Written By: Matsheole Majoro
Every year, thousands of South Africans walk across graduation stages wearing graduation regalia that symbolise, hope, sacrifice and achievement. Communities ululate. Families rejoice. For many, a university degree represents the hoped-for bridge out of poverty. Then the penny drops, no job, no future. The bridge simply leads nowhere.
The harsh figures tell us all we need to know. South Africa’s official unemployment rate stood at 32.9% in the first quarter of 2025, with millions of South Africans unemployed. Amid university graduates under 35, the unemployment rate has reached 24%. That’s nearly one in four graduates who did everything right, studied, persevered and followed the script handed to them only to discover the economy has no place for them.
The Organisation for Economic Co-operation and Development (OECD) Education at a Glance 2025 report showed an unexpected and deeply worrying finding. Unlike the global standard, where higher education boosts job growth, South Africans show a countertrend. The unemployment rate is 38.8% among those without upper secondary education. It increases to 42.6% for those with uppers secondary education and it reaches 56.1% among tertiary- educated adults. A university degree now guarantees a longer queue for employment rather than a job.
This isn’t solely a failure of the economy but a failure of the universities themselves. South Africa’s public universities are chasing an unsustainable business concept. Falling government grants in real terms have triggered a growing interest in third-stream income through research monetization and authorised entrepreneurship programmes. Universities are behaving like businesses selling branded clothes and opening guesthouses and chasing profits instead of selling what the market actually needs.
The Department of Higher Education and Training has confessed that there is an absence of a longitudinal administrative tracking system to tie specific university degrees to post-graduation employment outcomes. The state is spending millions if not billions of taxpayer’s moneys without tracking which university qualifications lead straight to employment.
There is an overabundance of graduates in fields like social sciences, media studies and some humanities degrees who struggle to find employment. At the same time industries like healthcare, technology and engineering confront critical skills gap. South Africa currently has a shortage of between 30,000 and 50,000 registered building inspectors. Eighty-four percent of large businesses and global enterprises have a hard time finding expert talent. The country is in need of healthcare professionals, and engineers. Instead, universities keep generating graduates in fields with no demand.
Since 1994, the number of universities has gone up from 21 to 26, and student registration have soared from 500,000 to a million. However, graduation rates have not kept up. Only 20% of university students finish their qualifications. Of the million students registered only two hundred thousand graduate every year, the rest drop out, having debts and disappointment. The department has confessed that many students that pass and are granted admission to universities do not meet the minimum prerequisites to study STEM degrees. Instead of tackling this issue, universities admit students into programmes they can teach at a cheaper rate, programmes that leave graduates unemployable.
University tradition has moved more toward entrepreneurship - but not the kind that is beneficial to students. Student accommodation had become a profitable real estate enterprise; tuition increases annually above inflation while the quality of teaching deteriorates. Lectures are overburdened, and student finish without professional networks and skills they need.
Universities are not charities. They are institutions that receive public money and produce public goods. When they continue to generate graduates who cannot find work, they are failing their primary objective. The solution is not more government funding; it is market accountability. The first phase would be transparency, every institution receiving government subsidies or NSFAS money ought to be obliged to publish graduate employment outcomes by degree programme, verified and updated annually. Parents and students should know which qualifications lead to work, and which lead to the queue.
Once this information is known to the public, funding should follow results. Public grants and NSFAS distributions must be weighed towards programmes with demonstrated employment outcomes and identified skills shortages. Degrees that continue to generate unemployed graduates should not receive the same taxpayer support as those that produce engineers, nurses and software developers.
Instead of a unified bursary system that channels young people into whatever universities choose to offer, NSFAS should work as a voucher. The money should follow the student, not the university. This was the universities compete for students by offering qualifications that lead nowhere. Institutions that fail to deliver would lose students and eventually lose funding.
Universities should be mandated to track graduate employment outcomes by degree programmes, degrees that always have unemployed graduates should not get taxpayers grants. Education is not just about employment; it’s about critical thinking, and graduates thriving. This is true but a graduate that who can’t find employment cannot thrive. The chase for more knowledge is admirable it’s not a way for generating graduates the economy cannot take in.
The current system sells degrees; it’s a form of economic destruction. It takes the hopes of young people, and their families sacrifices, as well as taxpayers money and turns it into unemployment statistics.
Matsheole Majoro is a final year International Relations student and an associate of the Free Market Foundation.