OPTIMISING STRATEGIC FINANCING STRATEGIES FOR SKILLS DEVELOPMENT IN SOUTH 

AFRICA 

 

by 

 

KHULEKANI KHOZA 

Student number: 2530511 

 

A research report submitted in partial fulfilment of 

the requirements for the degree of 

 

MASTER OF BUSINESS ADMINISTRATION 

in the 

Faculty of Commerce, Law and Management 

University of Witwatersrand 

 

Supervisor: Prof Thabang Mokoaleli-Mokoteli 

 

February 2025  



ii 

DECLARATION 

I, Khulekani Khoza, declare that this research report, titled “Optimising Strategic Financing 

Strategies for Skills Development in South Africa”, is my original work. It has not been 

submitted to any other university or institution for the award of any degree or qualification. 

All sources used in this study have been properly acknowledged and cited in accordance with 

academic integrity standards. 

I further declare that this research complies with ethical guidelines, and no part of it has been 

plagiarised or falsely presented. 

 

 

 

Signature: ___________________________  Date: 21 February 2025 

KHULEKANI KHOZA  

Student Number: 2530511  

  



iii 

COPYRIGHT NOTICE 

The copyright of this research paper vests in the University of Witwatersrand in Johannesburg, 

SA, in accordance with the University’s Intellectual Property Policy. 

No portion of the text may be reproduced, stored in a retrieval system, or transmitted in any 

form or by any means, including analogue and digital media, without prior written permission 

from the University. Extracts of or quotations from this research paper may, however, be made 

in terms of Sections 12 and 13 of the SA Copyright Act No. 98 of 1978 (as amended), for non-

commercial or educational purposes. Full acknowledgement must be made to the author and 

the University. 

An electronic version of this research paper is available on the Library webpage 

(www.wits.ac.za/Library) under “Research Resources”. 

For permission requests, please contact the University Legal Office or the University Research 

Office (www.wits.ac.za). 

  

http://www.wits.ac.za/Library


iv 

ACKNOWLEDGEMENTS 

I would like to express my heartfelt gratitude to everyone who contributed to the successful 

completion of this research.  

First and foremost, I am deeply grateful to my supervisor, Prof Thabang Mokoaleli-Mokoteli, 

for her continuous guidance, support, and invaluable feedback throughout this research 

journey. Their insights and expertise have been instrumental in shaping this study. 

I would also like to thank the faculty and administrative staff at the University of 

Witwatersrand/Wits Business School for providing access to academic resources and research 

facilities. 

A special thank you to my family and friends for their unwavering encouragement, patience, 

and moral support throughout this academic endeavour. Your belief in me has been a source 

of motivation, resilience and thriving in difficult moments. 

Lastly, I extend my appreciation to all participants from different SETAs and stakeholders who 

took part in this study. Colleagues, your time, insights, and contributions were invaluable in 

shaping the findings of this research. I am forever grateful and indebted to all of you. 

Thank you all for your great support and encouragement. 

 

 

  



v 

ABSTRACT 

This study explores strategic financing mechanisms for skills development in South Africa, 

focusing on the effectiveness of current funding models and potential areas for optimisation. 

The research examines the role of Sector Education and Training Authorities in financing skills 

development and assesses the challenges and barriers faced in funding allocation and 

implementation. 

The study employs a qualitative research approach, gathering insights from key stakeholders 

in the skills development sector, including Sector Education and Training Authorities’ 

executives, policymakers, and industry experts. Key themes analysed include the impact of 

government grants, employer levies, public-private partnerships and alternative funding 

models on the sustainability of skills development initiatives. 

The findings indicate that while government grants remain the dominant funding source, 

inefficiencies such as delayed disbursements, rigid application processes, and limited industry 

collaboration hinder optimal utilisation. The study highlights the need for innovative funding 

models, enhanced stakeholder partnerships, and performance-based financing strategies to 

ensure sustainable and impactful skills development. 

The research contributes to the growing body of knowledge on skills development financing 

and provides recommendations for policymakers and funding bodies to refine financial 

structures that align with industry demands and national workforce development goals. 

 

Keywords: financing models, public-private partnerships, Sector Education and Training 

Authorities skills development, workforce development 

  



vi 

TABLE OF CONTENTS 

DECLARATION ....................................................................................................................... ii 

COPYRIGHT NOTICE ............................................................................................................. iii 

ACKNOWLEDGEMENTS ........................................................................................................ iv 

ABSTRACT ............................................................................................................................. v 

LIST OF FIGURES ................................................................................................................... ix 

LIST OF TABLES ..................................................................................................................... ix 

LIST OF APPENDICES ............................................................................................................ ix 

LIST OF ACRONYMS ............................................................................................................... x 

CHAPTER 1: INTRODUCTION AND BACKGROUND ................................................................... 1 

1.1 Introduction ................................................................................................................... 1 

1.2 Background of the study ................................................................................................ 1 

1.3 Research problem .......................................................................................................... 1 

1.4 Research objectives ....................................................................................................... 2 

1.5 Rationale of the study .................................................................................................... 2 

1.6 Delimitations of the study .............................................................................................. 3 

1.7 Study structure ............................................................................................................... 3 

CHAPTER 2: LITERATURE REVIEW .......................................................................................... 5 

2.1 Introduction ................................................................................................................... 5 

2.2 Underpinning management theories ............................................................................ 5 

2.2.1 Human Capital Theory .......................................................................................... 5 

2.2.2 Social Capital Theory ............................................................................................ 6 

2.2.3 Institutional and Stakeholder Theory ................................................................... 6 

2.3 The need for skills development .................................................................................... 6 

2.4 Significant causes of skills development needed ........................................................... 7 

2.4.1 Changing economic environment ......................................................................... 7 

2.4.2 Technology ............................................................................................................ 8 

2.4.3 Globalisation ......................................................................................................... 8 



vii 

2.5 Sectoral methods of skills development ........................................................................ 8 

2.5.1 TVET colleges ........................................................................................................ 8 

2.5.2 Small businesses (SMMEs) .................................................................................... 9 

2.6 Funding models between South Africa and other countries ......................................... 9 

2.6.1 Public and private financing for skills development ........................................... 10 

2.6.2 Vocational education financing in other countries ............................................ 10 

2.7 Sustainable development goals linking to skills development .................................... 11 

2.8 Implementation of strategy challenges ....................................................................... 11 

2.9 Conceptual framework ................................................................................................ 12 

2.10 Chapter summary......................................................................................................... 14 

CHAPTER 3: RESEARCH METHODOLOGY .............................................................................. 15 

3.1 Introduction ................................................................................................................. 15 

3.2 Research design ........................................................................................................... 15 

3.3 Population and sampling ............................................................................................. 16 

3.3.1 Target population ................................................................................................ 16 

3.3.2 Sampling technique and sample size .................................................................. 16 

3.4 Data collection ............................................................................................................. 16 

3.4.1 Research instrument ........................................................................................... 16 

3.4.2 Questionnaire administration ............................................................................. 16 

3.5 Data analysis ................................................................................................................ 17 

3.6 Delimitations and limitations ....................................................................................... 17 

3.7 Scope of the study ....................................................................................................... 18 

3.8 Bias elimination ............................................................................................................ 18 

3.9 Ethical considerations .................................................................................................. 18 

3.9.1 Ensuring that participants have provided informed consent ............................. 19 

3.9.2 Ensuring the safety and well-being of the respondents ..................................... 19 

3.9.3 Ensuring preservation of privacy and protection of personal information ........ 20 

3.10 Conclusion .................................................................................................................... 20 



viii 

CHAPTER 4: RESEARCH FINDINGS ........................................................................................ 21 

4.1 Introduction ................................................................................................................. 21 

4.2 Descriptive statistics..................................................................................................... 21 

4.2.1 Demographics ..................................................................................................... 21 

4.2.2 SETAs and their characteristics ........................................................................... 22 

4.2.3 SETAs current funding mechanism ..................................................................... 24 

4.2.3 Enhancing skills development financing ............................................................. 26 

4.3 Analysing factors that influence funding amounts allocated to different SETAs ......... 28 

4.4 Analysing how the perception of SETA’s funding varies with executive role ............... 29 

4.5 Analysing the relationship between source of funding and perception of its 
effectiveness ................................................................................................................ 29 

4.6 Analysing the relationship between funding barriers and strategic initiatives ........... 30 

4.7 Additional feedback ..................................................................................................... 31 

4.8 Chapter summary......................................................................................................... 33 

CHAPTER 5: DISCUSSION AND CONCLUSION ........................................................................ 34 

5.1 Introduction ................................................................................................................. 34 

5.2 Discussion..................................................................................................................... 34 

5.2.1 Factors influencing the funding allocation to different SETAs ............................ 34 

5.2.2 Perception of SETA funding by executive role .................................................... 35 

5.2.3 Relationship between source of funding and perceived effectiveness .............. 36 

5.2.4 Relationship between funding barriers and strategic initiatives ........................ 37 

5.3 Conclusion .................................................................................................................... 37 

5.4 Future research directions ........................................................................................... 38 

REFERENCES ....................................................................................................................... 40 

APPENDICES ....................................................................................................................... 45 

 

  



ix 

LIST OF FIGURES 

Figure 1: Conceptual framework of skills development financing and public vs private 
funding sources ............................................................................................................ 13 

Figure 2: Skills development value chain & SETA funding allocation process ......................... 13 

 

LIST OF TABLES 

Table 1: Demographics of respondents ................................................................................... 21 

Table 2: SETAs and their characteristics ................................................................................... 23 

Table 3: Current funding mechanism ....................................................................................... 24 

Table 4: Enhancing skills development financing .................................................................... 27 

Table 5: Correlation matrix between the amount of funding allocated to SETAS ................... 28 

Table 6: Executives’ perceptions of SETA funding .................................................................... 29 

Table 7: Relationship between source of funding and perceived effectiveness ...................... 30 

Table 8: Funding barriers and strategic initiatives ................................................................... 30 

 

LIST OF APPENDICES 

APPENDIX A: WITS ETHICAL CLEARANCE ................................................................................. 45 

APPENDIX B: INVITATION TO PARTICIPATE ............................................................................... 46 

APPENDIX C: FASSET GATEKEEPER’S LETTER ........................................................................... 48 

APPENDIX D: RESEARCH INSTRUMENT: QUESTIONNAIRE ....................................................... 49 

APPENDIX E: EDITOR’S LETTER ................................................................................................. 53 

  



x 

LIST OF ACRONYMS 

AQA Accreditation & Quality Assurance  

DHET Department of Higher Education and Training  

HDIs Historically disadvantaged individuals, youth and women. 

HE Act Higher Education Act 1997  

M & R Monitoring & Reporting 

MG/DG  Mandatory & Discretionary SETA Grants 

NQF  National Qualifications Framework 

NSDP National Skills Development Plan 

NSDP National Skills Development Plan  

NSF National Skills Fund  

PEG Promote Economic Growth 

PPP  Public-Private Partnership 

QCTO Quality Council for trade and occupations  

RPL  Recognition of Prior Learning 

SAQA South African Qualifications Authority 

SARS South African Revenue Service  

SDA Skills Development Act No. 97 of 1998  

SDGs Sustainable Development Goals 

SDL Skills Development Levy  

SDLA Skills Development Levies Act No. 9 of 1999  

SETA Sector Education and Training Authority 

TVET Technical and Vocational Education and Training  

WBL  Work-Based Learning  

 

 



1 

CHAPTER 1: INTRODUCTION AND BACKGROUND 

1.1 Introduction 

This chapter introduces the thesis by presenting the background of the study. The research 

problem is stated, as well as the research objectives. Section 1.5 explains the rationale for the 

study and Section 1.6 describes the delimitations of the research. The structure of the thesis 

is outlined in Section 1.7. 

1.2 Background of the study 

Since the inception of democracy in South Africa (SA) in 1994, the country has been 

confronted with a serious skills shortage, as it endeavours to rebuild its economy after the 

apartheid years (Dias, 2007).  

To address the persistent skills shortage, the post-apartheid government introduced several 

interventions, the most significant being the enactment of the Skills Development Act of 1998. 

This legislation aimed to develop and implement sector-specific skills development initiatives 

tailored to the needs of the economy (Halabi, 2013). In line with the Skills Development Act, 

Sector Education and Training Authorities (SETAs) were established in SA to drive skills 

development and training within specific economic sectors.  

Skills development plays a vital role in promoting economic growth, advancing social progress, 

and enhancing individual prosperity (Halabi, 2013). In the context of SA, where socio-

economic disparities persist, the need for effective skills development programmes is 

paramount. Strategic financing is pivotal in supporting these initiatives, ensuring adequate 

resources are allocated to address skill gaps and promote sustainable development. The 

literature review chapter explores the theories underpinning skills development, examines 

existing financing mechanisms, and identifies challenges and barriers in SA and other 

countries (Halabi, 2013). 

1.3 Research problem 

The dire need for skills development in SA and the consequences of skills shortages are 

apparent in areas of economic growth, unemployment, and socioeconomic issues, including 

poverty and crime rate, causing a collapse in infrastructure.  



2 

Sustainable Development Goal (SDG) 4 advocates:  

• Investigate the inclusivity of skills development programmes implemented by SETAs in 

SA in alignment with SDG 4.  

• Evaluate the quality of education and training provided through SETA programmes in 

SA, considering SDG 4’s emphasis on equitable and quality education. 

• Explore the provision of lifelong learning opportunities within the skills development 

framework in SA, aligning with SDG 4’s goal of promoting continuous learning.  

• Examine the integration of sustainable development principles into skills development 

programmes, reflecting SDG 4’s emphasis on education for sustainable development.  

• Develop robust monitoring and evaluation frameworks to track progress towards SDG 

4 targets within the skills development sector in SA.  

Despite the government’s efforts through SETAs and incentives, the skills shortage remains a 

problem, raising questions as to the efficacy of the funding mechanisms used. 

1.4 Research objectives 

The intended aim of the research is to explore methods and strategies to improve the 

effectiveness and efficiency of financing mechanisms for skills development. 

• To determine factors that influence the amount funded to different SETAs 

• To analyse the perception that SETAs’ funding varies by the executives’ roles  

• To determine whether the source of funding has any relationship with the perception 

of its effectiveness 

• To assess the relationship between the funding barriers and their strategies and 

initiatives. 

1.5 Rationale of the study 

The funding gaps or mechanisms in skills development have elements that require some 

deliberation in the study: 

• Limited comprehensive comparative analyses of skills development financing models 

across countries or regions, leaving a gap in identifying international best practices 

applicable to SA. 



3 

• Insufficient exploration of stakeholder perspectives, particularly those of SETAs, 

employers, training providers, and government officials, which are essential for 

designing effective strategies. 

• Lack of detailed research focusing on concrete strategies for optimising strategic 

financing, with existing literature providing broad recommendations without in-depth 

analyses of implementation mechanisms. 

• Inadequate examination of innovative policy interventions and reforms aimed at 

enhancing skills development financing, such as outcome-based financing and sector-

specific funding mechanisms. 

• Absence of longitudinal studies tracking the long-term impact of skills development 

financing initiatives, leaving a gap in understanding sustained effectiveness and 

contribution to economic growth and social development. 

1.6 Delimitations of the study 

The research focuses on exploring methods and strategies to improve the effectiveness and 

efficiency of financing mechanisms for skills development. This may involve identifying best 

practices, evaluating existing funding structures, and proposing changes to optimise resource 

allocation and outcomes (Bennell, 1999). A proven track record is a crucial sign of financial 

sustainability. 

1.7 Study structure 

Chapter 1 provides a brief background on optimising strategic financing strategies for skills 

development in SA, identifying the research problem, objectives, and study rationale. 

Chapter 2 presents a literature review, exploring relevant management theories and the 

conceptual framework underpinning the study. 

Chapter 3 details the research methodology, covering the target population and sample 

selection, data collection methods, data gathering procedures, techniques used for data 

analysis, and adherence to ethical guidelines throughout the study. 

Chapter 4 presents the research findings, offering a detailed analysis of the data collected. 

The chapter examines key aspects such as the factors influencing funding allocation to 

different SETAs, variations in funding perception across executive roles, the relationship 



4 

between funding sources and perceived effectiveness, and the impact of funding barriers on 

strategic initiatives. The findings are discussed in alignment with the study’s objectives, 

providing empirical insights into the effectiveness and challenges of skills development 

financing in SA. 

Chapter 5 provides a discussion and conclusion, linking the research findings to existing 

literature and theoretical frameworks. The discussion interprets the findings in relation to 

management theories and conceptual models, evaluating whether they support or contradict 

previous studies. The chapter concludes with key recommendations for policy improvements, 

funding optimisation strategies, and future research directions to enhance the effectiveness 

and sustainability of SETA financing mechanisms. 

  



5 

CHAPTER 2: LITERATURE REVIEW 

2.1 Introduction 

The study explores literature on strategies for funding skills development, with a specific focus 

on SA. The chapter unfolds in a structured manner, commencing with an examination of the 

foundational management theories in Section 2.2, laying the groundwork by elucidating the 

theoretical frameworks that underpin effective skills development strategies. Following this, 

Sections 2.3 to 2.10 discuss the criticality of skills development, elucidating the pressing need 

within SA. Against the backdrop of these foundational insights, the study then proceeds to 

delve into the heart of the matter—optimising strategic financing strategies for skills 

development in SA. This critical examination aims to provide actionable insights and 

recommendations tailored to the unique challenges and opportunities inherent in the context 

of SA, ultimately contributing to the enhancement of skills development initiatives and the 

broader socio-economic landscape. 

2.2 Underpinning management theories 

2.2.1 Human Capital Theory 

The Human Capital Theory posits that investments in education and training contribute to the 

development of human capital, which in turn enhances productivity and economic growth 

(Cheng et al., 2023). This theory argues that investment in education enhances productivity 

and justifies financial allocation (Iqbal, 2013). In the context of vocational education financing, 

this theory underpins the argument for investing in vocational education as a means to 

develop a skilled workforce and address unemployment. The research seeks to examine how 

investments in vocational education translate into improved employment outcomes and 

economic performance. The focus is on identifying and addressing the needs of various 

stakeholders involved in an organisation or sector (Trzcinski & Randolph, 1991). In the realm 

of vocational education financing, a diverse range of stakeholders, including government 

agencies, employers, educational institutions, and students, are deeply invested in the 

funding and efficacy of vocational education programmes. The current study seeks to provide 

insights that can enhance the alignment of funding strategies with the diverse needs of all 

involved parties, while ultimately contributing to the optimisation of vocational education 

programmes. 



6 

2.2.2 Social Capital Theory 

The Social Capital Theory emphasises the importance of social networks, relationships, and 

community resources in fostering economic development and facilitating skills acquisition 

(Kilpatrick et al., 2003). Exploring how social capital influences skills development initiatives 

can provide insights into leveraging networks for financing and support. 

2.2.3 Institutional and Stakeholder Theory 

The Institutional Theory examines the roles and interactions of institutions in shaping 

organisational behaviour and outcomes. Understanding the institutional landscape 

surrounding skills development can inform effective financing strategies and policy 

interventions (Raynard, 2015). The theory further examines how organisations conform to 

institutional pressures and norms within their environment. For example, the adoption of 

vocational education financing models may be influenced by institutional pressures from 

international organisations like the European Union, which advocates for alignment with 

European standards (Raynard, 2015).  

The Stakeholder Theory, according to Parmar (2010), suggests that various stakeholders 

should play a role in financial decision-making. The Resource Dependency Theory suggests 

that organisations experiencing financial constraints tend to adopt innovative funding 

mechanisms to sustain their operations (Hillman et al., 2009). 

2.3 The need for skills development 

Today, skills are increasingly recognised as integral to education’s role in preparing individuals 

for the labour market. These skills are often developed through problem-solving, 

communication, teamwork, and other core competencies (McGrath, 2002) 

The importance of strengthening basic and secondary education is highlighted as a critical 

need in many countries, as learners often lack the essential literacy and numeracy skills 

necessary for further learning and employment. Despite increased demand for secondary 

schooling, inadequate foundational skills persist, hindering progress towards achieving SDG 4. 

While there is a growing recognition of the significance of non-technical skills, such as critical 

thinking and social competencies, in the evolving job market, efforts to integrate these skills 

into education systems remain limited, with many countries only including them in curriculum 



7 

outcomes. However, there is a shift towards prioritising these skills, which is expected to 

contribute to SDG Target 4.4 (Comyn, 2018). 

Furthermore, there is a call for re-evaluating occupational standards and qualifications to 

adapt to the changing demands of the workforce and to accommodate the increasing diversity 

of learning achievements. The rise of digital technologies offers opportunities for more 

flexible delivery and assessment methods, allowing for a broader range of modularised 

learning offerings. This shift towards a broader mastery of competencies and trans-

disciplinary solutions challenges traditional occupational classifications and credentialing 

systems, leading to the emergence of digital credentials like badges and micro-credentials. 

Overall, there is a growing recognition of the need for education and training systems to 

provide greater flexibility and breadth of learning to meet the demands of a rapidly changing 

world (Comyn, 2018). 

2.4 Significant causes of skills development needed 

SDG 4 aims to ensure inclusive and equitable quality education and promote lifelong learning 

opportunities for all. This goal emphasises the importance of access to quality education at all 

levels, including technical and vocational education and training (TVET), to equip individuals 

with the knowledge and skills necessary for employment, decent work, and entrepreneurship. 

SDG 8, on the other hand, focuses on promoting sustained, inclusive, and sustainable 

economic growth, full and productive employment, and decent work for all. Together, Goals 

4 and 8 highlight the critical link between education, skills development, and economic 

empowerment, advocating for systems that enable people to learn continuously and 

contribute meaningfully to the labour market throughout their lives (United Nations, 2015). 

2.4.1 Changing economic environment 

Pro-poor development strategies emphasise the necessity of sustainable labour-intensive 

growth, bolstering social sectors, and providing safety nets for vulnerable populations. It 

advocates for empowering local communities through decentralisation of power and fostering 

civil society participation. The strategies underscore the importance of enhancing training and 

support across various sectors, including agriculture, rural development, vocational 

education, and public works programmes. They acknowledge historical biases towards 

vocational education for formal wage employment but stress the need to expand training 



8 

opportunities to encompass informal sector activities, enabling broader participation in local 

economic development (Bennell, 1999). 

2.4.2 Technology 

Technological change is a dynamic process characterised by both job destruction and creation, 

along with transformations in existing job roles and work organisation. Recent advancements, 

particularly in fields like artificial intelligence, robotics, and biotechnology, are amplifying each 

other, leading to unprecedented rates of change. While these changes may eventually lead to 

new job opportunities, initially, they often result in efficiency gains through job shedding. 

Some experts foresee a future with increasing technological unemployment due to the 

disruptive effects of innovations like robotics and 3D printing (Comyn, 2018). However, others 

argue that automation will not eliminate entire occupations but rather transform them, with 

some tasks being replaced while others evolve. Studies suggest varying degrees of risk for job 

loss due to automation across different countries and industries. 

2.4.3 Globalisation 

Globalisation compels poor countries to improve the quality of their workforce to attract 

foreign investment. Initially, developing nations benefit from low-cost manufacturing due to 

cheaper labour, but this advantage is temporary as other countries emerge as competitors. To 

remain competitive, developing nations must invest in enhancing their skills and capabilities. 

This shift is exemplified by the progression from China to other Asian nations like South Korea, 

Taiwan, and Singapore. The Heckscher-Ohlin model underscores the significance of a country’s 

human resource quality in determining its comparative advantage in trade. Therefore, 

investing in human capital is essential for economic development and sustained 

competitiveness in the global market (Kuruvilla, 2007). 

2.5 Sectoral methods of skills development 

2.5.1 TVET colleges 

The SDGs, especially goals 4 and 8, underscore the significance of TVET and skills 

development, aligning with existing international frameworks. This focus is expected to 

amplify attention on skills development, employability, and lifelong learning throughout the 

2030 Agenda’s implementation. Moreover, labour market trends and advancements within 

TVET institutions are poised to bolster the evolution of lifelong learning systems. However, 



9 

despite the SDGs prioritising lifelong learning, fragmented approaches and insufficient 

funding, particularly for adult and continuing education, remain obstacles. Addressing these 

challenges demands robust political commitment and financial investment to unlock the full 

potential of the sector and establish more effective lifelong learning systems, equipped to 

support learning for both work and life in the future (Comyn, 2018) 

2.5.2 Small businesses (SMMEs) 

The current state of entrepreneur training in SA reveals a fragmented landscape, with 

numerous stakeholders often pursuing objectives that diverge from the expectations set by 

academic literature. While there is a proliferation of training providers, many focus more on 

traditional management education rather than fostering entrepreneurial skills (Nieman, 

2001). This confusion is compounded by a lack of standardisation and quality control, leaving 

the field open to a multitude of approaches. Despite initiatives like the South African 

Qualifications Authority (SAQA) aiming to introduce oversight, the training landscape remains 

largely unregulated. Moreover, while government initiatives aimed at coordinating training 

efforts were introduced, recent research suggests that the desired level of coordination has 

yet to materialise, highlighting a gap that must be addressed to support entrepreneurial 

growth effectively (Nieman, 2001). 

2.6 Funding models between South Africa and other countries 

Skills development is widely recognised as a critical component for enhancing workforce 

productivity, economic growth, and social development. In many countries, including 

Tanzania, various financing mechanisms and initiatives are employed to support skills 

development efforts. This literature review aims to provide insights into the effectiveness and 

challenges associated with these financing mechanisms, with a focus on public financing, 

private financing, skills development levies, financial instruments, tax incentives, and public-

private partnerships (PPPs) (Andreoni, 2018). 

The Skills Development Levy (SDL) and its impact in Tanzania: The SDL serves as a critical 

funding mechanism for skills development. Employers contribute a compulsory levy based on 

their employees’ gross emoluments. This levy aims to support education and training 

initiatives outlined in the Skills Development Act. While SDL provides a significant funding 

stream, challenges related to resource allocation, coordination, and monitoring persist. 



10 

Efficient utilisation of SDL funds remains essential to address skill shortages and promote 

inclusive growth (Andreoni, 2018). 

Beyond SDL: Diversification of funding sources to enhance skills development is crucial. 

Besides SDL, other avenues include: 

• Government allocations and budgetary provisions for education and training. 

• Donor support and external funding from international organisations. 

• Private sector investments, companies investing in skill-building programmes. 

• Trainee fees: Contributions from individuals participating in training. 

2.6.1 Public and private financing for skills development 

Skills development is a critical component for enhancing workforce productivity, economic 

growth, and social development. In Tanzania, various financing mechanisms are employed to 

support skills development efforts. Public financing, driven by government initiatives, plays a 

central role. Budget allocations, grants, and subsidies contribute to the accessibility and 

quality of vocational education and training (VET) facilities. Adequate funding ensures that 

skill-building programmes effectively address industry-specific needs. Additionally, private-

sector investment complements government efforts. Corporate training programmes, 

apprenticeships, and partnerships with educational institutions enhance skill acquisition. 

Private financing, motivated by corporate social responsibility, contributes to workforce 

development and competitiveness (Andreoni, 2018). 

2.6.2 Vocational education financing in other countries 

In the USA, vocational education is crucial for Georgia’s economic development, as it prepares 

individuals for the workforce and attracts international investments. Aligning with the EU 

labour market standards is essential but challenging without reducing unemployment and 

enhancing professional growth (Bentley Davey, 2021). In 2018, Georgia enacted legislation to 

modernise vocational education, aiming to meet European standards and address labour 

market demands (Leibbrandt et al., 2010). Additionally, the government introduced financing 

initiatives in 2013, including voucher financing and programme-based funding, to support 

vocational education programmes. These efforts are expected to lead to a skilled workforce, 

reduced unemployment, and increased productivity, contributing to Georgia’s long-term 

economic growth (Bentley Davey, 2021). 



11 

In addition, financing and sponsored activities were issued by the Government of Georgia in 

2013. 

• Voucher financing refers to the provision of funds through vouchers that may be used 

to pay for goods or services. 

• Financing vocational educational programmes consisting of modules involves 

providing funds for educational programmes that are structured in modules, allowing 

students to choose specific areas of study. 

• Programme financing refers to the provision of funds for specific programmes or 

initiatives. 

• Target programme financing involves providing funds for specific programmes or 

initiatives that have certain goals or targets. 

2.7 Sustainable development goals linking to skills development 

Collaboration and alliances are crucial for implementing SDG 4 in SA, particularly within higher 

education institutions and publicly funded entities. Better policy coordination and governance 

are needed to integrate SDG 4 effectively. Challenges like distrust between the government 

and civil society hinder partnerships (Haywood et al., 2019). Advocating for multi-stakeholder 

partnerships involving government, civil society, academia, and the private sector is essential. 

These partnerships can mobilise resources and work together to achieve the SDG 4 objectives. 

The United Nations highlights the importance of partnerships in balancing economic, social, 

and environmental development aspects. Collaboration can address gaps in national 

strategies and ensure fair development, including marginalised groups (Haywood et al., 2019). 

2.8 Implementation of strategy challenges 

The implementation of inclusive education policies faces significant challenges, primarily due 

to uncertainties in execution methods and a lack of capacity within provincial departments. 

Without clear directives and financial support, progress stalls, and school administrators, 

lacking assistance, revert to special education approaches (Donohue & Bornman, 2014). A 

structured implementation strategy is proposed, starting from the highest level of authority 

and cascading down, encompassing policy commitment, resource allocation, capacity 

building, development of guidelines and standards, monitoring and evaluation, stakeholder 

engagement, and sustainable support systems. 



12 

The Education White Paper 6, titled “Special Needs Education: Building an Inclusive Education 

and Training System”, was a significant step forward in recognising the rights of individuals 

with disabilities in SA. However, for this policy to have a meaningful impact, concrete 

measures and intentional actions must be implemented. Inclusive policies are only effective 

when put into practice and enforced by the Department of Education. The adoption of 

inclusive policies can lead to development in SA, provided that clear processes, directives, and 

responsible authorities are in place for implementation (Donohue & Bornman, 2014). 

2.9 Conceptual framework 

Utilising the management framework and doing literature research, a conceptual framework 

was developed about access to sufficient funding allocation, which is necessary to support 

comprehensive skills development programmes. Inadequate funding can lead to programme 

limitations, such as limited infrastructure, outdated training materials, and insufficient staff 

capacity. The latter refers to these entities that receive funding through the SDL, which is 

determined at 4.5% of the monthly salary of enterprises (Palmer, 2020). As for which countries 

have the best skills development funding mechanisms, it is challenging to make many 

definitive assessments without a comprehensive comparative analysis. However, countries 

like SA and Kenya have established structured funding mechanisms through levies (Skills 

Development Levy in SA and Industrial Training Levy in Kenya) (Palmer, 2020), which are used 

to finance skills development programmes. These countries have also implemented sector-

specific training initiatives and robust governance structures to oversee fund utilisation. 

Additionally, countries with strong PPPs and effective monitoring and evaluation systems tend 

to have more successful skills development funding mechanisms (Palmer, 2020). Public 

training systems, which are typically the market leader in formal sector training and the 

primary provider of organised pre-employment training, have typically been formed 

concurrently. Institutions of higher learning in the public sector are mostly funded by funds 

allotted by the government. When fees are in place, they are typically set at simply nominal 

amounts and go to the government rather than the institutions themselves. As a result, public 

training institutions are not very motivated to create in-demand courses that could bring in 

money from fees. Furthermore, companies have the option to enrol their employees in 

ongoing training programmes, which are typically offered at subsidised fee levels rather than 

at full cost. There is minimal motivation for institutional training providers to match their 



13 

training offerings with the demands of the labour market since funding allotments to public 

training providers are typically unrelated to objective, outcome measures, such as the success 

of placing trainees in gainful employment (Ziderman, 2016). In Figure 1 below, shaded boxes 

represent training providers and black arrows indicate funding flows. 

 

Figure 1: Conceptual framework of skills development financing and public vs private funding 
sources 

Source: Johanson (2004)  

 

 

Figure 2: Skills development value chain & SETA funding allocation process  

Source: Palmer (2020) 



14 

 

Sectoral funding mechanisms at the national level are essential to workforce development. 

These solutions provide improved labour market outcomes, economic growth, and skill 

enhancement by concentrating on industry-specific demands. To comprehend the effects of 

sectoral funding, the study looks at case examples from Europe, Brazil, and SA in this review 

2.10 Chapter summary 

This chapter underscored the critical importance of skills development in SA and the role of 

strategic financing in supporting these initiatives. It explored management theories 

underpinning skills development, the significance of financing mechanisms, challenges and 

barriers in funding, and insights from international experiences. By addressing these issues, 

SA can enhance its skills development efforts and promote sustainable economic and social 

development. 

  



15 

CHAPTER 3: RESEARCH METHODOLOGY 

3.1 Introduction 

This chapter outlines the research methodology employed in the current study. The chapter 

provides a comprehensive explanation of the research design, target population, sampling 

techniques, data collection instrument, and data analysis procedures. The primary aim of this 

chapter is to describe the methods and processes used to gather and analyse data to address 

the research objectives effectively. The chapter is organised as follows: Section 3.2 presents 

the research design; Section 3.3 outlines the population and sampling; Section 3.4 discusses 

the data collection process including the research instrument and its administration; Section 

3.5 presents the data analysis methods; Section 3.6 shows the limitations and delimitations 

of the study; Section 3.7 presents the ethical considerations of the research and Section 3.8, 

the chapter summary, concludes the research. 

3.2 Research design 

In line with Auriacombe (2016), this research design served as a methodical blueprint that 

guided the framework for data collection and analysis. This study adopted a qualitative 

research approach, focusing exclusively on senior executives from all 21 SETAs in South Africa. 

Data was collected through structured online questionnaires, targeting key decision-makers 

such as CEOs, CFOs, COOs, and other senior managers involved in strategic financing for skills 

development. While not a formal case study, the design incorporated an exploratory, 

descriptive approach, aiming to extract rich, contextual insights on funding strategies. 

Thematic analysis was used to interpret responses, with findings reported using the language 

and perspectives of the participants to preserve authenticity. 

This design focused on developing answers to the models and strategies of a given problem. 

• It described and provided an explanation for the problem. 

• It provided explanations and interpretations of solutions that could be put into 

practice. It constructed a theory from the viewpoint of a researcher. 

• The strategy that was employed was the utilisation of study and narrative biography. 

  



16 

3.3 Population and sampling 

3.3.1 Target population 

The target population for this study comprised key stakeholders in the SETAs in SA, including 

CEOs, CFOs, COOs, and other senior management involved to ensure diverse representation 

in skills development initiatives. The study focused on individuals who had substantial 

knowledge and experience in managing or influencing the financing of skills development 

programmes.  

3.3.2 Sampling technique and sample size 

The sampling frame comprised senior executives (CEOs, CFOs, COOs, and senior managers) 

from all 21 registered SETAs in South Africa. From this frame, a purposive sample of 41 

executives was selected based on their strategic roles in skills development financing. 

3.4 Data collection 

3.4.1 Research instrument 

Data was collected using a structured questionnaire specifically designed to gather 

information on the strategic financing strategies for skills development in SA. The 

questionnaire was divided into six sections, which are demographic information, SETA’s 

details, current funding mechanism, strategies for improvement, policy and innovation and 

additional comments. The study approach was qualitative research to obtain adequate 

information through online questionnaires administered to 41 voluntary participants from 21 

SETAs. Participants were CEOs, CFOs, COOs and other Senior Managers/Executives. The study 

employed a non-probability or purposive sampling approach. The method used a thematic 

analysis approach, which enabled the examination and interpretation of participants’ 

perspectives. This is a process of interpretation in which data information is systematically 

examined to identify patterns within the data, to produce a descriptive account of the 

phenomena (Smith & Firth, 2011). 

3.4.2 Questionnaire administration 

Data collection can be done using online questionnaires. Using questionnaires was 

appropriate for optimising financing strategies for skills development in SA. This study 

gathered quantitative data through an online questionnaire employing demographic 

information, SETA details, current funding mechanisms and strategies for improvement. The 



17 

benefits of utilising questionnaires include anonymity, practicality, rapid and straightforward 

data collection, comprehensive coverage of a topic, and reliability and accuracy. These 

questions were designed to be inquisitive and focused on achieving certain goals, aiming to 

gather precise information and insights to address some problems and concerns raised in 

research. The detailed research instrument (questionnaire) appears in Appendix 1. The 

questionnaire consisted of 20 questions and contained a cover letter assuring the respondents 

about the confidentiality and anonymity of the information. The questionnaire has four 

sections: Section 1 is Biographical Data, Section 2 is SETA Details, Section 3 is Current Funding 

Mechanisms, and Section 4 is Strategies for Improvements. 

3.5 Data analysis 

The data collected from the questionnaires was analysed using quantitative data analysis 

techniques. Descriptive statistics were employed to summarise the demographic information 

and key variables. Frequency distributions, means, and percentages were calculated to 

provide an overview of the responses. Additionally, inferential statistics, including chi-square 

tests, were used to explore relationships between variables and determine the significance of 

the findings. The data was analysed using SPSS to ensure accuracy and reliability. The study 

objectives and research questions were addressed by utilising a structured online 

questionnaire schedule to collect pertinent data. The responses provided by the participants 

were examined by the researcher to develop themes and subthemes. The chosen samples 

responded directly to the questionnaire. 

3.6 Delimitations and limitations 

Limitations refer to external factors that are outside the researcher’s control, which impose 

restrictions on the researcher’s approach and the conclusion (Gelo, 2008). A significant 

constraint on this study is the limited time available to the researcher, which prevented them 

from conducting many data-gathering tasks. The data collection was conducted using a single 

tool, which was the online questionnaire. However, this approach might have presented a 

drawback since it required respondents to possess tools and equipment to participate in the 

research. Consequently, only those with access to these tools were able to participate. 

  



18 

3.7 Scope of the study 

Delimitations refer to the decisions made by the researcher that need to be recognised and 

acknowledged (Gelo, 2008). Typically, these selections delineate the limits established by the 

researcher. This study topic is Optimising strategic financing strategies for skills development 

in SA. The participants were SETA Executives (CEOs, CFOs and COOs), DHET, QCTO, NSA, NSF 

and Department of Employment and Labour documents. The sample was obtained through a 

combination of basic snowball sampling and random sampling. 

3.8 Bias elimination 

Bias is characterised as any inclination that leads to a biased evaluation of a research question 

(Hall & Wright, 2008) and they describe systematic bias as a situation where the sampling 

procedure or any tests used to be in favour of one answer or outcome over others. Bias can 

occur at any stage of the research process, encompassing study design, data collection, data 

analysis, and publication. Cellina (2021) reports that bias can be introduced into a study 

through various means. Volunteer bias refers to the phenomenon observed in research with 

voluntary participation, where individuals who perceive themselves as more capable are more 

likely to engage. Nevertheless, these individuals may not accurately reflect the characteristics 

of the intended group. This study employed simple random sampling and snowball sampling 

techniques. 

Data collection bias is a type of data bias that arises when the researcher’s personal beliefs 

influence the way data is gathered (Florczak, 2022). The researcher may possess a pre-existing 

notion that could potentially impact the methodology employed for data collection. In this 

study, the issue was resolved by obtaining a "second opinion" from a proficient person who 

evaluated these questions. Florczak (2022) also discusses the presence of measuring biases 

which might arise when the information or data collection instrument has not been 

sufficiently evaluated for either reliability or validity. The researcher dedicated sufficient time 

to thoroughly evaluate the instrument’s reliability and validity to try to minimise any possible 

potential biases. 

3.9 Ethical considerations 

According to van Zyl et al. (2019), ethics in research refers to a collection of rules and principles 

that provide direction on the moral conduct process of research. This section expands and 



19 

provides further details on certain “right” rules. Ethical considerations in this research refer 

to a collection of concepts that guided the design and implementation of this study. The 

principles encompass voluntary involvement, informed consent, anonymity, confidentiality, 

potential for hazards, and disclosure of outcomes. Respondents participated voluntarily and 

had the freedom to withdraw from the study at any point if they chose to do so.  

The following aspects were taken into consideration 

• Firstly, they presented a comprehensive account of the sampling and data collection 

methodologies employed in the study.  

•  Additionally, they presented a comprehensive description of the analysis procedure 

and the results, with verbatim excerpts from the online questionnaires.  

• Additionally, they deliberated upon the merits and constraints of the investigation, and 

how these factors might impact the understanding and analysis of the results 

3.9.1 Ensuring that participants have provided informed consent 

Research places significant emphasis on obtaining informed consent from participants before 

their involvement in a study (van Zyl et al., 2019). To guarantee informed consent, participants 

were requested to provide formal consent. This entailed ensuring the email contained the 

essential information along with the questionnaire link. Participants were asked if they 

comprehended the nature and purpose of the research. The research description employed 

straightforward and succinct English to ensure that the respondents understood the 

investigation’s purpose completely. Furthermore, participants were informed that they had 

the option to omit any question they found inappropriate to answer or to completely 

withdraw from the study at any stage. 

3.9.2 Ensuring the safety and well-being of the respondents 

It is crucial to guarantee the safety of the participants by preventing any form of harm such as 

physical discomfort, psychological suffering, or stress related to their employment (van Zyl et 

al., 2019). The researcher bears the obligation to guarantee that the study does not pose any 

hazard to the participants. The research was designed to eliminate any possibility of bodily or 

emotional injury to the participants. The researcher included contingency procedures to 

guarantee the respondents’ safety during their involvement in the study. 



20 

3.9.3 Ensuring preservation of privacy and protection of personal information 

When doing research, it is crucial to guarantee that the privacy of the respondents is not 

violated (van Zyl et al., 2019). Typically, this is achieved by ensuring that the identities of 

participants are kept anonymous. It is crucial to maintain tight confidentiality among all 

participants. The introductory paragraph of the questionnaire explicitly emphasised that no 

personally identifiable information which could be used to identify the responder would be 

collected. Although the email addresses of all targeted audiences or employees are identified, 

the process of completing those surveys or questionnaires does not require the submission of 

email addresses. As a result, it was not possible to directly link any given response to a single 

participant. To maintain confidentiality, anonymity, and data protection, the researcher will 

retain the data for a period of 5 years for future analysis and subsequently dispose of it. 

3.10 Conclusion 

A survey research method was employed to gather data from a sample of certain individuals 

for the study (Alam, 2014). A questionnaire was created and distributed, utilising an online 

platform for data collection. The analysis of data used both inferential and descriptive 

techniques (Arkkelin, 2014). During this research, ethical concerns were carefully addressed, 

including safeguarding the participants, ensuring their anonymity, and gaining proper consent.  

In the following chapter, the study findings are presented, thoroughly examined and analysed 

utilising the methodologies outlined in the chapter (Wiles et al., 2008). 

 

  



21 

CHAPTER 4: RESEARCH FINDINGS 

4.1 Introduction 

This chapter presents the research findings and is organised into Section 4.2 which presents 

the descriptive statistics and includes statistics on demographics, characteristics of SETAs and 

SETA funding mechanisms; Section 4.3 analyses the factors that influence the funding amount 

allocated to different SETAs; Section 4.4 analyses how the perception of SETA’s funding varies 

with executive role; Section 4.5 analyses the relationship between source of funding and the 

perception of its effectiveness; Section 4.6 analyses the relationship between funding barriers 

and strategic initiatives and lastly, the chapter summary concludes the chapter. 

4.2 Descriptive statistics 

4.2.1 Demographics 

Table 1 illustrates the demographic characteristics of the respondents. The majority of 

respondents were male (63.4%) compared to female respondents (36.4%). This gender 

disparity indicates that the management teams within SETAs are predominantly male, which 

contrasts with the broader demographic trends in SA, where the gender distribution is more 

balanced. This suggests a potential underrepresentation of women in leadership roles within 

SETAs 

Table 1: Demographics of respondents 

Indicator Measure Frequency % 
Gender Female 15 36.6 

Male 26 63.4 
Ethnicity  African 37 90.4 

Indian 2 4.9 
White 2 4.9 

Age range 25 - 34 3 7.3 
35 - 44 18 43.9 
45 - 54 14 34.1 
55 and above 6 14.6 

Qualification Bachelors 1 2.4 
 Honours 16 39.0 

Masters 17 41.5 
PhD 6 14.6 

Work experience years 0-3 8 19.5 
4-6 15 36.6 

7-10 5 12.2 
11-15 9 21.9 



22 

 

Most respondents identified as African (90.2%), with minimal representation from Indian and 

White ethnic groups (each at 4.9%). This distribution reflects the demographic composition of 

SA and indicates that SETAs are largely managed by individuals from the African community. 

Furthermore, the age distribution of respondents shows a concentration of mid-career 

professionals, with the largest group falling within the 35–44 years age bracket (43.9%). This 

suggests that SETAs are managed by individuals who are likely to have accumulated substantial 

professional experience while still being actively engaged in career development. 

Respondents were found to be highly educated, with over 80% holding advanced degrees. 

Specifically, 39.0% of respondents had an Honours degree and 41.5% held a Master’s degree. 

This high level of educational attainment indicates that SETAs are managed by individuals with 

strong academic backgrounds, which may contribute to strategic decision-making and 

effective leadership within these organisations. 

The analysis of work experience reveals that a significant proportion of respondents have 

between 4–6 years of experience (36.6%), followed by those with 10–15 years of experience 

(21.9%). This distribution suggests a balanced mix of emerging and seasoned professionals 

within SETAs, contributing both fresh perspectives and experienced insights to the 

management of skills development initiatives. 

4.2.2 SETAs and their characteristics  

Table 2 illustrates the representation of respondents from diverse SETAs, although certain 

SETAs have higher representation than others, reflecting varying engagement levels across 

sectors. 

  



23 

Table 2: SETAs and their characteristics 

Indicator Measure Frequency % 
No. of respondents from each 
SETA 

AGRISETA 1 2.4 
BANKSETA 2 4.9 
CATHSSETA 2 4.9 
CETA 1 2.4 
CHIETA 1 2.4 
ETDPSETA 1 2.4 
EWSETA 3 7.3 
FASSET 9 22.0 
FOODBEVSETA 2 4.9 
FPMSETA 1 2.4 
HWSETA 2 4.9 
INSETA 1 2.4 
LGSETA 1 2.4 
MERSETA 3 7.3 
MICTSETA  2 4.9 
TETA 1 2.4 
MQA  1 2.4 
PSETA 1 2.4 
SASSETA 1 2.4 
SERVICESETA 2 4.9 
WRSETA 3 7.3 

Roles of respondents CEO 19 46.3 
CFO 3 7.3 
COO 1 2.4 
Other (CIO & Manager) 18 43.9 

Size of the SETAs Above 50 41 100 
Types of skills development 
initiatives 

Adult education and training 3 7.3 
Apprenticeships 4 9.8 
Bursaries and scholarships 6 14.6 
Learnerships 23 56.1 
Skills planning research 1 2.4 
Skills programme  1 2.4 
Candidacy 1 2.4 
All of the above except Apprenticeship 1 2.4 

 

The data reveals that CEOs form the majority of respondents (46.3%), highlighting strong 

leadership representation. This is followed by 43.9% of respondents comprising CIOs, 

Corporate Services Executives, Senior Managers, and other managers within the SETA 

environment. This distribution indicates that while strategic leadership plays a key role, 

operational leaders who are "foot soldiers" in grants, skills levies, and funding distribution also 

significantly influence SETA operations. 



24 

In terms of SETA size, all respondents are from SETAs with more than 50 employees, reflecting 

the large-scale operational capacity required to manage skills development initiatives 

effectively. Respondents indicated that learnerships (56.1%) are the most supported 

interventions, underscoring SETAs’ focus on practical skills development. These findings 

suggest a strong emphasis on experiential learning, with SETAs prioritising initiatives that 

enhance job readiness and practical competencies. 

4.2.3 SETAs current funding mechanism  

Table 3 shows that 80.5% of SETA funding comes from government grants (skills levies/taxes), 

making it the primary source, while employer levies and private funding each contribute only 

2.4%. This centralised approach supports government efforts to address skill shortages but 

creates a risk of over-reliance, limiting the SETAs’ flexibility to diversify programmes or quickly 

adapt to sectoral needs. 

Table 3: Current funding mechanism 

Indicator Measure Frequency % 

Current funding Mechanism Government grants 33 80.5 
Employer levies 1 2.4 
Employers’ skills levy 1 2.4 
Levies from qualifying employers 1 2.4 
Private funding 1 2.4 

Effectiveness of the current 
funding mechanism  

Very effective 16 39.0 
Somewhat effective 19 46.3 
Somewhat ineffective 5 12.2 
Neutral 1 2.4 

More funding – skills 
development areas 

Digital skills 6 15 
Entrepreneurship skills 5 12 
Higher education 14 34 
Soft skills 3 7 
Technical skills 4 10 
Vocational training 8 20 
Work placements  1 2 

Financing mechanisms are 
adequately aligned 

Agree 24 59 
Disagree 9 22 
Neutral 1 2 
Strong agree 5 12 
Strong disagree 2 5 

Key strengths of the current 
funding mechanism  

Adequate funding levels 5 12 
Alignment with industry needs 4 10 



25 

Comprehensive monitoring and 
evaluation 

4 10 

Flexibility in funding usage 3 7 
Focus on outcome-based funding 3 7 
Inclusivity and equity 2 5 
Stability and predictability 2 5 
Strong stakeholder engagement 3 7 
Support for diverse programmes  5 12 
Timely disbursement of funds 4 10 
Transparency in fund allocation 4 10 

Weaknesses/challenges of the 
current funding mechanism 

Delayed disbursement of funds 12 29.3 
Complex application & reporting 
processes 

10 24.4 

Inefficient use of resources 9 22.0 
Insufficient collaboration with the 
private sector 

7 17.1 

Encouragement of innovation 3 7.3 

 

The minimal contribution from employers suggests limited private-sector engagement. This 

could indicate a gap in collaborative efforts between SETAs and industry stakeholders, 

potentially affecting the alignment of skills development initiatives with real-world demands. 

Despite government grants being the primary funding source for SETAs, their effectiveness is 

questioned, with only 39% of respondents rating them as "Very Effective." The majority 

(46.3%) consider them "Somewhat Effective”, indicating that while the grants play a crucial 

role, they may not fully meet expectations. Furthermore, 12.2% find them "Somewhat 

Ineffective", highlighting concerns about efficiency, accessibility, or impact. The minimal 

neutrality (2.4%) suggests that most stakeholders hold strong opinions on the matter. These 

findings indicate a need for improvements in funding distribution, administration, and 

adaptability to better support sectoral and organisational needs. 

The funding allocation for skills development strongly prioritises higher education (34%), 

indicating a focus on degree-based qualifications over practical training. Vocational training 

(20%) receives moderate support, aligning with global best practices that balance theoretical 

and hands-on learning. Digital skills (15%) and entrepreneurship (12%) show a shift toward 

technology-driven workforce preparation and self-employment, supporting economic 

sustainability. However, technical (10%) and soft skills (7%) receive lower funding, potentially 

creating gaps in specialised industries and workplace adaptability. Work placements (2%) have 



26 

the weakest funding correlation, highlighting the limited integration of real-world experience 

into training programmes, which may impact graduate employability. A more balanced 

funding approach could bridge these gaps and enhance workforce readiness. 

The majority (71%) believe current mechanisms are effective, providing a solid foundation for 

improvement. However, 27% express concerns, highlighting areas needing better alignment 

with operational or sectoral needs. Targeted interventions, such as stakeholder engagement 

and funding reviews, could address these gaps. With only 2% neutral, most respondents have 

clear opinions, emphasising the need to maintain strengths while refining strategies through 

adaptive policies and engagement for better satisfaction and alignment. 

The current funding mechanism demonstrates several strengths, with adequate funding levels 

(12%) and support for diverse programmes (12%) being the most notable, ensuring a broad 

range of skills development initiatives receive financial backing. Alignment with industry 

needs (10%), comprehensive monitoring and evaluation (10%), and timely disbursement of 

funds (10%) contribute to ensuring that resources are effectively allocated and used 

efficiently. Transparency in fund allocation (10%) reinforces trust in the system, while flexibility 

in funding usage (7%) and outcome-based funding (7%) allow for adaptability in responding 

to sectoral demands. Strong stakeholder engagement (7%) enhances collaboration, though 

inclusivity and equity (5%) and stability and predictability (5%) indicate areas where further 

improvements could strengthen long-term funding effectiveness. Overall, the mechanism 

balances structure and adaptability, ensuring efficient skills development investment. 

CEOs focus on long-term sustainability but struggle with complex application processes 

(24.4%), which hinder execution and stakeholder confidence. CFOs prioritise timely fund 

disbursement and efficiency but face challenges with delays (29.3%) and resource 

inefficiencies (22.0%). COOs advocate for innovation through technology and private-sector 

partnerships but encounter limited collaboration (17.1%) and a lack of innovation (7.3%) in 

funding strategies. Addressing these challenges can enhance overall financial planning, 

efficiency, and strategic alignment. 

4.2.3 Enhancing skills development financing  

The key to improving skills development financing in SA lies in government policy optimisation 

and strategic initiatives that address identified barriers. Encouraging private sector 



27 

partnerships (34%) is the most favoured approach, followed by implementing transparent 

accountability measures (22%), increasing budget allocations (20%), and simplifying funding 

applications (20%) to ensure efficiency. 

Among strategic initiatives, leveraging technology (24.4%) and fostering PPPs (21.9%) are seen 

as crucial for modernising financing mechanisms, while a centralised skills development fund 

(19.5%) and outcome-based funding models (17.1%) offer structured approaches to financial 

sustainability. 

However, several barriers hinder progress, with a lack of stakeholder coordination (24.4%) and 

resistance to change (21.9%) being the most significant challenges. Additionally, a lack of 

skilled professionals (19.5%), inadequate policy support (17.1%), and insufficient funding 

(12.2%) indicate systemic gaps that require targeted reforms. Addressing these barriers 

through transparent governance, digital transformation, and diversified funding sources will 

be key to strengthening SA’s skills development financing system. 

Table 4: Enhancing skills development financing  

Indicator Measure Frequency % 

Government policies should be  
optimised to enhance financing skills 
development 

Encouraging private sector 
partnerships 

14 34 

Implementing transparent 
accountability measures 

9 22 

Increasing budget allocations 8 20 

Simplifying funding application 
processes 

8 20 

Strategic initiatives could enhance  
skills development financing in SA 

Leveraging Technology 10 24.4 

Fostering Public-Private Partnerships  9 21.9 

Centralised Skills Development Fund:  8 19.5 

Outcome-Based Funding Models  7 17.1 

Transparency & Accountability  6 14.6 

Barriers identified by respondents Lack of Stakeholder Coordination 10 24.4 

Resistance to Change 9 21.9 

Lack of Skilled Professionals 8 19.5 



28 

Inadequate Policy Support 7 17.1 

Insufficient Funding 5 12.2 

 

4.3 Analysing factors that influence funding amounts allocated to different SETAs 

This analysis investigated the demographic factors that influence the amount of funding 

allocated to various SETAs. The aim is to investigate whether there is equitable resource 

distribution that ensures that SETA funding is allocated fairly across different sectors, 

considering industry size, skills demand, and economic impact. 

Table 5: Correlation matrix between the amount of funding allocated to SETAS 

Variables Gender Ethnicity Age Qualification Work 
experience 

Funding 
amount 

Gender 1.0 
(0.0) 

0.4 
 (0.071) 

0.12  
(0.599) 

-0.22 
(0.332) 

0.08  
(0.744) 

1.0  
(0.0) 

Ethnicity 0.4 
(0.07) 

1.0 
(0.0) 

0.08  
(0.729) 

-0.29 
(0.203) 

0.16  
(0.497) 

0.4  
(0.071) 

Age 0.12 
 (0.599) 

0.08  
(0.729) 

1.0  
(0.0) 

0.23 
(0.315) 

0.67 
(0.001) 

0.12 
(0.599) 

Qualification -0.22  
(0.332) 

-0.29 
 (0.203) 

0.23 
 (0.315) 

1.0 
(0.0) 

-0.02  
(0.948) 

-0.22 
 (0.332) 

Work 
experience 

0.08 
(0.744) 

0.16 
(0.497) 

0.67 
(0.001) 

-0.02 
 (0.948) 

1.0 
(0.0) 

0.08 
 (0.744) 

Funding 
amount 

1.0 
(0.0) 

0.4 
(0.071) 

0.12 
(0.599) 

-0.22 
(0.332) 

0.08 
(0.744) 

1.0 
(0.0) 

 

The correlation statistics indicate a few notable relationships between the variables. The 

strongest positive correlation is observed between Qualification and Funding Amount (0.67, 

p = 0.001), suggesting that higher qualifications are significantly associated with increased 

funding amounts. the correlation between qualification and funding amount does not appear 

to be statistically significant. The correlation between qualification and funding amount (r = -

0.22, p = 0.332) indicates a weak negative relationship, meaning higher qualifications are not 

strongly associated with increased funding allocation. Additionally, the p-value (0.332) 

suggests that the relationship is not statistically significant, implying that qualification does 

not play a decisive role in determining the amount of funding allocated. 



29 

On the other hand, Work Experience shows a weak negative correlation with Ethnicity (-0.29, 

p = 0.203) and Gender (-0.22, p = 0.33), though neither relationship is statistically significant. 

This suggests that work experience does not vary meaningfully across different demographic 

groups. Overall, the data highlights the potential importance of educational qualifications in 

securing funding while indicating no strong statistical link between demographic factors and 

work experience. 

4.4 Analysing how the perception of SETA’s funding varies with executive role  

This section investigates whether different executives (e.g., CEOs, CFOs, COOs) may have 

varying views on SETA funding based on their responsibilities. For example, a CEO might focus 

on overall strategy and sector impact, while a CFO might emphasise financial efficiency and 

compliance. 

Table 6: Executives’ perceptions of SETA funding 

Variable Executive role Seta’s funding 
Executive role 1.0 

(0.0) 
-0.105 

(0.515) 
Seta’s funding -0.105 

( 0.0) 
1.0 

( 0.0)  

 

A weak negative correlation (r = -0.105, p = 0.515) was found between executive roles and 

perception of SETA’s funding. This indicates that perceptions of funding do not significantly 

vary based on whether the respondent is a CEO, CFO, or another executive. However, given 

the insignificance of this relationship, it suggests that while executives may have different 

responsibilities, their overall assessment of funding mechanisms remains relatively uniform 

across roles. 

4.5 Analysing the relationship between source of funding and perception of its 
effectiveness 

This section investigates the relationship between the source of funding and the perception 

of its effectiveness. 

  



30 

Table 7: Relationship between source of funding and perceived effectiveness 

Variable Source of funding Funding effectiveness 
Source of funding 1.0 

(0.0) 
0.043  
(0.79) 

Funding effectiveness 0.043  
(0.0) 

1.0 
(0.0) 

 

The correlation between the source of funding and perceived funding effectiveness was weak 

(r = 0.043, p = 0.790), indicating no meaningful relationship. This suggests that regardless of 

whether funding comes from government grants, employer levies, or other sources, 

respondents do not perceive a significant difference in the effectiveness of funding 

mechanisms. This finding may point to a general sentiment that SETA funding efficiency is 

influenced by structural and operational factors rather than the funding source itself. 

4.6 Analysing the relationship between funding barriers and strategic initiatives 

This section investigates the relationship between funding barriers and strategic initiatives. 

Table 8: Funding barriers and strategic initiatives  

Variable Funding barriers Strategic initiatives 
Funding barriers 1.0 

(0.0) 
0.299 

 (0.057) 
Strategic initiatives  0.299 

(0.0) 
1.0 

(0.0) 

 

A significant positive correlation (r = 0.299, p = 0.057) was found between funding barriers 

and strategic initiatives. While the correlation is not strongly significant at the conventional 

5% level, it suggests that the more barriers respondents perceive in funding mechanisms, the 

more emphasis they place on strategic initiatives to address these challenges. This aligns with 

the expectation that organisations facing financial constraints are more likely to seek 

structured interventions such as PPPs and accountability measures. 

The analysis reveals that funding barriers and strategic initiatives exhibit a moderate 

correlation, indicating that as more challenges are identified, there is a stronger push for 

reform and improvement strategies. The source of funding does not significantly impact 

perceptions of effectiveness, suggesting that concerns about funding mechanisms are more 



31 

closely tied to operational challenges rather than funding origins. Furthermore, executives 

across different roles share similar views on funding, implying that organisational perspectives 

on funding effectiveness are not heavily influenced by specific leadership positions. These 

insights underscore the necessity for structural improvements in funding mechanisms rather 

than merely diversifying funding sources. Additionally, organisations should focus on 

addressing perceived barriers through well-aligned strategic initiatives to ensure that funding 

challenges do not hinder skills development efforts. 

4.7 Additional feedback 

Stakeholders emphasised the need for greater flexibility in funding allocations to ensure that 

SETAs can effectively adapt to emerging sectoral demands. The rigid nature of current funding 

structures often limits the ability to respond to shifts in industry needs. To address this, 

recommendations include integrating real-time monitoring tools that assess the impact of 

funding and enhance accountability, ensuring that resources are allocated efficiently and 

transparently. 

A recurring theme from respondents highlights the need for stronger collaboration between 

SETAs, industry experts, employers, and other stakeholders. Partnerships with industries and 

leveraging sector-specific expertise can ensure that funding is directed toward areas with the 

highest impact. For example, collaboration with mining companies in regions like Kuruman 

can align skills development initiatives with local industry requirements, creating direct 

pathways to employment for trained individuals. 

Another key concern raised by respondents is the disparity in funding accessibility across 

different provinces and economic sectors. Calls for decentralised, sector-focused funding 

models emphasise the need to address provincial disparities and cater to unique sectoral 

demands, such as mining, health, and welfare. This suggests a shift toward customised funding 

approaches that prioritise critical sectors like technical skills and apprenticeships, ensuring 

that funding meets the specific needs of regional industries. 

The existing funding mechanisms are perceived as overly reliant on skills levies, with limited 

flexibility to integrate alternative funding sources. Respondents suggested regulatory reforms, 

including updating DHET policies and allowing international donor funding schemes, to create 

a more diversified funding structure. Reducing over-reliance on levies by incorporating private 



32 

sector contributions and donor partnerships could enhance financial sustainability and 

expand the reach of skills development programmes.  

Additionally, there is a recognised gap in leveraging innovation and technology for skills 

development. Implementing technology-driven approaches and adopting modern training 

models could enhance the efficiency of funding mechanisms, ensuring that skills development 

aligns with the evolving needs of industries such as technology and manufacturing. This would 

also help bridge the gap between training programmes and employment opportunities. 

A critical challenge identified in the study is the mismatch between the skills supplied by SETAs 

and the actual needs of industries. This disconnect often results in unemployment among 

beneficiaries who are trained in skills that do not align with market demands. Industry-driven 

insights are essential in shaping training programmes that lead to sustainable employment 

outcomes. Strengthening employer involvement in curriculum development and funding 

decisions can help mitigate this issue. 

Concerns were also raised regarding governance and decision-making within SETAs, 

particularly the lack of representation for unemployed youth in policy discussions. A more 

inclusive approach that incorporates diverse stakeholder perspectives, including marginalised 

groups, could improve governance and ensure equitable distribution of funds. Enhanced 

transparency and participatory decision-making could contribute to a more effective and 

responsive funding system. 

Broadening the funding base by involving international donors, private sector contributions, 

and alternative funding mechanisms was another prominent suggestion. Exploring options 

such as decentralised funding, sector-specific financial models, and targeted donor 

partnerships could provide long-term financial sustainability for skills development initiatives. 

Lastly, barriers such as resistance to change, lack of stakeholder coordination, and inadequate 

policy support remain significant challenges. Addressing these barriers through strategic 

initiatives, such as fostering PPPs, improving stakeholder engagement, and aligning funding 

priorities with national economic goals, will be essential in ensuring that skills development 

funding effectively contributes to long-term economic growth and employment outcomes. 

  



33 

4.8 Chapter summary 

This chapter provided an overview of the key research findings regarding SETA funding 

allocation, stakeholder perceptions, and strategic responses to funding challenges. The 

analysis included demographic insights, the structure of SETAs, and the effectiveness of 

funding mechanisms. Additionally, the chapter examined correlations between funding 

allocation and various demographic and operational factors.  

The findings indicate that while SETA funding plays a crucial role in skills development, 

challenges related to accessibility, efficiency, and alignment with industry demands remain 

significant. The chapter also explored the influence of funding barriers on strategic decision-

making, emphasising the need for greater flexibility, improved stakeholder collaboration, and 

policy refinements. These insights provide a foundation for the subsequent chapter, which will 

focus on discussing these findings in the broader context of skills development and policy 

implications. 

Stakeholder feedback emphasises the need for greater flexibility in funding allocations, 

stronger collaboration between SETAs and industry partners, and more transparent funding 

processes. Decentralised, sector-focused funding models could help address regional 

disparities and sector-specific demands, ensuring that funds are directed toward high-impact 

skills development areas. Moreover, leveraging alternative funding mechanisms, such as 

international donor contributions and private sector partnerships, could reduce the SETAs’ 

heavy reliance on government grants and levies, enhancing financial sustainability. The study 

also underscores the importance of aligning training programmes with industry demands to 

improve employability outcomes and ensure that skills development initiatives contribute 

meaningfully to economic growth. Addressing challenges such as delayed disbursement of 

funds, rigid application processes, and insufficient innovation in financing models will be 

critical in strengthening SETA funding effectiveness and ensuring that SA’s skills development 

system remains responsive to the evolving needs of the workforce and industry. 

  



34 

CHAPTER 5: DISCUSSION AND CONCLUSION 

5.1 Introduction 

This chapter is organised into sections. Section 5.2 presents the discussion, where the 

research findings are examined with existing literature and theoretical frameworks. The 

discussion includes an analysis of key factors influencing SETA funding allocation, perceptions 

of funding effectiveness among executives, the role of funding sources, and the impact of 

funding barriers on strategic decision-making. Section 5.3 provides the conclusion, 

summarising the study’s key insights and their implications. The chapter concludes with 

recommendations for future research to address identified gaps in Section 5.4. The discussion 

integrates theoretical perspectives such as Human Capital Theory, Resource Dependency 

Theory, and Stakeholder Theory to interpret the findings and provide a deeper understanding 

of the factors shaping funding mechanisms within SETAs. The analysis also highlights practical 

implications for policy adjustments and strategic decision-making aimed at improving 

financial sustainability and effectiveness. 

5.2 Discussion 

5.2.1 Factors influencing the funding allocation to different SETAs 

The study found that funding allocations to different SETAs are not significantly influenced by 

educational qualifications. The correlation between qualification and funding amount (r = -

0.22, p = 0.332) indicates a weak negative relationship, meaning higher qualifications are not 

strongly associated with increased funding allocation. Additionally, the p-value (0.332) 

suggests that this relationship is **not statistically significant, implying that qualification does 

not play a decisive role in determining the amount of funding allocated. This challenges the 

assumption that formal academic credentials are the primary determinant of funding 

distribution within SETAs. Instead, other factors such as demographic elements (e.g., gender 

and ethnicity) may have more influence, requiring further investigation. This suggests that 

decision-makers prioritise educational credentials when allocating funds, which aligns with 

Human Capital Theory (Cheng et al., 2023), where investment in skills development is linked 

to productivity and economic growth. However, demographic factors such as gender, 

ethnicity, and work experience showed no statistically significant impact on funding 



35 

allocation, challenging assumptions that broader social equity considerations influence 

financial decisions within SETAs. 

These findings align with the Human Capital Theory (Iqbal, 2013), which argues that 

investment in education enhances productivity and justifies financial allocation. However, the 

findings challenge Social Capital Theory, which posits that professional networks, industry 

experience, and relationships should play a significant role in resource distribution (Kilpatrick 

et al., 2003). Furthermore, the Institutional Theory (Raynard, 2015) explains why funding 

decisions may be influenced by established bureaucratic norms rather than industry-specific 

needs. 

A major implication of this finding is the potential equity issues in funding allocation. The 

emphasis on formal education as a primary determinant for funding distribution may overlook 

highly skilled individuals without advanced degrees, thereby reducing funding fairness. 

Additionally, the reliance on academic qualifications over industry needs may result in skill 

mismatches between SETA-funded programmes and actual labour market demands. 

To address these concerns, it is recommended that SETAs expand their funding criteria beyond 

academic qualifications and consider factors such as industry expertise, vocational 

certifications, and experience. Furthermore, the implementation of performance-based 

funding models that prioritise measurable skill outcomes and employability rates could ensure 

a more equitable and efficient distribution of resources. 

5.2.2 Perception of SETA funding by executive role 

The study found that perceptions of SETA funding effectiveness do not vary significantly across 

executive roles (r = -0.105, p = 0.515). However, qualitative insights revealed that CEOs tend 

to prioritise long-term sustainability and skills development impact, while CFOs focus on fund 

disbursement efficiency, and COOs advocate for PPPs and innovation in financing strategies. 

This finding aligns with Institutional Theory, which suggests that organisations operate within 

rigid institutional frameworks, often standardising financial decision-making and limiting the 

influence of individual executive perspectives (Raynard, 2015). It also challenges prior studies 

that propose that executive roles lead to distinctly different funding priorities, reinforcing the 

argument that SETA executives operate within a rigid institutional structure that limits 



36 

individual influence over funding perception. Stakeholder Theory (Parmar, 2010) suggests that 

various stakeholders should play a role in financial decision-making, yet the weak correlation 

found in this study implies that financial structures within SETAs are highly centralised, limiting 

executive influence on funding strategies. 

The lack of significant differences in perception across executive roles suggests that rigid 

financial decision-making structures within SETAs might limit opportunities for innovation and 

adaptability. Moreover, the standardised approach to funding allocations may restrict the 

ability of executives to tailor financial strategies to sector-specific needs. 

To improve financial decision-making, SETAs should consider decentralising funding strategies, 

allowing different executive roles to shape allocation priorities based on their expertise. 

Additionally, the introduction of flexible funding models would provide executives with 

greater autonomy to allocate resources in alignment with sectoral and industry-specific needs. 

5.2.3 Relationship between source of funding and perceived effectiveness 

The research found that the source of funding does not significantly impact perceptions of 

funding effectiveness (r = 0.043, p = 0.790). Whether funding originated from government 

grants, employer levies, or private contributions, stakeholders perceived similar inefficiencies 

across all sources. This finding challenges the PPP Theory, which argues that diversifying 

funding sources enhances financial sustainability and programme efficiency (Andreoni, 2018)

. Instead, the results support Resource Dependency Theory, which suggests that stakeholders 

view operational and structural inefficiencies, rather than funding sources, as the primary 

constraints on funding effectiveness. This highlights the need for reforms in financial 

governance rather than simply diversifying funding sources. 

The lack of differentiation in funding effectiveness based on source suggests that funding 

inefficiencies are not inherently linked to funding origins but rather to operational and 

administrative challenges. Over-reliance on government grants, which account for 80.5% of 

total funding, creates financial rigidity and limits SETAs’ ability to quickly adapt to evolving 

industry needs. 

To improve funding efficiency, SETAs should diversify their revenue sources by increasing 

employer contributions, securing international donor funding, and exploring impact-driven 



37 

investments. Furthermore, the adoption of performance-based funding models would ensure 

that financial allocations are aligned with measurable outcomes, rather than being dictated 

by bureaucratic processes. 

5.2.4 Relationship between funding barriers and strategic initiatives 

A moderate positive correlation (r = 0.299, p = 0.057) was found between funding barriers and 

the emphasis on strategic initiatives. This indicates that organisations facing greater financial 

constraints are more likely to pursue reforms such as PPPs, outcome-based funding models, 

and accountability measures. 

This finding aligns with Stakeholder Theory, which emphasises the importance of multi-

stakeholder collaboration in driving funding reforms (Parmar, 2010). It also supports the 

Resource Dependency Theory, which suggests that organisations experiencing financial 

constraints tend to adopt innovative funding mechanisms to sustain their operations (Hillman 

et al., 2009). The emphasis on policy optimisation, transparency, and technology-driven 

funding models reinforces global best practices in funding skills development 

The findings indicate that high barriers to funding result in reactive rather than proactive 

financial management. Additionally, a lack of stakeholder coordination and limited 

collaboration with private industry further exacerbate funding challenges. 

To mitigate these issues, it is recommended that SETAs develop proactive financial planning 

models that anticipate funding shortages and integrate industry-driven partnerships to 

enhance financial sustainability. Furthermore, policies should be updated to allow for greater 

private sector involvement in funding mechanisms, ensuring that funding aligns more closely 

with industry needs. 

5.3 Conclusion 

The study provides significant insights into SETA funding mechanisms and their effectiveness. 

The findings suggest that educational qualifications play a critical role in funding allocation, 

while demographic factors do not significantly influence allocation, but potentially lead to 

inequitable distribution. Additionally, executive roles do not strongly shape perceptions of 

funding, suggesting that institutional structures dominate over individual leadership 



38 

perspectives. perceptions of funding effectiveness remain consistent across executive roles, 

indicating a centralised and rigid financial decision-making process. 

Furthermore, the research demonstrates that the source of funding does not significantly 

impact perceptions of effectiveness, reinforcing the idea that structural inefficiencies, rather 

than funding origins, are the primary challenges. The study also highlights that organisations 

facing financial barriers/constraints are more likely to implement strategic initiatives, 

reinforcing the need for structural reforms on policy and innovative funding models. 

To address these challenges, the study recommends broadening the criteria for funding 

allocations, decentralising decision-making, and diversifying revenue sources to reduce over-

reliance on government grants. Additionally, the implementation of performance-based 

funding models and stronger PPPs would help align funding with industry needs and improve 

financial sustainability. Policy reforms to improve the efficiency and transparency of funding 

allocation. Greater flexibility in funding models to adapt to sector-specific needs. Integration 

of technology to modernise funding mechanisms and streamline processes. Addressing these 

issues can improve the effectiveness of skills development financing and ensure that SETAs 

contribute meaningfully to workforce development and economic growth. 

5.4 Future research directions 

While this study provides valuable insights, several areas require further investigation. Future 

research should conduct longitudinal studies on the efficiency of SETA funding and its long-

term impact on workforce development. Also, future studies should track the long-term 

impact of funding allocation on skills development and employment outcomes. Additionally, 

comparative analyses of SA’s skills development funding models with international best 

practices would help identify potential improvements. The impact of alternative funding 

models should be assessed by the feasibility and effectiveness of performance-based and 

outcome-based funding in the SETA framework. 

Further research is also needed to explore decentralised funding models that prioritise 

industry-specific needs. Identify the unique funding requirements of different economic 

sectors to ensure that skills development aligns with industry needs. Finally, investigating the 

integration of digital financial management tools could provide innovative solutions to 

improve fund allocation efficiency and transparency, examining how technology, such as 



39 

blockchain and AI-driven analytics, could improve transparency and efficiency in funding 

allocation. 

In addressing these gaps, future research could contribute to a more effective, transparent, 

and sustainable skills development funding ecosystem in SA. 

 

  



40 

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