopardise the future prospects of South Africa’s youth.”