South Africa's R286 Million NSF Fund Scandal: Investigations Uncover Massive Mismanagement and Fraud

South Africa’s National Skills Fund (NSF), overseen by the Department of Higher Education, is embroiled in a significant scandal as investigations reveal R286 million in funds allocated for the upliftment of the poor through skill development projects is unaccounted for. According to the latest report by Nexus Forensic Services, multiple projects, from artisan training in the Eastern Cape to a KwaZulu-Natal rabbit farm, have grossly mismanaged these grants, with funds being used for purposes unrelated to their proposed initiatives.

In the Eastern Cape, a sizable advance of R131 million was intended for training 1,025 artisans in Bizana and Lusikisiki but remains unexplained following an excessively short nine-month contract period. Far from the goals of the NSF, no tangible results were evident from this substantial financial outlay.

The situation appears grim in other provinces as well, with the Yikhonolakho Women and Youth Primary Cooperative in KZN raising eyebrows. Intended for rabbit breeding operations, the cooperative spent a meager 1.3% of a R123 million grant on related activities. The alleged misappropriation by the cooperative’s directors, the Manzini family, included purchases unaligned with the cooperative's mission, such as a Nissan Navara and a farm property. Investigations revealed no trace of the promised rabbit farm.

Additional cases involve Ekurhuleni TVET and a human resources consultancy in unrelated locations. The TVET is alleged to have squandered R17 million, while the consultancy is under scrutiny for R13.4 million following a canceled contract. A college in Port Elizabeth, too, could not fully justify the NSF's R7 million investment, missing R1.2 million in the balance sheets.

The DHET's report to the Standing Committee for Public Accounts highlighted NSF staff's failure to ensure compliance. It pointed out irregular site visits, poor record-keeping, and lack of thorough verification as key factors contributing to the alleged misappropriation. As per the Parliamentary Monitoring Group, nearly all entities receiving tenders breached agreements, notably not using a dedicated bank account for NSF funds.

Whilst the Hawks continue their diligent investigation into the NSF beneficiaries who have seemingly filled their pockets, Parliament, aware since 2022, has taken a stern view on these revelations. It is of paramount importance that such misuse of funds meant for societal development is thoroughly addressed and rectified in South Africa.