Unraveling the Rubicon NSF Scandal: A Blow to Skills Development

In the heart of South Africa's efforts to bridge the skills gap through targeted training programs, a shocking case of fund misuse has come to light. Renowned fashion designer Hangwani Nengovhela and her company, Rubicon Communications CC, received R2.7 million from the National Skills Fund to empower 100 young learners with essential qualifications in clothing and textile manufacturing. Instead, the funds vanished almost immediately, leaving the participants stranded without the promised training, certificates, or pathways to employment in the sector. This incident, part of wider concerns over the National Skills Fund's management, highlights vulnerabilities in public funding for post-school education initiatives.

The scandal, which unfolded between 2018 and 2019, gained renewed attention in early 2026 when the Special Investigating Unit secured a repayment agreement. It underscores the critical need for robust oversight in skills development projects that are meant to feed into Technical and Vocational Education and Training colleges and broader higher education opportunities.

The National Skills Fund's Mandate in South Africa's Post-School Landscape

The National Skills Fund, a Schedule 3A public entity under the Department of Higher Education and Training, plays a pivotal role in advancing South Africa's skills agenda. Established to support the National Skills Development Plan 2030, it allocates resources from the skills development levy paid by employers to initiatives like learnerships, bursaries, and workplace training. These programs are designed to equip unemployed youth and workers with qualifications recognized by Sector Education and Training Authorities, often in partnership with TVET colleges.

In the fiscal year leading up to the scandal, the NSF managed billions of rands aimed at high-impact sectors such as manufacturing, where clothing and textiles offer viable entry points for school leavers. TVET colleges across provinces like Gauteng rely on such funding to scale up artisan and occupational training, creating pipelines to universities for further studies or direct industry absorption. However, incidents like the Rubicon case erode public confidence and delay legitimate projects.

How Rubicon Secured the Lucrative NSF Grant

In April 2017, Hangwani Nengovhela, celebrated for her Rubicon Clothing label showcased at South African Fashion Week, submitted a compelling proposal to the NSF. Titled under the rural development stream, it sought R4.1 million to train 3,000 learners, though the approved portion was scaled to R2.7 million for 100 participants from Protea Glen in Soweto. The program promised a national certificate in clothing, textile, footwear, and general manufacturing, complete with stipends, equipment, and job placement support.

The proposal boasted partnerships, including advisory from the University of the Witwatersrand and factory space from Energy Clothing. Unfortunately, due diligence fell short: Rubicon's accreditation with the Fibre Processing and Manufacturing SETA had lapsed, and Wits later confirmed no involvement. Funds were disbursed in June 2018 directly into Rubicon Clothing's operational account, bypassing standard project-specific banking protocols.

A Rapid Depletion: Tracing the R2.7 Million Spend

Within two months of receipt—by December 2018—the entire R2.7 million had been exhausted. SIU forensic audits revealed a breakdown far removed from training needs:

• R1.39 million on general operations and logistics.
• R290,000 on machinery purchases.
• R700,000 repaying various loans.
• R300,000 transferred to Tshamano Nengovhela, Hangwani's husband and purported project manager.
• R500,000 in cash withdrawals by Hangwani.
• R164,000 on school fees.
• R90,000 on rentals, plus personal and miscellaneous outflows.

Remarkably, R947,000 vanished in the first two days alone. No dedicated project account ensured traceability, contravening NSF guidelines.

Learners Left Stranded: Personal Toll of the Failed Program

The 100 learners, mostly from disadvantaged Soweto communities, arrived in February 2019 expecting transformative training. Instead, they endured chaos: pre-signed attendance registers for ghost classes, shared outdated sewing machines for 15-20 at a time, erratic facilitators, and no stipends. After four to six weeks, the program halted—premises locked for unpaid rent, equipment seized.

In May 2019, learners penned a desperate letter to Gauteng authorities, backed by affidavits detailing accommodation woes and false promises. Without national certificates, they missed artisan roles or TVET articulations, perpetuating unemployment cycles. This betrayal amplified dropout risks in Gauteng TVET colleges, where skills programs are lifelines.

Investigations Uncover Systemic Lapses

The Department of Higher Education and Training commissioned Nexus Forensic Services in 2021 to probe 10 NSF projects. Their 2022 report slammed Rubicon: fruitless expenditure, recommend full recovery, and Hawks referral. NSF declared breach in 2020, pursuing judgment by 2023/24.

President Cyril Ramaphosa's March 2025 proclamation empowered the SIU, revealing deeper maladministration. Auditor-General flagged NSF's poor evidence for skills funding in 2023/24 audits. A criminal docket sits with the Hawks since 2022.

For deeper insights, see the amaBhungane investigation.

Repayment Secured: SIU's Breakthrough in February 2026

In a milestone, Hangwani signed an acknowledgement of debt in February 2026, pledging R2.7 million plus interest via R74,772 monthly installments from May. NSF Acting CEO Melissa Erra hailed it as safeguarding resources for genuine skills initiatives. Minister Buti Manamela welcomed the recovery, stressing accountability amid ongoing NSF reforms like the ERP system launched in December 2025 for digital tracking.

Yet, repayment doesn't preclude prosecution; SIU plans NPA referral against directors and the company. Check SIU's official statement.

The Husband's Defense and Shifting Responsibilities

Tshamano Nengovhela positioned himself as sole operator, claiming funds bought equipment and stipends post-February 2019. His regretful letter blamed venue issues, but timelines contradict—funds depleted pre-start. Metadata links Hangwani to drafting, despite his distancing her. As sole director, her oversight liability persists.

Ripples in the Broader NSF Crisis

This isn't isolated: NSF faces probes over R5 billion unaccounted (2022 estimates), with SIU expanding since 2025. Nexus reviewed 10 projects; AG noted evidential gaps. Impacts span TVETs nationwide, delaying artisan training amid 32% youth unemployment. Funding freezes hit colleges like those in Gauteng, stalling N4-N6 phasing.

Implications for TVET Colleges and Higher Education

TVET enrollment surged to 700,000+, but scandals undermine trust. Gauteng colleges report placement gaps; stranded learners forgo NCV progression to universities. DHET's response includes SETA accreditation rigor and NSF's digital overhaul. Yet, calls grow for full SIU probes and governance reforms to protect post-school education.

Explore DHET's NSF overview for context.

Photo by Vitaly Gariev on Unsplash

Pathways Forward: Reforms and Recovery Efforts

Positive steps: NSF's 2025/26 plan prioritizes verifiable outcomes; partnerships with TVETs for monitored learnerships. Manamela emphasizes youth empowerment via clean funding. For colleges, this means diversified sources like SETA levies. Learners can pivot via NSFAS bursaries or reconfirmed programs.

Stakeholders urge whistleblower protections and AI audits for transparency, ensuring scandals like Rubicon bolster, not break, South Africa's skills revolution.