Introduction
The warnings are getting louder, and they are coming from economists, the Reserve Bank, and international institutions, all saying the same thing and that is: South Africa is heading for another economic shock. The Middle East conflict, and rising fuel prices are about to push inflation past 5% and keep interest rates higher for longer.
However, while boardrooms and parliament debates focus on growth forecasts and bond yields, South Africa’s children remain the most affected. Stanlib’s chief economist, Kevin Lings warns that rising fuel and diesel costs will push inflation from 3.1% to over 5% within two months. The Reserve Bank’s April Monetary Policy Review projected inflation to peak at 4% in quarter two (Q2) and only return to the 3% target by late 2027. The Centre for Risk Analysis calls this “the last calm before a storm”. The phased withdrawal of fuel levy relief will drive prices higher across the board, making South Africa vulnerable to capital flight. The International Monitory Fund (IMF) warned that 80% of emerging market inflows are “hot money” from non-bank sources, and a geopolitical shock can trigger abrupt outflows. This was observed in March when foreign investors pulled off R41.3 billion from government bonds in one week. This culminated in the rand dropping over 5%, worsened by the escalating global east conflicts.
Why ECD and Our Children Can’t Be an Afterthought:
When inflation rises and household incomes are squeezed, basic necessities, including food, ECD fees and transportation to early learning programmes, become less likely to access. South Africa already has the majority of its population earning below the minimum wage, keeping them in abject poverty. With an additional 5% inflation shock, thousands of more families will pull children out of ECDs which will negatively affect children.
Research shows that 80% of the brain develops in the first five years of a child’s life. A child who does not have access to quality early learning may enter Grade R already behind, and the gap never closes. This may lead to higher dropout rates, lower matric results, and higher youth unemployment in years to come.
Institutions such as Motheo Training Institute Trust, ECD Resource and Training Organisations (RTOs), Foundations, Private Companies and funders, contribute to overall possible income generation of practitioners by offering NQF Level 4 and 5 training. But stronger government intervention is required to support the most vulnerable.
A Call to Government: Act Before the Shock Hits
There are certain practical things that government to protect its most vulnerable, especially in the early learning sector:
1. Protect and expand ECD funding:
Ring-fence the ECD subsidy and the ECD NQF Level 4 and 5 training budgets.
2. Extend targeted fuel relief for ECD and public transport:
Treasury can extend the R3 cut to the General Fuel Levy using mining export revenue. Prioritise ECD transport and food inflation in that relief.
3. Fast-track ECD site registration and support:
Thousands of creches operate informally. Use this crisis to bring them into the formal system with fast-tracked registration, basic infrastructure support, and access to nutrition programmes.
4. Communicate ethically, honestly and early:
The Centre for Risk Analysis (CRA) notes that South Africa is in a better fiscal position than after the Ukraine war and that is true, but only if we use that space to protect the most vulnerable. The Reserve Bank and Treasury have an important role to play!
Conclusion:
Economic shocks are inevitable, however more must be done by the government to support our early learning programmes and ensure that children have access to quality early learning.
Rex Molefe
(The Director of Motheo Training Institute Trust)
