Johannesburg — ILLITERACY cost SA billions a year, Nedbank CEO Tom Boardman said yesterday.

It is estimated that if the quality of schooling in SA was where it should be -- at a level befitting an upper-middle income country, which is the level of South African government spending on education -- then gross domestic product would be R550bn higher than it is, according to research commissioned by Nedbank.

The research, predominantly a literature review, was conducted to illustrate the urgency of the problem, Boardman said.

"If you want to change anything, you have to increase awareness.

"What does it take to get everyone to understand just how critical it is (to improve schooling quality and literacy levels in SA)?" he asked.

T-Sec economist Mike Schussler, who was not involved in the research, said any figure given was an approximation, but there was no doubt poor-quality education was costing SA billions.

"The point is that (the lack of education) is costing the country and it won't help if the next report (on this issue) in 10 years' time says the same thing. We have to do something. Our labour force does not have the skills found in other developing countries' labour forces," he said.

Boardman said the nongovernmental organisation (NGO) on behalf of which Nedbank commissioned the research, the READ Educational Trust, had a good answer to SA's poor school-level literacy and numeracy record.

SA has come last, or near the bottom, on several internationally comparative literacy and numeracy benchmarking tests.

The government's estimate that 4,7-million (14%) of SA's adults are functionally illiterate is probably an underestimation, according to the research.

Low educational quality stood out as the critical brake on economic growth, said the researchers, who included well known education economist Prof Servaas van der Berg.

READ's Learning for Living Project, which ran from 2000- 04 and eventually reached about 875000 of SA's 12-million school pupils, saw impressive improvements in reading scores, Boardman said.

"There was a significant shift up in every literacy measure for the children on that programme. Their reading comprehension went from 30% to 70%, language and grammar from 28% to 61%, and spelling from 43% to 64%," he said.

While READ's R130m programme was not the only one likely to work, it also had the advantage of being "a classic example of Walking Together", Boardman said, referring to the three Dinokeng scenarios released earlier this year.

The scenarios, drawn up by business, political and civil society leaders, aimed to promote debate on SA's future, based on a message about how people all had to work together or fail.

READ's programme was inexpensive and brought the government, business and civil society together, Boardman said.

"Here was business (in the form of the Business Trust) working together with a specialist NGO in the field, itself working with and welcomed by government. We've got to do more of it," he said.

SA was "slipping steadily" down the World Economic Forum's global competitiveness index, and the forum's 15 listed challenges to doing business in SA put an inadequately educated workforce at the top of the list, Boardman said.

"The basis of all education is literacy.... We know the problem, we need to fix it, so we need to Walk Together," he said.