Students at South African universities and higher education institutions will receive an extra 17 billion rand ($1.2 billion) over the next three years, Finance Minister Pravin Gordhan said on Wednesday.
The government of Africa's most industrilised country is under pressure to improve access to education following the protests that have disrupted learning at various campuses but has said in response to the protests that it could not allocate extra funds to education at the expense of health or housing.
Weeks of demonstrations calling for the scrapping of university fees, prohibitive for many black students, have highlighted frustration at enduring inequalities in South Africa more than two decades after the end of white minority rule.
"The medium-term budget policy statement proposes to accelerate the growth of spending on post-school education," said the Treasury.
"A zero percent university increase in 2018 would likely result in a shift of resources from other priorities towards higher education," the Treasury said.
Students took the streets when the government in September recommended that 2017 university tuition fee increases be capped at 8 percent, higher than the current inflation rate of 6.1 percent.
Spending on post-school education and training rises to 89.3 billion rand in 2019/20 from a revised 68.6 billion rand in 2016/17, an annual growth rate of just over 9 percent and one that outpaces inflation of 6.1 percent.
Over the past five years, spending on tertiary education and training has grown faster than other budgets, including health and policing, and increased from 1 percent of GDP in 2008 to 1.5 percent today, said the Treasury.
However, as South Africa has tried to avoid a low-growth trap with real GDP growth estimated at 0.5 percent this year, the Treasury warned that policy risks over the medium term are mainly associated with unanticipated spending requests, such as the call for free education.
($1 = 13.8040 rand)