Report No. 29492-MZ Mozambique Skills Development in Mozambique: Issues and Options August 26, 2004 Human Development Country Department AFCO2 Africa Region Document of the World Bank FOROFFICIAL USEONLY PRSP Poverty Reduction Strategy Paper PTR PupilTeacher Ratio SADC SouthernAfrican Development Cooperation SER Sector Expenditure Review SME Small and Medium-Sized Enterprises SSA Sub-SaharanAfrica TVE Technical and Vocational Education W E T Technical Vocational Education and Training TWG TechnicalWorking Groups TWC TechnicalWorking Committee UP UniversidadePedagbgica VETA Vocational and Educational TrainingAuthority (Tanzania) VT Vocational Training Vice President: Callisto Madavo CountryDirector: MichaelBaxter Sector Director: Oey Meesook Sector Manager: DzingaiMutumbuka Task Team Leader: Alexandria Valerio This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. _I Table of contents ACKNOWLEDGEMENTS................................................................................................................... iv EXECUTIVE SUMMARY ...................................................................................................................... v 1 INTRODUCTION....................................................................................................................... 1 2 3... TRENDS INPOST-PRIMARY EDUCATION ........................................................................ 5 LABORMARKET CONTEXT .................................................................................................. 7 3.1 Demand side characteristics............................................................................................. 7 3.2 Supplyside characteristics............................................................................................. 13 3.3 Matching supply and demand: some issues................................................................ 15 4. TECHNICAL VOCATIONAL EDUCATIONAND TRAINING:AN ASSESSMENT...20 4.1 Overview of the MozambicanTVET environment..................................................... 20 4.2 Formaltechnical and vocational education................................................................. 22 4.3 Non-formal vocational training..................................................................................... 27 4.4 Financing of TVET........................................................................................................... 30 5. GOVERNMENT POLICIESRELEVANTFORTVET ......................................................... 36 6. CONSIDERATIONS AND OPTIONS FOR FUTURE DEVELOPMENT......................... 41 6.1 Summary of mainissues................................................................................................. 41 6.2 Increasingaccess and equity.......................................................................................... 41 6.2.1 Role of government and other providers inthe TVET environment ..............42 6.2.2 Revisingqualification structures.......................................................................... 50 6.3 Increasingquality and relevance................................................................................... 55 6.3.1 Raising quality of training................................................................................. 55 6.3.2 Improvinglabor-market responsiveness of TVET......................................... 59 6.4 Increasingfinancial sustainability................................................................................. 60 6.5 Institutionalreform and governance ........................................................................... -65 6.5.1 National coordination/govemance .................................................................. 65 6.5.2 Facilitatingthe reformprocess ......................................................................... 68 7. RECOMMENDATIONS FOR FUTURE INVESTMENT .................................................... 71 7.1 Systemreform and institutionbuilding....................................................................... 72 7.2 Short-term initiatives for quality improvement.......................................................... 75 7.3 Selected investments inpublictraining institutions................................................... 78 7.4 Stimulationof non-public training provision.............................................................. 80 ANNEX................................................................................................................................................... 82 REFERENCES........................................................................................................................................ 93 List of tables and graphs Tables Table 3 1:Structure of the economy inpercent of GDP. 1996-2001................................................. 8 Table 3 2: Companies by size (formalsector) ........................................................................................ Table 3.3: Establishmentsand employment by region2002. private and public sectors..............10 .. 9 Table 3.4: Employment by Sector.......................................................................................................... 10 Table 3.5: Establishments and employment by sector 2002. Private and public sectors...............11 Table 3 6: Highest level of education................................................................................................... . 13 Table 3.7 Average monthly pay by highest levelof education and methodof payment (in `000 MT) ............................................................................................................................................ 15 Table 3.8: RapidLabor Market Study: Qualifications of existing labor force by sector (in %) .....16 Table 4.1: Percentage of TVE expenditure of total education expenditure, 2000 (millUSD).......31 Table 4.2: Recurrent government spending onTVE (inmillionof MT).......................................... 31 Table 4.3: Recurrent per student expenditure by levelof education, 1999and2001 (1999 USD) .................................................................................................................................................. 32 Table 4.4: Structure of recurrent TVE spending 1998......................................................................... 33 Table 6. 1:Options: Govemment's future role inthe TVET landscape ........................................... 46 Table 6 3: Options for intervention and reform areasto improve training quality ....................... 55 Table 6 4: Options: Financial sustainability of the W E T system...................................................... .. 64 Table 7. 1:Suggested activities relatedto SystemReform and InstitutionBuilding...................... 73 Table 7.2: Suggested Activities relatedto Short-term Initiatives for Quality Improvements ......77 Table 7.3: Suggested activities relatedto Selected Investment inPhysical Infrastructure of Public TVET Institutions................................................................................................................. 79 Table 7. 4:Suggested activities relatedto system reform and institutionbuilding........................ 81 Graphs Graph4.1: TVET environment........................................................................... 20 Graph6.1: Current W E T landscape.................................................................... 45 Graph 6.2: Possible future TVET landscape............................................................ 49 Graph 6.3: Differentoptions for a revisedTVE qualification system............................ 53 Graph 6.4: Options for institutional arrangements................................................... 68 Annexes Table Al: Private enterprises. employees and annual turnover by industrialgroups......... 83 Table A2: Type of income by highest levelof education (HHS).................................... 84 Table A3: Employmentstatus byhighest level of education (HHS)............................... 85 Table A4: Type of employer by highest levelof education (HHS)................................. 86 Table A5: Employmentinindustry by highest level of education (HHS)...................... 87 Table A6: Average monthly pay (HHS).................................................................. 88 Table A7:Unit cost inpublicTVET institutions inother sub-Saharan countries............. 88 11 .. Table A8: Estratdgia do Ensino Tdcnico-Profissionalem Moqambique2002-2011: Recurrent 89 cost projections for W E -FinancialScenarios........................................... Table A9: Estratdgia do Ensino Tdcnico-Profissionalem Moqambique2002-2011: 90 Capital expenditure projections................................................................ Table A10: Suggested trainingprovider/organization systems for different target 91 labor markets ................................................................................... Table All: Summary of donor support to W E T inMozambique.. ................................ 92 ... 111 ACKNOWLEDGEMENTS The Economic and Sector Work (ESW) was undertakenby a team led by Alexandria Valerio and composed of, Jorgen Billetoft, Jutta Franz, Elena Bardasi and Noel Kulemeka. As members of the extended team, Arvil Van Adams, Paud Murphy, Jon Lauglo, Peter Moll, Antonio Franco and Louise Fox renderedvaluable advice to the analysis and presentation of the work. We appreciated the leadership and overall support of Dzingai Mutumbuka, Birger Fredriksen and Oey Meesook. Financial assistance from the Norwegian Education Trust Fund (NETF) is gratefully acknowledged. For their invaluable assistance, the team is indebted to the following officials inthe Ministry of Education: Zefanias Muhate, Permanent Secretary, Quiteria Mabote, Director of Technical Education, Virgilio Juvane, Director of Planning, Antonio Chambal, National Director of Administration and Finance and Sarifa Fagilde, Director of Secondary Education. Armando B a n e (DINET) and Juan Carlos Balmas (DINET) were instrumental in the collection and interpretation of information and data. In the Department of Vocational Training (INEFP), Ministry of Labor, the team is grateful to Felix Manhique, Director of INEFP, andJeronimo Pires Mahoque for their assistance. The team would like to acknowledge the support and guidance received from peer reviewers in the World Bank: Juan Prawda (LCSHD) and Amit Dar (SASHD) and from Cooperating Partners inMaputo, inparticular Alastair Machin (GTZ), JorgenFriis (Danida), Per Holm (Danida), Malena Vaca (Spanish Cooperation), Giorgia Depaoli (Italian Cooperation), Eusebio Martin (Salesians), Simon Ingram-Hill (British Council), Roger Munns (British Council), Poul Erik Rasmussen(Danida) and Jose Guedes de Sousa. A number of other people contributed to the collection and analysis of data and information, including Gabriel T. Machado (CTA) and Gerry Maketos (PoDE/CAT), as well as headmasters of public and private technical schools and institutions and vocational training centers. The draft report was presented at the National Seminar on Technical Vocational Education and Training (TVET) in May 2004, which was attended by an array of different public and private stakeholders, includinga number of private employers inMozambique. The contributions of the participants are reflected in the ESW. Isabel Mutambe provided assistance intyping, editing and layout of the report. iv EXECUTIVE SUMMARY Introduction Although Mozambique has sustained rapid growth since achieving peace in 1992, most Mozambicans still live in poverty. The key elements of the Action Plan for Reduction of Poverty, PARPA, outlining the Government's strategy for overcoming poverty, are economic growth achieved through public investment in human capital and productive infrastructure, and institutional reform to improve the climate for private investment. As regards education, the PARPA reaffirms the Government's commitment to securing access to primary education for all. However, the importance for overall socio-economic development of other types and levels of education is also emphasized. With respect to technical and vocational education, the PARPA advocates that substantial expansion of access to elementary-level Escolas Artes e Oficios, enhancement of quality and relevance of technical education and expansion of the supply with non-formal training is to support rural development and employment generation. The World Bank`s Country Assistance Strategy 2004-08 (CAS) indicates that the Bank is prepared to enter into a credit agreement to finance an integrated Technical and Vocational Education and Training (TVET) sector reform program inthe magnitude of USD20 million. The project is envisaged as a means to improve access to post-primary education and to 'increase graduation of Mozambicans with the skills, practices, and attitudes needed to fill technical positions, and create value-adding knowledge and innovationinproduction.' This Economic and Sector Work (ESW) attempts to identify the key issues and strategic options to strengthen the analytical base inthe sub-sector and support the preparation of this project. It was carried out under the leadership of the World Bank in response to a request by the Government of Mozambique (GoM) to assist in the identification of reforms and investments to ensure the vocational education and training system responds effectively to skills needs and employment opportunities inthe labor market. Specifically, the study aims at identifying ways and means through which the World Bank could support the efforts of the GoM to: (a) augment the supply and productivity of skilled labor in key sectors of the economy; (b) draw up an integrated TVET system; (c) improve the extemal efficiency and relevance of the vocational education and training system; (d) improve internal efficiency and quality of existing technical and vocational education; and (e) expand access to W E T and reduce existing inequalities inthe system. The findings of this sector study support major premises that should guide any further discussion about an appropriate TVET reform path in Mozambique. Firstly, all reform efforts will have to be governed bythe goal of transforming the current supply-driveninto a demand-oriented TVET system. Secondly, the situation and financial analysis shows that a further expansion and strengthening of the TVET system as it is at the current moment will compromise its long term development and modernization prospects and will not be financially sustainable. Thirdly, it must be understood that TVET itself and alone will not solve the problem of unemployment and lack of productivity inthe Mozambican economy. TVET can only support growth and economic development once other factors that influence the investment climate are right.Fourthly, Government will need to re-define its role, niches V and special responsibility in the national TVET system in accordance with defined and agreed criteria and in partnership with other stakeholders in the training system. Such a new definition of roles and responsibilities has to be done before other major reform elements are identified. Finally, it mustbe understood that a comprehensive reform agenda will require the joint efforts of all stakeholders, includingthe cooperating partners, many of whom have already contributed technical and/or financial resources to the improvement of TVET. The ESW falls in two principal parts: (1) a diagnostic assessment of trends in the labor market, ineducation and the technical and vocational education and training sector; and (2) a discussion of various options that are available for the Government to improve access, quality and labor market responsiveness of TVET in a sustainable manner. The discussion takes its point of departure inthe different policies and strategies relevant for TVET, notably the Estratigia do Ensino Ticnico Profissional em Moqambique 2002-2011 approved by the Council of Ministers inDecember 2001 and the Employment and Vocational Training Strategy 2004-2010 anticipated to be endorsed by the Council of Ministers shortly. Furthermore, the discussions at the 2004 National Seminar on TVET provided important inputs to the ESW The seminar highlighted inparticular the need for buildingan integrated system of WET in Mozambique encompassingthe entire range of formal and non-formal training provided in the country. The ESW follows this integrative approach and is generally addressing the performance and challenges of the entire and wider TVET system. Throughout the paper, the following definitions are therefore used: Technicaland VocationalEducation (WE) refers to formal technical education based on the curricula approved by DINET. Vocational Training (VT) denotes all sorts of in-service and pre-service non-formal skills training based on curricula that are not approved by MINED (for example training by INEFP, employers, NGOs, etc). The term Technical and Vocational Education and Training (TVET) is used as an overarching term to describe the entire landscape of formal, non-formal and informal training. Trends in post-primary education Although access to primary education has improved significantly, it is still less than one- third of an age group that reaches EP2, and less than 10percent that make it to EGSl.1 Not more than 2-3 percent of an age group completes 12 years of education. Girls have a significantly lower completion rate than boys. As a result of higher access to primary education there is a mounting pressure on the GoM to expand the capacity of secondary education as well. At the moment, accessto secondary educationis highlybiased infavor of 1The formal educational system inMozambique is structured as follows: lower primary level (EP1) which includes Grades 1-5; upper primary level (EP2), which includesGrades 6-7; lower secondary level (ESGl), which includesGrades 8-10; and upper primary level, which includes Grades 11and 12. Technical and Vocational education is divided into three levels, elementary, basic and medium/intermediate level, corresponding to EP2, ESGl and ESG2 levels, respectively. vi urban youth, especially those from the southern zone (Maputo-Matola). At its present capacity, the TVE sub-system can provide further education opportunities for approximately 12 percent of the EP2 graduates, or approximately 10,200 young people, every year. Labor market context Approximately 95 percent of the total labor force depends on the informal sector for its subsistence, while an estimated 520,000 are employed in the formal sector, public and private. In the formal sector, large enterprises dominate in terms of employment, while small enterprises (1-9 employees) account for the great majority of registered enterprises. Almost one-quarter of all jobs inthe formal sector are found intrade/commerce, while some 40 percent are engaged ingovernment services such as education, health and general public administration. Agriculture dominates the informal sector. With the exception of large companies inpartnership with foreign investors, employment tends to be stagnating inthe private formal sector. However, some sub-sectors show signs of growth, e.g. construction, tourism, processingof forestry products, and manufacturing of certain specialized items. Overall, the Mozambican workforce is very poorly educated and has limited skills. Half of the population has no education at all or only basic literacy skills, while slightly above 40 percent leave the education system with primary education. Merely 7.5 percent have achieved secondary or tertiary education and only 0.5 percent of the population has a post- secondary degree. Access to education is highly unequal with significantly less chances for girls and students inrural areas. Employment opportunities inthe formal sector as well as salaries increase with the level of education. Graduates from technical schools earn, on average, more thanthose from the generaleducation system. Appropriately skilled and qualified workers are highly needed in the Mozambican economy. There are indications that up to two-thirds of the workforce inthe formal sector is qualified or semi-qualified, indicating a marked need for training opportunities in Mozambique. Only scattered information, however, is available on specific skills and qualification needs. Although TVE graduates appear to be easily absorbed in the labor market, enterprises complain about a lack of relevant skills of graduates. Overall, the WET system does not provide industry (both formal and non-formal) with a sufficiently skilled workforce at the moment. Enterprises cope with this problem in different ways. Large enterprises utilizing state-of-the art technology seem to be prepared to invest in workers training. However, this is not the case for the many medium-sized and small enterprises, which have difficulties coping with the open trade regime in place since the early 1990s. Overall, lack of financial incentives to train and the fear of enterprises that trainees may leave the company after training are important reasons for the reluctance of companies to invest in training. In the informal sector, traditional apprenticeship appears to be the commonmodeof skills transfer. vii An assessment of TVET TVET in Mozambique is comprised of different public and private provider systems and offered as formal, non-formal or informal training. Formal technical and vocational education (WE) provided by the National Directorate of Technical Education (DINET) in the Ministry of Education (MINED), some other ministries and few private training institutions is by far the largest sub-system, providing educational opportunities to some 13- 14,000 young people every year. Apart from formal training, the Ministryof Labor (INEFP), NGOs and churches offer non-formal vocational training to different target groups, mainly school leaverswithout alternative educational and economic options and other marginalized groups inthe labor market. A private trainingmarket, albeit still at an infant stage, is slowly developing, serving school leavers, companies which send their staff to upgrading training programs and other target groups who are able to afford commercial tuition rates. Employer-based staff training can be found mainly in large and mega projects and, as traditional apprenticeship, in the informal sector. More research to shed light on the capacities and potentials of private training providers is urgently needed. Overall, access to training is very low and largely concentrated inMaputo city and Maputo province. Only recently has the MINEDembarked on broadening lower level TVE offers in the rural areas. Girls are strikingly underrepresentedinthe entire TVET system. Not more than 25 percent of all TVE students are girls. Although exact figures for the other sub- systems are not available, it can be assumed that the gender bias is even more pronounced inother publicandnon-public TVET providersystems, notably invocationaltraining. Quality is generally perceivedto be very low inthe general public training systems, notably the DINET and the INEPF schools, caused by under-qualified and insufficiently skilled teachers, shortage of teaching aids, partly dilapidated workshops for practical training and outdated curricula. As a result, internal efficiency in the formal WE system is low as indicated by high repetition and dropout rates. Although graduates from the TVE system tend to fare well in the labor market, employers complain about insufficient practical and management skills of graduates. N o information is available about the quality of training in the private sector. Ingeneral however, the economy faces a severe shortage of appropriately skilled labor indicatingthat the current TVET system as a whole is not capable of effectively responding to the needs of the labor market. A serious cause of concern is the shortage of training earmarked for employment and self-employment inthe informal sector, by far the largest segment of the labor market. Available information indicates furthermore that the entire TVET system is seriously under resourced. Regarding formal WE, public unit spending in Mozambique is among the lowest inAfrica affecting the quality of training. However, funds available for training are also short in all other TVET sub-systems. INEFP schools, for example, rununder capacity due to resource constraints. The preparedness to embark on staff trainingby industryi s also constrained by lack of resources. There is a serious lack of data and information about unit cost in different segments of the TVET system, at different qualification levels and for different occupational specializations. Research on cost and spending in W E T i s urgently needed to informfurther planning processes. ... Vlll A major bottleneck of the current TVET environment is its fragmentation and the uncoordinated manner inwhich each sub-system is managed and administered. This tends to produce duplications and wastage of scarce national training resources. Management and governance of the public training systems furthermore do not involve employers and other representatives of the world of work to any significant extent, with the consequence that training programs and curricula are not related to the labor market context. The centralized decision-making structure in the formal TVE system prevents efficient use of resources at school level and responsiveness of the training offers to the specific requirements of target groups and needs of the localeconomic environment. The social and economic consequences of Mozambique's estimated 14 percent HIV/AIDS prevalence rate are extensive. It is projected that HIV/AIDS could reduce per capita GDP growth rates by up to 1percent annually inthis decade (Arndt, 2003). As regards education, HIV/AIDS results inabsenteeism and death of teachers, and the need to subsidize orphaned children. Government policies relevant for TVET The current Education Sector Strategy Plan1999-2003 (ESSPI) emphasizes that acquisition of gainful skills goesbeyond formal technical education. As regards expansionof the TVE sub- system, ESSPI gives priority to Escolus Artes e Oficios, i.e. the elementary level. While the plan calls for quality improvement, it does not envisage major new investments apart from the Escolas Artes e Oficios. ESSPII2005-2009, yet to be made official, is emphasizing the need for public-private partnership and contributions by international development partners in the expansion of accessto secondary education, includingTVE. The Estratkgia do Ensino Tdcnico-Profissional em MoFambique 2002-2011 which fleshes out the ESSPI inrelation to WE, deviates from the ESSPIinone respect: It states the possibility of establishing a number of intermediate level TVE schools in some of the provinces lacking such schools in order to level out the regional imbalances. Otherwise the TVE Strategy confirms the priorities of the ESSPI calling for quality improvement, increased access, decentralization of school management, and redefinition of the role of DINET towards regulation downplaying its function as provider of TVE. The TVE Strategy also warns against premature specialization and favors stronger flexibility of the training system. The National Employment and Vocational Training Program prepared by INEFP of MINTRAB calls for establishment of a tripartite nationaltraining board and authority, the development of a competency-based training system with the possibility of recognition of prior learning, introductionof a payroll levy to improve the financial base of WET, etc. Inthis context, the DINET and the draft INEFP strategies are very similar. Therefore the recent initiatives, which were prepared at the 2004 National Seminar on WET, to form a TVET Working Committee with the mandate to develop an integrated National W E T Program have to be welcomed. ix Considerationsand Optionsfor Future Development Summary of main issues Four issues emerge as vital for the future direction of technical and vocational education and training (TVET) inMozambique: (a) the issue of access and equity, which relates both to the highly uneven regional distribution of TVET facilities, the skewed gender balance in the education system, and poverty-related barriers. But also the role of different TVET providers and how the various WET sub-systems are coordinated and articulated are key issues inthis connection. (b) the issue of quality and relevance, as indicated by the disputed quality of graduates and the l o w internal efficiency of WE. Labor market responsiveness is a crucial dimension of any attempt to improve the relevance of the TVET system. (c) the issue of sustainability. Quality improvements and increase of access cannot meaningfully be discussed without addressing the issue of mobilizationof resources to finance them. As the G o M has indicated that it is impossible to make more resources available to WET, the fundamental challenge is to search for sustainable sources of fundingof the expansion and improvement of the system. (d) the issue of institutional reform; i.e. governance and management of the TVET system. Related issues are the institutional anchoring of TVET and the role of government vis-&-vis non-government actors, e.g. national coordination, decentralization, and management at school level. Increasing access and equity Inview of severe resource constraints, government willneedto clearly define and delineate its specific role in the overall TVET system vis-&-vis other provider systems. Rather than trying to provide all, government may focus its training investment to ensure that strategic skills needs of the country are met, and that access and equity goals are achieved. The current TVET landscape shows a number of imbalances between the demand and supply of training. Very broadly, the demand and the need is very highfor training at lower qualification levels, aimed at providing industry with practically skilled technicians, and, in particular, at preparing the huge group of new labor market entrants for gainful employment inthe informal sector. The supply picture shows, however, that currently there is a fair supply with training programs (both WE and VT) at rather highqualification levels, preparing graduates for employment in government and large companies. The informal sector and smaller companies, on the other hand, appears to be substantially undersupplied withrelevant trainingoffers. Three major options appear to emerge if GoMis to redefine its specific role inthe country's TVET landscape: (a) Increase supply with training at lower qualification levels inorder to meet the skills needs of the informal sector and broaden access to school leavers and drop- outs; (b) increase supply of training at higher qualification level (intermediate or above) to X ensure that the country is supplied with a sufficient corps of skilled workforce inorder to maintain and extend the (still) infant industrial structure and infrastructure; (c) inview of a further potential for private initiatives in TVET, investment in the support of private training involvement. A strengthening of employer-based training and private training schools may cater for large segments of the training needs of the formal sector at no or low cost for government. A definitionof the government's role inthe TVET systemwill furthermore inevitably leadto a discussion about the appropriateness of the current qualification structure within the formal TVE system. Some issues and options inthis regard include: Appropriate entry and exit points of W E with general education: Consider the introduction of a closed TVE block with one entry point at the beginningand one exit point at the end of the TVE stream only. This would also provide the option to develop an alternative internal structure of TVE following patterns in neighboring SSA countries. Role of Escolas Artes e OficioslEscolas Profssionais: It needs to be decided whether the new elementary level programs will be merged with basic level TVE or become own lower levelqualifications outside of the TVE system. Appropriate start of W E : It may be considered to start the vocationalization of education at a later stage, i.e. at the current intermediate level. Introduction of a National Vocational Qualifications Framework: This appears to be the appropriate way forward to facilitate the emergence of an integrated and articulated training system which eventually will allow for horizontal and vertical permeability between the different training sub-systems. The already existing framework between the general education and TVE system may serve as a point of departure for a wider NQF definition. However, it needs to be considered that an NQF development and introduction will require substantial time and financial resources, as other country experiences show. This concern applies in particular, when the NQF is translated into training organization, i.e. when a competency-based training system is introduced and subsequently independent testing and certification developed. Increasing quality and relevance Initiatives aiming at improvingthe quality and relevance of the TVET system appear to be a matter of urgency and feature prominently in the relevant policy documents. There are several short and medium term options to (a) improve training of technical teachers, (b) reform standards and curricula, (c) improve availability of teaching and learning materials, (d) establish a quality assurance system and (e) refurbish and rehabilitate selected public training institutions. Also, the further decentralization of management responsibilities to the training institution level may enable institutions to act more professionally and responsive, and thus improve quality. xi Some points for discussion include: o Improving technical teachers training: Immediate in-service training of technical teachers is a matter of urgency. However, it also appears to be indispensable to establish in the long run a systematic pre-service technical teachers' scheme. Questions that need to be addressed include (1)whether it is feasible to establish an o w n institution or whether a training program could be attached to an existing higher education institution, and (2) what kind of qualification structure would provide the best profile and m i x of practical and academic skills of technical teachers. This issue is also important in view of the long-term cost implications of increasing the average qualification level of teachers. o Developing a competency-based training system: The proposition to move towards a CBT system in Mozambique appears to be appropriate, but needs to be further operationalized. A CBT system may provide the ground to facilitate quality (and system efficiency) improvement in different ways: (1)it systematically involves employers and the business community inthe definition of the training outcomes; (2) it facilitates flexibility in training approaches and curricula; (3) it increases transparency among different training schemes, (4) it will facilitate an increased articulation between the different training sub-sectors and the possibility to recognize learning outcomes in non- and informal learning environments. Furthermore, it will align Mozambique with the rest of Southern African countries. A major challenge will be to design a simple and relatively low cost system with the opportunity of implementation starting immediately. The establishment of a CBT system will inthe long runcall for a n assessment and certification system providing for external assessment of training outcomes. While such a system may be established gradually, the WET system may immediately gain credibility among the world of work, if employers' will be involved with a prominent role in the implementationof testing. o Targeted investment in rehabilitation of physical infrastructure: The appalling state of some of the public TVE institutions calls for investment in refurbishing and re- equipping workshops and buildings. However, such investment should be carefully planned and targeted in accordance with the re-definition of the role of the public TVE sector in the overall national TVET landscape. The idea has been aired to introduce a sector focus for individual schools, i.e. that schools specialize in education and training for a particular industry or economic sector. Such specialization would entail a number of advantages, such as stronger interaction with employers and better utilization of teacher resources across courses. Furthermore, it would facilitate the possibility of offering short-term tailor-made skill upgradingcourses incooperationwith private businesses. o Improvement of management capabilities: The relevant policy documents strongly call for strengthening the capacity of technical school management. Apart from financial management, there seems also to be a point for enhancing the capacity of the management to identify local trainingneeds and design courses inresponse to these. To ensure relevance of TVET to the needs of the labor market, the training system must find ways to continuously react to changing market patterns. Feasible options available in Mozambique to improve the labor market responsiveness of different WET programs xii include: (a) decentralization of decision-making about training courses and contents to the level of training institutions, including capacity building of school staff (teachers and managers) in simple local labor market observatory methods; (b) at the national level introduction of expert and employers panels to discuss priority training areas, complemented by selected sector (rapid) appraisals to inform planning processes; (c) systematic involvement of employers in all TVET planning and implementation tasks, preceded by capacity buildingactivities of employers. Increasing financial sustainability Inorder to ensure long-term sustainability of the TVETsystem, the relevantpolicies callfor a diversification of funding sources with contributions from trainees and the private sector and more active income generating activities at school level. The overall notion of funding diversification is fully in line with trends all over Africa. Regarding private sector involvement in funding, the introduction of a training levy has been suggested in Mozambique. A point for discussing is whether a revenue-raising scheme is appropriate in the Mozambican context, which would merely collect funds to finance public training supply. Another option is to introduce a levy-grant system, which would refund expenses of private firms, if and when they invest themselves intraining. Such a system may be more inlinewithGovernment's policyto actively encourageprivate sector investmentintraining. The success of any levy system will depend on whether Government succeeds in creating ownership of the W E system among the private sector and whether the levy paying firms are involved in the spending decisions. Inthis context, the creation of a national training fund, governed by a stakeholder body, may be a case in point. Such a fund may also facilitate that some of the generated funds are used to subsidize training that is more geared towards informal sector employment. The TVE policy suggests a significant increase of training fees, up to 20 percent of total recurrent cost of training. The social implications of such as move should be carefully considered, as well as the relative burden to TVE students vis-&vis their peers in general education. If fees in TVE are higher than in general education, this may reinforce the already low prestige of WE. Exclusion of poor students through the introduction of high training fees may be avoided by scholarships. However, loanbased scholarship schemes, as suggested in the TVE Strategy, are difficult to administer. An easier option may be to exempt poor students, which, on the other hand, would reduce the income through training fees. Some WET institutions have introduced income-generating activities, mainly inthe form of productionof goods for local sale. There seems to be scope for further utilizing this revenue potential, for instance in the form of tailor-made courses for local companies or more systematic production activities. However, this will require a strengthening of the management capacity of the institutions, and probably also additional freedom of the management to deal withbusiness initiatives. Since the introduction of a new comprehensive financing system will take time, it may be important to investigate and possibly implement ad hoc and short-term activities to ... Xlll immediately raise the resource base for public training, which are not dependent on the existence of a fully developed new financial system. Institutional reform and governance Substantial modifications in the management structure of TVET including development of new institutions are recommended to improve coordination, governance and management of the W E T system. In particular the establishment of a National Training Council as a governing body, and the establishment of a National Training Authority as an agency in charge of regulation and supervision implementation have been suggested. Regarding the National Training Council, the question of ministerial ownership of W E T needs to be clarified. Obvious options include MINED or MINTRAB. Another possibility worth considering (and implemented insome countries) i s that a Training Council would be directly under the purview of the Prime Minister or another line ministry in charge of economic development. Furthermore, the current discussion appears to envisage a traditional tripartite composition of the Council. Itmaybe considered, however, to opt for a wider 'stakeholder council' model, with representatives of NGOs, SME associations, training providers and other players that may speak for any important actor or client inthe TVET sector. Experience has also shown that the scope of responsibility usually turns out to be a decisive success determinant of national training councils. It may be an option for Mozambique to equip the NationalTrainingCouncilwith decision-making responsibility for national TVET planning, policy development and overseeingthe implementingbodies. A new training authority is suggested in the relevant policy documents responsible for regulatory functions includingstandard setting, oversight of testing, accreditation, possibly management of a training fund, labor market monitoring, W E T information system. This role could possibly be taken over by any of the current responsible public organs DINET or INEFPor by anindependent publicauthority still to be created. The latter option appears to feature prominently inthe current discussion. The major problem related to the creation of a (semi)-autonomous body will be the likely long duration of creating the relevant legal framework and the cost of institution building. Another issue of concern is the question whether regulation of the training system and delivery of training will be in one hand or not, i.e. the question whether the new regulatory body would also be responsible for the management of the publictraining institutions or not. Recent efforts to revive the W E T reform process, which resulted inthe establishment of a TVET Technical Working Committee, are very positive. The envisaged composition of the working group, involving a broad spectrum of stakeholders, raises hopes that the current situation of parallel policy initiatives and drafts can be overcome. Experience from other countries has shown that the success of major TVET system reform processesdepend largely on a strong national ownership and lead inthe reform process, a clearly defined mandate of the group responsible for the formulation of the reform elements and a well facilitated and resourced process that ensures that necessary research and policy drafting can be commissioned and participatory discussions organized. xiv Recommendationsfor future investment The findings of the ESW underscore the main assumptions and objectives formulated by Government in the relevant policy documents. In order to operationalize the policies, it appears to be necessary that Government, together with its development partners, concentrates its future short- and medium-term investment in TVET in the following four major areas: 1. Systemreformandinstitutionbuilding 2. Short-term initiatives for quality improvement 3. Selected investments inpublictraining institutions 4. Stimulation of non-public training provision. System reform and institution building Many of the diagnosed current problems of the TVET system are as much rooted in structural deficiencies as in immediate resource constraints. This includes the system of planning and implementation of training that does not include representatives from the world of work and sustainable mechanisms to monitor and align the training with changing labor market demand patterns. It also includes the absence of transparent quality assurance mechanisms, the fragmentation and lack of articulation of training offers, as well as structural resource constraints as a consequence of an undiversified funding system that is largely dependent o n government allocations. The establishment of an appropriate regulatory and institutional framework therefore appears to be pre-condition for the long- term development and unfolding of a demand-oriented, efficient and relevant TVET system. Itis recommended, therefore, that Government invests further inthe process of defining the system reform that has n o w gained momentum with the envisaged establishment of the Technical Working Committee (TWC). Resources will be needed to inform participants and increase capacities of the involved stakeholders, for further researchand conceptual work, to facilitate a broad participatory discussion process about the appropriate system design and for legal development. Depending onthe agreed outcomes of the reform design investment will need to be channeled in institution building and the development of appropriate systems and procedures for the implementation of the new governance and regulatory framework. This may include the establishment of a national TVET Council, possibly a regulatory authority, the set-up of a new financing system, establishment of a National Training Fund, a quality assurance body, standards development, testing and certification, a technical teachers training institutions, and other necessary institutions. Short-term initiatives for quality improvement While the reform of the overall framework is rather a medium-term process, immediate interventions are needed to improve the quality, efficiency and relevance of the current training supply, not least to increase the attractiveness and ownership of the TVET system among students and their families, employers and Government. Interventions aimed at improving the availability, quality and motivation of technical teachers, revising and developing curricula, improving the management capability of the public WET xv administration and at school level, developing and distributing teaching aids and reference material, providing training material for practical instruction are likely to impact o n the quality of TVET inthe short-run, if ongoing activities of the public authorities (DINET and INEFP) and different donors are coordinated and appropriately resourced. Selected investments in public training institutions At the current moment, investment inthe rehabilitation of DINETinstitutions appears to be most urgent. However, investment decisions needs to be prioritized in order to meet the presumably limited available capital funds and in view of their impact o n future recurrent budgetary requirements. It appears important that the relevant ministries (essentially MINED and MINTRAB) involve key stakeholders in the development of its prioritized investment plans and that the planning is made on the basis of an overall national agreement about the future role and emphasis of the different provider systems in the Mozambican TVET landscape. With the participation of privatebusinesses, private training providers and public training providers other than DINET, all possibilities should be explored to encourage private investment in TVET and initiatives of other public sectors before final investment decisions are made. Possible occupational specializations of schools need to be discussed with relevant stakeholders in order to identify specific training and qualification needs and to avoid competing training offers by different providers. In addition, possibilities of converting existing basic level W E schools into intermediate level or elementary schools need to be explored. Investing into rehabilitation of individual schools should also be used as a tool to foster decentralization and strengthening of school management. Also considering limited available resources it may be contemplated to establish a funding facility for school rehabilitationlrefurbishment to which individual schools have access if and when they present an institutional development plan that appropriately reflects the local labor market in which the schools are acting and clearly and convincingly outlines vision and implementation plan for the school. An institutional development plan would also need to describe the institutional gender and HIV/AIDS policies. Stimulation of non-public training provision To improve access and quality of training in a cost-effective manner, it is suggested that public funds may be usedto encourage and stimulate the supply of such non-public training initiatives, in particular to stimulate more innovative skills development schemes targeting the informal sector and specific short-term training needs of workers in industry. Such investment could, for example, take the form of a Skills Development Fund out of which different non-public training institutions and initiatives may be subsidized according to specified priorities and criteria. Initiatives may include: o Employer-based training initiatives aimed at training of already employed or future staff. This may also include initiatives by employer-groups or industry to self- organize training for a specific sector. o Vocational training and employment promotion schemes provided by NGOs, projects, etc. with a view to creating access to employment oriented skills xvi development for school leavers and other target groups (including, for instance, informal sector operators). o Private for profit training institutions that may provide important additional access to training in particular in urban and semi-urban areas. Compared with public training schools, private training institutions are often more efficient, effective and cost-effective. They can also provide training on behalf of government, e.g. through out-contracting arrangements. xvii 1. INTRODUCTION 1.1 Mozambique has sustained rapid growth since achieving peace in 1992. Although the poverty rate has decreasedby 15%between 1996and2002, the majority of Mozambicans, i.e. 54%, still live inpoverty. The Plano de AgEo para a ReduqEo da Pobreza Absoluta (PARPA)* for 2001-2005, Mozambique's first PRSP, identifies six principal determinants of poverty: (a) slow growth of the economy untilthe beginning of the 1990s, (b) low levels of education of working age household members, particularly women, (c) high dependency rates in households, (d) low productivity in the family agriculture sector, (e) lack of employment opportunities within and outside of the agricultural sector, and (f) poor infrastructure, especially inrural areas. Female-headed households tend to have higher poverty levels than male-headed ones. 1.2 The key elements of the PARPA, outlining the Government's strategy for overcoming poverty, are economic growth achieved through public investment in human capital and productive infrastructure, and institutional reform to improve the climate for private investment. Growth i s expected to originate from three sources: (a) large-scale capital-intensive projects (the so-called mega-projects) financed by private foreign capital; (b) productivity and value-added gains in agriculture and manufacturing, especially labor intensive manufacturing and services; and (c) a general expansion in internal trade, transport and services. To support the implementation of this strategy, the PARPA identifies six priority areas for action: health, education, infrastructure, agriculture and rural development, governance transformation (in particular deconcentration and decentralization), and macroeconomic and financial sector reforms. Given the strong disparity between the Maputo region and the rest of the countries, special attention will be paid to overcoming regional disparities. 1.3 As regards education, the PARPA reaffirms the Government's commitment to securing access to primary education for all. However, the importance for overall socio- economic development of other types and levels of education such as technical and higher education is emphasized. Especially the noticeable shortage of persons with higher education is a source of concern as it hampers efficient functioning of the public administration, improvementof the quality of secondary education, and development of the private business sector. This, in turn, necessitates expansion of secondary education, another priority of the PARPA. With respect to technical and vocational education, inline withthe focus onrural development and the desireto expand privatebusinessactivities, the PARPAadvocates substantial expansionof accessto elementary-level Escolas Artes e Oficios,3 investment in enhancement of the quality and relevance of technical education, amongst other things through a curriculumreform, and rehabilitation of existing technical schools. It i s stressed that the technical education should encourage self-employment and entrepreneurial behavior. The PARPA also calls for expansion and improvement of various non-formal skills schemes that may ease entry to the labor market. As the public sector i s facing severe resource constraints, the PARPA suggests a system based on partial cost Govemment of Mozambique (2001). Plano de Ac@o para a Reduqio da PobrezaAbsoluta. 3 These schools are usually found inrural areas, where they offer basic training relatedto agriculture and artisan activities such as brick-laying and carpentry. recovery in partnership with the private sector and other interested actors. The education policy sketched in the PARPA i s further elaborated in a number of sub-sectoral strategy papers discussed below. 1.4 The Country Assistance Strategy 2004-08 (CAS) which sets the guidingprinciples for the World Bank`s operations in Mozambique, indicates that the Bank i s prepared to enter into a credit agreement to finance an integrated TVET sector reform program in the magnitude of USD20 million. The project is referred to as a means to overcome the problem of 'the missing middle inMozambique's education and learning program', i.e. the fact that while access to primary and tertiary education has expanded significantly inrecent years a corresponding expansion of secondary education has not occurred. Furthermore, it is mentioned that the project is supposed to `increase graduation of Mozambicans with the skills, practices, and attitudes needed to fill technical positions, and create value-adding knowledge and innovation in production.'4 Hence, the project i s supposed to address the issue of increasingaccess as well as upgradingof economy's productivity. 1.5 This Economic and Sector Work (ESW) was carried out under the leadership of the World Bank inresponse to a request by the Government of Mozambique (GoM) to assist in the identification of reforms and investments to ensure the vocational education and training system responds effectively to skills needs and employment opportunities in the labor market. Specifically, the study aims at identifying ways and means through which the World Bank could support the efforts of the GoM to: (a) augment the supply and productivity of skilled labor inkey sectors of the economy; (b) draw up an integrated TVET system; (e) improve the external efficiency and relevance of the vocational education and training system; (d) improve internal efficiency and quality of existing technical and vocational education; and (e) expand access to TVET and reduce existing inequalities of the system. 1.6 The findings of this sector study support major premises that should guide any further discussion about an appropriate TVET reform path in Mozambique. Firstly, all reform efforts will have to be governed by the goal of transforming the current supply- driven into a demand-oriented TVET system. Secondly, the situation and financial analysis shows that a further expansion and strengthening of the TVET system as it is at the current moment will compromise its long term development and modernizationprospects and will not be financially sustainable. Thirdly, it mustbe understood that TVET itself and alone will not solve the problem of unemployment and lack of productivity in the Mozambican economy. TVET can only support growth and economic development once other factors that influence the investment climate are right. Fourthly, Government will need to re-define its role, niches and special responsibility in the national W E T system in accordance with defined and agreed criteria and in partnership with other stakeholders in the training system. Such a new definition of roles and responsibilitieshasto be done before other major reform elements are identified. Finally, it must be understood that a comprehensive reform agenda will require the joint efforts of all stakeholders, including the cooperating partners, 4World Bank(2003). `Country Assistance Strategyfor the Republic of Mozambique'. WashingtonDC, p.33. 2 many of whom have already contributed technical and/or financial resources to the improvementof TVET5. 1.7 The ESW falls in two principal parts. The first provides a diagnostic assessment of trends ineducation, labor market tendencies, i.e. skills requirements and job opportunities, and the current TVET system. As inmost other sub-Saharan African countries, the principal challenge is to improve the quality and relevance of TVET in order to achieve a balance between the demand and supply of skilled labor. The second part discusses various options that are available for the Government to accomplish this objective in a sustainable manner. The latter part is supposed to facilitate the implementation of the Estratkgia do Ensino Tkcnico Profissional em Moqambique 2002-2021 approved by the Council of Ministers in December 2001 and the Employment and Vocational Training Strategy 2004-2020 anticipated to be endorsed by the Council of Ministers shortly. In May 2004 Direcqlio Nacional do Ensino Tkcnico (DINET) hosted a national seminar on the future direction of technical education in Mozambique. The seminar resulted in a series of important recommendations regarding improvement and modernization of the provision of technical and vocational training. The findings of the seminar have formed an important basis for the options and recommendations highlighted in the last part of the report. The seminar highlighted in particular the need for building an integrated system of TVET in Mozambique encompassingthe entire range of formal and non-formal training providedinthe country. 1.8 The report follows this integrative approach and is generally addressing the performance and challenges of the entire and wider TVET system. Ituses the following definitions: o Technical and Vocational Education ( W E ) refers to formal technical education based on the curricula approved by DINET, Direcqlio Nacional do Ensino Tkcnico-Profissional of the Ministhio da Educaqlio (MINED). TVE is largely offered by schools under management of DINET, and, within particular areas, a number of sector ministries such as Ministry of Health (MISAU) and Ministry of Agriculture and Rural Development (MADER). Also, a smaller number of private for profit schools are offeringTVE. TVE is formal inthe sense that it follows a recognized curriculumand leads to recognizedqualifications. o Vocational Training (VT) denotes all sorts of in-service and pre-service non-formal skills training based on curricula that are not approved by MINED, but that may in some cases be recognized by other authorities or foreign organizations.6 VT is usually of shorter duration, seldom exceeding one year. VT is offered by private as well as public training providers, e.g. Ministryof Labor (MINTRAB), or as in-service training by (large) companies. o The term Technical and Vocational Education and Training (TVET) is used inthis paper as an overarching term to describe the entire landscape of formal, non-formal and informal training. It would also include and reflect informal training environments where no certificates are awarded at all, i.e. traditional apprenticeship, learning on the job, etc. The term TVET system refers to the relation between the different See also the synopsis of donor support to TVET inthe Annex. Usually SouthAfrican SETA. 3 training providers and the rules governing relationships, articulation, provision, financing and facilitation. 4 2. TRENDS I N POST-PRIMARY EDUCATION Educationfor thefew 2.1 From a supply side perspective the future direction of W E T is affected partly by the issue of providing school-leavers who do not make it into the secondary education level and beyond with skills that enable them to sustain themselves and their families decently, and partly by the issues of the missingmiddle of the Mozambican education system, i.e. the fact that secondary education has not undergone the same expansion as primary and tertiary education, entailing severe pressure on the Government to increase access to secondary education. 2.2 While Mozambique has largely succeeded in achieving access to primary education for all - from 1993 to 2002, the national gross enrollment rate increased from 60 to 112 percent at lower primary level (EP1) - access to EP2, upper primary level, still lags severely behind. Hence, less than one-third (28 percent) of the corresponding age group is enrolled inEP2. Inabsoluteterms, the number of studentsinthe primary systemincreased from 1.3 million to 3.2 million from 1993 to 2002. In2004, 3.1 million pupils were enrolled in EPl7. Although the transition rate from EP1 to EP2 has improved in the last 10 years, from 68 percent to 88 percent, the total number of students enrolled in Grades 6 and 7 is currently not more than about 412,000. These are remarkably low enrollment rates for a country of almost 18 millionpeople, making the system of post primary education inMozambique one of the narrowest across sub-Saharan Africa. 2.3 Currently approximately 450,000 young people each year enter the world of work. According to MINED statistics, 186,100 young people completed EP1 in 2002 and approximately 91,000 completed EP2. At the current moment, 340,000 students are enrolled inGrade5 most of whom leavinglower primary education at the end of the academic year. Less than 10 percent are able to continue their education beyond EP2. This means, as indicated above, that more than 50 percent of the new entrants to the labor market have not more than EP1 and just over one-quarter have EP2 as the highest level of education. At all levels girls have lower completion rates and correspondingly higher dropout rates thanboys with increasing tendency (e.g. for EP1 more than 60 percent of the completers are boys, at EP2 the share of boys is almost three-quarters), As will be discussed below, only few facilities are at present available for providing these young people with basic life and labor market introductory skills. 2.4 The situation becomes more acute as students seek educational opportunities beyond EP2 level, due to the limited number of seats. The gross enrollment rate inboth lower and upper secondary levels (ESG1and ESG2) has remained largely unchanged at approximately 7-8 and 2 percent respectively over the last decade, although the strong social demand to expand access to secondary education has resulted in conversion of more than 20 EP2 schools to ESGl schools inthe last years. Also, a number of private secondary schools have emerged, mainly in Maputo and the other large cities. The total enrollment for MINED schools inESGl is 209,000 and 31,000 inESG2. In2002 the number of graduates from public 'FiguresprovidedbyMINED,Directorateof Planning, in2004. 5 secondary schools was 22,200 for ESGl and 5,600 for ESG2. Were private schools included, the figures would be 2-3 percent higher. There are significant discrepancies in regional access to secondary education as the majority of secondary schools is located in urban or semi urban areas. Hence, enrolment in both ESG and TVE is several times higher in the Maputo-Matola area compared to anywhere else inthe country. 2.5 In 2002 total enrollment in public technical and vocational (WE) schools8 was approximately 32,000 students divided between the elementary level with 950 students (equivalent to 0.2 percent of students enrolled in EP2), basic level corresponding to ESGl with 25,200 students, andthe intermediate level, correspondingto ESG2with5,700 students, including the evening shift students. Girls account for even less of the students inthe W E sub-system than in ESG, viz. approximately 20 percent of the students in TVE schools. In the same year the public technical schools produced 2,600 graduates at lower secondary level and Approximately 910 at higher secondary level. This corresponds to respectively 12 and 16 percent of those who graduated from mainstream secondary schools. Overall, at the present capacity, technical and vocational education under MINED offers education opportunities for approximately 11,200 new EP2 graduates every year.9 This correspondsto approximately 12 percent of the EP2 graduates. However, in reality many TVE students, especially those attending evening classes, are previous graduates who after having joined the labor market want to pursue the next level of education. Figures for enrolment in secondary technical schools operated by other ministries and by private organizations are not available, butpresumably they offer inthe order of 1-2,000 seats per year. Summary of findings 2.6 Inbriefthetrendsinpost-primary educationcanbesummarizedasfollows: o While accessto primary education has improved significantly, it is still lessthan one- third of an age group that reaches EP2, and less than 10 percent that makes it to EGS1. Not more than 2-3 percent of an age group completes 12 years of education. Girlshave a significantly lower completion rate thanboys. o As a result of the expansion of access to primary education, there is a mounting pressureonthe GoMto expand the capacity of secondary education as well. o Access to secondary education is highly unevenwith a strong favoring of the urban youth, especially those from the southern zone (Maputo-Matola). o At its present capacity, the TVE sub-system can provide further education opportunities for approximately 12 percent of the EP2 graduates, or approximately 10,200 young people, every year. 8TVEis dividedinto three tiers: elementary, basic andintermediate. 9Annual intake at basic level for the W E sub-system. 6 3. LABOR MARKET CONTEXT 3.1 Demand side characteristics Promisinggrowth prospects 3.1 Despite the flood-induced drop to 1.6 percent in 2000, GDP growth averaged 9.4 percent from 1997 to 2002. The remarkable economic recovery is attributable mainly to the 'mega-projects' (aluminum smelting (Mozal), natural gas and titanium mining), investment from neighboring countries, buoyant donor support and healthy agricultural growth. Economic growth reached8.3 percent in2002 and is projected to continue growing at 7 to 12 percent a year over the next five years, with fluctuation mostly due to mega-project construction.10 3.2 Table 3.1 indicates that the Mozambican economy measured in terms of GDP has undergone quite substantial structural changes as a result of the rapid growth. Most remarkably is the relative decline of the agriculture sector, which continues to provide the livelihood to two-thirds of the population. Its share of GDP fell from 30 to less than 20 percent between the mid nineties and 2001. Although declining in relative terms, agriculture, however, experienced a substantial increase in real terms during the period. This is attributable to a combination of factors such as increase of the rural labor force resulting from the return of refugees and internally displaced people combined with improved access to inputsand markets. Duringthe same period, the relative importance of industrial activities has risen from 16 to 25 percent, mainly caused by a sharp increase in construction activities, which have benefited from the investment phase of Mozal, aid- funded reconstruction projects, and investments in commercial structures in the Maputo- Motala area. The manufacturing sector is not very diversified with foodbeverages accounting for 38 percent of the production and aluminum production(especially Mozal) for another 23 percent. Thus, food and beverages together with metallurgy and minerals make up almost 73 percent of manufacturing output. Other important manufacturing sub-sectors such as textile/garment and footwear tend to be stagnating.11 Services increased as well and contribute almost 55 percent to GDP, with the transport and communication, real estate rental and government services beingthe most dynamic sub-sectors.12 10See World Bank (2003). 'Country Assistance Strategy for the Republic of Mozambique'. While economic growth surveys forecast continued growth, they also highlight the need to diversify growthindustries, lessen dependence on extemal assistance, improve the skill levelandproductivity of the labor, and reduce the negative impact of HIV/AIDS on growth and humanresource. Recentstudies suggest the annualGDP growthrate may bebetween 0.3 percent and 1percent lower thanit would havebeeninthe absenceof the pandemic (See Amdt, 2003). See World Bank (2002). Investment Climate Assessment. l2The Govemment has especially increasedthe number of teachersinresponseto the education for all thrust. 7 Table 3.1: Structure of the economv inDercent of GDP. 1996-2001 Source: Mozambique, IMFCountry ReportNo02/139 (July2002), inWorld Bank (ZOOZ), Investment Climate Assessment. 3.3 Economic development during the previous years has been accompanied by remarkable achievements in poverty reduction. According to figures from the latest household survey, poverty reduction targets for 2010 that were formulated in the PARPA have almost been achieved. However, to deepen and consolidate this trend a higher level of domestic private investments is necessary to replace the current reliance o n large-scale FDI projects that generate relatively few and expensive jobs. The mega-projects are likely to boost the level of economic activity, raising manufacturing output and increasing government revenue. However, the net effect o n the balance of payment of the mega- projects is modest as the export earnings often are offset to a large extent by a sharp increase in imports and by the payments of interest and dividends to investors. So although the mega-projects will lead to increased output and exports, their overall developmental effect is not sufficient to provide the scale of economic growth needed to achieve the massive poverty reduction envisaged by PARPA. The expected job creation effect of the mega- projects confirms that. It is estimated that the current and planned mega-projects would only generate about 20,000 lasting jobs in Mozambique, 5,000 within the companies involved, and another 15,000 among suppliers and service providers, although more extensive job creation effects will occur duringthe construction phase of the mega-projeds.13 Medium and large errtaprisesdominate theformal sector 3.4 It is estimated that Mozambique has a total work force of approximately 9.6 million persons of which an estimated 5-6 percent corresponding to approximately 520,000 are 13Anderson (2001). The Impact of the Mega-Projects inthe Mozambican Economy. Ministry of Finance and Planning. 8 employed inthe formal sector. Findings from the 2002 establishment census by the National Statistics Institute (INE) (see Table 3.2) indicate that the formal business sector is comprised of 28,870 enterprises providing employment to some 301,000 people of which 85 percent are individually owned companiesl4. The vast majority (90 percent) are small and micro- enterprises with less than 10 staff. However, these account for only 20 percent of total employment. Medium sized enterprises, 9 percent of the total, employ roughly 70,000 people, 23 percent of total formal employment. Four hundred large companies, on the other hand, provide employment to 57 percent of the total workforce informal enterprises. Large companies include, among others, public utility companies, financial institutions, transport and construction companies. 1 Grand Total 1 28,870 302,245 66,444 Source: INE, ResultadosFinais do Cempre2002 Note: The figures include allprivate enterprises, public and parastatal enterprises and cooperatives, butnot public administration and non-profit organisations 3.5 Available information suggests that recent growth was over proportionately based on the performance of larger firms. Of all companies reporting investment in2001, only 4 percent were micro enterprises, 33 percent small, and 63 percent were medium sized and large enterprises. This i s seen as an indication of the barriers to investment encountered especially by smaller enterprises (World Bank, ICA, 2003). Figures shown in Table 3.2 do not reflect the contribution of a significant number of enterprises that are part of the informal sector. As mentioned, it is estimated that the informal sector represents around 40 percent of the Mozambican economy, and 90-95 percent of the workforce (see below for a more extensive discussion of the informalsector). 3.6 Formal economic activities are concentrated in Maputo city and Maputo Province, followed by Sofala, Nampula and Gaza provinces (see Table 3.3). The Maputo-Matola area accounts for 29 percent of all registered establishment and 51 percent of all employees inthe l4105 of all enterprises are public, parastatal or cooperatives. 9 formal sector, indicating a high concentration of especially large employers here. Better overall operating conditions, superior supply with infrastructure, easier access to decision makers and, not least, proximity to South Africa are the most important reasons for the boom of the area. The prolonged crisis inZimbabwe has adversely affected the growth of the central zone, whichtraditionally maintains close ties to its neighbor to the west. Table 3. 3: Establishments and emdovment bv region 2002, Drivate and Dublic sectors Province N o of Yo of N o of YOof total Memo: % of total establishments total Employees population Niassa 1,417 2.9 17,352 3.3 5.1 Cab0 Delgado 2,398 5.0 15,618 3.0 8.4 Nampula 5,278 11.0 39,178 7.5 18.8 Zambezia 3,614 7.5 36,427 7.0 19.2 I Tete I 2,834 I 5.9 I 21,094 I 4.0 I 7.7 I Maniea 3,095 6.4 22,491 4.3 6.7 Sofala 6,857 14.2 40,498 7.8 8.4 Inhambane 3,603 7.5 26,591 5.1 7.4 Gaza 5,058 10.5 36,383 7.0 7.0 I MauutoProvince I 3,775 I 7.8 I 43,127 I 8.3 I 5.6 I Maputo City 10,186 21.2 222,448 1 42.7 I 5.8 (Restodo Mundo) 33 1I 0.1 1I 0 n.a. Formal sector employment tends to stagnate 3.7 As stated, despite the structural changes, agriculture remains by far the most important sector in terms of employment. Data derived from the National Household Survey show that in 2002, 70 percent of the workforce was employed in agriculture, followed by trade and services. Manufacturing accounts for only 1.25 percent of the total labor force, industryintotal (Le. mining, manufacturing, and construction) for slightly more than 5 percent (Table 3.4). 3.8 Looking alone at the approximately 521,000 who earn their living inthe formal sector the picture is entirely different as indicated inTable 3.5. Some 8 percent of all formal establishments are classified as industry, employing 15 percent of all employees. Data from the Mozambique Enterprise Survey show that overall employment in the manufacturing sector has not increased between 1999 and 2002. Around half of the firms included in the survey experienced contraction of employment during the Source: Data from 2002 National Household period, while the other half saw an expansion. Survey Positive employment effects were visible in the wood processing and furniture sector, plastic production, printing and construction materials production. The strongest employment growth could be observed insmall firms, and overall employment was growing more inexport-oriented firms (Harding/Calvo 2003). Sector N o of % of No of % of establishments total employees total Agriculture 814 1.7 16,559 3.2 Fisheries 159 0.3 3,848 0.7 Mining 65 0.1 2,190 I 0.4 Manufacturing 3.268 II 6.8 I1 50.027 I 9.6 Electricity, gas and water 117 1 0.2 I 5,392 1.0 Construction 379 0.8 22,979 4.4 I Retails/wholesale trade, vehicle reuairI 17,829 37.0 116,146 I 22.3 I Lodgingand restaurants 6,030 12.5 23,945 4.6 Transuort and communication 714 1.5 1III 29.549 II 5.7 Financial services 337 0.7 5,982 1.1 Realestate, ... 831 1.7 24,420 4.7 I Public administration 1 3,892 1III111 8.1 I 96,878 1 18.6 \ Education 7,386 15.3 I 63,129 12.1 Health 1,463 1I 3.0 I 19,753 3.8 Social services 4,806 10.0 40,380 7.7 International organizations 58 0.1 30 0.0 Total 48,148 100.0 521,207 100.0 3.9 The vast majority, or 90 percent of all establishments and 80 percent in terms of employment, of the formal sector is made up of trade and services including public administration, education and health (Table 3.5). Retail/wholesale trade and vehicle repair account for 22 percent of employment, making itby far the most important sub-sector. With 5.7 percent transport/communication is the third most important sub-sectors in terms of employment after retail/whole sale trade and manufacturing. Overall, public activities such as education, health, social services and general public administration account for 40 percent of the total work force in the formal sector. Agriculture and fisheries is relatively unimportant with 4 percent of the formal sector workforce. The expansion of tobacco and cashew nuts growing incentral Mozambique may change this pictureinthe future. 3.10 Available data suggest that especially many medium-sized and large companies have experienced difficulties adjusting to the more open trade regime prevailing since the early 1990s. While a smaller number of large companies with links to foreign investors such as those producing beverages, processing agricultural (e.g. tobacco) and forestry products, and the mega-projects are doing well, the companies that used to benefit from preferential treatment in the domestic market tend to face difficulties. Also new areas such as plastics, printing and selected garment companies (those with government contracts) are showing promising signs, and Mozal is reportedly increasingly relying on local sub-contractors. Likewise, the share of manufacturing output destined for export seems to be growing slowly. Nonetheless, the overall conclusion of the Mozambique Investment Climate Assessment (2003) is that growth inthe private sector has slowed down substantially after 11 the initial rebounding of the private sector inthe mid 1990s. Important sub-sectors such as textile, garments, and footwear, whichhave served many developing countries as a stepping stone for development of the export sector, have actually experienced serious difficulties as a result of international competition due to low labor and capital productivity. Hence, total factor productivity inMozambique is significantly below regional averages. Theinformal sector: Wherethemajority earns i t s living 3.11 No exact figures exist, but on the basis of the findings of the Household Survey 2002/03 and other available data it can be calculated that 7-8 millionof the approximately 9 millionpeople who depend on the informal sector15 for their living are having agriculture as their main source of income. Employment in agriculture basically consists of self- employment or unpaid family labor in the smallholder-farming sector. However, in most cases households rely on a combination of activities in order to reduce their vulnerability. There are more women than men working inthe agricultural sector, and poverty seems to be more pronounced among women than men. One in five rural households i s female- headed. As discussed above, agricultural production has increased markedly in recent years, although the agricultural sector's share of GDP has gone down due to structural changes of the economy. Income inthe household-based agricultural sector seems to have improved somewhat with great regionalvariations, butpoverty remains widespread. 3.12 As in most sub-Saharan countries, non-agricultural activities inthe informal sector are dominated by commerce. In the last decade, petty trading has mushroomed all over Mozambique, althoughinmore remote areas the weak development of the money economy remains a hampering factor. Petty trading is dominated by women. Next after commerce, traditional artisan activities and, to a lesser extent, petty services, e.g. bicycle repairing, are the mainsub-sectors of the informal economy. Mozambiquealso has anexceptional custom for traditional handicrafts such as woodcarving and basket making. An estimated 1-1% millionpeople are having some sort of non-agricultural informal sector activity as their main source of income. The quality of the products of the artisan sector inMozambique appears to be higher than inmost other countries on the continent. There are probably two reasons for that: (a) Most importantly, during the colonial era many craftsmen were of Portuguese descent who brought with them the craftsmanship traditions from Portugal. Similarly, Mozambique has a prolonged pre-independence tradition for institutionalized craftsmanship training by for instance the railways; and (b) many of the currently self- employed craftsmen previously worked in the formal sector and lost their job as the economy contracted during the war or more recently as a result of the dissolution of the state sector. The better trained craftsmentend to be concentratedinurbancenters, while the more resource-weakones are predominantlyfound inthe ruralareas16. 3.13 Self-employment is not necessarily associated with poverty, althoughmany business operators are struggling to survive. It is however far from unusual that a non-registered 15The term `informal sector' here refers to all sorts of activities that are conductedwithout beingofficially registeredinthe form of an enterprise. However, the business operator oftenneeds a license to conduct his or her business inanurbansettingor at a market place. 16Information on the informalsector is mainly based on Billetoft, 1998 and de Vletter 2001. 12 micro enterprise employs 5-6 workers and a number of apprentices. Some may evenemploy 10-15 workers. Enterprises tend to be larger in urban centers as compared with the countryside. Equipment tends to be obsolete, but some of those who have been able to take over workshops abandoned by fleeing Portuguese in the late 1970s are often surprisingly well equipped. Low and middle-income households make up the predominant clientele of the informal sector. As regards the non-agricultural informal sector women are primarily found in the retailing trade and in activities such as dressmaking. Most other informal sector activities have a strong male dominance. 3.14 According to the Household Survey 2002/03 persons with no or little schooling are heavily over-represented in the informal sector. Hence, more than three-quarter of the business operators have completed less than five years of education. In spite of the relatively highlevel of technical proficiency of many artisans, the low level of education is likely to hamper their innovative capability, especially their capacity to adjust to market changes. The fierce competition within certaintrades demonstrates that. 3.2 Supply side characteristics The workforce is poorly educated 3.15 Ingeneral, the Mozambican workforce is poorly educated and low skilled. Half of the population, according to the National HouseholdSurvey 2002, has no education at all or only basic literacy skills, while slightly above 40 percent at the beginningof this decade had left the education system with primary education. Hence, three-quarters of the population have at the most 5 years of school attendance. Merely 7.5 percent have achieved secondary or tertiary education of whom 4.1 percent left school after ESGl (Grade 10). Only 0.5 percent of the populationhas acquired a post-secondary degree. These figures do not reflect the fact that several private higher education institutions, especially universities, have been established inrecent years. The effect of this development has yet to be seen. However, as pointed out in the PARPA, the inadequate number of people with higher education is not only hampering efficient operation of private business, but also the public administration suffers from an acute shortage of competent people. Table 3.6: Highest level of education ITotal IMale IFemale IUrban Rural I ETbasic I 0.5 I 0.7 0.2 0.8 0.0 ETintermediate I 0.5 I 0.8 0.2 0.8 0.0 .I Teachtraining 0.2 0.3 0.2 0.2 0.3 Highereducation II0.5 II 0.6 II 0.4 11 0.8 1I0.0 Total I 100.0 I 100.0 I 100,o I 100.0 I 100.0 Source: NationalHousehold Survey 2002 3.16 Data from the Household Survey also reveal high inequalities in educational chances. Fifteenpercent more males than females achieve some kind of education. Close to 60% of all women have never had accessto any education. More than double as many male than female students have received secondary education. This ratio rises to 3:l if technical education is concerned (Table 3.6). Inequalities are even sharper between the urban and rural population. Seventy two percent, 72%, of all people in the rural areas have never received formal education. Of those who had, accessbeyond primary education is very low. Only 1.9 percent of the rural people has achieved higher than primary education, compared to 13.7 in the urban areas. Chances are almost non-existing for rural girls and women, of who 80% have no education at all, and only 0.7% has accessbeyond primary education. 3.17 Inlinewiththe thinkingof the post-independencesocialist era, the educationsystem is clearly gearedtowards wage employment inthe formal sector, public and private. Results from the Household Survey show (see Table A2 in the Annex) that the likelihood of receiving a wage income is going up with the level of education. 90 percent of high school graduates (including intermediate level WE) and 95 percent of tertiary education completers work in the formal sector. As found inother sub-Saharan African countries as well, the risk of unemployment is also increasing with the level of education. While, according to the Household Survey, very few people with no education or basic literacy skills only reported to be unemployed, unemployment appears to be above average among people with primary and secondary education. Presumably, the reason for that is that the preparedness to become self-employed or venture into some odd job decreases with the level of education. Moreover, as many people with secondary education are continuing their education they may perceive themselves as temporarily unemployed while on the waiting listfor the next levelof education. Educationsecures a better living 3.18 Considering the low average education level, it is hardly surprising that education and income are directly correlated. An unskilled production worker in Mozambique typically earns UDS 45 a month and professionals, i.e. someone with a certificate from a secondary or tertiary institution, would typically earn USD 190, which is still low by regional standards. `A multivariate regression explaining earnings of workers in the Mozambican manufacturing sector finds that, as expected, highly skilled workers are paid higher wages. Managers and professionals receive the higher pay, and the amount of education a worker has received is directly related to earnings' (ICA, 2003, p. 37). This i s widely a result of the government pay-scale structure that ties earning to the `Level of education alone. 14 Education Wage casual Familiy Aid Self- Average employment None 1026 777 173 1594 1255 Literacy training 839 312 .I. 959 862 EP1 1438 1334 1249 1593 1475 EP2 1721 2445 244 2579 1914 ESGl 2140 720 .I. 8415 2830 ESG2 3408 6286 .I* 5173 3516 ETelementary 2265 .I. 31911 4674 ETbasic 3139 2200 *I. 2490 3066 ETintermediate 4947 3295 .I, 10871 5041 Teacher training 2294 3135 .I. 2393 Higher education 17033 6000 .I. .I. 16426 I Total Other I 11708 $1. .I. 11708 1880 I 1441 1 667 2037 1880 3.19 The National Household Survey 2002 and the External Efficiency Study of TVE Graduates (MINED /Austral 2003) furthermore show that TVE graduates earn better than graduates from equivalent general education levels. Workers who have completed the intermediate level of technical education on the average earn approximately USD 200 a monthcompared to USD 140 for ESG2 graduates. The differences are not as pronounced at lower secondary level, where basic TVE graduates earn on average USD 120 a month and ESGl leavers USD 11317. A primary school-leaver with no additional education would usually get USD 60-80 a month. Onthe average women tend to earn less than men, mainly because of lower levels of education. It is finally an interesting finding of the HHS, which deserves more research, that self-employed appear to earn more than people in employment. 3.3 Matching supply and demand: some issues The economy needs skilled labor 3.20 The relatively positive labor market standing and the over proportionate wage income expectations of TVE graduates are a response to a widespread need of qualified technicians in the economy. The Rapid Labor Market Study (Muhamad 2003) provides the most comprehensive overview of the current skills and qualification structure of the workforce inthe formal sector. Inthe study sample as muchas 39 percent of the workforce are technicians, office employees and salespersons, or otherwise 'qualified' employees (see Table 3.8). I f semi-qualified personnel is added the percentage of staff with some kind of formal, non- or informally acquired skills below higher education level rises to 68 percent. The wage figures indicatedinTable 3.7 for elementaryTVE graduates are notconsideredhere due to thelow number of cases includedinthe survey. 15 Using the total formal employment figures from the National Statistics Institute (around 520,000 employees in the formal sector, see Table 3.5) it may well be estimated that some 200,000 qualified employees, or, if the semi-skilled group is added, 350,000 workers with some technical training background are working in the formal sector. This indicates a substantial absorptive capacity of W E T graduates inthe formal sector and consequently, a markedneed for relevant training programs. 3.21 The percentage of qualified personnel is highest in the commerce sector, tourism, agriculture and fisheries. Construction, fisheries and the service sectors are predominantly employing semi-qualified workers, while agriculture, tourism and services are the sectors employing the largest share of unqualified workers. Gender disaggregated figures are not available.'* Construction I 0 2 4 9 30 48 7 100 Tourism 3 1 4 20 17 19 35 99 Fisheries 15 2 7 10 1 4 1 43 18 99 Other 7 1 31 5 1 7 1 17 1I 32 II 100 3.22 While most reports on investment opportunities and barriers inMozambique point very generally to the problem of low labor productivity and low innovative potential as a consequence of severe and widespread skills deficits, concrete skills demand patterns are largely uninvestigated. Few attempts have been made so far to define on a wider and deeper scale the actual and specific needs of the economy interms of skilled manpower and the role of the national vocational education and training system in its provision. So far, only two studies commissioned by GTZ on the engineering and tourism sectors have attempted to define more precisely the disparities between what skills, knowledge and attitudes are needed by employers and what skills are imparted inthe current W E T system. Both studies are supposed to serve as a starting point to standard development and curriculumrevisionfor training inthe sectors. 3.23 N o information is available on the skills needs and qualification profiles of employees inthe informal sector apart from very general observations of comparatively low technology and productivity levels, which points to an insufficiently skilled workforce. Experience from other sub-Saharan African countries suggests that micro-entrepreneurs Significant differences exist inthe staff qualification structure by location. However, these canbe attributed to the sample structure. 19The fact that some totals donot addup to 100%is attributed to rounding. 16 generally lack business skills (ina broader sense), operate with simple technologies and at a very low technical skills level. Shortage of financial resources, lack of appropriate training offers and insufficient understanding of benefits of training usually attributes to a very low effective demand for training (if not stimulated by tailored programs). Traditional apprenticeship, the most common mode of skills development inthe informal sector, tends to perpetuate technology and skills constraints. On the other hand informal entrepreneurs may be keen to formalize their skills in recognized qualifications in order to broaden their market access. However, no system such as trade testing exists inMozambique. Employers' strategies to cope with the shortage of skilled labor 3.24 The fact that W E graduates apparently encounter no serious difficulties finding employment, especially not intermediate level W E graduates, does not necessarily prove that skills of the graduates are matching the demand of the firms. It may well be explained with the short supply of secondary school leavers, induced by the narrow education pyramid in Mozambique. Indeed, all available studies clearly indicate that employers are not satisfied with the level of skills, knowledge and job preparation of graduates from the education system, whether from the technical or the general stream. Firms employing TVET graduates are in particular complaining about insufficient practical skills of graduates. But also lack of knowledge of basic management and problem-solving tools and lack of language proficiency is an often heard complaint. Ingeneral, the private sector seems to be short of practically skilled technicians, middle-managers and supervisory staff, 3.25 In this situation, one would expect that employers give considerable attention to workers' training to compensate for the l o w skills levels of the Mozambican workforce. This is in fact the case for some, mainly larger companies. Coping strategies, according to the Rapid Labor Market Study, include internal and on-the-job training as well as use of external training provision. Some companies also organize formal long-term initial training to cater for their company specific qualification needs. Ingeneral, sectors such as tourism, services, and fisheries tend to utilize external training offers more frequently than agriculture or industry, which, however, may be determined by the availability of training offers in the market. Public employers, such as the civil service and public utility companies, are usually catering for their owntechnical education and training needs. Overall, larger companies are more likely to provide their staff with additional external training than smaller companies, caused by financial constraints of smaller companies. However, the World Bank`s Investment Climate Assessment found that overall, the private sector's attitude towards investing intraining is rather ambivalent. Most employers saw no need for further training of their workforce. While large companies with state-of-the art technology indicated preparedness to set aside means for training of their workforce, this was not the case for the many large, medium and small enterprises that have not been able to invest in new production equipment and that are struggling to stay in the market. According to all available studies, inability to finance training and lack of government incentives appear to be the most important reasons for non-training (Muhamad 2003; World Bank, 2003, Investment Climate Assessment). This finding is also supported by experience of the PODE project20. This World Bank project has been able to encourage smaller companies to co- 2oBased on interview with a consultant to the PODEproject. 17 finance selected training activities ina set-up where the project offers a 50 percent subsidy of the training cost. 3.26 Companies finally do also fill gaps inthe workforce through recruitment of foreign qualified nationals, although administrative barriers and regulatory hurdles make it quite costly to access skilled labor from outside of Mozambique (ICA, 2003). In 2002, INEFP authorized 4,167 new working contracts for foreign nationals, of which 57 percent were in the construction sector (Muhamad2003,14). Apart from recruitingforeigners, 52 out of 149 interviewed companies indicated to recruit qualified staff from other companies inorder to cope with the shortage of skilled labor inthe market. Infact, more than 20 percent of the firms interviewed during the World Bank Investment Climate Assessment (World Bank, 2003, Investment Climate Assessment) admitted that training would be too risky as trained staff may leave. 3.27 Skills transfer in the informal sector usually takes the form of traditional apprenticeship whereby a master craftsman passeson his knowledge and expertise to young persons. Although a number of organizations, mainly NGOs, are offering skills development programs for the informal sector, their extent is marginal compared with the number of people in the sector. While the traditional apprenticeship system provides a valuable opportunity for the trainee to acquire practical knowledge about the trade, the limitation of the system is the lack of technological innovation and product specialization as demonstratedby the widespread product duplicationwhich canbe witnessed at any market place. Skills development is only eflective if economicgrowthis achieved 3.28 A broader private sector-led growth in Mozambique, as identified by the Government as one of the key engines of poverty reduction, will require a more rapid development of local enterprises and the SME sector. To achieve this objective, it is generally acknowledged that the formation and availability of an adequately skilled workforce in order to raise productivity is among, but yet only one of, the key areas that need to be addressed. More important investment obstacles include over-bureaucratic procedures and red tape, low quality of the legal system, restrictive labor law, corruption and lack of credit. Virtually none of the available analyses count shortage of skills the number one constraint of business development. WET alone will not create employment. To render substantial investment in WET profitable therefore requires that other factors determining the investment climate and economic performance are effectively addressed as well. Summay of findings 3.29 Inbrief the tendencies of the labor market inMozambican can be summarized as follows: 18 o Approximately 95 percent of the total labor force depends on the informal sector for its subsistence. Approximately 521,000 are employed inthe formal sector, public and private. o Inthe formal sector, large enterprises dominate interms of employment, while small enterprises (1-9 employees) account for the great majority of registered enterprises. Almost one-quarter of all jobs in the formal sector are found in trade/commerce, while some 40 percent are engaged ingovernment services such as education, health and general publicadministration. Agriculture dominates the informal sector. o With the exception of large companies in partnership with foreign investors, employment tends to be stagnating inthe private formal sector. However, some sub- sectors show signs of growth, e.g. construction, tourism, processing of forestry products, and manufacturing of certain specializeditems. o Salaries increase with level of education. Graduates from technical schools on average earnbetter thanthose from general secondary schools. o A survey of the qualification structure inthe private sector found that two-third of the workforce is qualified or semi-qualified, indicating a marked need for relevant training inMozambique. o There is only scattered information available on the specific qualification needs of various industries. o While large enterprises utilizing state-of-the art technology seem to be prepared to invest inworkers training, this is not the case for the many medium-sized and small enterprises that have difficulties coping with the open trade regime prevailing since the early 1990s. o Skills development inthe informalsector predominantlytakes the form of traditional apprenticeship. Although the system ensures a highlevel of practical knowledge of the trade, it is not conducive to product development and technological innovations. 19 4. TECHNICAL VOCATIONAL EDUCATION AND TRAINING: AN ASSESSMENT 4.1 Overview of the MozambicanTVET environment 4.1 Technical and vocational education and training in Mozambique is comprised of different public and private provider systems and offered as formal, non-formal or informal training. Formal technical and vocational education (WE) provided by DINET, some other ministries and few private training institutions is by far the largest sub-system, providing educational opportunities to some 13-14,000 young people every year. Apart from formal training, the Ministry of Labor, NGOs and churches offer non-formal vocational training to different target groups, mainly school leavers without alternative educational and economic options and other marginalized groups in the labor market. A private training market, albeit still at an infant stage, is slowly developing, serving school leavers, companies which send their staff to upgrading training programs, and other target groups who are able to afford commercial tuition rates. Employer-based staff training canbe found mainly inlarge and mega projects and, as traditional apprenticeship, inthe informal sector. The systems are describedinmore detail inthe following sections. Graph 4.1: TVET environment iGeneralEducation DINETand other INEFP, NGOs, Privatetraining Employer- 1 Higher education Various in- programmes company training Upper k I public and private and others market basedtralnlng providers 1 secondary ,WE Various VT I TVE intermed. ~ durations (new elementary Profissionais ,________________ programs) ! Traditional Apprenticeship Lower primary I I I________________ ! I 20 4.2 Overall, access to training is very low and largely concentrated in Maputo city and Maputo province. Only recently has the Ministry of Education embarked on broadening lower levelTVE offers inthe ruralareas. Girls are strikingly under -represented inthe entire TVET system. Not more than 25% of all TVE students are girls. Although exact figures for the other sub-systems are not available, it can be assumed that the gender bias is even more pronounced among other providers and providers' sub-systems. 4.3 Quality is generally perceived to be very low inthe general public training systems, notably the DINET and the INEFP schools, caused by under-qualified and insufficiently skilled teachers, shortage of teaching aids, partly dilapidated workshops for practical training and outdated curricula. As a result, internal efficiency inthe formal TVE system is low as indicated by high repetition and dropout rates. Although graduates from the TVE system tend to fare well inthe labor market, employers complain about insufficient practical and management skills of graduates. In many sub-Saharan African countries, training provided directly by employers and private commercial training centers, tend to be of better quality and more relevant than training provided in the public training system. Unfortunately, no empirical evidence or information is available about the situation in Mozambique in this regard. In general however, as the previous chapter showed, the economy faces a severe shortage of appropriately skilled labor indicating that the current TVET system as a whole is not capable of effectively responding to the needs of the labor market. A serious cause of concern is the shortage of training earmarked for employment and self-employment inthe informalsector, by far the largest segment of the labor market. 4.4 Available informationindicates furthermore that the entire W E T system is seriously under funded. Regarding formal WE, public unit spending in Mozambique is among the lowest inAfrica affecting the quality of training. However, resources available for training are also short in all other W E T sub-systems. INEFP schools, for example, run under capacity due to resource constraints. The preparedness to embark on staff training by industry i s also constrained by lack of resources. 4.5 A major bottleneck of the current W E T environment is its fragmentation and the uncoordinated manner inwhich each sub-system i s managed and administered. This tends to produce duplications and wastage of scarce national training resources. Management and governance of the public training systems furthermore do not involve employers and other representatives of the world of work to any significant extent, with the consequence that training programs and curricula are not related to the labor market context. The centralized decision-making structure in the formal TVE system prevents efficient use of resources at school level and responsiveness of the training offers to the specific requirements of target groups and needs of the localeconomic environment. 4.6 The social and economic consequences of Mozambique's estimated 14 percent HIV/AIDS incidence rate are extensive. It is projected that HIV/AIDS could reduce per capita GDP growth rates by up to 1 percent annually in this decade (Arndt, 2003). As regards education, HIV/AIDS results inabsenteeism and death of teachers, and the need to subsidize orphaned children. It is thus estimated that approximately 2,700 teachers of all levels will be lost between 2002 and 2006. Overall, the total cost of HIV/AIDS on the 21 education sector is projected at USD7 million in 2006, corresponding to a five percent increase in total education spending. There are no data available o n the relative impact of HIV/AIDS at the different levels of education, but the risk of dissemination must, other things being equal, be higher at secondary school level, as the likeliness of teachers and students developing sexual relationships is more pertinent. 4.2 Formal technical and vocational education Basicfeatures of TVE 4.7 Direccqlo Nacional do Ensino Tkcnico (DINET) under the Ministhio da Educaqlo (MINED) is the national agency for technical and vocational education in Mozambique. There are currently 42 institutions under the auspices of DINET. The W E system comprises three levels: elementary, basic and intermediate. The duration of the courses varies from three to four years, according to the area of specialization and level. Successful graduates obtain a general education certificate one level higher than the entrance level. The elementary level recruits Grade 5 completers (EP1). The courses, which last two years at the Escolas Artes e Oficios, aim at providing elementary skills with emphasis o n practical aspects. To the graduates it confers a school grade equivalent to upper primary education level (EP2). In collaboration with Don BOSCO,DINET is currently piloting a new curriculum for the elementary level at a number of new schools, Escolas Professionais, which provides two years of post-EP2 vocational training. The new curriculum has n o academic equivalence in the national education system and therefore does not lead to a formal academic qualification, an issue that is still being contemplated by DINET. There are indications that all existing Escolas Artes e Oficios will be converted to Escolas Professionais. It is also being pondered whether an academic element equivalent to that of the basic level should be imparted into the curriculum of the Escolas Professionais. Is that going to be the case, the Escolas Professionais will essentially be at par with the existing basic level schools, just with a modernized, modularized curriculum for the practical subjects. The basic level recruits Grade 7 completers (EP2) and last three years (day course) or four years (evening course). The graduation level is equivalent to the first cycle of secondary education. Leavers from basic level technical schools qualify for the second cycle of secondary education (ESG2), corresponding to technical education at intermediate level. The intermediate level recruits Grade 10 completers (first circle of ESG1). The duration of the day course is 3% years (4 years for agriculture) and 4 years for the evening course. The last term of the course is centered on professional practice and is usually spent inindustrial attachment. 4.8 As mentioned, the capacity of the TVE system is limited. At elementary level, approximately 430 new places were available in2003 (intake capacity), while basic level W E schools offered approximately 8,400 places, and the intermediate level approximately 1,500 places at national level. This means that approximately 11,000 people every year can continue their education in the W E sub-system. Due to the low internal efficiency of the W E sub-system the completion rate for all levels is rather low. Hence, in 2003 the elementary level produced approximately 200 graduates, the basic level 4,000, and the intermediate level approximately 900 graduates. Apart from the elementary level, the capacity has remained unchanged, indicating completion rates at around 45 percent for the 22 basic level and 65 percent for intermediate level. Girls are even more underrepresented in TVE schools than general secondary education schools, constituting approximately one- quarter of the students. They are mainly to be found incomdrcio, i.e. accounting, secretarial and related courses. 4.9 Also, a number of other ministries and parastatals provide recognized formal technical-vocational education at basic and intermediate level. Like schools under DINET, the courses by these institutions lead to a certificate qualifying for education at one level higher than the entrance level within the national education system. Ministry of Health (MISAU) operates by far the highest number of schools, viz. 11,all over the country. Most of these are at basic level. Other TVE schools comprise the School of Journalism, Institute of Public Administration, School of Fisheries, Schools of Visual Arts, and the School of Labor Studies. Reportedly, three parastatals offer recognized TVE courses, i.e. the Aeronautical School (intermediate level), operated by the Airport Authority, Institute of Telecommunications (intermediate level), operated by TDM, and the Professional Training Center (basic level) of Electricidade de Moqambique. Lastly, there are approximately eight private institutes offering TVE courses at intermediate level plus some few ones offering training at superior level. Almost all these are located inMaputo. The private institutions typically concentrate in areas with limited capital requirements such as management and ICT, or light engineering e.g. electronics). Data on the capacity and performance of formal non-DINET TVE institutions are not compiled o n a regular basis, but a qualified guess would be that these institutions provide post-primary education opportunities for 2-3,000 youngpeople every year. All together the TVE sub-system, public and private, caters for an estimated 15-18 percent of the EP2 graduates. 4.10 The TVE curriculum comprises essentially the same generic (academic) subjects as that for ESG, although in practice the academic part is reduced in relation to ESG. The principal difference is that the TVE curriculum on top of the generic part contains elements of practical subjects, trade theory as well as practical exercises. The general subjects constitute some 60-65 percent of the timetable of WE. The duration of TVE and ESG is the same for lower secondary, while the intermediate level of TVE is ?hyear longer than ESG2 as a result of the concluding industrial attachment. ESG2 has a slight specialization into three different branches, preparing for different types of further education. Both at basic and intermediate level, TVE offers three main avenues of specialization, comhcio, ugricultura and indtistria, further sub-divided into 28 distinct areas of expertise. The curricula for ESG and TVE, except for that of elementary level, have not undergone major reforms inthe last ten years. The fact that TVE graduates qualify for continued studies within the general secondary education stream is the reason why many TVE students in reality choose technical education simply because they cannot get access to ESG in the first place. Admission to TVE is alone based on the student's performance in academic subjects. Similarly, MINED controlled exams only apply for these subjects, while testing in the practical subjects is exclusively the responsibility of the school itself. 23 Quality concerns 4.11 The DINET system i s characterized by low internal efficiency, which in turn is related to the quality of education. Highrepetition and dropout rates and long completion times are the symptoms of this. First and foremost, lack of qualified teachers is supposed to negatively impact on the quality. Less than half of the teachers teaching academic subjects have adequate academic training (tertiary education); this is even more pronounced among teachers teaching practical subjects, who in general lack practical knowledge of their field. Since the early 1990s, n o institution for technical teacher training has existed. Hence, only very scattered updating of the qualifications of the technical teachers has taking place since that time. Mobility among technical teachers is low. Secondly, the curricula are outdated and overloaded with academic subjects. Except for those of intermediate level industrial courses, no major changes have taken place during the last 20 years. Thirdly, shortage of teaching aids and facilities hampers adequate teaching. 4.12 Several organizations have surveyed the conditions of the W E schools. CBE in1999 made an extensive stocktaking of all DINET schools, and recently GTZ and Danida have conducted supplementary investigations in most provinces.21 The conclusion of these surveys is that considerable variation exists between the physical conditions of TVE schools. Especially those inthe major urban centers tend to be ina relative good shape, while those inmore remote places often are pretty rundown. Institutions, which have been sponsored by anextemal partner, are oftenbetter equipped and seldom experience serious shortage of materials and equipment. Furthermore, in recent years the Government has partly rehabilitated the facilities of some TVE institutions without extemal support; however budget allocations for equipment and teaching materials still fall seriously short of needs. Hence, while physical installations of the TVE schools may be ina relatively good condition, workshops mostly entirely lack pertinent equipment which combined with shortage of teaching materials prevent most practical training to occur as envisaged inthe curriculum. Labor market acceptance 4.13 Contrary to widespread expectation, recent studies (MINED/Austral2003; Muhamad 2003) have shown that vocational education appears to prepare students relatively well and better than general education for employment. A careful assessment of available data derived from the Household Survey 2002 (see Table A2 and A 3 inthe Annex) indicates that graduates from the technical and vocational education streams are less likely to be unemployed, less likely to depend on family aid and, interestingly, less likely to be involved in self-employment compared to their peers from the general education stream. This indicates that graduates from the TVE sub-system, despite the deficiencies of the system, tend to be more appreciated by the employers than ESG graduates, although TVE graduates according to the government pay scale are entitled to 25 percent higher pay than graduates from mainstream secondary education. This is particularly the case for intermediate level 21CBE (1999).`Investment Strategy for Technical andProfessionalEducationinMozambique'. Danida (2003). 'Survey Report Technical-VocationalSchools inCab0 Delgado, Tete, and ZambCzia'. GTZ-GFA Management (2003). 'Educational Needs Assessmentinthe Sector of Educational Management'. 24 graduates. Household survey figures, in fact, indicate that TVE graduates earn generally more than their peers who graduated from general education (see chapter 3). 4.14 A recent study of the external efficiency and cost structure of selected parts of the TVET system confirms this impression. The survey found that the overall efficiency of the TVE sub-system seems to be higher than usually assumed (MINED/ Austral, 2003; Billetoft & Roque, 2004). On the basis of a sample of approximately 475 graduates from schools under DINET and other institutions it was found that roughly one-third of the sample have continued their studies, one-third have found a full-time salaried job - permanent and temporary, and one-third have some kind of part-time job, were self-employed or reported to be overtly unemployed. 4.15 However, there are significant variations between levels of educations and trades. The study suggests that basic TVE graduates (equivalent to lower secondary education) encounter substantially more problems in labor market acceptance than graduates from intermediate level TVE schools (equivalent to upper secondary education). While unemployment among TVE intermediate graduates is almost nil, the MINED/Austral study recorded a substantial unemployment among basic level graduates.22 Intermediate level graduates are preferred in the civil service and the parastatal sector, while basic level graduates are more likely to find employment in family enterprises or other private business. This may not necessarily reflect the employers' preference, but the fact that intermediate level graduates are rather absorbed in the public sector. Interviews with employers indicated that they clearly prefer intermediate level graduates to basic level ones as technicians, stating that TVE basic level graduates have hardly any practical experience and it requires too mucheffort to bringthem upto a n adequate competency level. The main findings of the study were: o Labor market acceptance is high for TVE graduates, especially for intermediate level TVE graduates. However, employers complain about insufficient practical skills and management skills of the graduates. Also their language proficiency is criticized. o As expected more basic level graduates reported to be still studying. This is expected as an intermediate level certificate is the goal of most students. Few have the resources and qualifications required to pursue tertiary education. o Indeed, half of the respondents continue to study, even if they are workingat the same time. The level of education is critical for the career of graduates, both in terms of remunerationZ3and job responsibility. o Graduates from agricultural schools have experienced more difficulties infinding employment than those from commercial and industrial schools. The reasons for that are probably the slow recovery of the agricultural sector and the fact that the 22 Bothsources indicate fairly positive labor market records for graduates from the elementary levelWE. However, asjust two elementary levelschools, Escolas Artes e Ofcios, were operation untilrecently, the sample of graduates inbothsurveys is very small. z8 The salary scale inthe Mozambican public service considersonly the level of education, not actual performance. The scale is the same across professions andoccupations. 25 agricultural schools tend to be locatedinfaraway areas with limitedemployment opportunities. Very few graduates are self-employed. More dropouts than graduates reported to be self-employed (in the informal sector), but also for this group self- employment is limited. Direct unemployment is low for all categories. As predictable, dropouts have a higher rate of unemployment than other categories. Women reported a relatively higher unemployment rate than men (four times as highamong graduates andtwice as highamong dropouts). Along the same line, slightlyfewer interviewed womenthanmenare havingfull-time employment. As regards trade specialization, graduates from schools teaching agriculture are not as inclined as graduates from schools specialized in commerce and industry to pursue further studies. The reason might be that young people interested in continuing their studies are not to the same extent attracted by agriculture as students incommerce and industry. Another factor mightbe that continuation of further studies tends to depend on whether or not there are institutions of a higher level in the geographical region, and not all provinces have agricultural schools at intermediate level. Graduates from agricultural schools also reported a much higher share of temporary employment than any other groups, reflecting the employment structure of the agricultural sector with a predominance of fixed-term appointment, a phenomenon that is widespread among donor ` organizations and NGOs as well. Inthe central zone of the country, relatively more of the respondents reported being 'student' than in other parts of the country; while those with permanent employment dominate among the respondents inthe southern zone - suggesting that graduates looking for employment aim at the Maputo region. Managementof TVE 4.16 The national education system has a structure made up of four levels of administration: The central agencies, e.g. DINET, the Provincial Directorates of Education (DPE), the District Directorates of Education (DDE), and the individual schools and training institutions. Amongst other things, the central agencies are responsible for defining the sub- system's strategy, objectives and targets, for consolidating the overall budget for the sub- system (WE), for procurement and distribution of textbooks and teaching materials, for curriculum development, for human resources development (i.e. teacher training), for assessment (examinations), and for supervision of schools. The DPE is responsible for intra- provincial allocation of resources by district offices and other spending units such as technical-vocational schools. The DPE manages the overall provincial salary fund and the funds to ensure the DPE's and subordinate institutions' functioning (schools, training institutions, boarding facilities). The DPE may also administer provincial investment projects and a limited portion of external funds. Ineach province, there is a Department for Technical Education, which forms part of the DPE. The Provincial Department supervises the technical schools at provincial level, and serves as a link between DINET and the schools. The Provincial Department reports to the Provincial Director for Education. Typically the Provincial Department for Technical Education has one, exceptionally two, staff. 26 4.17 DINET is headed by a National Director and has a professional staff of approximately 25 at head office, divided into four departments. A recent organizational analysis of DINET4found, among other things, that while the head office staff is adequately qualified, it has a strong need for further education and training. Communication with the provincial offices is characterizedas non-satisfactory, calling for marked improvement. The report also strongly advocates devolvement of more functions from the central to the provinciallevelinorder to improve efficiency and easy operation of the sub-system. As part of the ongoing reform of the publicsector, the Reform Office, Gabineteda Gestlio da Mudanfa, of the GoM has proposed a reduction of the number of directorates within MINED. An option inthis connection would be to establish DINET as a semi-autonomous agency under MINED. A decisionasto this isexpected rather soon. 4.18 Concerning TVE institutions outside of DINET, i.e. schools of other ministries and private ones, DINET approves the curricula of these W E institutions but is not otherwise dealing with these. The Inspection Department of MINED secures that private education institutions meet certainminimumrequirements. 4.19 The management of the individual DINET schools enjoys discretionary authority over allocated funds and locally generated revenue within existing legislation. As regards course programs, curricula adjustments, and hiring and firing of teaching staff all decisions are taken at higher levels of administration. Few schools practice formalized interaction with the local business community, but occasional contact is established inorder to search for places for esthgio (internship), for students. N o DINET schools have boards with participation of privatebusiness or other local external stakeholders. 4.3 Non-formaI VocationaI Training (VT) 4.20 Under the purview of the Ministry of Labor (MINTRAB), the National Institute for Employment and Vocational Training (INEFP) is responsible for the largest public non- formal TVET sub-system. Within eight Cmtros de Forma@ Professional (CFPs), all located in urban areas, short-term training courses are offered to unemployed and people working in industry. The training programs are predominantlypractical and do not lead to recognized educational awards. The CFPs cater for two target groups: (a) young, first-time jobseekers, (b) workers who wish to upgrade their skills or are changing job due to unemployment. The entry requirement is Grade 4 to 6, depending on the course. Courses typically last four months (500 hours). About 75 percent of the lessons are practical exercises in workshops, while 25 percent are technology (trade theory) lessons. Overall current capacity appears to be around 2,000 trainees per year; however capacity utilization i s low (around 50 percent) apparently due to resource constraints and low management capabilities. The share of girls and women attending the courses is said to be extremely low due to the fact that programs are mainly offered in typical male trades which offer little employment opportunities to female job seekers. Although significant donor money was channeled into the CFPs during recent years, and the INEFP centers have generally the reputation to be fairly well equipped 7.4GTZ-GFA-Management (2003). `Organizational Design andDevelopment Investigation'. 27 and kept, the overall quality of the training appears to be rather low, caused by inadequate curricula and difficulties of the schools to recruit appropriate and motivated teaching staff. A tracer study (MINED/Austral 2003) shows mixed results for CFP graduates. While 20 percent of the surveyed graduates continue their education, 32 percent were found to be in employment, and only 18 percent were self-employed (although the INEPF schools are explicitly targeting self-employment), Approximately one-tenth reported they were directly unemployed. Few of the INEFP centers have managed to venture into training agreements withcompanies andprojects(suchas PODEand GABI) and were able to focus and improve their training profile. This is for instance the case for the Centro de Forma@o Profissional Electrottcnica and the Centro de Forma@o Profissional de Machava, both in Maputo. After having been leased out to Mozal, which rehabilitated the centers, they are now transferred back to INEPF. The real challenge for INEFP is to maintain the good reputation of the centers resulting from the high quality of training after Mozal is no longer involved inthe daily management of them. 4.21 Information is rather sketchy with respect to the careers of graduates. The external efficiency study (MINED/Austral 2003) provides some indications that the job market i s fairly difficult for trainees leaving the short-term courses offered by the CFPs (Centros de Formap'fo Profissional) of INEFPas well as non-public skills training programs. Well above 10 percent of the traced CFP leavers reported to be unemployed and rather few indicated that the training had led to relevant employment. Only around one quarter of the interviewed INEFP CFP graduates had found their way into self-employment, which i s the explicit target labor market of that training. 4.22 Apart from the INEPF centers, the bulk of non-formal training in Mozambique i s offered by non-public W E T providers and provider systems. An estimated at least 100non- public training centers offer a wide range of training programs to different target groups. These include NGO and church run centers and private for profit institutions, targeting a diverse spectrum of groups including school leavers, workers in industry, marginalized groups, etc as well as staff training offered by companies. Overall, non-public training may be divided into four main groups: (1) training programs offered by private for profit training institutions, (2) employer-based training, (3) training provided by NGOs and churchaffiliated organizations and (4) so-called traditional apprenticeship training (master craftsmantraining). 4.23 Private commercial training providers providing non-formal training are supposed to register with the Ministry of Labor. The schools usually concentrate on IT, business management, secretarial and more recently tourism training. Although the private training market is growing, in particular inthe urban areas, low effective demand limits its growth dynamic. Small companies, a potentially important client group of private training providers, usually indicate to lack the necessary means to purchaseprivate training services. More recently, the World Bank PODE project has started to successfully support the use of private training resources by Mozambican SMEs. Systematic informationon training plans, financing patterns, problems and opportunities inthe private training market still has to be obtained. 28 4.24 Although not systematically assessed, there is also evidence that most of the large employers and the mega-projects run their o w n training centers, providing non-formal short-term training (induction and skills upgrading) and company specific training programs, some of which even lead to internationally recognized certificates. Comprehensive information o n this training sub-system is missing. 4.25 NGOs, churches (e.g. D o n Bosco) and donor supported programs (e.g. EMPRETEC) are main stakeholders in employment oriented skills training for special target groups including entrepreneurship training for micro and small businesses. Other providers include government institutions such as the MADERor the Ministry of Environment. 4.26 Master craftsmen in the informal sector provide another important area of skills development. The sub-system resembles traditional apprenticeships in other sub-Saharan African countries. It is a self-financing, self-organizing system of training that is concentrated in traditional trades such as metalwork, woodwork, motor mechanics, tinsmithing, tailoring, bicycle repairing, etc. Although relatively efficient and effective, it tends to perpetuate technological backwardness and l o w technical know-how. The system usually provides few chances for girls, as most of the trades with a strong traditional apprenticeship culture are typically male trades. No estimate exists on the extent of the training taking place inthis sub-system, but it can safely be assumed that several thousand youngpeople eachyear learna trade this way. 4.27 Overall, there is a substantial shortage of data and information about all types of private (incl. NGO) non-formal WET inMozambique, which seriously inhibits coordination of different WET sub-systems at the national level and will make appropriate policy development and planning of an integrated TVET system difficult. Further research and evaluation is urgently necessary to realistically assess the performance, capacities and potential of the private training sector. Data are particularly missing with respect to enrolment, type and level of training, financing data, tracer study results, etc. 4.28 With the limited information at hand the following characteristics of the non-formal training system can be identified: o There seems to be a significant undersupply with training accessible for target groups with low educational attainment. The INEPF programs do not reach significantly more than 1,000 people per year, while the large companies tend to employ and train educational achievers, at least for the longer training programs. There is no quantitative information about the outreach of entrepreneurship and self-employment and micro and small enterprise promotion programs, however the general perception is that these programs are too limited and uncoordinated to achieve a wider impact. The most important WET sub-system for low education target groups is clearly the informal sector with its traditional apprenticeship system. o The training environment for self-employment and micro-enterprise promotion is fairly limited, again apart from the traditional apprenticeship system. Tracer 29 studies reveal a relatively low likelihood of CFP graduates finding their way into self-employment, although this i s anexplicit target labor market for the schools. o Muchof the non-formal training supply discriminates against girls and women, such as the traditional apprenticeship programs and the CFPs. o Large companies such as Mozal appear to cater for their own training needs, either inway of maintaining own training centers, runningtraining programs in coordination with other (including public) training institutions or through using the programs of private training institutions (within and outside Mozambique) for staff training programs. o Small and medium-sized companies appear to be reluctant to invest in staff training, due to various reasons, among them financial constraints, lack of suitable training offers, general lack of understanding of the benefits of training, fear that trained staff will be poached, etc. The World Bank PODE project, however, demonstrated that incentives can encourage SMEs to invest intraining and that training in turn improves the business performance of the training companies. o More research to shed light on the capacities and potentials of private training providers is urgently needed. 4.4 Financing of TVET 4.29 Reasonably systematic and comprehensive figures on costs and spending of TVET are only available for the formal TVE sector under MINED. The data show that inthe past public education spending concentrated on general education and in particular primary education, which consumed 66 percent of total recurrent and 77 percent of total capital expenditure in2000. Incontrast, 8 percent of government recurrent and 9 percent of total recurrent expenditure was spent on TVE (see Table 4.1), a percentage, which appears not to be low, compared with some other low-income African countries. The percentage is slightly lower for capital spending, where only 5.9 percent of the government expenditure and 8 percent of the total capital budget were used for W E . 4.30 Government spending on W E increased substantially during the 1990s. Total recurrent government spending almost doubled during 1996 and 1999 (see Table 4.2). This increase favored over-proportionately the lower levels of training. The highest growth during this time, albeit from an extremely low level, experienced W E T at the elementary level (EscolasArtes e Oficios), whichincreased by almost 500 percent. Spending onbasic level TVET doubled, while expenditure for intermediate level TVE increased by 40 percent. The increase in W E T spending reflects the general expansion of educational spending in Mozambique. As a percentage of overall education expenditure, TVET even slightly fell during1996and 1999. 30 TVE Total Education TVE in% of total expenditure expenditure education spending Recurrent: Government 8.1 100.8 8 External 2.8 18.4 15 Total recurrent 10.8 119.2 9 Capital: Government 0.7 11.8 5.9 External 1.9 22.2 8.6 Total recurrent 2.7 34.0 8 Total expenditure: Government 8.7 112.6 7.7 External 4.7 40.7 11.5 Total recurrent * 13.5 153.2 9 Source: World Bank (2003).Public ExpenditureReview, Phase2: SectoralExpenditure Review, Table 15. 4.31 Unitcostsof training25calculatedas overall recurrent expenditure onW E dividedby number of students enrolled are estimatedbetweenUSD180 and USD251, depending on the variables, for 2000 and 2001 respectivelyz6. Differences in the calculations, reflecting the overall weak data base for TVE in Mozambique, are likely caused by (1)whether or not boarding costs are included, (2) different enrolment base data (e.g. at the beginning or the end of the academic year), (3) inclusion or not of administrative costs, etc. Figures disaggregated by level of qualification or occupational group are not available. Another assessment (MINED/Austral2003), which calculated actual costs from the school levelmicro perspective, arrived at unit cost of between USD63 (basic level) and USD128 (intermediate level) inpublic schools in1998. The latter estimates are likely to understate actual spending, as the sample comprised particularly badly kept schools, and schools may have underreported the resources available to them. Especially, most of the investigated schools were unable to provide information on locally generated revenues. Furthermore, the survey didnot includeadministration cost related toMINED inits calculations. Table 4.2: Recurrent government mending on W E (inmillion of h4T) Source: World Bank (2003), Cost and Financing of Education. Annex 5 4.32 Available unit cost estimates appear rather weak and will need more research. Neverthelessthey suggest that Mozambique's recurrent spending on W E is at the very low 25Unit cost is defined here as annualcost per trainee enrolled. 26 Inits W E strategy DINET calculated on a basis of USD180for the year 2000, while the Education Sector Expenditure Review indicates 251.2 for 2001and 213.1 for 1999. 31 end compared with other sub-Saharan African countries. Although cross-country cost (or expenditure) data are difficult to comparebecausethey reflect different types of training and modes of delivery, the figures presented in Table A8 in the Annex give an indication of substantially higher TVET unit spending in other countries. InEthiopia with half the per capita GDP of Mozambique, the average minimum unit cost was recently calculated at USD280, with substantially different values (varying between USD168 and USD623) in different trades. Unit costs inpublic VTCs inBotswana were recorded between USD 3,200 and 5,600 in1996. Table 4.3: Recurrentper student 4.29 Considering international expenditure by level of education, 1999 and experience it is also surprising that TVE is 2001 (1999 USD) not the most expensive educational stream LevelofEducation 1 1999 I 2001 below tertiary education. W E per student EP1 23.5 24.6 expenditure are substantially higher than IEP2 51.5 54.6 I for primary education, and still 2.5 times as ESGl 92.5 97.6 high as in lower secondary education. ESG2 310.5 354.7 However, per capita spending inW E is 29 Technical Education 213.1 251.2 percent lower than in upper secondary Teacher Training 571.1 526.7 education, and less than half of spending Adult literacy 1I11I11 9.1 I1III1I 7.4 on teachers training (see Table 4.3). In Source: Oxford Policy Management (2002). The figures do not include externalresourcesprovided through budget comparison, per student spending on support or resources from bilateral agreements between TVET in Ethiopia is 4.5 time average per externalpartnersand NGOs andindividual schools and/or training institutions. student spending on secondary education (World Bank, Ethiopia PER 2003). 4.33 Higher W E per student expenditure as compared to primary and lower secondary education are mainly caused by higher spending on teachers (higher average teacher salary pluslower pupilto teacher ratio) and higher per student spending on goods and services27. Inthe case of upper secondary education (ESG2), cost differences are mainly induced by higher teacher salaries, a consequence of higher average teachers' qualification level. Interestingly, however, per student spending on goods and services, which includes teaching and training material, is also higher in upper secondary than in technical and vocational education. 4.34 Students and their parents contribute significantly to the education cost. The Education Sector Expenditure Review found that for ESGl the proportion of the recurrent costs covered by the parents is as highas 30 percent, while it was found to be 11percent for ESG2, with great provincial variations (Education Sector Expenditure Review, p. 36). The Household Survey 2002 found that the households' burden of the cost of education is significantly higher for post EP, with the highest expenditure recorded for WE and higher education. The social implications of this are evident. However, as a general rule, poor students are exempted from paying school fees. Insome cases, as many as 15-20 percent of the students are exempted. Exemption is granted by the school management. Existing `'See World Bank (2002), Cost andFinancingof Education, Table 3.9, p35. 32 legislation provides for establishment of a government bursary scheme, but this has not yet materialized. 4.35 Table 4.4 indicates the structure of W E spending. Compared to other countries, the highproportion of wages for teaching and non-teaching staff is remarkable, reflecting both the relative importance of academic subjects (Le. classroom teaching) as compared to Table 4.4: Structure of recurrent TVE practical instructions, as well as the undersupply spending 1998 with teaching and training materials. Again, a Total spending comparison with Ethiopia may be illustrative inmillion. MT Percent that spent on average 48 percent of total Personnel 33,803 74.1 expenditure on salaries, and 37 percent on Teachers 31,862 69.9 educational material28. InMozambique, only 26 N o nteachers 1,941 4.3 percent are spend for goods and services, most Goodsand 11,786 of which as interviews in training institutions Services I I 25.9 I showed is spent to settle electricity and telephone bills and for other administration relatedexpenses. 4.36 Furthermore, the goods and services budget line may overestimate the actual resources available at school level, as the budget execution rate for the goods and services budget is generally very low (72 percent in 2002, see Oxford Policy Management 2OO2)?9 However, schools do also generate income from training fees and sales of products. Trainingfees are around USD8 inbasic level schools and USD20inintermediate institutions. Students in the night shifts pay slightly more. Fees for boarding are substantially higher, whichmay explain the relatively highshare of recurrent costs to be coveredby parents that were indicated in the Education Sector Expenditure Review (2003). Poor students are exempted from paying fees. The school income, which is directly spent by the schools and not accounted for in the budgets, is often used to supplement funds available for educational material, support staff, and social and cultural activities. Own revenuesusually represents a substantial proportion of the funds allocated as operational funds by the provinces to the schools.30 4.37 Interms of capital spending, TVE experienced a modest increase from a rather low level during the second half of the 1990s and a steep increase of 165 percent between 1999 and 2001. In2001 per student capital expenditure was reported at USD58. Data to analyze to what extent more recent capital spending has developed in line with targets of the Estratlgia do Ensino Tlcnico-Profissional em Moqambique were not available. 28InBotswana, 27percentof totalexpenditure for publicVTCswas pentoninstructor salaries in1996(Botswana 1997). 29Ontop, 10percentof the allocatedbudget for goods andservicesare principally retained by the provincial finance departments. 30CBE (1999)presents examples of income generated by schools rangingfrom 35 percent to 150percent of the operational budgets. Schools that were visited duringthe preparatory missionhadbeen generating 56 and57 percent of the operationalbudget respectively. 33 4.38 The problem of under-sourcing of the TVE sub-system is compounded by the existence of a complicated system of public financial management and control indisbursing the government funds that are made available. InMINED, for example, financial control is exercised by the Planning Directorate working in co-operation with Ministry of Finance at national and provincial levels. Ministry of Finance channels funds to its provincial directorates, which inturn channel it to the schools. As a result, DINET, at both national and provincial level, has almost no influence on budgeting, investments and financial flows and no detailed knowledge or control over the operational and capital resource requirements of the schools under their responsibility. Moreover, the lengthy process for channeling funds invariably results both inhuge delays intransferring the necessary capital funds to the school level and significant under-spending of the allocated annual budget. Some Escolas Projssionais which were opened in recent years reported that they had never received any allocation at all31. 4.39 TVE under MINED does only represent one segment of the training supply; as stated above approximately 85-90 percent of the estimated entire TVE enrolment inMozambique. Public spending under the education sector represents only a fraction of the overall national spending on TVET. Additional public resources are used to finance vocational training centers run under the Ministry of Labor and training centers under other ministries and parastatal organizations. Households and industry are investing in training as well; by tuition fees paid for commercially provided training programs and company based formal and informal training activities. An assessment of overall national expenditure on W E T will be necessarybeforea comprehensivefinancing strategy canbe designed. 4.40 Some of the major characteristics of financing TVE and VT inMozambique can be summarized as follows: o The current TVE system in Mozambique appears to be under-sourced, in particular with respect to operational costs out of which educational and training material is financed, which is one of the reasons for low quality and efficiency. This finding may be surprisingas TVE graduates are competing well inthe labor market. o As far as information is available, the situation of underfundingis also severe in the INEFP system and one of the major reasons for the low capacity utilization of the schools. o N o comprehensive costing has been done so far to establish the additional resource requirements for training according to existing curricula. However, it can be assumed that measures to improve quality and relevance of training (e.g. better qualified teachers and increased and improved practice training) may substantially increase the overall cost of training. o N o reasonable disaggregated expenditure and unitcost data are available for the different levels of TVE. As data provided by the MINED/Austral study (2003) suggest unit costs are presumably rising substantially with higher TVE levels induced (1)by higher qualification requirements and subsequent rising salaries of teachers, and (2) by differences in sophistication of equipment and training 31Reports were made duringthe 2004 NationalSeminar on TVET. 34 material. Also, experience from other countries show that training cost varies significantly between occupational areas and trades. A comprehensive cost assessmentby different levels and training areas needs to be conducted for future planningprocesses. o Available figures suggest a very uneven allocation of resources between the different levels of WE, which cannot be explained by different resource requirements in the different W E levels. In particular, basic level training appears to be under-funded inrelation to the other TVE levels. In1997, recurrent government unit spending was 4.5 times higher for elementary than for basic level training, and 3.3 times higher inintermediate level compared to basic level training32, largely caused by higher teacher salaries. Similarly, the pupil to teacher ratio in 2003 was 1:48 for basic commercial and industrial, compared to 1:14 for basic agriculture, 1:12.4 for elementary, and 1:15 for intermediate leve1.33 o A complicated public financial management and control system, and a lengthy process for channeling funds to the schools compound the problem of general financial constraints. o The current system of provincial budget allocation to schools is not transparent and appears to produce inefficiencies. Allocations to schools appear to be arbitrarily done by the provincial authorities inmost cases and not dependent on performanceindicators suchas enrolment, graduation rates, etc. 32Calculationsbasedon World Bank(2003), Cost andFinancing of Training. 33Calculationbasedon 2003 Education Statistics. Incomparison, the calculated PTRfor technical trades training inEthiopia,whichcomprisesafairly highpracticaltrainingcontents, is1:20. 35 5. GOVERNMENT POLICIES RELEVANT FOR TVET 5.1 The Education Sector Strategy Plan (ESSP) 2999-200334i s an operationalization of the Government's Politicu Nucional de Educu@o from 1995. It defines the Government's short to medium-term education policy and priorities. The primary aim of the ESSP is 'accelerated progress towards universal primary education, with particular emphasis on increasing enrolments among girls'. Construction of new classrooms and improved internal efficiency through streamlining of the curriculum, and more transparent and simple assessment practices and student performance standards, are the principal means to achieve this goal. The ESSP emphasizes that the Northern and Central regions need special attention, where female enrolments are lowest, and poverty most widespread. Improved quality of education is stated as the second objective of ESSP. Teacher training, pre-service and in- service, combined with enhancement of school facilities are the instruments suggested in this connection. Finally, the document stresses the crucial importance of strengthening the current institutional and financial framework in order to improve the sustainability of the school system. Stronger community involvement and decentralization of day-to-day management to the provincial and school level are the proposed key elements here. Inthe document it is repeatedly emphasized that the Government is unable to mobilize the necessary resources to meet the social demand for education and training. Therefore, alternative providers such as NGOs, entrepreneurs and employers combined with support of external partners are expected to play an important role. It is therefore proposed that in the long term MINED should concentrate on its regulatory role, viz. defining policies and on guidingand coordinatingthe actions of its partners, payingless attention to direct provision of education. 5.2 With respect to TVET, the ESSP calls attention to the fact that acquisition of gainful skills goes beyond formal technical education; non-formal skills training being more pertinent for most school-leavers. As regards WE, ESSP in consonance with the PARPA prioritizes re-opening and revitalizing of agricultural schools and elementary level rural Escolas Artes e Oficios insupport of expanded rural income opportunities and increased rural production. Concerning the basic and intermediate level W E schools, it is mentioned that the current capacity will be maintained while minimum quality standards will be restored. N o new major investments are foreseen for the basic and intermediate levels. Instead, it is assumed that private partners and other government institutions, includingother ministries, will play a key role in technical education and skills training. In terms of secondary education, ESSP observes that the labor market demand for ESGl graduates, for instance in terms of primary school teachers, is fast growing and exceeds the number of graduates. Therefore, the target for this sub-system includes a limited expansion of enrolment with focus onincreasingequity inaccess, particularlyfor girls and students from rural areas. 5.3 Achievement of the ESSP goals and targets is varied. As mentioned, access to generalprimary educationhas improved markedly, and enrollment at lower secondary level has also shown significant increase. For WE, enrolment has gone up at elementary level due to rehabilitation and construction of a number of new elementary level schools, whereas 34As the preparation of anew ESSPfor 2004(5)-2008(9)hasbeen delayed, the validity of the current ESSPhas beenextendedby one year untilthe end of 2004. 36 the number of students at basic and intermediate levels is essentially unchanged. As envisaged in the ESSP, non-government provision of secondary education is increasingly compensating for the narrowness of the education pyramid, as demonstrated by the considerable number of private general secondary and technical schools. Most of these have been established in the major urban centers, i.e. Maputo-Matola, Beira and Nacala, further deepening the urban-rural divide. As regards internal efficiency and the quality of education progress has been less encouraging. Progression within EP1and from EP1to EP2 shows some advancement, but the picture for ESG and TVE remains essentially as poor as before. Shortage of qualified teachers continues to hamper quality improvements. Indeed, the rapid expansion of EP1and EP2 enrolment has aggravated the situation. Many see the deficiency of qualified teachers as the most pressing current challenge for the education system. 5.4 Inclose dialogue with its development partners and other stakeholders the GoMis presently preparing the Plum Estratiggico da EducaqEo 2005-2009 (usually referred to as ESSPII). Although not yet final, the document offers a valuable indication of the Government's visions and priorities for the education system for the rest of the decade. Although ESSPIIis essentially an update of the ESSP, with no major changes of the overall strategic goals and priorities, it puts stronger emphasis o n leveling out imbalances, e.g. initiatives aiming at stimulating girls' access35 and ensuring access for youth from remote regions, and to the struggle against HIV/AIDS. Education of more and better qualified teachers, and especially female teachers, is the number one priority of the ESSPII. It also mentions that the increasing number of EP1 and EP2 graduates has created a pressure for the expansion of post-primary educational opportunities. Hence, expansion of secondary education without substantial increases in costs is envisaged through reliance on non- government providers of education, improved internal efficiency through better quality of teaching, and cost sharing with other stakeholders, including parents and their families, as the Government's limited resources preclude major investments. It is mentioned though that construction of new secondary schools may take place in areas where schools are not available. The ESSPII draws a rather bleak picture of WE, characterizing the technical schools under MINEDas almost beyond repair, apart from those enjoying sponsorship from international partners. As is discussed below, this statement seems to be somewhat exaggerated. Indeed, many technical schools are ina bad physical shape, but definitely not to a point where they cannot be brought up to reasonable standard. As the Government is unable to mobilize the resources needed for bringing the system up to an acceptable level, the strategy for TVE is described as one of `teste de mercado'. Only to the extent that external partners, including parents and local communities, agree to share the costs of WE is there a basis for expansion and improvement of the sub-system. It is stated that incentives and subsidies may be more effective in encouraging large enterprises and other employers to invest in training opportunities for their current and prospective employees'. While well performing WE schools will continue to receive Government support, those that do not perform might, according to the ESSPII, be closed down. Apart from construction of new elementary level schools, no other major investments inthe TVE sub-system are envisaged. The ESSPII thus signals a lower priority to technical and vocational education inthe future, 35Enrolment of girls is showingslower progressthan that of boys. 37 than for instance indicated inthe PARPA, reflecting the urgency of expanding other parts of the educational system and the strong call for quality improvement throughout the system. 5.5 For general secondary education and technical and vocational education, the broad principles of the ESSP are further elaborated and particularized in the two separate documents, Estratdgia para o Ensino Secundhrio Geral e Forma@o de Professores para o Ensino Secundhrio, and Estratdgia do Ensino Tkcnico-Profissional em Mocambique 2002-2011. Both documents were approved by the Council of Ministers in2001. With respect to secondary education, the document essentially reiterates what is stated in the ESSP. The prime objective is given as to expand access 'in order to cater for the needs of the increasing number of students who finish primary education'36 In its expansion efforts the Government intends to `count on partnerships with religious, private, non-governmental and other organizations', in addition to construction of schools under the auspices of MINED. Donor funds are mentioned as a key to the expansion.37 Also distance learning is stated as an option expected to possess considerable potential. The low quality of the ESG sub-system is attributed to insufficient qualifications and l o w motivation of teachers, an excessively academic curricul~m~~, lack of learning materials and equipment, and weak management capacity. Teachers training, curriculum reform, especially reorientation of the curriculum towards life skills and the world of work, and decentralization of decision- making are suggested means to improve the efficiency and effectiveness. Intwo respects the Estratdgia para o Ensino Secundhrio Geral e Formaglio de Professores para o Ensino Secundhrio represents a change of previous years' policy. Firstly, it acknowledges the importance of non-government provision of secondary education, and, secondly, it breaks with previous years' strong emphasis on large, urban-based schools through recommendations of constructionof smaller schools, especially ESGl schools, outside of the urban centers. 5.6 The main divergence between the ESSP and the Estratigia do Ensino Tdcnico- Profissional em Mocambique2002-2021 is that the W E strategy calls not only for a n expansion of elementary level WE, but also of intermediate level schools with a view to ensure that such schools exists inall 10 provinces. This aim is envisaged to be achieved either through conversion (upgrading) of existing basic schools or, more likely, construction of new intermediate level Other important features of the strategy are a strong call for enhanced flexibility of the education system 'in opposition to premature specialization' and as a means to encourage life-long learning, stronger responsiveness to the realities of the labor market, including more focus on self-employment, creation of tripartite structures for social dialogue, and the need for common improvement of the facilities of W E schools. The 36The target is to increasethe number of students inESGl from 70,000 to 100,000 and to build250 additional classroomsby 2004. 37The World Bankthrough IDACredit 31720has committed to finance 6 new ESGschools. JICA and AfDB have made similar commitments. '*The number of academic (generic) subjectsis as highas 11for ESGl (andthus for basic levelW E ) and 7 for ESG2. The Strategy for Secondary Educationand Teacher Education characterizes this number as excessiveand calls for a reduction. A major reason for the highfailure rate after year one of the ESGl is often attributed to the excessive numberof subjects -apartfrom the poor quality of teaching. 39The TVE Strategy actually envisages 22 new elementary levelschools and6 more intermediate levelW E schoolsto be established by 2011. The planforesees anincrease inenrolment from the current levelof Approximately 31.000 to 45.000 in2011. Substantialinvestments indormitories are envisaged inthis connection. The budgetary implications of this are discussed ina later section. 38 Estratdgia do Ensino Tdcnico-Profissional em Mocambique 2002-2011 outlines three scenarios as to how to boost the W E sub-system based on different unit cost assumptions. The scenarios are discussed inmore detail insubsequent sections of the ESW. 5.7 Inearly 2004 MINTRAB circulated a new draft National Employment and Vocational Training Pr~gram,~o which was prepared inconsultation with the ILO. Interms of vocational training the strategy explicitly advocates for the integration of skills training with employment and self-employment promotion programs. The document sketches a number of initiatives aimed at increasing employment promotion with special attention to women through support to micro, small and medium-sized enterprises. Inshort, the proposed key ingredients are micro finance, labor-intensive infrastructural development and basic skills training - all to be based on a national employment policy. The document also calls for establishment of a labor market information system in order to facilitate effective employment planning. Some core system reform elements are also put on the agenda, including the establishment of a tripartite national training board and authority, the development of a competency-based training system with the possibility of recognition of prior learning, introduction of a payroll levy to improve the financial base of TVET, etc. Unfortunately, the strategy does not define its relationship to the DINET system and the already adopted National TVE Strategy of 2001. The Employment and Vocational Training Program is accompanied by a `skeleton budget' estimating the cost of implementation. For the employment part, the estimated cost is USD23 million, and for the training part USD26 million. 5.8 There is considerable consonance between the TVE Strategy of DINET and the INEFP Vocational Training Program. For instance both strategies emphasize the need for a national qualification system and a national training board/council. Similarly, both strategies call for a more flexible system, and broadening of the financial basis of the TVET provision. Untilrecently, the two strategies had been discussed inisolation without mutual coordination and dialogue and without a common vision about a comprehensive and coordinated TVET system. In this context, the agreements reached at the 2004 National Seminar on W E to work towards an integrated TVET system have to be considered a very importantstep forward. Summay of findings 5.9 Inbrief the government policy on post-primary education can be summarized as follows: o The Education Sector Strategy Plan 1999-2003 (ESSPI), which is still valid, emphasizes that acquisition of gainful skills goes beyond formal technical education. As regards expansion of the TVE sub-system, the ESSPIgives priority to Escolas Artes e Oficios, i.e. the elementary level. While the plan calls for quality improvement, it does not envisage major new investments apart from the Escolas Artes e Oficios. 40Ministry of Labor (2004). `Employment andVocational Training Strategy inMozambique2004-2010' 39 o ESSPII2005-2009, yet to bemade official, is emphasizingthe needfor public- privatepartnership and contributions byinternational development partners in the expansion of accessto secondary education, includingW E . o The Estratigia do Ensino Ticnico-Profissional em Moqambique 2002-2011 which fleshes out the ESSPIinrelation to WE, deviates from the ESSPIinone respect: It states the possibility of establishing a number of intermediate level TVE schools insome of the provinces lacking such schools inorder to level out the regional imbalances. Otherwise the TVE Strategy confirms the priorities of the ESSPI calling for quality improvement, increased access, decentralization of school management, and redefinition of the role of DINET towards regulation downplaying its function as provider of W E . The TVE Strategy also warns against premature specialization and favors stronger flexibility of the training system. o The National Employment and Vocational Training Program prepared by INEFP of MINTRAB calls for establishment of a tripartite national training board and authority, the development of a competency-based training system with the possibility of recognition of prior learning, introduction of a payroll levy to improve the financial base of TVET, etc. Inthis context, the DINET and the draft INEFP strategies are very similar. Therefore the recent initiatives, which were prepared at the 2004 National Seminar on WET, to form a TVET Working Committee with the mandate to develop an integrated National WET Program have to bewelcomed. 40 6. CONSIDERATIONS AND OPTIONS FOR FUTURE DEVELOPMENT 6.1 Summary of main issues 6.1 From the previous sections especially five issues emerge as vital for the future direction of technical and vocational education and training (WET) inMozambique: (a) The issue of access and equity, which figures prominently inthe current political debate in Mozambique as indicated in the PARPA, the ESSPII and other policy documents. The issue relates both to the highly uneven regional distribution of TVET facilities, the skewed gender balance inthe education system, and poverty- related barriers. But also the role of different WET providers and how the various TVET sub-systems are articulated into a qualification structure are key in this connection. (b) The issue of quality and relwance, as indicated by the disputed quality of graduates and the low internal efficiency of WE. Insufficiently qualified and poorly motivated teachers, shortage of teaching materials and workshop facilities, and outdated curricula are part of the problem. Balancing demand and supply, the most essential of the issues of any TVET reform, definitely constitutes a very fundamental challenge. Labor market responsiveness is a crucial dimension of any attempt to improve the relevance (external efficiency) of the TVET system. (c) The issue of sustainabilify. Quality improvements and increase of access cannot be meaningfully discussed without addressing the issue of mobilization of resources to finance them. As the GoM has indicated that it is impossible to make more resources available to WET, the fundamental challenge is to search for sustainable sources of funding of the expansion and improvement of the system. (d) And finally the issue of institutional reform; i.e. governance and management of the TVET system. Related issues are the institutional anchoring of WET and the role of government vis-a-vis non-government actors, e.g. national coordination, decentralization, and management at school level. 6.2 Also, the issue of the HIV/AIDS pandemic calls for attention. Firstly, education institutions play a crucial role in the effort to curtail further spread of the endemic, and, secondly, the costs of operating the system are affected by the loss of teachers and students. Any development of the TVET system must take these aspects into consideration in line withexisting Government policy. 6.2 Increasing access and equity 6.3 The following section discusses options available to the Government of Mozambique to improve TVET both, qualitatively and quantitatively, under the assumption that public spending o n TVET is not likely to be significantly increased in the foreseeable future. 41 Against the background of resource constraints, increasing access and equity is very much a determinant of best use of scarce resources within a clearly demarcated role of government inthe training system. Experience inmany countries worldwide, notably countries with very effective training systems, shows that governments cannot afford to do all, in particularly not being responsible for providing and delivering all needed TVET to all target groups. Ithas become more commontherefore, that governments tend to limit their engagement to two central roles: (a) being a regulator and supervisor of W E T that is provided by a diversified spectrum of actors (b) providing and delivering training in important sectors and niches where no other public or private provider is active, i.e. filling the gaps inthe training supply. This may comprise training for difficult labor market segments, such as the informal sector, for marginalized target groups, and in strategic occupational areas that are important for economic development of the country, butnot (yet) attractive for other training providers. 6.4 Within this context, the following paragraphs try to stimulate a discussion about a suitable role for govemment inthe current Mozambican TVET landscape trying to identify, which the major gaps in the training supply are and how government can act to fill those gaps. In a second step, potential adjustments in the public qualification structure are discussed, which may help utilize public training resources more efficiently than at the current moment. 6.2.1 Roleof governmentandother providersinthe TVET environment 6.5 The different W E T provider systems in Mozambique are operating largely independent from each other. They are unconnected, not harmonized and sometimes duplicating. Apart from (formal and informal) industry-based schemes, programs are usuallynot tailored for specific requirementsinthe labor market. A discussiononthe future role of government and other provider systems within the training landscape therefore requires a closer look on the prevailingW E T demand and supply patterns inMozambique. Training demand is diverse but particularly high at lower qualification levels targeting the informal sector 6.6 Demand for technical and vocational education and training, inthe wider sense, may broadly be classifiedby kindof training as follows: o Initial (pre-employment) training to prepare schoolleavers for careersinthe formal sector. Graduates with solid occupation specific skills are needed by enterprises of all size categories. They are essential to improve the economy's flexibility, productivity and competitiveness; o Short specialized and upgrading training of workers in industry. There appears to be a high need in all sectors and size categories of enterprises. However, 42 effective demand tends to be rather low inthe SME sector and hardly existing in informal enterprises. Reasons for this include: (1) lack of resources, (2) lack of government incentives, (3) unavailability of training programs; o Initial training to prepare labor market entrants for self-employment and work in the micro and small enterprise sector, including small-holder agriculture sector. This training needs to be employment-oriented, i.e. with a relevant praxis content, product specific, including entrepreneurship orientation and business management training, and embedded in more comprehensive micro and small business promotionenvironment. 6.7 Available information does only allow for very general hypotheses about specific training needs in terms of sectors or occupational groups. Although the most important sectors interms of formal employment are known (trade, hotel/ restaurants, manufacturing, construction, services, agriculture, motor vehicle services), sector-specific skills needs have only been identifiedinthe case of very few sectors. More importantly, however, the growth dynamic of the different sectors and sub-sectors, and subsequently their demand for new workers is difficult to forecast as they depend on improvements of the overall investment climate in Mozambique and regional and global economic developments. Mozambique therefore should consider to install a system of TVET planning that firstly institutionalize the participation of private businesses inthe definition of qualification contents and levels, and secondly, can flexibly incorporate changing growth and development patterns in different sectors and skills areas. 6.8 Regarding qualification levels, available information41 suggest that the need for people skilled at lower qualification levels is especially high and may well exceed, interms of numbers, the need for people with higher qualifications. As the informal sector employs by far the largest share of the workforce, training is particularly needed to prepare young people for gainful employment (incl. self-employment) in the informal sector. This sector will have to absorb most of the increasingnumber of primary school leavers and new labor market entrants without primary school completion. Until 2010, 450,000 to 500,000 young people are expected to enter the labor market annually with different levels of educational attainment. While it is assumed that training for the informal sector i s at a relatively low qualification level, further research and expert discussions are necessary to establish more precise demand patternfor training interms of qualification levels. TVETsupply is biased towards employment in theformal sector 6.9 On the supply side, the current training system still bears the marks of a training system of a centrally planned economy. It is dominated by standardized, mostly long-term pre-employment schemes, while a complementary more flexible training market catering for specific short-term training needs of enterprises is only developing slowly. The public formal TVE system under DINET appears to follow supply rationales such as the availability of training institutions and existing curricula. As Graph 1visualizes, TVE offers a very low number of training places provided at the lowest qualification level (elementary level), a 41Especially the RapidLabor Market Appraisal (Muhamed 2003) whichindicated that there are moresemi- qualified employees inmost sectors than qualified employeesand technicians. 43 sudden very large supply broadening at basic level and again a sudden supply squeeze when the ladder reaches the intermediate level (the highest level within the TVE system). It is interesting to note that the intermediate level supply is still more than double the elementary level supply (including the new Escolas Professionais). The very academic training tends to prepare graduates for employment in government and large enterprises and less for small enterprises and the informal sector where significant pre-employment training is needed. 6.10 Whereas most of the W E supply i s effectively targeting employment in mega- projects and large companies, it has to be considered that such companies are themselves significant training providers, either by maintaining company-based training centers or by cooperating with outside training institutions for company-oriented training programs (e.g., Mozal). Some of these large and very large companies provide long-term initial training to any recruits with a certain level of schooling irrespective of whether graduates come from the general or technical vocational education system. Recent developments also appear to indicate a positive trend towards public/private partnerships in the running of training institutions42. The larger segment of the business sector is assumingly also an important consumer of short-term training programs provided inthe private training market, mainly in the field of white-collar professions. The public sector, i.e. public administration and public enterprises, also appears to be largely self-catering inmeeting its demand for skilled personnel, mainly through specialized training institutions, for example, for health personnel, agricultural extension workers, etc. Inother words, training needs of large parts of the formal sector are potentially served by several training provider systems: industry (or employers) themselves, the private training market and the formal public W E system. 6.11 On the other hand, apart from traditional apprenticeship training in artisan trades, not enough training is available to prepare new labor market entrants for employment and self-employment inthe informal sector. Such schemes would need to be tailored to specific skills and knowledge requirements in the informal sector and may also include integrated skills development and self-employment promotion schemes. The largest public provider of non-formal vocational training, INEFP, so far appears to have fallen short of its objective, partly because training programs are of low quality and relevance, and also because actual enrollment number have remained low. To what extent the newly expanding elementary level TVE supply can fill this gap remainsto be seen.43 6.12 Graph 6.1 visualizes some of the apparent imbalances in the current training landscape. It shows, broadly speaking, that training needs in large enterprises, to a lesser extent in medium enterprises and in the public sector, are well catered for by currently available training programs, while the informal sector appears to be substantially undersupplied. In the following, options are discussed for government to balance the picture ina most efficient and cost-effective way. 42A modelhas beendeveloped with Emest & Young, andaccording to industry representatives there is significant interest from the side of employers to embark on partnership with govemment interms of training. 43For the previousperiodsinformationonthe careers of elementary W E graduates are based on toolow samples to allow for conclusions onthe effectiveness of elementary level training. 44 Graph6.1: CurrentWET landscape 1 Publicsector I Medium enterprises Small enterprises (including micro ."l*,priM and including ag,iC"lt",e 6SCIOr) I Optionsfor redefining govmment's role in TVET 6.13 The ESSP and the Estratigia do Ensino Ticnico-ProFssional em Mogambique 2002-2011 suggest for the formal TVE system anexpansion of elementary levelenrollment and increase in technical education opportunities at intermediate level. On the other hand, basic technical education opportunities are to be slightly reduced and aligned with the expected enrolment figures at the higher intermediate level. This reorientation is also aimed at increasing equity inthe access to W E inthe rural areas and across provinces as opening of further schools at elementary and intermediate level is planned. The general policy direction, which would result in a more pyramid-shaped W E supply structure, overall appears to be inline with identifieddemand patterns. 6.14 Inview of limited fiscal resources and management problems inthe publictraining system in Mozambique, government may consider to limit its scope of involvement in training delivery and clearly define a specific and distinct role in the countries' training supply. This may include concentrating training in strategic areas on the one hand, and ensuring that access and equity goals are met on the other hand. Three major options 45 appear to emerge if GoM i s to redefine its specific role inthe country's TVET landscape: (a) Increase supply with training at lower qualification levels inorder to meet the skills needs of the informal sector and broaden access to school leavers and drop-out; (b) increase supply of training at higher qualification levels (intermediate or above) to ensure that the country is supplied with a sufficient corps of skilled workforce in order to maintain and extend the (still) infant industrial structure and infrastructure; (c) in view of a further potential for private initiatives in TVET, investment in the support of private training involvement (see Options Impact Remarks (advantaged disadvantages) Option a: Increase of basic post- Re-orient training to Training is less costly and will primary TVET informal sector and semi- strengthen training provision qualified workers for the to marginalized groups and formal sector rural areas (equity aspect). Outionb: Increase of higher Focus of publictraining Highcost, lower volumes of towards strengthening training. However, strategic skill areas prospering part of private business is primarily looking for this category of graduates Option c: Use of public resources to Strengthened industry Industry-based training stimulate non-public training supply and private initiative in supply dependent on and concentrate on niches TVET economic performance; strategy depends o n preparedness of private actors to invest 6.15 The first option emphasizing training at lower qualification levels would directly support poverty reduction goals. As training cost are assumed to significantly decrease with lower qualification levels, a re-orientation of public training towards elementary level training would enable government to increase training places within a given resource envelope, thereby increasing access and potentially equity. It would provide opportunities for primary school leavers and potentially other target groups such as out-of-school youth, and it would help improving the currently underdeveloped training environment geared for informal sector employment. However, more precise training needs and requirements in the informal sector are largely unknown so far. Thorough labor market analysis and training needs assessments will need to take place before decisions on the future training focus are made. Most likely, training programs needto be newly developed focusing less on theory and general competencies and more on employable skills and entrepreneurship competencies. There is a general risk that skills training will not lead to better employability of graduates, unless the business climate for small enterprises is improved. This may in particular be the case, i f training inthe rural areas is increased. The labor market problems identified for W E in agriculture (see MINED/Austral 2003) may indicate that the labor market in the rural areas is particularly problematic. Again, new demand-oriented training programs will need to be developed. The shift in orientation of public training supply, suggested in option (a) would furthermore imply that with new target groups and more 46 flexible training programs elementary level trainingwould slowly loose its link to the formal TVE system and become an employment oriented skills training scheme, which may not fit into the specific competencies and responsibilities of the Ministry of Education inthe long run. 6.16 The second option, concentrating public TVE resources in selected strategic skill areas at high qualification level, would more clearly put public W E T into commission of formal sector- and mega project-led economic growth. Training supply would stay limited interms of enrolment numbers due to substantially higherunitcost of training. Infact, itis not likely that significantly more than 1%of an age group could be absorbed i f the public TVE system would be shifted towards intermediate level training. On the other hand, it is very likely that investment in such training would generate a good return, as graduates would likely be absorbedinthe labor market without problems and add productivity to the economy. 6.17 The third option assumes that government, instead of aiming at the delivery of most of the strategically important training itself, decides to explicitly support private sector investment inTVET and limits its role to filling gaps inthe country's training market. The major advantage of such a policy, which is increasingly on the agenda inmany parts of the world, is that more private training delivery will tend to free public resources that can then be used to pursue other crucial objectives such as training regulation and investment in niche strategic TVET areas. Such a strategy would imply that private sector training activities have not reached their full potential and can still be further stimulated through incentives. A major disadvantage of a training strategy that relies substantially on private training inputs i s the fact that private training investment depends on overall economic performance indicators and may not be as predictable and straightforward to plan as public training supply. 6.18 Overall, the three options do not exclude each other. They may even be pursued complementarily representing different foci of public targeting. For efficiency considerations it is important that in any discussion about these options the potential of the entire public and non-public training system is taken into consideration. Coordination of future public investment in TVET with other training provider systems may reduce duplication of training efforts and ease learning from best practices. The decision on government spending will also need to be determined by the scope external resources and training initiatives can be mobilized. In the following section, the options are further discussed inthe light of the Mozambicanpolicy context. One optionfor government is to strengthenand support non-public training supply 6.19 Regarding external resources, government's explicit commitment in different policy statements to strengthen private sector involvement and investment inTVET should be re- emphasized. Inparticular inthe context of higher level WE, the positive training culture in large and public companies and mega-projects may be taken into consideration and systematically integrated with national TVET planning. Although more precise information on the preparedness of large private firms to invest in training is still lacking, available 47 evidence indicates an already high involvement and high preparedness for continued investment, a finding that resembles the situation in most other sub-Saharan African countries44. Supported by financial incentive schemes (e.g. through a levy grant system or tax rebates) and increased participation inthe governance of the TVET system, a portion of the responsibility for training at higher levels may be shifted to employers themselves. This could help to increase the overall training supply at no or relatively low cost (e.g. lost tax income, etc) for government and ensure labor market responsiveness of highleveltechnician training inMozambique. Apart from training in company-based training centers, which is likely confined to very large employers and mega-projects, options aimed at stimulating industry based training activities may be explored as well, for instance incooperation with industry associations. Examples of such training are available inneighboring sub-Saharan countries for example in accountancy, hotel and hospitality, construction, and others. Employers' investment inTVET may also includepublidprivate partnerships inthe running of public training institutions, a field in which promising initiatives have been emerging more recently. 6.20 The strengthening of the emerging yet still rather infant private training market is another option explicitly taken up inrecent policy papers. Like everywhere insub-Saharan Africa, the market tends to be concentrated in cheap to train occupational areas such as commercial trades, including IT, accounting, secretarial, management, tourism, etc. It principally serves both training demands: initial pre-employment training for school leavers, as well as short-term courses for employees. I f this market is strengthened, the publicW E (andwider TVET) system may have the scope to rather concentrate on areasthat are less attractive to private investors. Usually, private for profit training institutions are runrelatively cost effectively and can flexibly react to changing market environments. The emergence of a private training market can also impact on equity and poverty reduction, as private providers normally attract students from the better off segment of society thus freeing public training capacities for poorer target groups. Incentive policies may include special investment incentive, conducive accreditation and operational environment, and even direct or indirect subsidies to private training providers. Strengtheningtrainingfor theinformal sector 6.21 While most of the current training supply i s meant to prepare graduates for employment in the formal sector, the demand and need for employment-oriented skills development schemestargeting work inthe informal sector ishighand expected to rise with increasing numbers of new labor market entrants. The public authorities can play several, possibly complementary, roles in strengthening and increasing the provision of relevant training. A case for government is to invest in the promotion of such training schemes, preferably throughincentivesto independent training providers, subsidization of innovative and employment oriented training programs, and other measures geared to create a conducive environment for labor market responsivetraining development and delivery by a variety of different non-public training providers. An important issue for all informal sector oriented training is that it requires, to be effective, a conducive micro and small enterprise policy and development environment, where credit and necessary business development eSee, for instance, Johanson& vanAdam (2003). 48 services are available and accessible. There are also some cases in neighboring African countries where traditional apprenticeships were more systematically supported. Government shouldfocus its training supply in undwsuppliedfields 6.22 Considering the relative strength and expansion potential of non-public TVET provider systems, government may define its specific niches and strategic role in the development of TVET in Mozambique. This definition requires a broad and inclusive discussion about the vision of the future Mozambican TVET system and the roles each stakeholder is expected to take over. As mentioned, the Government's intention (as expressed in the relevant policy documents) to reduce basic level TVET to the benefit of elementary and intermediate level training appears to be a right move towards aligning the public training supply with the structure of the labor market. Inparticular the emphasis on extending lower level (elementary) TVE supply responds to both labor market demand as well as equity and access considerations. Regarding elementary level training, the policy envisages new establishment of 22 Escolas Artes e OficioslEscolas Profssionais with preference inrural areas. Preliminary enrollment targets are less clearly spelt out but it appears that students expecting to pass through this level would still be less than the expected intake capacity of basic level WE. In order to determine the optimum relative strengths of elementary TVET vis-&vis the other levels of W E and general education, it appears necessary that its future role inthe overall W E sub-system be clarified. This issue is further discussed below. Inany case, a clearer focus of public WE(T) supply towards marginalized target groups and youth and the informal sector appears important to counteract the current imbalances in the training landscape. Inthis context, the intention of DINET to establish new Escolas Arks e OfcioslEscolas Profssionais in rural areas points into the right direction. The same applies for vocational training centers under INEFP, which are envisaged, according to the latest strategy draft, to reorient their training efforts more explicitly towards self-employment promotion. 6.23 Given limited resources, the scope of expanding intermediate level training will be determined by both the government's final targets with respect to elementary level expansion and the extent to which the W E system can mobilize external resources, mainly from employers and within the private training market. Government needs to explicitly specify its role inthis environment. Strategic areas will have to be defined by geographical consideration (increasing access and equity by catering for undersupplied provinces) and/or by sectoral considerations, i.e. investing in skill areas that are important for economic development but not appropriately catered for by private stakeholders. In general, apart from investing innew infrastructure to establish intermediate institutions in all provinces, the possibilities to upgrade basic level schools to intermediate institutions should be considered wherever possible. 6.24 Graph6.2 illustrates a potential modified WET landscape inMozambique, with slightly redefined roles as discussed above4? 45Table A l l inthe Annex summarizes possible mainproviders (provider systems) for different kinds of training andtarget groups. 49 Graph 6.2: Possiblefuture TVET landscape Mega projects Large film* 1 I - I Small 1 enterprises (including mlWO .nt.rp.i..* and including agricukure sector) 0 Strengthening employer-based and employer-funded initial and short-term training supply and a deepened private training market to cater for large segments of the formal sector training needs, inparticular inlarge and very large companies 0 Public provision of higher level WE for strategic sectors and inundersupplied provinces 0 Increasing supply with employment-oriented skills training geared for informal sector employment, bothby government and non-public providers 6.2.2 Revisingqualificationstructures 6.25 A definition of the government's role inthe TVET system will inevitably lead to a discussionabout the appropriateness of the current qualification structure within the formal WE system. Some issues and options inthis regard are discussed inthis section, as well as the advantages of merging the formal W E system into a broader National Vocational Qualifications Framework. 50 Appropriate entry and exitpoints of TVE withgeneral education 6.26 The current qualification levels - elementary, basic and intermediate - describe terminal TVE programs, each of which can be entered from the general education system. This is attractive from the point of view of retaining options for general school leavers at different levels. However, it also contributes to inefficiency of the TVET system as such. In order to ensure entry at each level, basic trade related knowledge and skills have to be repeated at every level requiring high resources in terms of teachers, equipment, training material, class rooms, etc - at least if the system is sufficiently resourced and function as supposed to. At the current moment the system appears mainly to help students coping with insufficient educational choices46. Considering the fact that quality improvements in the TVE system will inevitably require more unit resource input than currently available, there may be a case for reconsidering the frequent entry and exist points (to and from general education), possibly defining one general entry point (after Grade 7, or at the beginning of basic level TVE) and one exit point (after equivalent of Grade 12 or graduation of intermediate level WE). Such a model, comprising one block of basic and intermediate levelTVE, was suggested at the NationalSeminar onTVET inMay 2004. 6.27 Currently, TVE and general education are articulated through equivalences between their certificates. These equivalences serve two purposes: They determine equal (comparable) payment between graduates from the different systems and, secondly, they ensure access to higher education for TVE graduates. The first point is likely to become increasingly unimportant, as the emerging private sector is moving away from usingpublic salary scales. The second issue, on the other hand, will remain relevant if the TVE system wants to attract capable students and prepare young people for engineering careers. Hence there i s a strong point for maintaining a system whereby TVE certificates have a defined value inthe general education framework and graduates have a chance for transition to the general and higher educationsystem. 6.28 However, full equivalences betweenTVE and general education certificates require a substantial portion of general academic education within the TVE program, leading to long durations of the TVE programs. Inorder to keep the duration of courses relatively short, it may also be considered to maintain permeability through bridging courses for TVE graduates wishing to change to general education at the end of TVE training period. Also, to reduce the number of students who only opt for TVE because they failed to proceed in general education, there may be a case for defining specific entry requirements into TVE, for example, practical aptitude andtechnical interest. 6.29 I f and when entry and exit points inrelation to general education are re-defined, for instance towards a model suggested during the 2004 National Seminar on TVET, it may be possible - without compromising the general recognition of TVE within the education framework - to refine the number of exit levels from the TVE sub-stream inalignment with the needs of the labor market and requirements to harmonize the Mozambican TVET 6 Students tend to prefer generaleducation, and opt for W E streams only if no places are available for themin general education. Therefore, the possibility of hoppingbetween the different streams improves chances to stay inthesystem. 51 qualification system with the one of its Southern African neighbors, which in most cases maintaina TVET qualification structure with three or five different qualification levels, often defining a training period of around one year. A move of the Mozambican system towards its neighbors may ease the gradual development of international recognition of its training system.47 Role of Escolas Artes e OficioslEscolas Profissionais 6.30 As discussed in Chapter 3, W E at elementary level appears to be currently in transition. The original Escolas Arks e Oficios, which started at post Grade 5 level (EPl), are now increasingly complemented and replaced by Escolas Profssionais starting after completion of full primary education. If the trend continues, elementary level TVE will be entirely upgraded to post primary level inthe foreseeable future. At the current moment, the new two year curricula of the Escolas Profssionuis do not provide a certificate equivalent to lower secondary education as does basic WE. Effectively the new programs have introduced a new post-primary TVET scheme outside of the formal W E system meant to prepare students for employment. However, there are demands at the moment to extent the duration of the new schools inorder to re-establish the recognition of certificates within the general education system. I f the latter trend lasts Escolas Profssionais will develop into normal basic level W E programs with modernized curriculum. Since most of the new Escolas Profissionais are to be opened in rural areas, this trend would act to increase access and equity to post-primary education. However, if such an integration of elementary with basic TVE becomes effective, it will also further reduce the supply with public training explicitly targeting the informal sector. Appropriate start of TVE 6.31 With the described trend towards abolishing the former elementary level training programs the question of the right entry age into vocational specialization within the education system has become an issue for discussion. The fact that intermediate W E graduates do better in the labor market than basic level graduates suggests the option to limitformal TVE to intermediate leveltraining, i.e., to start with vocational specializationin the formal education sector after Grade 10, a system, many African countries maintain. In this context, TVE would sharpen its focus to train high level technicians for supervisory positions in industry leaving vocational training and informal sector focused skills development to other training schemes outside the formal W E system. Such a decision may broaden the scope for general secondary school expansion as general education - at least after necessary reforms for quality improvements have been introduced - will be less expensive than WE. Under such as system, Escolas Profissionais, runas a vocational training scheme independently from the formal TVE system, would need to sharpen their focus on 47A possible modelfor areform of the present qualification system, derived from different suggestions discussed at the current moment, is presentedinthe Annex. Inthe longrun, the W E qualification system may be discussed inthe framework of aimingat a comprehensive nationalTVET qualification framework that would span beyondthe TVE system andbe capable to integrate other currentlynon- andinformal trainingschemes. This may also act to improve the attractiveness of training offered by INEPF andother non-formal providers, or inarevisedelementary trainingprogram. 52 employment oriented skills training targeting informal sector employment and semi-skilled workers. Permeability between Escolas Profssionais and formal post Grade 10 formal W E could be maintained through the introduction of bridging courses, with or without the organizing frame of a qualifications framework. Introduction of a National Vocational Qualifications Framework 6.32 The relevant policy documents suggest, and this was reiterated by the 2004 National Seminar on TVET, to formulate a National Qualifications Framework (NQF) for Mozambique. This appears to be the appropriate way forward to facilitate the emergence of an integrated and articulated training system which eventually will allow for horizontal and vertical permeability between the different training sub-systems. Such an NQF would need to define on the one hand equivalences and relationships between different TVET qualifications and on the other hand between vocational qualifications and the general qualifications system. The already existing framework between the general education and TVE systemwould inthis case serve as a point of departure for a wider NQF definition. 6.33 While an NQF appears to be a suitable and attractive solution for Mozambique, it should also be understood that its development and introduction will require substantial time and financial resources, as for example the South African experience has shown. This concern applies in particular, when the NQF is translated into training organization, i.e. when a competency-based training system is introduced and subsequently independent testing and certification developed. Tanzania and Botswana are further case studies for the substantial resource requirements not only to develop but also to maintain and sustain a system of occupational standards and independent assessment including its necessary institutional set-up. Summay of options 6.34 Insummary, twobasicoptions canbeextractedfor a moresystematic redefinition of qualification structures inthe W E system, taking the already ongoing reform of elementary level qualifications into considerations as well as the expected demand patterns inthe labor market (see Graph 6.3). 53 Graph 6.3: Different options for a revised TVE qualification system Option a Option b GeneralEducation jeneral Education N E 1 Higher Hlgher education 1 1 I i ~ education 6.35 The first option (Optiona) describes the W E basic and intermediate "block" that was suggested during the 2004 National Seminar on TVET, while is assumed that the current elementary level training programs are merging into basic levelW E . The advantage of this system, as compared to currently, is the increase in efficiency within vocational specialization. The "block" also allows for flexible internalstructuring of the training period (for example into three vocational levels), allowing Mozambique to start aligning its vocational qualification structure with neighboringSADC countries. 6.36 In the second option (Option b) formal vocational education would basically be limited to intermediate level training, clearly geared for preparing students for senior technician careers in the labor market and further engineering studies. Students would enter TVE more trainable with a wider general education base than currently. Elementary level in the Escolas Arks e Oficios and the new Escolas Profissionais would provide an alternative post-primary educational option, with curricula revised to prepare students for employment. Options for re-turning to the general education system after elementary level training and other TVET schemes outside of the DINET system can be left open through bridging courses and other means of recognition to be defined inthe NQF. Although not immediately necessary, the second option would sooner or later raise the question whether training schemes below intermediate level training (i.e. outside of the W E system) are best located inDINETinthe long run. 54 6.3 Increasing quality and relevance 6.3.1 Raising quality of training 6.37 Initiatives aiming at improvingthe quality and relevance of the TVET system appear to be a matter of urgency and feature prominently inthe relevant policy documents. Quality improvement in training is related to matters as for instance training of technical teachers, reform of standards and curricula, availability of teaching and learning materials, establishment of a quality assurance system and the refurbishment of pitblic training institutions. Also, the further decentralization of management responsibilities to the training institution level is expected to enable institutions to act more professionally and responsive, and thus improve quality. The Estratigia do Ensino Ticnico-Profssional em Moqambique 2002-2012 identifies improvement of quality and relevance as one of three priority areas. Activities proposed include both short-term interventions and more comprehensive system reform options meant to support quality improvement in the long runand lastingly. 6.38 Any activities aimed at improving quality of training should be accompanied by the introduction and rigorous implementation of monitoring and evaluation schemes. TVET programs are most effective when they are implemented in conjunction with rigorous evaluations in order to ensure that the training is actually implemented as intended, the quality of training is high, and employers are benefiting from the scheme. Without rigorous and systematic monitoring and evaluation, there is significant opportunity of misuse. 6.39 The following table provides an overview about critical reform areas. It identifies options for short-term interventions as well as more fundamental framework reform aspects which can only be pursued in the medium to long run. Some issues in relations of this reform agenda are discussed below. In most reform areas, foreign partners, e.g. GTZ, CooperacidnEspaAola and Danida, are already providingassistance. reformareas to improve ti iningquality Interventionfield Quick Requirementsfor long- Remarks and critical issues interventions termsystem reform Technical In-service (1)Establishing * Feasibility of establishing an teachers training training of continuous in-service own technical teachers training current learning/ upgrading institute? technical system; * Qualification system of teachers corps (2) Establishing pre- technical teachers employment technical * Measures to retain trained teachers training technical teachers inthe svstem Curricula and Revisionof (1)Establishmentof a * Institutional arrangements standardization curricula , standard-based training * Alignment of quick system system (CBT system) interventions with long-term reformdirection Assessment and (1)Establishmentof an * Institutional arrangements for certification and assessment and assessment andcertification 55 other quality certification system Degree of independence assurance (2) Accreditation system :autonomy) of accreditation elements system New learned Short-term Revisionof technical *Institutionalarrangements centered didactic pedagogical teacher training methods courses Refurbishment of Renovation (1)Developing`centers of Feasibility of developing + publictraining and equipment excellence' sector-specific 'centers of institutions procurement of excellence' selected * Need to deepen relationship training with business community in institutions order to facilitate sector focusing of training institutions Management of Management (1)Decentralization of * Feasibility of moving public public training training and management inthe training institutions towards institutions management public training system the training market information (2) Autonomy of public * Degree of autonomy of public systems training institutions training institutions *Degree of commercialization of public training institutions Labor market Expert panels; (1)Developsimpletools * Skills demand is dependent monitoring sector specific for (decentralized) on investment climate and studies observatories economic development (2) Decentralization of decision on course I program Improving technical teacherstraining 6.40 While immediate in-service training of technical teachers who are currently in the system seems to be needed, it also appears to be indispensable to establish inthe long runa systematic pre-service technical teachers' scheme. In this context, ways and means to improve the practical knowledge of technical teachers are important, and industrial attachment and other forms of workplace-related learning may be considered. Cooperacion Espafiola and the African Development Bank have both expressed an interest in financing establishment of a teachers training facility under MINED. Questions that need to be addressed inthis context include (1)whether it is feasible to establish an own institution or whether a training program could be attached to an existing higher education institution (Pedagogical University (UP) or Engineering Faculties), and (2) what kind of qualification structure would provide the best profile and mix of practical and academic skills of technical teachers. The issue of an appropriate qualification structure and qualification requirements for technical teachers is also important in view of the long-term cost implications of increasing the average qualification level of teachers. Furthermore, as experience in other countries show, technical teachers training will run the risk of being highly ineffective as longas only few graduates will effectively go into and remain inteaching. Investment into technical teachers training may therefore be accompanied by measures to raise prestige and attractiveness of the technical teaching profession. 56 Developinga competency-basedtrainingsystem 6.41 The proposition to move towards a CBT system in Mozambique appears to be appropriate, but needs to be further operationalized. A CBT system implies that the authority about training contents will be shifted from (input-defining) curricula to (output defining) standards. This may provide the ground to facilitate quality (and system efficiency) improvement indifferent ways: (1)it systematically involves the users of skilled people, i.e. employers and the business community, in the definition of the training outcomes; (2) it facilitates flexibility in training approaches and curricula and hence the tailoring of training programs to specific target groups; (3) it increases transparency among different training schemes, (4) it will facilitate anincreased articulation betweenthe different training sub-sectors and the possibility to recognize learning outcomes innon- and informal learning environments. Furthermore, it will align Mozambique with the rest of Southern African countries, which are moving towards CBT systems (SADC has a policy of introducing CBT init member countries). A major challenge will be to design a simple and relatively low cost systemwith the opportunity of implementationstarting immediately. As some donors are currently actively supporting the revision of curricula inthe TVE system, a decisionon CBT and the accompanying qualification systemi s pressing inorder to delineate the framework for the ongoing curricula revisions. 6.42 The 2004 National Seminar on W E T suggested developing "interim standards" under the leadership of DINET, to bridge the time untilthe CBT and standard setting system i s fully in place. It should be considered inthis context that the concept of competency- or standards-based training systems implies to delegate the formulation of the training outcomes (competencies formulated in standards) to a broader range of stakeholders, in particular representatives from the world of work. Formulating standards within DINET would representa stepback inthe context. Itshould be rather considered to employ already in the (necessary) process of interim standard formulation the notion of employer involvementor employer leadership, not least to reinforce the process of ownership creation among employers. Inpractice, such an involvement inthe short runmay also mean that a mandated and representative stakeholder body (such as the TWC) delegates the development of interim standards to another appropriate institution (suchas DINET). 6.43 The establishment of a CBT system will in the long run call for a clearly defined assessmentand certification systemproviding quality assurance of trainingthrough external assessment of training outcomes. While such a system may be established gradually, the TVET system may immediately gain credibility among the world of work, i f employers' will be involvedwith a prominent role inthe implementationof testing. Targeted investment in rehabilitation of physical infrastructure 6.44 The appalling state of some of the public W E institutions calls for investment in refurbishing and re-equipping workshops andbuildings. However, such investment should be carefully planned and targeted in accordance with the re-definition of the role of the public TVE sector in the overall national TVET landscape. A re-definition of the WET 57 system is likely, as mentioned elsewhere, to incorporate the re-assignment of public schools in terms of qualification levels and a sector focusing of certain training institutions. Investment in public TVE(T) institutions must be planned in close cooperation with the relevant training institutions not least to strengthen ownership of the reform process at training institutional level. Given the limited resources of the GoM, investment in refurbishment and re-equipping of TVE institutions is inthe short runlikely to be financed by foreign donors, or the private sector, as suggested in the draft ESSPII. Danida, CooperacibnEspafiola and the Portuguese Government either plan or are already providing funds for selected refurbishment, equipment and materials. 6.45 The idea has been aired to introduce a sector focus for individual schools, i.e. that schools specialize ineducation and training for a particular industry or economic sector such as construction, engineering, tourism, for the transport sector etc. Incase of DINET schools, the issue of whether the specialization should be at intermediate level only or also comprise the basic level schools would need to be discussed in the context of the TVE qualification reform process. Specialization, or the establishment of "centers of excellence", would entail a number of advantages, such as stronger interaction with employers in the particular industry/sector, and better utilization of teacher resources across courses. Furthermore, it would facilitate the possibility of offering short-term tailor-made skill upgrading courses in cooperation with private businesses. Selection of focal industries and sectors should be a consultative process involving all key stakeholders, especially prospective employers. More data o n the competency needs of the various industries/sectors will be needed. Co-funding with private business could be considered as well. Sector specialization, however, may compromise equity objectives, as schools would need to be where businesses are, hence reinforcingthe urbanbias. Improvementof managementcapabilities 6.46 The relevant policy documents strongly call for strengthening the capacity of technical school management. Apart from financial management, there seems also to be a point for enhancing the capacity of the management to identify local training needs and design courses inresponse to these, for strengthening the capacity to tap income-generating opportunities, and, not least, for an improvement of the planning and supervisory capacity of the management. Inorder to be effective, management training programs would need to go hand in hand with a further decentralization of decision-making down to the school level. 6.47 Apart from school management, public TVE(T) administration authorities, such as INEFP, DINET and their provincial structures, urgently need to enhance their management capabilities. Such training programs could be implemented in collaboration with the Institute of Public Administration or another specialized institution. 58 6.3.2 Improving labor-market responsivenessof TVET 6.48 Improving the relevance of W E T in the world of world is a matter of quality of training, but also of picking the right trade areas that are in demand, choosing the appropriate contents for the training programs and finding the right training methods for the target groups. For the latter points, the training system must be continuously provided with labor market information, obtained from the actors inthe labor market, i.e. employers and potential trainees, and from experts. 6.49 Comprehensive systems of national manpower forecasting and planning, infashion duringthe 1970sto informeducation and training policies, essentially failed to produce the desired results. However, also less ambitious labor market monitoring and observatory systems have in many countries exceeded the implementation capacity of national authorities. With the exceptionof Mauritius, the World Bank study on skills development in sub-Saharan Africa (Johanson/Adams, 2003) could not identify a single example of good practice for national labor market monitoring in Africa. More promising approaches of labor market assessment and monitoring have been tried out at decentralized levels whereby training institutions developed flexible mechanismsand tools to (1)understandthe economic environment in and for which they operate, (2) maintain permanent dialogue betweenthe centers and the business community, e.g. through business associations, and (3) create 'panels' of local informants with good knowledge of local employment opportunities and skills needs. Within a decentralized system of responsibility for training delivery, this kind of local labor market observatories that depend on and at the same time deepen the relationship between training providers and the business community seem to be less costly and riskyincomparison with comprehensivenational informationand forecasting systems. 6.50 Improving labor market responsiveness i s also very mucha matter of TVET system structures that bring training closer to the world of work. Measures to improve training quality, the participation of employers in all planning and decision-making processes, the lead of employers in standard setting and testing (quality assurance), encouragement of employer-based training and cooperative training programs in WET institutions, and finally the devolution of power in public TVET structures to the level of training delivery (traininginstitution) are key determinants of making training more responsive and flexible. 6.51 Feasible options available inMozambique to improve the labor market responsiveness of different TVET programs, therefore, include: a) Decentralization of decision-making about training courses and contents to the level of training institutions, includingcapacity buildingof school staff (teachers and managers) insimple local labor market observatory methods. b) At the national level introduction of expert and employer panels to discuss priority training areas, complemented by selected sector (rapid) appraisals to inform planningprocesses. c) Systematic involvement of employers in all TVET planning and implementation tasks, precededby capacity buildingactivities of employers. 59 6.4 Increasing financial sustainability 6.52 I f TVET supply is to be maintained at current levels, or even expanded, it is important to increase, stabilize and diversify the funding base. As shown before, public vocational education and trainingprovisionappears to be substantially under-sourced at the current moment providing one of the major reasons for lack of quality of training. The two major strategies relevant for TVET ( W E and INEFP strategies) therefore assume an increase in available resources to finance both: more and better training. Both strategies back a diversification of fundingsources. Policiescallfor cost-sharingand diversification of funding 6.53 The W E Strategy is most explicit inthis regard. It envisages a dramatic increase in public spending for formal WE, inpart inducedby a 45 percent increase of enrolment, but mainly as a result of increasing unit cost. Three scenarios are outlined based on different assumptions about average recurrent unit cost development (see Tables A9 and A10 inthe Annex). Total recurrent W E spending under these scenarios will increase to USD27 million, USD34 million or USD54 million representing average unit cost of USD 600, 750 or 1,200 as compared to base unit cost of USD 180 in 2001. The INEPF Strategy suggests a budget of USD26 millionfor the expansionof vocationaltrainingbetween2004 and2010. 6.54 In order to diversify the resource base for TVE, the DINET Strategy explicitly suggests establishing a new system of cost-sharing and recommends rates each partner should contribute: o The government, expected to increase its budgetary allocation to W E inorder to cover 50 percent of recurrent cost This would imply a recurrent budget increase compared to 2000 of 25 percent, 60 percent or 125 percent depending on the scenario; o The trainees (includingworkers) and their families, contributing 20 percent to the recurrent training cost and 33.4 percent of the cost for boarding. Scholarships on loanbasis are suggested for trainees who cannot raise the training fees; o Companiesare envisagedto contribute 20 percent. More precise modalities are not discussed, although it appears obvious that the policy maker had some kind of training tax or levy in mind. The draft INEFP Strategy is explicitly demanding the introductionof a training levy; o Through income-generating activities, public training institutions are expected to raise 10 percent of their recurrent cost on their own. 6.55 Contributions from cooperating partners, e.g. the World Bank, Danida, GTZ, CooperacidnEspafiola etc. are expected to complement internally generated resources. 6.56 Both strategies ( W E and INEFP) focus on their own training sub-system, not the broader TVET environment. For the discussion of a new diversified financing system, however, it may be useful to also consider resource requirements of the wider W E T context. Such a discussion may at a later stage also include potential allocation mechanisms to the 60 different TVET sub-systems and the potential options to steer and shape the training system as a whole and to stimulate non public training supply. Overall, more detailed and comprehensive cost assessment and estimates including a feasibility study of different financing options could substantiate the discussion on the future financing mechanisms for TVET inMozambique. A casefor the introduction of training levies ? 6.57 The integration of employers into the financial responsibility of training has been an issue indeveloping and developed countries for a long time, and training levy systems have a long tradition for example in Latin America and Asia. African countries that gained experience with training levies include Mauritius, Ivory Cost, Tanzania, Malawi, South Africa, or Botswana (with respect to a sectoral levy for construction training). Usually, cross-sector levies are based on the wage-bills of companies and amount to 1to 2 percent of the total wage bill, implying that the levy income i s determined by the strength of the (usually) formal economy. Assuminga national wage billof M T 17,292 billionin2001(INE, GDP statistics), a 1percentwage billlevy imposed on all wage income inthe country would theoretically have the potential of generating up to MT 173billion4s. A wage bill, however, needs to be carefully integrated with other sector strategies, as it increases the cost of labor - affecting the competitiveness of industry and benefiting capital intensive production and - reduces the overall corporate income tax revenue. Equally important, however, is the necessity to base the introduction of a levy on a broad acceptanceby employers. Otherwise, as experience inTanzania shows, the overall compliance rate can be low, reducingthe levy income and producinginequalities betweencomplying and non-complying companies. 6.58 Depending on the national W E T development strategies, countries usually decide to introduce either a straight levy system or a levy/grant system. A straight levy system is geared towards raising net revenues, usually to finance a public training system. This i s what the Mozambican W E Strategy implicitly suggests. The other option, a levy/grant system, will rather be introduced if the financial burdenfor training is unequally distributed among companies, and firms are to be encouraged to increase their investment intraining. Itappears that the latter framework may alsobe a serious optioninthe Mozambicancontext if non public training provision is to be explicitly encouraged. Studies (e.g. World Bank, Investment Climate Assessment) have shown that some companies are reluctant to invest in training because they fear to loose trained staff to non-training companies. A levy/grant system, whichwould principally reimburse realtraining cost of employers, would serve as a compensation mechanism inthis context and would encourage employers to get involved in training. Through fine-tuning of the reimbursement rates and conditions, a levy/grant system, as the Mauritius example shows, can very well be designed in a way that both objectives are accomplished; viz. to refund employers direct investment in training and to generate a net surpluswhichcanbe used for subsidizing non-employer training supply. 6.59 Experience has shown that the success of levy systems very much depends on the modalities of the management and allocation decisions of levy income. The establishment of .training funds is a widely used method to ensure that training levies are not consumed ~ 48This would include the public service as employer. 61 within the overall national budget but earmarked for financing training. More often, employers (and trade unions) are nowadays sitting on the boards of training funds, exerting influence on spending decisions, which may also foster the development of ownership of the TVET systemby employers. Inthe Mozambican context, the concept of a training fund may also facilitate earmarking of certain portions of the levy income for support to non-public and non-formal training programs in order to assist the broadening of the W E T environment. 6.60 Another option may be sector-based or industry training levies, organized by and imposed only on selected industries and preferably introduced or strongly supported by industry itself or its representative bodies. Revenues from sector levies would usually exclusively be used for sector specific interventions and not re-distributed cross-sectorally. Such sector-based levies can be found in countries without a strong and unified national training system, oftento cater for training needs of particularly strong or growing industrial sectors. Sectoral levies usually have a highacceptance among employers, because normally industry representatives are involved in the administration as well as in the delivery of training. Sector-organized levies, preferably on a voluntary basis, may be an option in Mozambique to start getting strong employers involved in the TVET system and to create good and best practice of industry initiatives in training. Some of the public/private partnership initiatives between employers on the one and INEFP and DINET on the other side may provide points of departure. 6.61 Before a design for a levy system inMozambique is discussed inmore detail it may be beneficial to carefully study the abundance of experience with levy systems elsewhere in the world. A general finding, for example, that has emerged is that small employers may not substantially benefit from levy schemes. Evidence shows that the more educatedfigher skilled workers may be the primary recipients of training and that these workers are more likely to work inlarger companies. Some general principles may be considered while trying to conceptualizethe levy scheme for Mozambique: (") early involvement of employers inthe design and decision-making of the levy scheme; (") administrative efficiency and transparency; (") ensure that non public providers are not crowded out and that bothpublic and private training providers have access to funds; (") ensure quality control of training providers. Are trainingfees socially acceptable? 6.62 While the introductionof a training levy, if properly designed to assist the reshaping of the traininglandscape, seems to be aninteresting option for Mozambique, the intentionof raising training fees from students in the public TVE system appears to be a point, which needs careful discussion. Figures from the recent household survey show that on average households pay between MT 84,000 and M T 354,000 for WE. Figures are substantially higher for the upper household expenditure quintile, which assumingly are more likely to attend private training institutions. Training fees to the extent discussed inthe Estratdgiado Ensino Tdcnico-Profissional em Moqambique (20 percent of recurrent cost, i.e. up to USD240 per year) would increase spending to the level of current per capita income and to around 20 times the current amount for the majority of households. 62 6.63 From an equity point of view, substantial training fees exceeding the level of 'commitment fees' are problematic. Although at the current moment, students from the public TVE system are not likely to earn less after graduation than their peers graduating from general education, this situationwill be different, if and where the W E system is going to reorient its target labor market towards SMEs and the informal sector. One option could be to limit the introduction of substantial training fees to higher W E levels (basic and intermediate). Furthermore, training fees that are higher than fees inthe general education system may also reinforce the discrimination against vocational training. In order not to make W E even less an attractive educational option, there may be a case for not to de-link training fees from fees payable inthe general education sector. 6.64 Training fees runthe risk of reducing the participationof poor students in the TVE sub-system. To mitigate the social consequences the TVE strategy suggests the introduction of a bursary system on loan basis. The feasibility of such a system, however, should be carefully assessed. A loan system tends to be bureaucratically challenging, in particular if the traceability of graduates is rather difficult i f students will join the small business and informal sector after training. Furthermore, income expectations of W E graduates, particularly at lower qualification levels, are usually not very high, posing either a heavy burden on new labor market entrants who leave the TVE system and/or reducing the effective repayment pace. From an equity point of view an exemption scheme would be another option, exempting poor students from paying (tuition and boarding) fees, if training fees are to be introduced. An exemption scheme would tend to pushstudents from higher income groups (who are not exempted) towards the private training sector thus increasing public training capacities for lower income groups. It would also stimulate demand inthe privatetraining market. However, the net income from fees would be reduced. Boardingcosts are a heavy burden 6.65 The provision of boarding poses a heavy load on public coffers. Inthe TVE Strategy the Government plans to increase boarding facilities for TVE students by 130 percent to 13,555 places between 2001 and 2011. Annual student boarding cost is currently estimated at USD 500, and it is planned to increase expenditure by 50 percent, 100 percent or 200 percent depending on the scenario49.Inany scenario, boarding cost is estimated to be fairly above unit tuition cost. Total expenditure for boarding in the public W E system is estimated to raise to between USD 10 and 20 millionannually until2011, of which one third is expected to be contributed by students themselves. I f students will contribute the expected share (i.e. depending on the scenario USD250,333 or 500), there i s a high riskthat the equity effects of the provision of boarding will rather be offset by high fees. Alternatively government would have to bear a larger share than expected, if boarding fees would also fall under an exemption scheme for needy students. As envisaged inthe W E strategy, there may be a need for a closer look into more cost-effective ways of boarding, for instance through privatization. 49See also Tables A9 andA10 inthe Annex. 63 Efsiciency increasewill help saving scarce resources 6.66 It is positive that the TVE strategy also puts significant emphasis on measures of efficiency increase through better planning procedures and improved budgetary and allocation procedures. Increased budgetary transparency and enhanced management capabilities at training institution level will also support increased institutions' revenues from other sources such as service delivery, short courses and other income generating activities. Efficiency at training institution level may also be stimulated by altemative methods of transferring funds to schools, for example through performance- or outputbased funding methods (or formula funding), demand-side financing schemes (e.g. vouchers), competitive biddingmethods, etc. Summay of options 6.67 The followingtable summarizes some of the mainoptions to sustainably increase and diversify the resourcebase for TVET. Options Impact Remarks (advantaged disadvantages) Traininglevies a) Sector levies Self-organization of Tends to strengthen already specific sectors strong sectors b) Straight levy system Revenues generation for Provides n o incentives for publictraining system industry to invest intraining and may even des-incentivize c) Levy-grant system Incentives for employers Limited resources left for to train funding public training suuulv d) Introduction of a training fund Earmarkedlprotected Provides better opportunities account for training for stakeholder involvement; goodtool to pool national resources; provides easy tools for supporting non-public traininp TrainingFees a) Substantial increase of tuition fees Raisingrevenues May be socially unacceptable b) Scholarship scheme onloanbasis Improve accessibility and Very difficult to implement; equity deferred revenues c) Exemptingfees for needy students Improve accessibility and Reduced revenues I I eouitv I I I -1 - Raisingtraininginstitutions income I I a) Streamlining financial Easing and incentivizing Main advantage (budgetary management procedures I G A autonomy) already imdemented b) Management training Improving market Rightbalancenecessary orientation of schools between educational and commercial goals of schools 64 Short termmeasures to increaseresourcesavailablefor TVET 6.68 The introduction of a training levy system, including establishment of a Training Fund, which may provide a stable long-term financial base for the entire W E T system is clearly a mid- to long term perspective. Experience in other countries has shown that the design and introduction of levy systems may take several years including the necessary research and conceptual work, informed decision-making, awareness creation among employers and politicians, legal drafting and legal process, development of collection system, development of disbursement policies and procedures, set-up of administrative system, etc. In view of the precarious and acute financial situation of the public TVET system, it may be another option to investigate and possibly implement ad hoc and short- term activities to immediately raise the resource base for public training, which are not dependent on the existence of a fully developed new financial system. Such measures may include more pro-active income generating activities of public training institutions, possibly stimulated through streamlined financial management mechanism, possibly training fees, activities to increase capacity utilization of training inputs (workshops, teachers, etc), or activities to raise voluntary contributions from communities and employers. 6.5 Institutional reform and governance 6.5.1 National coordination/governance 6.69 The current TVET sub-systems - WEDINET, WE/private training institutions, vocational training by INEPF and non-public providers, the private vocational training sector, in-company training schemes, sector specific training programs (by Ministry of Health, Agriculture), traditional apprenticeship and other informal training at the workplace - operate more or less independently of each other. Together they provide a rather fragmented and unarticulated system, large parts of which are unrecorded and largely unknown to outsiders. The public sub-systems are managed by the relevant ministries without any institutionalized influence of clients and transparent quality assurance. The situation leads to sub-optimal resource utilization, mainly throughloss of synergies between different training providers, risk of public supply crowding out private training initiatives, lack of transparency of qualifications and programs, lack of knowledge sharing between different stakeholders, and lack of mechanisms to recognize learning in other training streams. Even more serious, however, is the fact that there is no institutionalized exchange between those responsible for regulating and implementation WET and the world of work. Inappropriate curricula and training programs (Le. lack of relevance of training) and lack of ownership of employers inthe TVET system are among the consequences. Thecasefor a National Training Council 6.70 Both in Estratdgia do Ensino Tdcnico-Profssional em Mogambique 2002-2011 and the draft Employment and Vocational Training Strategy (INEFP Strategy) substantial modifications in the management structure of W E T including development of new 65 institutions are recommended to overcome these weaknesses. The suggestion - part of both strategies - to form a tripartite National Training Council, is a valuable first step towards institutionalization of the cooperation and involvement of the clients of TVET in the governance of the training system. Some issues call for further discussioninthis context: o Ideally, a NationalTraining Council should have the oversight and coordinating role of the entire TVET environment. Itwould be the main body responsible for monitoring and evaluation of the national training supply. In this context, the question of ministerial ownership of W E T needs to be clarified. The two strategies both appear to claim ownership for their own mother ministries, i.e. MINED and MINTRAB. Another possibility worth considering and implemented in some countries is that a Training Council would be directly under the purview of the Prime Minister or another line ministry in charge of economic development; o The current discussioninMozambique appears to envisage a traditionaltripartite composition of the Council. Inview of the importance of economic sectors which would be represented neither by employers associations nor trade unions such as the informal sector, it may be considered to opt for a wider 'stakeholder council' model, with representatives of NGOs, SME associations, training providers and other players that may speak for any important actor or client inthe W E T sector. Such as model was introduced, for example, in Malawi. The envisaged composition of the new Technical Working Committee (TWC) which is to be created upon the recommendation of the 2004 National Seminar on TVET as a frontrunner to a National Training Council, is following the model of a widely representative stakeholderbody. o Experience has shown that the scope of responsibility usually turns out to be a decisive success determinant of national training councils. Councils with advisory function only, a typical model in developed countries with an established consultative tradition, tend to be with limited real influence in countries where a consultative culture is still at an infant stage, which usually includes a low capacity for interest articulation of stakeholders. Also for reasons of creating ownership among the world of work, it could be considered to equip a National Training Council with decision-making responsibility for national WET planning, policy development and overseeingthe implementingbodies. 6.71 While formation of a National Training Council is an important first step to ensure coordination of the different TVET sub-systems, a more substantial integration will require further systemic developments such as a National Vocational Qualifications Framework to articulate the different training programs, a national assessment and certification system based on occupational standards to ensure recognition and portability of qualifications, as well as financing mechanisms that will ensure a planned and tailored balancing of available resources at a national scale. How to best organizea TVETregulatory body? 66 6.72 It will also be necessary to decide on the institutional responsibility for major regulatory functions includingstandard setting, oversight of testing, accreditation, possibly management of a training fund, labor market monitoring, TVET information system, and the like. This role could possibly be taken over by any of the current responsible public organs DINET or INEPF or by an independent public authority still to be created. The latter option appears to feature quite prominently inthe current discussion.50 Infact, an autonomous or semi-autonomous regulatory institution outside of one of the concerned line ministries has clear advantages. Firstly, it avoids establishing a hierarchy among the different TVET sub- systems. Secondly, it will ease the transition of power from a single ministry to a multi- stakeholder body and will make it easier for employers and other non-ministerial stakeholders to create ownership. As such it appears to be the best institutional complementation to the creation of a National Training Council, if such a Council assumes decision-making responsibility. Thirdly, the greater administrative independence of (semi)- autonomous bodies in terms of employment, wages, operational procedures, etc. usually makes it easier to attract competent staff and develop easy and flexible proceduresjl, an important ingredient for the implementation of a major reform process. The major problem related to creation of a (semi)-autonomous National Training Authority will be the likely long durationof creatingthe relevant legalframework and the cost of institutionbuilding. 6.73 Another issue of concern once govemance and administration are re-defined is the question whether regulation of the training system and delivery of training will be in one hand or not. InTanzania, for example, the public training institutions were all given to the autonomous and self-financing Vocational Education and Training Authority (VETA) once the institutionbecame operational. After realization that this led to an unintended favoring of VETA managed (public) training institutions as compared to non-VETA owned centers, VETA now tries to loosen its ties to the centers by granting them more autonomy. Inthe case of Mozambique, the possibility of delinking regulation and public delivery is loosely sketched in the Estratigia do Ensino Th"o-Profissiona1 em Moqambique and the ESSPII. However, no specific indicationof the institutionalset-up or the fundingmodalities appears from the documents. The problem around such a model would be that it would add an additional administrative structure inneed of financial consolidation and capacity building inadditionto DINETand INEPF. Alternatively, two scenarios appear to be available: (i) A regulatory authority/institution with the formal TVE institutions under its portfolio, with INEPF remaining an independent training provider as many other providers under the regulatory authority of the new Training Authority; (ii) All general public TVET institutions currently rununder DINET and INEPF under the purview of the regulatory authority. In both cases, it might be considered to further decentralize training delivery, i.e. strengthen operational and budgetary autonomy of public training institutions in order to avoid pre- occupation of the regulatory authority with the management of its own institutions and 50The Draft Employment and Vocational Training Strategy (Ministry of Labor, 2004) explicitly talks about the creation of a NationalTraining Authority. Ina similar directionpoints the MINED organizational analysis (Ministry of Education, 2003), which suggests converting DINETinto an autonomous entity. 51A goodexample for this is Tanzania. The Vocational Education andTrainingAuthority (VETA) pays much higher wages thanthe civilservice resultingina remarkable stable andcompetent workforce. 67 privileging of public institutions with respect to access to services and financial resources.52 The graph on the next page summarizes the three options outlined above. 6.5.2 Facilitating the reform process 6.74 Recent efforts to revive the TVET reformprocess, which resulted inthe establishment of a TVET Technical Working Group, have to be welcomed. During the 2004 National Seminar on TVET it was suggested and agreed among the represented stakeholders to formalize and enlarge the Working Group and to form a Technical Working Committee charged with the responsibility of driving the W E T reform process and preparing the establishment of a NationalTrainingCouncil. The new committee will comprise, apart from an array of various private and public stakeholders, representatives of all three line ministries currently involved in general TVET provision: Education, Labor and Higher Education. With the broadened membership the previous donor dominance will also be significantly reduced. The new developments raise hopes that the current situation of parallel policy initiatives and drafts can be overcome. Experience from other countries has shown that the success of major TVET system reform processes depend largely on a strong national ownership and lead inthe reform process, a clearly defined mandate of the group responsible for the formulation of the reform elements and a well facilitated and resourced process that ensures that necessary research and policy drafting can be commissioned and participatory discussions organized. 52Decentralizationwould furthermore improve the possibilities of training institutions to embed training into the local context (thus enhancing labor market responsiveness) and would create an important preconditionfor more advanced demand-or performance oriented funding mechanisms. 68 E n-i: a - - c ' ? L U cv 1- U .-c - 0 U v) C 8 L I. 0 v) 0 C 1- 0" U .-0c 0" c 6.75 The Malawian reform process duringthe late 1990sprovides an interesting example in this regard. One critical success determinant was the establishment of a Task Force composed of major stakeholders and established and mandated by a Cabinet Directive, which provided the group process with legitimacy and responsibility for policy and legal drafting. The Task Force was headed by a representative of the national Chamber of Commerce, which created and ensured a fair degree of ownership of the business community and also eased at a later stage negotiations about the introduction of a training levy. The process was well resourced by the involved donors (Danida and GTZ), which financed background studies, study tours, consultancy inputs and workshops, and ensured the continuing work of a full-time secretariat to facilitate the process. Technical expertise among national stakeholders that was formed in the course of the formulation process, includingan emerging discussionculture, acted to form a sound basis for the national TVET Council (TEVET Council) established later as the decision-makingbody inthe WET sector. 6.76 Inthe caseof Mozambique, thefollowingissuesappear tobeof importance: o The question of which institution is chairing the reform process is important in order to avoid the creation of hierarchies and imbalances between the different provider institutions from the outset. It may be worth considering a solution similar to the Malawian example (lead of a private sector representative) or assigning the lead responsibility to a government institution outside of the TVET sector whichis concernedwith economic development issues; o Sufficient funds should be pledged and budgeted for to facilitate a full-time secretariat and necessary conceptual work. 6.77 To harmonize the overarching reform formulation with already ongoing reform activities, mainly inthe field of curriculum development and institutionalcapacity building, a phased work plan reflecting prioritiesand feasible reform sequences shouldbe elaborated. 70 7. RECOMMENDATIONS FOR FUTURE INVESTMENT 7.1 Current and expected future demand for a technically skilled workforce, necessaryto support diversification and productivity increases in the economy and to attract further foreign investment, underscored by the high acceptance of current W E graduates in the labor market, justifies further public investment in vocational and technical education and training as a key option to increase educational opportunities for primary school leavers, school-drop out and other target groups in need of training and qualifications. As the Estratigia do Ensino Ticnico-Profissional em Mogambique 2002-2011 and the INEFP Strategy in accordance with other relevant policy documents have pointed out, a further development of training and technical education opportunities at lower levels will be a core challenge in order to achieve equity and access targets as well as to more effectively respond to the skills needs of the informal sector. To achieve this, the specific emphasis and roles of the different training providers in Mozambique need to be coordinated. The qualification and supply structure of TVE providedby DINET may require adjustments inorder to increase efficiency of the TVE sub-system. As the public sector will not be able to afford a significant and continuous increase of relevant training offers, the Estratdgia do Ensino Ticnico-Profissional em Mogambique 2002-2011 also emphasizes the need to encourage and stimulate private investment intraining, bothinterms of private for profit training institutions and employer- basedor financed training initiatives. 7.2 At the current moment, public training provided by DINET and INEFP is characterized by low intemal efficiency and lack of quality. Although in particular intermediate level TVE graduates do get jobs, their actual skills are largely perceived to be inadequate and insufficient to cater for the needs of the developing Mozambicaneconomy. The Estratiigia do Ensino Ticnico-Profissional em Moqambique therefore puts substantial emphasis on the need to improve the quality of training, which addresses both (1) immediate improvements of relevant training inputs (e.g. curricula, training and teaching material) and capacity building of the involved actors (teachers, administrators, institutions) and (2) a more far-reaching system reform agenda in order to provide a sound long-term regulatory and facilitating framework for the development of efficient and relevant TVET in Mozambique. This includes the aspects of a stakeholder-driven governance and management structure of the system, financing mechanisms, the establishment of a competency-based training system, and other framework conditions. All these reform aspects are similarly captured inthe INEFPStrategy as well. 7.3 At the 2004 National Seminar on TVET, major actors agreed that an increase of access, equity and efficiency of technical and vocational education and training in Mozambique would best be accomplished in the framework of a broadly coordinated and, as far as possible, integrated TVET system. As a first step towards coordination, the establishment of a Technical Working Committee (TWC) for TVET assembling an array of major stakeholders was decided. The main purpose of the TWC, which is considered the forerunner of a formal National Training Council, is to facilitate and drive the integrated reform process of TVET. The main donors inTVET inMozambique have already indicated their preparedness to support this process. It is expected that in 2005, the TWC (or the 71 National Training Council) will have developed an Integrated TVET Sector Reform Program, which will form the basis for the integrated implementation of the different sector strategies already developed by DINET and INEFP. 7.4 The findings of this ESW underscorethe importance of a coordinated and integrated W E T reform process and the main assumptions and objectives formulated by Government in the relevant policy documents. Inthe following, four major pillars are suggested as priority areas for future short- and medium-term public investment in support of TVET, which will have to be operationalized, scheduled (phased), and budgeted for in the IntegratedW E T Sector Reform Program. The suggested priority areas are: 1. Systemreformandinstitutionbuilding 2. Short-term initiatives for quality improvement 3. Selected investments inpublictraininginstitutions 4. Stimulationof non-public trainingprovision. 7.1 System reform and institution building 7.5 Many of the diagnosed current problems of the TVET system are as muchrooted in structural deficiencies as in immediate resource constraints. This includes the system of planning and implementation of training that does not include representatives from the world of work and sustainable mechanisms to monitor and align the training with changing labor market demand patterns. Italso includes the absence of transparent quality assurance mechanisms, the fragmentation and lack of articulation of training offers provided in different sub-systems of the TVET environment, as well as structural resource constraints as a consequence of an undiversified funding system that is largely dependent on government allocations. The establishment of an appropriate regulatory and institutional framework therefore appears to be a pre-condition for the long-term development and unfolding of a demand-oriented, efficient and relevant W E T system. Some options for such a reform process havebeen discussed inthe previous sections. 72 a 6 . . . . . . . . . . . . . . . 7.6 It is recommended, therefore, that Government invests further inthe process of defining the system reform that has now gained momentum with the envisaged establishment of the Technical Working Committee (7WC). In order to achieve legitimacy and ownership of the users of the training system, it appears important that stakeholder involvement is strengthened in this process, including the active participation of private business representatives, trade unions, private training providers, and other relevant social and economic stakeholder groups, apart from the relevant government agencies and donors. Resources will be needed to inform participants and increase capacities of the involved stakeholders, for further research and conceptual work, to facilitate a broad participatory discussion process about the appropriate system design and for legal development. 7.7 Depending o n the agreed outcomes of the reform design investment will need to be channeled in institution building and the development of appropriate systems and procedures for the implementation of the new governance and regulatory framework. This may include the establishment of a national TVET Council, possibly a regulatory authority, the set-up of a new financing system, establishment of a National Training Fund, a quality assurance body standards development, testing and certification, a technical teachers training institutions, and other necessary institutions. 7.8 In summary, the activities listed in the matrix (see above) appear to be pertinent for system reform and institution building. Some activities may require substantial evaluation and research work before decisions can be taken. Overall, general and specific capacity building of members of the TWC (or later National Training Council) and relevant stakeholder groups (e.g. business associations) may need to be part of the system reformprocess53. 7.2 Short-term initiatives for quality improvement 7.9 While the reform of the overall framework i s rather a medium-term process, immediate interventions are needed to improve the quality, efficiency and relevance of the current training supply, not least to increase the attractiveness and ownership of the TVET system among students and their families, employers and Government. Interventions aimed at improving the availability, quality and motivation of technical teachers, revising and developing curricula, improving the management capability of the public WET administration and at school level, developing and distributing teaching aids and reference material, providing training material for practical instruction are likely to impact on the quality of WET in the short-run, if ongoingactivities of the public authorities (DINET and INEFP) and different donors 53The points raisedinthe matrix are not exhaustive andnot prioritised. The matrix is meant to provide aninput into the ongoingandnecessarydiscussionabout aNationalWET Sector ReformProgram. 75 are coordinated and appropriately resourced. The following matrix lists some of the reform areas that require immediate (fast track) initiatives54. 54The points raised inthe matrix are not exhaustive andnot prioritised. The matrix is meant to provide aninput into the ongoingdiscussion about a National WET Sector ReformProgram. 76 - It.-c 0 Y 7.3 Selected investments in public training institutions 7.10 Investment into physical infrastructure, workshop and laboratory facilities in the public TVET structures is important for two reasons: (1)to improve the training quality, dilapidated structures need to be upgraded, outdated training equipment renewed and modernfacilities (e.g. IT) installed; (2) to increase equal access to WET, more training institutions may need to be opened in undersupplied provinces and areas, dormitories renovated or newly constructed, and new training programs established that are attractive for female students and relevant to the rural and urban informal labor market. At the current moment, investment in the rehabilitation of DINETinstitutions appears to be most urgent. However, investment decisions needs to be prioritized inorder to meet the presumably limited available capital funds and inview of their impactonfuture recurrent budgetary requirements. 7.11 It appears important that the relevant ministries (essentially MINED and MINTRAB) involve key stakeholders in the development of its prioritized investment plans and that the planning is made on the basis of an overall national agreement about the future role and emphasis of the different provider systems in the Mozambican TVET landscape. With the participation of private business, private training providers and public training providers other than DINET, all possibilities should be explored to encourage private investment inTVET and initiatives of other public sectors before final investment decisions are made. Possible occupational specializations of schools need to be discussed with relevant stakeholders inorder to identify specific training and qualification needs and to avoid competing training offers by different providers. In addition, possibilities of converting existing basic level TVE schools into intermediate level or elementary schools needto be explored. 7.12 Investing into rehabilitation of individual schools should also be used as a tool to foster decentralization and strengthening of school management. Also consideringlimited available resources it may be contemplatedto establish a funding facility for school rehabilitation/refurbishment to which individual schools have access if and when they present an institutional development plan that appropriately reflects the local labor market in which the schools are acting and clearly and convincingly outlines vision and implementation plan for the school. An institutional development plan would also need to describe the institutional gender and HIV/AIDS policies. The following matrix summarizes possible activities inthis regards5. 55The points raised inthe matrix are not exhaustive andnot prioritised. The matrix is meant to provide aninputinto the ongoing discussionabout a NationalWET Sector ReformProgram. 78 Y6E 38- 4? aJ ~ I2 a, ? 0 y3 0 v1 .C v1 P c,aJ -5 m e a Y -6E 0 aJ a $ w 7.4 Stimulation of non-public training provision 7.13 Selected policy documents, in particular the Estratigia do Ensino Ticnico- Profissional em Moqambique, emphasize the need to involve the private sector and other potential groups (such as NGOs, churches, etc.) in the provision of TVET in order to broaden and deepen the overall national training supply, hence to increase access and equity of access. The 2004 National Seminar on TVET reaffirmed this commitment and provided a first platform for the relevant stakeholders, i.e. public officials, private training providers, employers, to discuss strategic goals and possible options. 7.14 Private sector involvement inTVET addresses different training sub-systems: (a) Employer-basedtraining initiatives aimed at training of already employed or future staff. This may also include initiatives by employer-groups or industry to self-organize training for a specific sector. Recent years saw an encouraging number of discussions and initiatives between employers and government institutions for public-private partnership inTVET provision. Suchinitiatives need to be integrated into national TVET planning and further supported. An increase inemployers' initiatives inTVET will increase resources overall available for TVET and will act to improve quality and relevance of training. (b) Vocational training and employment promotion schemes provided by NGOs, projects, etc. with a view to creating access to employment oriented skills development for school leavers and other target groups (including, for instance, informal sector operators). (c) Private for profit training institutions that may provide important additional access to training in particular in urban and semi-urban areas. Compared with public training schools, private training institutions are often more efficient, effective and cost-effective. They can also provide training onbehalf of government, e.g. through out-contracting arrangements. 7.15 To improve access and quality of training in a cost-effective manner, it is suggested that public funds may be used to encourage and stimulate the supply of such non-public training initiatives, inparticular to stimulate more innovative skills development schemes targeting the informal sector and specific short-term training needs of workers inindustry. Such investment could, for example, take the form of a Skills Development Fund out of which different non-public training institutions and initiatives may be subsidized according to specified priorities and criteria. The following matrix summarizes possible activities inthis regard56. 56The points raised inthe matrix are not exhaustive andnot prioritised.The matrix is meant to provide aninputintothe ongoingdiscussion about aNationalTVET Sector ReformProgram. 80 2w VI 2 a 2 TT TT E 0 P Q V U 3 a - 'E 0 0 0 %) Table A 6: Average monthly pay By type of employer Government 2123 Public 2153 Private 2145 Self-emdoved 1977 Family enterprise 551 Employer 1354 Cooperative 701 I Average 1878 Source: National Household Survey 2002 Year UnitcostinUS Dollar (/ range of) Tanzania 2000 575 11,292 Malawi (calculated) 1998 622 Malawi (actual) I 1998 I 238 1440 Botswana (brigades) 1996 1,109 11,842 Botswana (VTCs) 1996 3,177 15,611 I Ethiopia (calculated) II 2002 II 280 Ethiopia (typical actual) I I 2002 200 Mozambique 1998-2000 I 63 1251 I Sources:Basedata taken from RAMBOLLet a12001; Franz, Maleta, Mtambo 1998; Botswana 1997;Franz 2003; MINED/Austral2003, World Bank 2003. Remark: Cost data mostly indicatedinlocal currency were convertedinto USDusing the median exchange rate at December 31 of the year under consideration 88 r f'l I I 7- r 0 - i? F. 3 0 m 3 2 ri t I 0 w 0 rl 0 0 2 t 3- 0 31 5 0 t 0 0 0 m 0 m Table A 10: Suggested training provider/organisation systems for different target labor markets EmployerAabor market Type of training Training provider1 qualificationneeded organization of training* Mega projects and large Pre-employment technician TVE system companies Upgrading/ short term training Small and medium Pre-employment technician enterprises (formal sector) training and below I Private training providers I I Micro and small enterprises (informal sector) Traditional apprenticeships Self-employment (informal sector) * Training suggestedto bestrengthenedis shaded ** Trainingmarket inthis context describesthe environment where severalcommercially oriented training providers offering demand-oriented training programs to clients who are willing to pay. Suchproviders may include private for profit institutions, but also public or NGO organizations who provide training on commercial terms. 91 I Table A 11: Summary of donor support to W E T inMozambique Cooperationpartnei Responsibleagency Supportareas Budgetandperiod Italian Cooperation Universidade Agricultural Faculty, 3 years. Start end Eduardo Mondlane Faculty of Tourism 2004 or beginning 2005. Z5.2m GTZ MINEDDINET W E T reform; diagnostic 2003-2005 studies; limited support to Budget not known; DINET schools inSofala, TA mainly Manicaand Inhambane. MIS GTZ MINTRAB/INEFP System reformand 2003-2005 development. Budgetnot known; TA mainlv Danida MINEDDINET Teacher training, 2004-2006 curriculum revision, Approximately equipment/material, limited DKK2m rehabilitationof DINET (=USD300,OOO) schools inCab0 Delgado, Tete and Zambazia Portugal (Fundacio MINEDDINET Reactivation of `Ensino de Plannedstart of 2nd Portugal Africa) Artes e Oficios' phase end 2004. Budnet not known Portugal (Min. of MINTRAB (INEFP) Reinforcement of the 2003-2005 Social Security & technical and operational Budget not known Labor) capacity of INEFP and its training activities in Spanish MINEDDINET Rehabilitationof Escolas (2001-2003) Cooperation Artes e Oficios, and 2004-2007 (through Salesians) construction of new Escolas 5.2m Professionais, incl. teacher training and curriculum develovment MINEDDINET English language training 92 REFERENCES Anderson, Per-Ake (2001).`The impact of the mega projects onthe Mocambican economy.' Discussionpapers No. 18, Gabinete de Estudos, Ministerio do Plano e Finanzas, Republica de Mozambique. Maputo. Arndt, C. (2003).'HIV/AIDS, HumanCapital and Economic Growthprospectsfor Mozambique.' Africa RegionWorking Paper SeriesNo. 48. The World Bank. Washington, DC. Billetoft, J. & Roque, S. (2004).`Technical and vocational education and training in Mozambique: Better thanits reputation .' Paperforthcoming. 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