JOHANNESBURG - The first blow to Martha Netshiozwe's future came when her parents died of AIDS. The second came when she ran out of money and had to drop out of a South African high school.

Netshiozwe, 23, is a product of the first post-apartheid generation who entered a new and aspiring education system which aimed to heal the economic divisions created by the white-minority government. But like many, she left without the skills to qualify for anything other than manual labor.

Despite pouring billions of dollars into education, the ruling African National Congress (ANC) has little to show for its money except for public primary schools regarded as among the worst in the world and millions of students destined for a life in the underclass.

"If you don't have an education, you don't have a chance in life," said Netshiozwe, who is unemployed with little prospect of finding regular work. She and her HIV-infected aunt live together and scrape by on about $100 a month in welfare benefits.

Nearly half of South Africa's 18 to 24 year olds - the first generation educated after apartheid ended in 1994 - are not in the education system and do not have a job, according to government data.

Academics have called this group the "lost generation" and worry it will grow larger unless the government fixes a system riddled with failing schools, unskilled educators and corruption that stops funding from reaching its intended destinations.

"This is an appalling waste of human potential and a potential source of serious social instability," the Ministry of Higher Education said this month when it unveiled sweeping plans for boosting university enrollment and improving vocational colleges.

The lost generation poses long term risks for Africa's largest economy, which is trying to grow its tax base as it funds increased social spending.

There are about three people receiving social welfare payments for each taxpayer. While the recipients of state funds are set to increase substantially under anti-poverty programs, the number of taxpayers is not, which should cause already yawning budget deficits to widen.

There have been numerous changes for the better in the ANC-run education system with more of the country's blacks, excluded from most high-quality education under apartheid, entering high-performing schools.

Once almost exclusively white, universities now reflect the racial composition of the country with more people from groups disenfranchised by apartheid climbing the ladder with a degree or diploma.

But at the same time, the number of people living in poverty has changed little since apartheid ended, with no remedy in sight given the structural problems in education.

"As things stand, the ANC is wreaking untold damage on our children and, consequently, on the country's future, just as apartheid education did in the past," said Barney Mthombothi, editor of the influential weekly Financial Mail.

Hundreds of schools do not have electricity or running water and absenteeism has become such a concern that President Jacob Zuma has begged teachers to show up for classes.

A study by graft watchdog Transparency International in 2011 pointed to massive local level corruption resulting in millions of students not having desks, chairs or books.

The central government has been trying to take over two provincial education systems that are effectively bankrupt.

Reuters