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Higher Education Minister, Blade Nzimande, says he will soon be making a proposal to cabinet on phasing in free university education.
Presenting his budget vote in parliament on Wednesday, Nzimande said he had received a report on the matter from a special working group and the next step would be to compile a strategy to phase this in.
The proposal on free university education was one of the resolutions taken at the ANC's conference in Mangaung in December.
Nzimande says that although the number of university graduates and post-graduate students has increased since 2009, the graduate rate is not only insufficient to meet the skills shortage in the South African economy.
"It is way below the rate of other emerging economies which South Africa has to compete with," he said.
Aside from making it easier for poor students to get into university and reviewing the way universities are funded Nzimande has allocated R2bn to build two new universities over the next three years.
These will be in Mpumalanga and the Northern Cape and construction is expected to start in September.
Nzimande said "to expand enrolments at the colleges, an allocation of R6.3bn would be made available over the next three years."
"This will enable us to ensure greater access to education and training opportunities for 702,430 poor and academically capable young people over the MTEF (Medium Term Expenditure Framework) period."
