PetroSA’s Billion-Rand Bungle: Students Bear the Brunt

Key Takeaways:

• 34% of young South Africans (aged 15-24) are not in employment, education, or training, according to Stats SA.
• ANC chair Gwede Mantashe has suggested that these unemployed young people have only themselves to blame, stating that the government has given them the "fishing rod" but cannot catch fish for them.
• An investigation by amaBhungane has uncovered a plot by PetroSA, a state-owned entity in Mantashe’s portfolio, to divert R1.2 billion from the National Skills Fund (NSF) to fix its ailing offshore oil rig.
• The NSF is meant to fund training for unemployed youth, provide bursaries to students, and build technical and vocational education and training (TVET) colleges.
• The scheme was the brainchild of political operator and soccer club owner Lawrence Mulaudzi, whose company, Equator Holdings, had been awarded a contract to secure funding to pay for PetroSA’s offshore infrastructure revamp.

Introduction to the Problem
The issue of youth unemployment in South Africa is a pressing concern, with one in three young people not in employment, education, or training. The ANC chair, Gwede Mantashe, has been criticized for his comments suggesting that these unemployed young people have only themselves to blame. However, an investigation by amaBhungane has revealed a more complex issue, involving the diversion of funds meant for training and education to fix an ailing offshore oil rig.

The National Skills Fund
The National Skills Fund (NSF) is a crucial entity in the South African government’s efforts to address the skills shortage and unemployment crisis. The fund is financed by a 1% tax on every employer’s salary bill and is meant to fund training for unemployed youth, provide bursaries to students, and build technical and vocational education and training (TVET) colleges. However, the fund has been plagued by issues of corruption, mismanagement, and missing money, which have raised concerns about its effectiveness in achieving its goals.

The PetroSA and Equator Holdings Scheme
The scheme, which was proposed by Equator Holdings, involved the diversion of R1.2 billion from the NSF to fix PetroSA’s ailing offshore oil rig. The proposal, which was submitted to the NSF, claimed that the funds would be used to train 5,500 artisans, but it was later revealed that a large chunk of the funds would be used to repair the oil rig. The proposal was met with skepticism by some officials, who questioned the lack of detail and the logistics of the project.

Logistical Flaws and Corruption Concerns
The proposal was plagued by logistical flaws, including the lack of infrastructure and human capital to train thousands of artisans. Additionally, there were concerns about corruption, with some officials questioning the involvement of Equator Holdings, a company with no experience in offering training. The proposal also included a number of errors, including a discrepancy of R324 million in the budget, which raised concerns about the transparency and accountability of the project.

The Role of Government Officials
The role of government officials in the scheme has been called into question, with some officials accused of being complicit in the diversion of funds. The Minister of Higher Education, Blade Nzimande, has denied seeing the proposal, despite claims by Equator Holdings that it had been submitted to him. The investigation has also revealed a lack of transparency and accountability in the government’s handling of the proposal, with some officials failing to disclose their involvement in the project.

Conclusion
The investigation into the PetroSA and Equator Holdings scheme has revealed a complex web of corruption, mismanagement, and lack of transparency in the government’s handling of funds meant for training and education. The scheme, which was proposed by Equator Holdings, involved the diversion of R1.2 billion from the NSF to fix PetroSA’s ailing offshore oil rig. The proposal was plagued by logistical flaws, corruption concerns, and a lack of transparency and accountability. The investigation has raised concerns about the effectiveness of the NSF in achieving its goals and the need for greater transparency and accountability in the government’s handling of funds.