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Proceedings: International symposium on

Implementation issues of diversified financing strategies for TVET

November 20-21, 2006Addis Ababa, Ethiopia

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Deutsche Gesellschaft für Technische Zusammenarbeit(GTZ) GmbH– German Technical Cooperation –

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Staff responsible for publication: Andreas König, [email protected]

Editors:Jutta Franz, [email protected] König, [email protected] Julia Schmidt, [email protected]

Proceedings compiled by:Eva Castañer, [email protected]

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February 2007Printed on recycled paper

Table of contents

Foreword 3

1 Introduction 4

2 The Ethiopian approach to financing TVET 5

3 Promoting efficiency, effectiveness and equity in public TVET institutions 7

4 International experience with cost-sharing with trainees 9

5 Financial implications of cooperative TVET 11

6 Generating income and increasing capacity utilisation in public TVET institutions 13

7 Promoting private investment in TVET 17

8 Financial implications of standard-based TVET 20

9 Lessons learned 21

10 Participants’ feedback to the symposium 25

List of annexes 29

Annexes 30

Acronyms 103

1

3

ForewordThe Government of Ethiopia is currently developing a

new financing strategy for technical and vocational edu-cation and training (TVET) as part of the ongoing funda-mental reform of the Ethiopian TVET system.The aim isto secure a sustainable finance base and develop opera-tional mechanisms to support this ambitious reform.

To enrich this process, the Ethio-German EngineeringCapacity Building Program (ECBP) organised anInternational Symposium on Implementation Issues ofDiversified Financing Strategies for TVET on November20-21, 2006 in Addis Ababa, Ethiopia.

The purpose of the symposium was to add an interna-tional perspective to TVET financing options at a timewhen Ethiopia faces the major challenge of fine-tuningand putting its TVET financing strategy into practice. Inthis spirit, the symposium was designed as an opportu-nity to benchmark the planned financing strategiesagainst international best practice, to exchange lessonslearnt with practitioners from other countries, and toassist Ethiopian decision-makers, implementers and sta-keholders both at federal and regional levels in wide-ning their understanding of the relevant issues, challen-ges and opportunities when developing and implemen-ting sustainable mechanisms of financing TVET.

The symposium was attended by nearly one hundredexperts and practitioners from eleven countries andfour continents, who generously shared their experien-ce and knowledge and actively engaged in criticalreflections and learning about TVET financing.

The present document presents the proceedings ofthe symposium.The two-day symposium was organizedas a combination of plenary and panel sessions.The ple-nary sessions introduced the participants to the recent-ly formulated draft Financing Framework for TVET inEthiopia in the context of the broader Ethiopian TVETreform process and provided an overview of internatio-nal best practice in financing TVET, presented by inter-nationally renowned TVET financing experts.

The panel sessions were used to present experiencesfrom different countries regarding the implementationof a series of financing instruments.The selection ofpanel topics was guided by specific challenges arisingfrom the Ethiopian TVET Financing Framework, ratherthan by mainstream trends in the international discus-sion on financing TVET. Lessons learned from the panelswere reported to a final plenary session, with specialemphasis on their relevance for the further develop-ment of the Ethiopian TVET Financing Framework.Theagenda of the symposium is shown in Annex 1.

The present documentation consists of a narrativepart and a series of annexes.The narrative summarisesthe main issues raised during the different plenary ses-sions and panels. Its structure roughly follows that ofthe symposium’s agenda, but those sessions which cove-red related topics have been clustered in order to avoidrepetitions and to provide a more comprehensive pictu-re.The chapter Lessons Learned pulls together the les-sons and conclusions that emerged throughout thewhole symposium.The last chapter summarises the par-ticipants’ feedback to the symposium.

All original presentations or papers delivered by thedifferent resource persons are provided in the annexesas reference material.Therefore the narrative focuses onthe core messages of the presentations and highlightsthe main issues that were raised during the discussions.Annex 2 briefly introduces the speakers and facilitators.

With this documentation, we would like to make avai-lable the wealth of international knowledge and expe-rience shared during the course of the symposium.Webelieve that this will be relevant for practitioners,experts and policy makers working on TVET systemreforms and specifically dealing with issues of TVETfinancing – in Ethiopia and worldwide.

Jutta Franz, Andreas König, Julia Schmidt (Editors)

Eschborn, February 2007

1 Introduction The symposium was officially opened by H.E. Minister

of Education (Ethiopia) Dr. Sintaheyu W/Michael. Hisspeech and that of Martin Mueller, German Director ofthe Engineering Capacity Building Program (ECBP),highlighted the important role that the reform of theTechnical and Vocational Education and Training (TVET)system plays in achieving Ethiopia’s targets to overcomepoverty.

Under the overarching goal of poverty eradication,Ethiopia’s economic development strategy aims at foste-ring fast economic growth, fair and equitable distribu-tion of incomes, the development of a competent andopen economy, and long-term reduction of the country’sdependence on ODA (official development assistance).

While a whole range of policies are necessary in orderto achieve these objectives, the examples of other coun-tries such as South Korea,Taiwan, Singapore, HongKong, Japan and Germany show that the developmentof human capital will play a pivotal role in Ethiopia’ssocial and economic development. In the case ofEthiopia, this includes advancing from a largely agrarianto an industry-based economy.This requires the deve-lopment of middle level workers to satisfy the labourdemand of the different sectors of the economy.

Ethiopia has made considerable progress towards uni-versal primary education and continues to work hard toensure relevance and quality at each educational level.As an increasing number of young people graduatefrom general education, it is of utmost importance to

provide them with options for further education andtraining which increase their employability.

In this context it is important to build a demand-dri-ven, flexible, integrated and high quality TVET system.The Government of Ethiopia (GoE) recognises the needto involve all stakeholders in the planning, policymaking, training delivery and monitoring and evaluationof the TVET system.The on-going reform seeks to incre-ase the engagement of the private sector – both of pri-vate TVET providers and enterprises as future employ-ers of TVET graduates – and to provide students andtrainees with knowledge, skills and abilities relevant forthe world of work.

One of the biggest challenges ahead is the sustainablefinancing of the reform process and of the actual opera-tion of the TVET system.The principles for this are laiddown in the draft Financing Framework for TVET inEthiopia.The main underlying principle is the need forefficient and effective use of diverse resources in orderto be able to provide more and better training toEthiopia’s youth.

The symposium was an open invitation to allEthiopian stakeholders to engage in the development ofEthiopia’s TVET system and a unique opportunity toshare lessons and learn from internationally renownedexperts and practitioners from all over the world.

The speech by H.E. Minister of Education (Ethiopia)Dr. Sintaheyu W/Michael is attached as Annex 3.

4

Presenters:• Dessalegn Mulaw, TVET System Reform and Capacity

Building Department Head, Ministry of Education,

Ethiopia

• Arvil Van Adams, Senior Consultant

Chair:• Andreas König, ECBP-TVET Reform Component

Coordinator, Ethiopia

The objective of this session was to introduce thenewly drafted Framework for Financing TVET inEthiopia from a double perspective. Dessalegn Mulaw’spresentation (Annex 4) provides the context withinEthiopia’s TVET system reform and outlines the mainprinciples and elements of the financing framework.Arvil Van Adams’ presentation (Annex 5) draws from hismore than twenty years of experience in TVET reformsand provides lessons for Ethiopia.

Main issues of the presentations and discussion:

Ethiopia’s TVET system reformEthiopia has achieved an increase of 1,200 % in TVETenrolment over the past five years and ranges secondcountry in Africa in terms of number of training institu-tions.The recent growth in TVET enrolment and provi-sion has been achieved by a considerable expansion ofpublic spending and increased TVET provision by priva-te institutions. Government sources estimate that priva-te TVET providers currently provide approximately 30%of all TVET in Ethiopia. Private TVET providers estimatetheir share of the market to be closer to 50%. NGOs(non-governmental organisations) also provide a signifi-cant share of TVET in Ethiopia.

Despite this significant progress in expanding TVETenrolment and provision, the current system can onlysupply formal TVET to 3% of the relevant age cohort ofprimary education graduates. However, those who donot finish primary education also need to acquire skillsto find employment. Ethiopia’s National TVET Strategyseeks to address these gaps in TVET provision through anumber of different measures.

The purpose of the TVET system reform is to developa coherent and comprehensive TVET system that allowsEthiopia to train the middle level workforce it needs toboost the country’s economic growth and competitive-ness in global markets. Ethiopia’s National TVET Strategyreflects best international practice regarding governan-ce, management, delivery and financing.A TVET reformis a long-term process – a journey in which Ethiopia isjoined by other countries worldwide.

Principles of the new TVET Financing FrameworkBased on the core principles for financing laid out inthe National TVET Strategy, a Financing Framework forTVET in Ethiopia has been drafted.The main principlesof the new TVET Financing Framework are diversifica-tion of funding sources, increased involvement of theprivate sector, and increased efficiency.

These principles are not intended to reduce publicspending, but to share the burden and readjust the rolesthat the public sector, the private sector and householdsplay in TVET financing.The public sector must still acti-vely finance TVET because it needs to address issues ofequity, market failures, strategic development, etc.

The three P’s for TVET FinancingFinancing is a powerful tool to shape the social andeconomic impact of the TVET system: the way a coun-try chooses to finance its TVET system has a significantimpact on its quality, efficiency and relevance.This willinfluence the potential of TVET to foster fair social andeconomic development and – ultimately – to reducepoverty.

The three P’s for financing can assist policy makersand practitioners in making the right decisions: Poverty(assuring attention to the poor), Performance (creatingthe right incentives for results and quality), Partnership(creative involvement of the private sector in governan-ce, financing and delivery). In using the 3 P’s to guidethe choice of TVET financing instruments and mecha-nisms, it is important to strike a balance between thethree.• PovertyA broad sectoral perspective is needed when devisingmechanisms for cost-sharing with trainees/students.Introducing fees (up front or ex-post) only in certainbranches of the education sector introduces potentialinequities into the system.

Private TVET providers need full cost-recovery.Thestate needs to creatively use a range of instruments toensure that the poor have equal access to good qualityTVET, whether from public or from private TVET provi-ders.

There is a potential problem to be considered inbalancing out performance against equity. If the perfor-mance of TVET institutions is only measured in terms ofhow many of their students pass standard-based assess-ments, there is a risk that the institutions will selecthigh performers, who tend to be from higher incomefamilies.This can be overcome by creating specificrewards/incentives for institutions who take in poor students.

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2 The Ethiopian approach to financing TVET

• PerformanceIn the past, the significant increase in TVET enrolmentin Ethiopia was managed by a combination of govern-ment funding, intensive short-term teacher training andbuilding of TVET centres.The rationale was still that of asupply-driven system.The future stages of the TVETreform require a paradigm shift towards a demand- andoutcome-driven system.This holds not only for the trai-ning itself, but for the management of the TVET systemand its institutions as well.The deciding factor for suc-cess is not input or supply, but performance.• PartnershipIn countries like Ethiopia, where the consumers do notyet sufficiently value quality, it is difficult to convinceprivate sector employers to invest in training skilledworkers to improve the quality of their products. It isthe role of the government to sensitise both consumersand producers about the benefits of quality – quality ofproducts and services as well as of education and trai-ning.

Public and private TVET providers need to exploreways to build partnerships.The dialogue establishedduring this symposium can serve as a platform to furt-her develop openness and mutual trust.

TVET financing is an important aspect of governancein TVET. Stakeholders expected to contribute financiallywill do so more willingly if they are involved in gover-nance as well.The private sector in any country tends

to be more prepared to engage in multi-stakeholderforums when it recognises the relevance of doing so. Inlarge countries, it may be easier to get the private sectoron board at the level of regional associations, which canlater be scaled up to the national level.

Public-private partnerships require new roles and res-ponsibilities by all actors involved. Both sides need toassess what they need to learn in order to become bet-ter partners.These learning needs can be addressedthrough appropriate capacity building measures.

Ethiopia’s significant progress towards universal pri-mary education by 2015 has increased the pressure toexpand post-primary education, including secondary,TVET and higher education.An increasing number ofdonors have expressed their interest in supportingTVET. In the long run, the TVET system needs to be ableto function sustainably based on diverse funding sour-ces in order to reduce dependency on external inflowsof funds.

Managing the reform processTVET reform is a long-term process.Accelerating thepace of change can jeopardise quality.Any TVET reformrequires good M&E (monitoring and evaluation) mecha-nisms and willingness to learn from experience. SouthKorea is one of the best examples worldwide for impro-vement based on continuous learning from experience.

6

Presenter:• Vladimir Gasskov, Senior Training and Skills

Development Specialist, Skills and Employability

Department, ILO Geneva



In this session Vladimir Gasskov presented an over-view of mechanisms for financing TVET – their structu-re, underpinning factors, and the features that makethem efficient, effective and equitable. For the originalpresentation see Annex 6.

Main issues of the presentation and discussion:

The three E’s for TVET FinancingThe choice of TVET funding mechanisms has leverageon the achievement of national development objectives(Effectiveness), on outputs per unit costs (Efficiency)and on the degree to which students from differentbackground have access to good quality training(Equity).

Structure of TVET financing mechanismsWhen discussing TVET financing mechanisms it isimportant to differentiate the following different com-ponents: sources of funding, decision-making authori-ties, rules and procedures for budgeting and disburse-ment, and the financial and performance accountabilitysystem. Many different examples exist across the worldand the outcome in terms of the three E’s for TVETfinancing depends on how these components are fine-tuned.

Output-based versus input-based disbursement of public fundingInput-based funding mechanisms – based on costs dueto human resources, training materials, equipments,logistics, etc. – are popular because they are comparati-vely less complex than output-based ones.The disadvan-tage is that input-based disbursement is rather rigid andcannot be used as an instrument to reward the qualityand relevance of training.

In output-based funding formulas, the governmentpurchases TVET outputs.This can be measured as thenumber of student guided hours (SGHs) or equivalent

full time students (EFTSs). Different courses are assig-ned different funding rates according to their level andpractice orientation.The comparative advantage of thisformula is that it allows to link disbursement to actualperformance.

Underpinning factors for output-based funding In order for an output-based funding mechanism towork, it requires reliable funding sources, transparentdisbursement mechanisms and fair funding rates for dif-ferent types of courses, a high degree of managementautonomy for TVET institutions, standard-based qualityassurance, and transparent accountability mechanisms.

Output-based funding requires the different stakehol-ders to acquire new knowledge and capabilities: fun-ding agents need to be able to use the flexibility toachieve objectives and priorities;TVET providers needto be able to cope with increased complexity in fun-ding, management and accounting; funding agents andproviders need to be able to assess and negotiate fairfunding rates and accountability mechanisms.

Dealing with complexityThe increased complexity of information, bureaucracy,and management associated with output-based fundingrequires appropriate instruments and professional TVETmanagers and accountants. Options exist to simplifycertain aspects of the system, such as grouped fundingrates and reducing the number of indicators to reportagainst. However, a certain level of complexity remainsand requires directors of TVET institutions to assumenew roles as managers of an enterprise.This may be dif-ficult for small TVET institutions in remote areas.

Flexibility Output-based funding based on fair rates of funding,standard-based quality assurance and transparentaccountability mechanisms can be used for any kind oftraining provided by any kind of provider (public, priva-te, NGO).The use of SGHs/EFTSs makes it possible toadapt disbursement to TVET institutions on a quarterlybasis, depending on their performance.

Studies in New Zealand show that it is very difficult toestablish the precise cost of training. Courses of diffe-rent funding rates can subsidise each other.This requi-res considerable management flexibility at the sametime as transparent accountability for the funding recei-ved.

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3 Promoting efficiency, effectiveness and equity in public TVET institutions

Poverty – equitable access to TVET Different mechanisms exist to enable students from dif-ferent backgrounds to access TVET opportunities equal-ly, such as full government funding, income-dependenttraining fees, education loans, etc.The choice of mecha-nisms needs to take into account factors such as thecountry’s level of income, rate of employment, etc.

In developing and emerging countries, training loansbear a considerable risk of loan default. Usually, onlyemployed graduates under 50 years of age are liable forloan repayment.An option may be loans disbursed bycommercial banks, assuming that they are more likely tocheck which kind of training is more likely to lead toemployment of the graduates.Any training loan schemeshould be analysed very carefully in terms of its realeffect on equity.

PerformanceThere is a certain concern that the burden of complexmanagement might compromise the quality of the trai-ning delivered. In order to counter that, funding ratesmust be based on competency-based quality assurancestandards. SGHs must not merely reflect the amount ofteaching hours, but must internalise all additionalresources invested into increasing training quality, suchas equipment, qualified teachers and instructors (inclu-ding their time spent on class preparation, increasingtheir own skills and knowledge, company visits, etc.),care takers, and overheads (management and capitalcosts). In New Zealand for instance, reconciliation com-mittees negotiate funding rates based on quality stan-dards. One important indicator is satisfaction andemployability of students.

PartnershipFinancing sources may include public funds, enterprisecontributions, trainee contributions, and income genera-ted by the TVET institutions.The question is not justwhich resources are made available, but also how theyare channelled into the TVET system to produce thedesired impact. Many different options exist for this.

Vice versa, opting for a certain mechanism such assectoral training funds, for instance, does not automati-cally imply that this will be only financed by the privatesector – in fact employees, employers and the publicsector may all contribute into the fund.

The public sector still has the responsibility to setquality standards, define development priorities, contri-bute to the costs of TVET through fair funding rateswhich may include overheads, and develop fundingoptions for students form different backgrounds (inco-me, prior education, region, gender, social and economi-cally disadvantaged, disabled etc.).

Managing the reform processThe TVET reform process in Ethiopia is of considerablesize and complexity.The amount of time required forinstitutional changes should not be underestimated.Theexample of New Zealand shows that it may take morethan 10 years to introduce flexible staffing schemesinto systems with an initially high percentage of civilservants.

In a country the size of Ethiopia, decentralisation islikely to pay an important role.The most innovative ofcurrent trends is to have different structures disbursepublic funds and/or purchase training for different tar-get groups.

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Presenter:• Adrian Ziderman, Professor in Economics and

Business Administration, Bar-Ilan University, Israel



Adrian Ziderman introduced the concept of cost-sha-ring with trainees and the benefits and risks associatedwith it. Based on international experience with highereducation, he presented a financial analysis of studentloan schemes and derived lessons learned for TVET inEthiopia.The presentation is attached as Annex 7.


Rationale of cost-sharing with traineesTraditionally,TVET fees have tended to be heavily subsi-dised, making only a very small contribution to coveringthe costs of TVET institutions.This can be a severe bud-getary burden where public resources are scarce.Thejustification for cost-sharing with trainees is that sinceTVET graduates benefit from higher incomes – due toincreased employability and better payment – theyshould contribute to bearing the cost of TVET.

Trainees can contribute to sharing the burden of TVETfinancing by paying higher, more realistic (i.e. coveringa higher percentage of the actual training cost) up-frontfees, through loan schemes, or by paying and ex-post“graduate tax” as proposed in the TVET FinancingFramework for Ethiopia.

The income generated though cost-sharing with trai-nees can be used to maintain current levels of enrol-ment and quality, for TVET expansion, or to encourageprivate TVET provision.

Risks of cost-sharing and risk mitigation The risks of increasing TVET fees are that total TVETenrolment may decrease (especially if other tracks ofeducation are not subject to fees) and that disadvanta-ged candidates may be excluded from accessing TVET.

These risks can be mitigated by selective exemptionsand selective grants.These tend to create a considerableburden on public budgets when the number of deser-ving candidates is high.This is where loan schemescome into consideration.

Equitable cost-sharing through loan schemes – theory and practiceLoan schemes suggest the win-win possibility of redu-cing the public budgetary burden (cost-sharing) overtime while increasing access to TVET for disadvantagedgroups (equity).The idea is that loan repayments willserve as a revolving fund. However, international expe-rience in student loan schemes for higher educationcalls for caution in managing expectations towards loanschemes.

With regard to cost-sharing (budgetary objectives),experience shows that the costs associated with theprovision of loan capital, administration of the loansscheme, and loan default result in a maximum loanrecovery ratio of 67%.The non-repaid element repre-sents an implicit (“hidden”) grant.

In terms of increased access for disadvantaged groups(social objectives) there is no evidence that loan sche-mes effectively raise access to higher education fordisadvantaged groups. Selective grants are more effecti-ve, but also more expensive.A certain balance betweenbudgetary and social objectives can be achieved withappropriate criteria for screening of candidates, pro-acti-ve targeting of needy students, adequacy of loan sizeand conditions, and a unified loan and grants policy.

The performance of loan schemes can be improvedby using commercial banks to disburse and collect theloans. However, this still requires public funding to sub-sidise low interest rates and to cover default loans.

Screening versus pro-active targeting Mechanisms to improve access of disadvantaged groupsto TVET need to take into account the multidimensionalnature of poverty.This includes not only the level ofincome and prior education, but also access to informa-tion, ability to understand bureaucratic procedures, etc.

When using screening, it is important to design appro-priate criteria.An example from Thailand shows that ifthe income level used for screening is set too high, themost disadvantaged candidates compete with more edu-cated, better informed, less needy candidates.

Appropriate screening criteria need to be backed byoutreach (pro-active targeting) to reach the most disad-vantaged target groups.A certain percentage of theresources raised through fees should be earmarked forthis purpose.

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4 International experience with cost-sharing with trainees/students

Applicability of loan schemes to TVETIt is difficult to assess the extent to which the interna-tional experience presented here can be applied toTVET, since it is mainly based on loan schemes for hig-her education. No truly comparable examples exist forTVET.

TVET tends to attract trainees from lower socio-econo-mic groups. On the one hand, this might result in higherrepayment default, less preparedness to assume the riskof a loan scheme, and problems of repayment follow-up,given that most graduates will be (self-) employed inthe informal sector. On the other hand, they are morelikely to recognise employment and wage benefits ofTVET than of higher education.

Applicability of graduate tax to TVET in EthiopiaAgain, it is difficult to assess whether experience basedon higher education can be applied to TVET. Even if itwere, caution is necessary given that the success of hig-her education graduate tax is still largely unknown.Thepre-requisites for smooth graduate tax collection are notusually found in developing countries (location of bor-rowers, information on income earned, effective collec-tion mechanism).

The term ‘contribution’ might be more appropriatethan ‘tax’.As a label to generate social acceptance of thescheme,‘contribution’ may be more positive.Also, it isquestionable whether the proposed graduate tax inEthiopia has the nature of a tax in the sense of an inco-me-contingent payment not limited in time.

At this stage in Ethiopia, moderate fee payments maybe more appropriate for cost-sharing (budgetary objecti-ves), combined with selective exemptions or grants forincreased access of disadvantaged groups (social objec-tives).

Cost-sharing versus cost-recoveryThe resources collected through a cost-sharing scheme(loan, tax, contribution) may be used to reduce publicspending while maintaining the overall level of spen-ding on TVET (cost-sharing).They may also be used toinject additional funds into the TVET system to expandoutput and increase quality (cost-recovery).

Managing the reform processIt is of crucial importance to develop a good M&Esystem and to invest in good information and feedbackgathering. Changes likely to have a critical impact onthe access to TVET for disadvantaged groups – e.g. hig-her training fees – should be introduced gradually, andtheir impact should be carefully monitored.

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Presenters:• Folkmar Kath (Panel 1), former Head of the Costs

and Financing Department of the German Federal

Institute for Vocational Training (BIBB)

• Roberto Niez (Panel 5), Administrator of the Jacobo

Z. Gonzales Memorial School of Arts and Trades

(JZGMSAT) in the Philippines

Chair:• Julia Schmidt (Panels 1 and 5), Senior Expert,

ECBP-TVET Reform Component, Ethiopia

Particular relevance of the topic in theEthiopian context:

The Ethiopian TVET Financing Framework assumesthat a deepened involvement of employers in the deli-very of TVET, through cooperative and in-company trai-ning has a significant potential to increase cost-effecti-veness in the TVET system and specifically to reducethe relative share of expenditure for public TVET provi-sion.The focus is not on reducing the total amount ofpublic spending on TVET but to tap into other finan-cing sources in order to expand the quantity and quali-ty of TVET provision.

The objective of panels 1 and 5 was to explore thefinancial implications of such cooperation for both trai-ning institutions and participating companies using theexamples of Germany and the Philippines.

With its dual system, Germany maintains a well-estab-lished and structured cooperative training system.Thecost implications of this system are well documented.

The Philippines have recently established a formalcooperative training programme, called the DualTraining System.The JZGMSAT (Jacobo Z. GonzalesMemorial School of Arts and Trades) is one of the lea-ding institutions in the implementation of the program-me. In the particular case of the Philippines, anothertopic of interest was the different approaches of trai-ning institutions to raise external income and to increa-se capacity utilization of facilities through income-gene-rating activities and provision of tailor-made non-formaltraining programmes, in particular to companies.

The presentations Employers’ contributions to TVET

in the German dual system (Panel 1) by Folkmar Kathand Experience with the dual training system in the

Philippines (Panel 5) by Roberto Niez are attached asAnnexes 8 and 9, respectively.


How much do companies spend on TVET, and whatis the return in financial terms?Recent research carried out in Germany shows thatwhen looking at the financial return of cooperativeTVET for companies it is important to distinguish grosscosts, net costs and benefits.

Gross costs are the costs actually incurred by the com-pany during the training process.They usually includepersonnel costs of trainees (trainees already receive awage in Germany), personnel costs of instructors, plantand material as well as other costs. Net costs are calcu-lated by subtracting the returns from the gross costs.The returns are generated by the trainee’s productivework during the in-company training.

Gross costs vary considerably depending on the sec-tor, the region where the company operates, and theway the training is organised within the company.Thedifferences are even greater for net costs, since the pro-portion of return varies substantially. Figures will alsodiffer depending on whether full or direct costingmethods are applied. Direct costing only covers thetypes of costs actually incurred as supplementary costsby the company as a result of training while full costingalso considers other kinds of costs. In Germany, it is esti-mated that average gross costs per trainee and yearamount to 16,435 EUR, returns to 7,730 EUR, henceresulting in average net costs of 8,705 when calculatedby full costing (10,178 EUR gross and 2,488 EUR netwith direct costing).

While gross and net costs are calculated for the actualtraining period, the estimation of benefits uses a long-term perspective, taking into account parameters thatare much more difficult to quantify.These benefitsresult from hiring persons trained in the company inste-ad of recruiting external skilled workers, from thecumulative critical mass of skilled workers generated byall cooperative training efforts across a certain sector,from innovation effects triggered by the actual in-com-pany training process, and from the improved publicimage of companies who engage in cooperative trai-ning.

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5 Financial implications of cooperative TVET

How can employers’ investment in TVET and theirparticipation in cooperative training be stimulated?What incentives have worked in developing coun-tries?The German dual system has evolved over centuriesand is engrained into the German culture. Even so, only25% of enterprises in Germany engage in cooperativetraining.Across the world, stimulating enterprises toengage in cooperative training requires continuous eff-orts by the government.

In making the case for cooperative training it is impor-tant to explain that investment in cooperative training isa mid- and long-term investment in human capital.Thedifference between short-term net costs and long-termbenefits needs to be well communicated. In developingcountries, the shortage of skilled labour is quite tangi-ble, and the opportunity of overcoming this shortagemay already provide strong motivation for engaging incooperative TVET.

It is equally important to raise awareness for the eco-nomic and social dimensions of cooperative TVET: itprovides the economy with skilled labour capable ofcompeting at international standards and it increasesthe employability of the trainees.This is of crucialimportance not only at the level of individual enterpri-ses, but for boosting the country’s competitiveness inglobal markets and fostering economic growth and soci-al development as a whole.

The experience from Germany, the Philippines andother countries shows that the government needs topro-actively campaign in order to raise the public’s awa-reness of the benefits of cooperative training. Not justthe private sector needs convincing, but society as awhole.This advocacy and marketing is not a one-timecampaign but remains a continuous effort. In Germany,negotiations among the different social partners regar-ding cooperative TVET take place on a yearly basis.

Tangible incentives for private sector investment inTVET may include tax deduction for training expensesand training-related donations, subsidies for capitalexpenses to improve training facilities, collective orindividual agreements to insert training clauses into thelabour contracts of trainees (whereby trainees wholeave the company before a pre-established point intime after completing their training have to refund partof the training costs to the company), etc.

How and to what extent can employer-based TVET contribute to the overall resources availablefor TVET? Does cooperative training reduce unitcost for TVET in TVET institutions, hence forgovernment?During in-company training, the employer covers thetrainee’s and instructor’s personnel costs. It also provi-des training facilities, either as separate training works-hops or integrated into the regular productive activitiesof the company.

In the case of JZGMSAT’s dual training programme,the employers cover the trainees’ fees for the in-schoolcomponent of the cooperative TVET and contribute to arevolving fund used for capital and operational expen-ses of the TVET institutions as well as for scholarshipsfor needy trainees.

All this constitutes a net inflow of resources into theTVET system. Government funding is still required tocover the TVET institution’s personnel costs, operationalexpenses and part of the capital outlay.

Does cooperative training lead to an enrolmentincrease compared to the traditional way of institution-based TVET?In the case of JZGMSAT, the introduction of the dualtraining programme has lead to an annual increase ofenrolment by approximately 11%.

Approaches of training institutions to raise external income and to increase capacity utilization of facilitiesIn the example presented from the Philippines,TVETinstitutions generate income through tailor-made cour-ses for enterprises, evening courses and entrepreneurialactivities of students.The in-company training compo-nent allows the TVET institutions to accommodate morestudents and thus increase capacity utilisation of its faci-lities.

Managing the reform processTVET systems are not transferable as a whole. It isimportant to look at elements and decide how they canbe adopted and adapted to the local context.

To foster cooperative TVET it is crucial to develop andsupport cooperation between all stakeholders.

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Presenters:• Bester Mahube (Panel 2), Coordinator of

Tswelelelopele Brigades Centre, Botswana

• Godfrey Kafere (Panel 3), Principal of Lilongwe

Technical College (LTC), Malawi

• Roberto Niez (Panel 5), Administrator of the Jacobo

Z. Gonzales Memorial School of Arts and Trades

(JZGMSAT) in the Philippines

• Gaminie Gunasinghe (Panel 8), Senior Consultant

to REVO (Rehabilitation and Modernization of TVET

Institutions) Project

Chairs:• Jutta Franz (Panels 2 and 8), International

Development Consultant on TVET Finance

• Dessalegn Mulaw (Panel 3), TVET System Reform

and Capacity Building Department Head, Ministry

of Education, Ethiopia

• Julia Schmidt (Panel 5), Senior Expert, ECBP-TVET

Reform Component, Ethiopia


In its new financing framework for TVET, theEthiopian government seeks to recover a substantialshare of recurrent costs of public institutions throughmore systematic income-generating activities.Furthermore, unit cost in public TVET institutions is rat-her high, because institutions are under-utilized andoften run under capacity. On the other hand, some –particularly urban – TVET institutions are overcrowded,which compromises the quality of training provided.The new financing framework therefore calls for increa-sed capacity utilization through non-formal training acti-vities, and increased efforts by the management ofpublic training institutions to develop tailor-made TVEToffers for industry and businesses and to deepen therelationship with the private sector.The issue of over-crowded TVET institutions is proposed to be addressedthrough introduction of performance-based budgetingand through improved management capacity of institu-tions at all levels of the TVET system.

The Botswana Brigades (government-subsidized butcommunity-owned TVET centres) generate externalincome by involving trainees in productive work andrunning independent production units in the centres.They are part of a well-established and formally structu-red TVET system and constitute a locally adapted appro-ach to Training with Production.

In the second half of the 1990s, Malawi embarked ona TVET sector reform process with the aim of makingTVET relevant and accessible. Lilongwe TechnicalCollege (LTC) is an outstanding example of a collegewhich prior to the reforms faced the common challen-ges of poor infrastructure, under-funding, running undercapacity and providing TVET programmes that were notrelated to the labour market. Now LTC is one of the lea-ding schools in Malawi providing competency-basedTEVET (technical, entrepreneurial and vocational educa-tion and training) programmes and a wide range ofskills development options, with substantial non-formaltraining and other income-generating activities.

The Philippines have recently established a formalcooperative training programme, called the DualTraining System. National TVET policy in the Philippinesalso encourages public TVET institutions to generateincome to cover part of the training costs.TheJZGMSAT (Jacobo Z. Gonzales Memorial School of Artsand Trades) is one of the leading institutions in theimplementation of the cooperative training programmeand generating income (see Chapter 5 on Financialimplications of cooperative training).

In Sri Lanka, the authorities have embarked on a poli-cy to encourage income-generating activities in publicTVET institutions.This policy is primarily aimed atincreasing the efficient use of human and physicalresources in the institutions.

The papers Training with Production in the

Botswana Brigades (Panel 2) by Bester Mahube,Increasing training activities and income: the example

of Lilongwe Technical College, Malawi (Panel 3) byGodfrey Kafere, the presentation Experience with the

dual training system in the Philippines (Panel 5) byRoberto Niez, and the paper Improving capacity utili-

sation and income in TVET institutions in Sri Lanka

(Panel 8) by Gaminie Gunasinghe are attached asAnnexes 10, 11, 9 and 12, respectively.

The discussion in panel 2 also presented the opportu-nity to learn about the current development of income-generating activities in TVET institutions in Rwanda.


Approaches of training institutions to raise exter-nal income and to increase capacity utilisation offacilitiesBased on the experiences of the countries representedin the different panels, three main types of income-

13

6 Generating income and increasing capacity utilisationin public TVET institutions

generating activities (IGAs) can be distinguished: pro-duction units at TVET centres undertaking entrepreneu-rial activities related to the occupational fields taught atthe centre, diversified training offers, and other com-mercial activities (see box below).Additionally, mostTVET institutions charge fees as a way of cost-sharingwith trainees. Diversified training offers and cooperativetraining schemes with the private sector also serve toincrease capacity utilisation of facilities.

Production units serve the double purpose of raisingsome income for the TVET institution and improvingthe relevance of TVET through exposure of the traineesand their instructors to the world of work (Botswana,Malawi, and Rwanda).The whole concept of theBotswana brigades was developed around such unitswith the added objective of contributing to local deve-lopment by implementing (government-sponsored)infrastructure development projects. JZGMSAT in thePhilippines has also developed entrepreneurial activitieswhich serve the double purpose of generating incomeand providing the trainees with opportunities for on-the-job learning, although this does not appear to be itsmain focus for IGAs and improved capacity utilisation.In the case of Sri Lanka, the production units in publicTVET institutions are used for cost-recovery – all inco-me generated is remitted to government revenue andthe treasury provides funds to cover the costs.Althoughthis does not generate additional income for the institu-tion, it does provide teachers and instructors with addi-tional income.

Examples of IGAs mentioned during the symposium: Production units: carpentry workshop, weaving works-hop, building material production, garage, metal wor-king workshop, slaughterhouse, office and IT supportservices, materials testing, electronic devices repairworkshop.Diversified training offers: in-school courses or in-com-pany training for enterprises (fees paid by employers),for the unemployed (contracted by employment agen-cy), upgrading courses for civil servants (contracted bydifferent line ministries), training of trainers (contractedby NGOs or development agencies), preparation of stu-dents for national and international professional exami-nations.Others: consultancies, conducting testing of recruitmentcandidates for enterprises, organising trade fairs, hiringout facilities.

Offering tailor-made courses for enterprises and eve-ning courses for diverse target groups is the main strate-gy of JZGMSAT in the Philippines to raise additionalresources for the centre. It is also used by brigades inBotswana.This kind of IGA is at the same time a strate-gy to improve capacity utilisation of TVET institutions.

The fees charged to trainees vary and are usually hig-her for courses with higher levels of certification. InBotswana, for instance, centres offering National CraftsCertificate (NCC) programmes can charge higher feesthan those who offer Trade Test B and C, because NCCare higher qualifications than Trade B and C.

The fact that the dual training system includes in-com-pany training periods allows JZGMSAT to accommodatemore students and thus increase capacity utilisation ofits facilities.Another source of income for JZGMSAT isthe contribution paid by the companies participating inthe cooperative training programme, of which 90% areforwarded to the trainees as allowances and the remai-ning 10% are paid into a revolving fund used to contri-bute to the institution’s capital expenses, operationalexpenses, scholarships and medical and social assistan-ce schemes for trainees.

How can the government encourage the develop-ment of IGAs and improved capacity utilisation byTVET institutions? Transparent ‘rules of the game’, capacity building, tech-nical assistance, subsidies and tax incentives are namedas incentives for TVET institutions to engage in IGAsand capacity utilisation improvement. One importantaspect in providing tangible incentives is to ensure thatthey are well coordinated by a lean administrative struc-ture invested with a clear mandate.

The rules of the game should include criteria whichentitle or oblige TVET institutions to develop IGAs, cri-teria for application for public subsidies, guidelinesregarding financial management and utilisation of gene-rated funds, and accountability mechanisms.Anotherimportant aspect to consider is what impact the genera-tion of income by the TVET institutions will have on theamount of public resources they are assigned. If incomegenerated by a certain TVET institution leads to a reduc-tion of the total amount of public subsidies received,this may be a disincentive. Instead, it may be more con-ducive to IGAs development to establish that a certainpercentage of the institution’s budget has to be coveredby IGAs.

Appropriate capacity building plays a pivotal role indetermining the success or failure of the efforts under-taken by TVET institutions to generate additional inco-me and improve their capacity utilisation. Capacity buil-ding can be organised as long-term or short-term cour-

14

ses and can be targeted e.g. at school managers, accoun-tants, teachers and instructors, members of councilsmaking decisions on budgeting and utilisation of resour-ces.

In Botswana the Department for Vocational Educationand Training (DVET) provides technical assistance forthe creation of new centres, curriculum development,etc. In Rwanda, technical assistance is provided by inter-national development organisations.

Public subsidies to TVET institutions may be providedin money or in kind. In fact, capacity building and tech-nical assistance – if provided by the government –might be considered a subsidy provided in kind. Othersubsidies include the provision of training materials,payment of allowances to members of boards oftrustees, subsidies to cover operational costs and capitalfunding for the establishment of new centres. In caseswhere considerable subsidies are provided by interna-tional donors it is important to design a sustainable fun-ding strategy to reduce dependency on ODA.

Different countries apply different fiscal regulations toTVET institutions. In the case of Botswana, Brigades paytax on surpluses, i.e. on income generated by IGAs andnot reverted to the development of the TVET institu-tion. Brigades are not exempted from paying valueadded tax (VAT) when purchasing goods and servicesfor the institution. In Malawi a multi-stakeholder negoti-ation process is underway to develop a fiscal regulationfor TVET institutions.

How can public TVET institutions be held accounta-ble for their IGAs and capacity utilisation? In Botswana the brigades are owned by local communi-ties and subsidised by the government. Each brigade isgoverned by an elected board of trustees which isaccountable to the community by means of regularpublic meetings.The accounts are audited once a yearby auditing firms appointed by the authorities. InMalawi, the TVET institution has spending autonomy forthe generated income.A series of committees with staffand management representation monitor income andspending of IGAs and the accounts have to be auditedby government-approved auditors.

Another important aspect of accountability is the qua-lity of the training provided. In Botswana, the criteriaare based on training input provided by the institution,such as the proportion of time spent for in-class or on-the-job training.The training has to follow curriculadeveloped by the ministry. Individual institutions canapply to be certified as meeting standards set by theBotswana Training Authority (BOTA).

Appropriate performance appraisal mechanisms forstaff and management were also mentioned as impor-tant instruments to increase quality and accountability.

Main problems associated with IGAs and increasingcapacity utilisation and how to address them• Economic viability of IGAsOne of the main problems associated with productionunits is that if they fail to establish themselves as econo-mically viable activities, the sustainability of the wholecentre, including its training delivery, is at risk. Suchexperiences have been reported from Botswana, Malawiand Rwanda.The most frequent causes for poor econo-mic performance of production units are lack ofmanagement capacity, poor marketing strategies andmisuse of funds, materials, equipment, facilities and trai-nees’ labour for the personal benefit of individual staff.

To a certain extent this can be overcome by appropri-ate capacity building measures and technical assistanceto develop appropriate institutional arrangements andaccountability mechanisms. It is important to motivatestaff and management of the TVET institutions and theproduction units, and to help them understand thatthey will derive a long-term benefit form contributingto the sustainability of their employing institution.

In remote areas, however, demand for certain productsand services may be weak, and thus the prospects ofgenerating significant amounts of income through pro-duction units may be limited.This lies beyond the scopeof influence of TVET authorities and can only be over-come through concerted efforts with other sector poli-cies to support the economic development of the area.In remote areas with little local private sector develop-ment, the main source of income for production unitsmay be to bid for public development projects, as wasreported from Botswana.

Securing sufficient start-up capital is a must for settingup a sustainable production unit.Additionally, the follo-wing were mentioned as success factors for productionunits:• innovative workplaces linked with a range of occu-

pations (e.g. making chairs combining the crafts ofcarpentry and weaving workshops);

• careful calculation of training and production capa-city to ensure profit;

• transparent and effective accountability mecha-nisms;

• production units operating separately as commercialenterprises with legal status and long-term develop-ment plans;

• use of domestic raw material, and • realistic marketing plans and distribution channels

for products and services.

15

• Distraction from core businessProduction units can serve the double purpose of rai-sing additional resources for the TVET institution andoffering the trainees the possibility to gain work expe-rience. However, there is a concern that in some casesthe pressure to raise enough income distracts the TVETinstitution from its core business of delivering goodquality vocational training.This may particularly be thecase when the learning and working processes are notintegrated in a systematic way. Examples of this arecases where workload is irregular, and unpredictedwork peaks disrupt the in-class teaching process, orwhen the tasks to be performed by the trainees arerepetitive and do not really offer the opportunity toacquire relevant competences.

In order to counter this, there is a tendency to separatetheoretical training from on-the-job training.This separa-tion does not necessarily mean that the two learningprocesses cannot take place within the same institution,but rather that they are designed and combined in sucha way as to complement rather than compete with eachother.Within the production process the tasks assignedto trainees should be selected according to their trainingvalue, depending on the trainees’ level of competence.

Establishing training quality standards may also be hel-pful in balancing out IGA and training objectives.Thestandards can be outcome-based and assessed withinthe context of a qualifications framework or be input-based and stipulate the proportion of time dedicated toon-the job and in-class training. It is also important toequip the instructors in the production units withappropriate teaching skills.

• Potential conflicts with local private sectorIf TVET institutions operate below local market prices,conflicts may arise with local enterprises. Fiscal and pri-cing regulations to enhance fair competition are onlyone aspect to counter this.

The way the production units interact with local com-munities and local business will be crucial in shapingtheir relationship and preventing potential conflict. It isimportant to take measures to build trust and seekmutual benefit, such as having local business ownersrepresented in managing boards of TVET institutions.

In fact, a production unit of a TVET institution may actas a motor for local development by providing employ-ment and doing business with local enterprises and the-refore not be perceived as a threat to local businesses.The use of innovative technology in the productionunits may prompt local businesses to subcontract cer-tain steps of their production process to the unit anduse this to improve the overall quality of their products.

In some cases, the TVET institution does not actuallyoperate its own IGA but leases it out to a local enterpri-se which runs it according to local market conditions.

What share of the training cost can be recoveredthrough IGAs and improved capacity utilisation?Given the current quality of data it is not easy to calcu-late the precise share of costs recovered through IGAsand measures to increase capacity utilisation. Figuresprovided do not clearly differentiate between gross andnet income, nor is it clear how costs for operation andoverheads are allocated to the different units anddepartments of the TVET institution.

In Botswana, the individual centres are required toraise 10-20% of their recurrent budget.Approximately10 to 15% are raised through IGAs. Each vocational areawithin a centre has its own unit of training and IGA.Not all units perform equally and some are subsidisedby others.An additional 3-5% is raised through trainingfees. Compared to government-owned technical colle-ges, the subsidies to the community-owned brigadesabsorb less public resources. In Malawi, the incomegenerated by LTC was said to amount to 150% of theallocations provided by the government. Staff costs arenot considered since teachers are civil servants. In SriLanka, the production activities may only be charged ona cost-recovery basis and not generate profit. It is esti-mated that IGA account for 5 to 6% of the annual bud-get of public TVET institutions.

When comparing the different options for IGAs byTVET institutions, it appears that more income can begenerated by offering diversified training and conduc-ting consultancies and other services rather thanthrough production units.The comparative advantage ofproduction units lies in providing hands-on workingexperience to trainees and opportunities for trainers tokeep their skills up-to-date.This can be of great impor-tance in remote areas where the opportunities to coo-perate with the private sector are limited.

Managing the reform processToo tight government control over financial manage-ment of resources appears to be a disincentive for thedevelopment of IGAs in TVET institutions. However,clear ‘rules of the game’ are needed.The role of thegovernment should be to develop transparent guideli-nes on the overall purpose of IGAs, set training qualitystandards and quality assurance mechanisms, and estab-lish transparent and manageable accounting mecha-nisms for the generation and spending of income raisedby TVET institutions.The regulatory framework needs todo justice to the different conditions in urban vs. rural,highly industrialised vs. remote areas by providingscope for adaptation to these different conditions.

The managers of TVET institutions need to acquiresolid business management competences to ensure thatengagement in IGAs does not jeopardise the quality oftraining provision. Similarly, instructors involved in trai-ning with production programmes or other kinds of

16

production-based training should be able to apply goodquality standards in their productive work and conveythese standards in their training.Therefore, one corepriority during the process of encouraging the develop-ment of IGAs and other measures to optimise capacityutilisation of (public) TVET institutions should be capa-city building for TVET accountants, managers andinstructors.

Setting realistic targets will be crucial for the reformprocess.When the generation and spending of incomeby public TVET institutions was liberalised in Ethiopia,

the expectations were that up to 40% of training costsmight be covered by IGAs.Although there are no relia-ble data available, it is estimated that the share of trai-ning costs covered by IGAs remains below 15% of thetotal training costs.

It is also very important to prevent potential conflictswith the local private sector.The two main strategiesare to seek opportunities for win-win cooperation andto develop fair fiscal regulations based on a transparentmulti-stakeholder dialogue.

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7 Promoting private investment in TVETPresenters:• Yusuf Bachu (Panel 4), General Manager of the

National Secretariat of UGAPRIVI (Uganda Association

of Private Vocational Training Institutions)

• Elliot Mulanje (Panel 7), Coordinator of the Blantyre

Service Centre of TEVETA (Technical, Entrepreneurial

and Vocational Education and Training Authority) in

Malawi

Chair: • Gerhard Quincke, Project Manager of the Partnership

Project between the Ethiopian Chamber of Commerce

and the German Chamber for Skilled Crafts of the

Rhein-Main area


In Ethiopia, a further expansion of TVET provided byprivate – mainly commercial but also non-profit – trai-ning providers is considered a key strategy to expandformal and non-formal training in a sustainable manner.A significant private training market is already develo-ping in urban areas. Further expansion is constrained bya number of investment regulations and uncertaintyabout the capacity and preparedness of private house-holds to pay commercial training fees. In this context itwill be increasingly important to develop effectiveinstruments to reduce the cost of private training deli-very, and/or to introduce mechanisms to ensure equityof access, particularly for disadvantaged target groups.

The Ethiopian draft TVET Financing Framework assu-mes that a deepened involvement of employers in thedelivery of TVET, through cooperative and in-companytraining has a significant potential to increase cost-effec-tiveness in the TVET system, and specifically to reducerelative expenditure for public TVET institutions. In thiscontext, the development of traditional apprenticeship

training in micro and small businesses is also conside-red an interesting tool to cost-effectively increase accessto TVET for a diverse range of target groups. Further-more, increased company investment in staff training isseen as a necessary contribution of the business sectorto life-long learning in Ethiopia.

In Uganda, the private training sector is comparativelystrong and provides substantially more training placesthan the public sector.With the support of foreign (initi-ally mainly German) support, UGAPRIVI (UgandaAssociation of Private Vocational Institutions) has deve-loped into a strong interest organization, providing ser-vices to its members and advocating for the interests ofprivate training providers within national policy mecha-nisms. UGAPRIVI is now represented in all relevantnational fora, and is the implementing agency to chan-nel substantial donor support to the private trainingmarket. Recently, the Government of Uganda decidedon a policy to subsidize training in private training insti-tutions in the context of the Universal Post-Primary

Education and Training Policy.Before the reforms undertaken in the late 1990s, the

TVET system in Malawi faced major challenges – evenby African standards – in terms of relevance, quality,access, and funding.The reform process systematicallyinvolved employers of the private and public sectors.Aseries of mechanisms and instruments have been deve-loped to encourage the engagement of employers inthe financing and delivery of TEVET, such as a traininglevy system and the promotion of traditional apprenti-ceships.

The presentation Promotion of private training provi-

ders in Uganda (Panel 4) by Yusuf Bachu is attached asAnnex 13. Elliot Mulanje’s paper Promotion of employ-

ers’ involvement in TVET in the formal and informal

sector in Malawi (Panel 7) is attached as Annex 14.


Role and characteristics of private TVET providersIn Ethiopia, private investment in TVET provision is fair-ly recent (since 2001). Incipient progress has beenachieved in that the attitude of leading government offi-cials towards private TVET delivery is increasingly sup-portive and the number of private TVET providers(PTPs) continues to grow.The opportunity to exchangeviews during the symposium was rated as a positiveimpulse to further improve the dialogue between thepublic and private sector, and to create a level playingfield for private and public TVET institutions.

In Uganda, 80% of BTVET (business, technical andvocational education and training) is provided by PTPs.These institutions can be commercial enterprises ornon-profit institutions founded by NGOs and religiousbodies.Together, they provide a practically nation-widecoverage of formal and non-formal BTVET services inurban, peri-urban and rural areas. Public institutionsmostly operate in urban areas and are not present in alldistricts. Supported by considerable amounts of techni-cal and financial assistance, UGAPRIVI has developedinto a strong national network of 300 private trainingproviders (50% of the private BTVET institutions inUganda). It actively engages in BTVET governance atregional and national level and shapes national policyon BTVET. UGAPRIVI has gained reputation as a trust-worthy partner by improving the quality of the servicesprovided by its partners through advisory services andaccreditation.

In Malawi, employers participate in TVET deliverythrough the On the Job Training Programme (OTJTP)and the Apprenticeship Training Programme, by provi-ding attachment places for trainees.Apprenticeships areparticularly suited for small and medium enterprises(SMEs) operating in the formal and informal sector, butspecial apprentice training has also been initiated bythe private sector in the modern automobile industry.

How to promote private investment in TVETThe cases of Uganda and Malawi illustrate well theimportance of combining the following approaches topromote private investment in TVET financing and deli-very: participation, conducive policies, appropriatefinancial incentives, transparent quality assurancemechanisms, capacity building, and organisational deve-lopment of private sector representative bodies.Thisapplies both to PTPs and to employers.

Participation refers to the active and systematic invol-vement of representatives of PTPs, employers and otherstakeholders in governance, management, needs assess-ment, delivery, curriculum development, competenceassessment, and financing of the TVET system. It isbased on this kind of comprehensive cooperation that ashared understanding can grow on how the differentstakeholders – public, private, civil society, NGOs – canbest complement each other.

Conducive policies include the liberalisation of theTVET market, the simplification of bureaucratic proce-dures for new investments, the legalisation of standard-based quality assurance and licensing mechanisms, andthe governance and financial management by an inde-pendent body representing all relevant stakeholders. Itsmembers should not be nominated but proposed bytheir respective constituency.

Financial incentives for private TVET investment(financing and delivery) may include tax exemptions forTVET-related expenses and donations undertaken byemployers, tax exemptions for TVET institutions, capita-tion grants to selected private TVET providers, second-ment of trained instructors from public to private insti-tutions, provision of funds (e.g. via vouchers) to increa-se access of disadvantaged groups and SMEs to TVET. InMalawi, 33% of incurred training costs are reimbursedto employers as an incentive to invest in TVET.Thereimbursements are financed out of a training fund cre-ated with payroll contributions by public and privateemployers.

The current international trends for establishing trans-parent quality assurance mechanisms point towards thedevelopment of national competence-based TVET quali-fications frameworks and associated mechanisms forassessment of trainees and licensing or accreditation ofpublic and private training providers.

Capacity building is needed for all TVET stakeholders,since their roles will change significantly as part of thereform process. Similarly, organisational developmentfor representative bodies of PTPs and employers will becrucial for their successful engagement in the reformand implementation of the TVET system.

The particular case of Malawi shows that while thedelivery of TEVET for the informal sector may requirespecific approaches, its financing needs to be integratedwithin the overall TVET financing framework.Recognising that the informal sector plays a major rolein most African countries has helped to increase thewillingness to use part of the TEVET levy for informalsector training.

18

The following recommendations were formulatedfor the particular case of Ethiopia:Private TVET providers could • make their network wider and more professional,• provide services to members (e.g. training/upgra-

ding of teachers and instructors),• utilise the potentials of cooperating with (German

and other) development organizations,• utilise the market opportunities created by the pre-

sent government policy (e.g. actively conquer thoseareas where the government is considering to pullout).

The Government of Ethiopia could• implement the very appropriate TVET strategy

quickly and sustainably, and make sure that the stra-tegy and the related regulations and standards arewell communicated to all levels of the hierarchy,

• create a level playing field between public and priva-te TVET institution (same conditions for all, e.g.regarding accreditation),

• remove bottlenecks for more investment in TVET(more liberal (pre-)accreditation rules, ensure fairimplementation of rules, provide easier access toland).

Development partners in Ethiopia could increase theirefforts to support the private sector in its endeavour toprovide TVET.

Problems in promoting private investment in TVETand how to address themBoth in Uganda and in Ethiopia there is a perceptionthat standards and bureaucratic procedures are notalways equally applied to public and private trainingproviders, causing comparative disadvantages for PTPs.This calls for transparent and simplified procedures andinstitutional arrangements that ensure their fair applica-tion.

The participation of the private sector – PTPs andemployers – in TVET policy making and governance isoften hampered by distrust.This is not only the casebetween the public and private sector, but also amongthe different members of the private sector who tendto view each other as competitors.Weak coordinationamong members of the private sector (e.g. employers’associations, trade unions, PTP associations) makes itdifficult for the government to find reliable interlocu-tors who truly represent their peers.The examples ofUganda and Malawi show that efforts to systematicallyinvolve the private sector in the reform and governanceof TVET need to be matched by awareness raising aboutthe benefits of getting involved, capacity building incommunication and networking, as well as technicalassistance for organisational development of their asso-ciations.

In developing countries private TVET institutions areoften perceived as rent seekers not necessarily offeringgood value for money when compared to public institu-tions. Standards-based quality assurance, transparentlicensing mechanisms and social marketing campaignscan help change this perception and foster the expan-sion of the private TVET market.

Similarly to public TVET institutions, many privateTVET providers in Ethiopia, Uganda and Malawi are stillbelow international standards in terms of managementand teaching quality. Strong private TVET providers’associations like UGAPRIVI can play a pivotal role inincreasing the capacity of their members to delivergood quality services.This underlines the importance ofproviding financial and technical assistance to developand professionalize such associations.

Impact of private TVET provision on accessNon-public TVET providers operating on a commercialbasis need full cost-recovery.This requires charging feesfor their services which poor households may not beable to afford.A series of instruments exist to ensureaccess to non-public TVET for disadvantaged groups.These include arrangements at the level of the individu-al TVET institution which allow poor students to paytuition fees in-kind or work for fees and – more impor-tantly – the sponsoring of poor students with resourcesfrom a levy fund, state budget, NGOs, etc. Modularisedcourses can also contribute to making TVET more affor-dable for poor households.

Managing the reform processConsiderable marketing efforts will be necessary tomotivate enterprises of all kinds (private and public,large and small, formal and informal) to buy into theTVET reform process.This will require that all stakehol-ders are prepared to participate, cooperate, share les-sons and actively learn from experience.

All efforts to promote private investment in TVETfinancing and delivery should be underpinned by relia-ble training needs assessments.

The readiness to accept a general TVET levy seemslow in Ethiopia, but voluntary sectoral levies might be aviable option, e.g. for the construction sector.Again, thisis an aspect that will require considerable advocacy eff-orts to convince the different stakeholders to participa-te. Granting increased ownership and shared governan-ce will be crucial in this process.

The integration of agricultural sector activities willrequire special consideration.

19

Presenter:• Gerhard Kohn, Senior Partner in INBAS: Institute for

Vocational Training, Labour Market and Social Policy,

a German consultancy company

Chair:• Dessalegn Mulaw (Panel 3), TVET System Reform and

Capacity Building Department Head, Ministry of

Education, Ethiopia


As part of the TVET reform process, the EthiopianMoE is currently establishing an outcome-based TVETsystem, including occupational standards-based assess-ment and certification. Learning from international bestpractice, it is currently in the process of developing themost appropriate mechanisms, procedures and instru-ments for standard setting, assessment and certification.During the recent study to develop a FinancingFramework for TVET in Ethiopia, it became apparentthat there is still little knowledge about the actualresource implications of setting up, implementing undcontinuous updating of an occupational standards-basedTVET system.

Several African countries are already in the process ofestablishing a standards-based TVET system in line withinternational best practice. Using some of them asexamples, G. Kohn’s presentation illustrates cost impli-cations of setting up, running and updating an outcome-based TVET system.The presentation Costs of standard

setting and competence-based assessment (Panel 6) byGerhard Kohn is attached as Annex 15.


CBET – a worldwide ‘mega-trend’Across all continents a clear trend can be observedtowards the establishment of Competence-BasedEducation and Training (CBET). CBET is an approach toTVET that emphasizes its outcomes – in terms of acqui-ring competences (often defined as encompassingknowledge, skills and abilities) required in the world ofwork – rather than the training inputs necessary toacquire these. In essence, a TVET QualificationsFrramework (TQF) provides mechanisms for standardssetting, assessment, certification, regulation of access toand movement within the CBET system.Financial implications of setting up and main-taining a standards-based systemThe different cost factors of building a TQF are linked

to the development and establishment of the TQF itself,to the development of corresponding relevant occupa-tional standards as well as appropriate curricular andtraining materials, to the regular updating of the wholesystem, and the capacity building of a whole range ofactors and institutions involved in the process.

Actual products (standards, instruments, materials)vary considerably in the degree of detail they provide,and this has a significant impact on costs. Examplesshow an order of magnitude per occupation of approxi-mately 35,000 EUR in one case versus 12,500 EUR inanother.

In an outcome- or standards-based TVET system,assessment of learners is based upon standards.Whileformative assessment is integrated into an ongoing trai-ning process, summative assessment is an ex-post assess-ment independent of the learning process. Summativeassessment is necessary wherever a TVET system seeksto provide open access and enable the recognition ofprior learning, independently of where and how thislearning has taken place. Different individuals can optfor one type of assessment or the other depending ontheir learning path and for what purpose they are see-king the credits. Pilot experiences in Africa show thatthe costs of summative assessment can amount to 150 –200 EUR per candidate for a full occupation at level 2(this can be described as approximately between semi-skilled and skilled worker level).The actual cost willdepend on the type of assessment, the number of asses-sors involved in the testing panels, the number of candi-dates being assessed in each batch, and the duration ofthe test.

Keeping costs low without detriment to quality andparticipation of relevant stakeholdersThe period of time for developing the necessary stan-dards and curricula to implement a TQF is roughly esti-mated at a minimum of 5 years. However, this will varydepending on a series of factors, such as the type ofsectors and level of technology involved, etc.These fac-tors and the pace of technological change also affectthe frequency of the revision of standards and curricula.

Not re-inventing the wheel can help keep costs low.This applies both to the procurement and adaptation ofstandards and instruments from other countries whilesetting up the TQF for the first time, and to the use ofdatabases – for instance assessment instrument and testitem databases – once the system is up and running.However, the applicability of existing standards andinstruments needs to be carefully analysed.The job pro-file approach is considered the most realistic in thiscase, as opposed to the ‘unit-standard’ type of standards.

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8 Financial implications of standard-based TVET

The cost of development, establishment and runningof an outcome-based TVET system are often underesti-mated and need to be carefully calculated and control-led.The range of existing options to help keep costs aslow as possible include: piloting before going to scale,avoiding over-detailed standards, use or adaptation ofalready existing products and databases, integration ofcurricula and training materials development into tea-cher and instructor training, as well as a lean implemen-tation structure.

Managing the reform processA common challenge encountered when developingand implementing a TQF in a country is that, in theearly stages, demand for assessment tends to be low.Individuals and enterprises, both in the formal andinformal sector, need to become aware of the benefitsof occupational assessment.This requires properly targe-

ted efforts to motivate and encourage these differentgroups and help them understand the benefits.

The ongoing discussion in Europe about a EuropeanQualifications Framework (EQF) shows that the diffe-rent parameters used – for instance to define standards– by the different countries make it difficult to findcommon solutions for credit transfer and accreditation,i.e. for the comparison of qualifications between coun-tries and systems.

One important aspect when looking at costs of trai-ning, assessment and certification is who covers thesecosts.This also differs from country to country. In mostsystems, the ‘users’ are asked to pay a fee for assessmentand certification.This may be the learners themselves ora sponsoring enterprise. However, no system has yetbeen successfully established which manages to recoverits costs through user fees alone.

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9 Lessons learned At the end of the symposium the chairs and resource

persons from the different panels reported back thecorresponding conclusions and lessons learned to theplenary. Jon Lauglo (University of Oslo) and TeshomeZawde (Ethiopian Employers Federation) acted as rap-porteurs from an international and an Ethiopian per-spective. Jon Lauglo’s presentation is attached as Annex16, and Annex 17 contains the speech by TeshomeZawde.

Using the three P’s (poverty, performance, and part-nership) and three E’s (equity, efficiency, effectiveness)introduced by Arvil Van Adams and Vladimir Gasskov atthe beginning of the symposium as a frame of referen-ce, this section pulls together the conclusions from theprevious chapters and the main issues that were addres-sed during the concluding plenary discussion.

The three main conclusions that can be derived are: • the Ethiopian approach to TVET reform and TVET

financing are very much in line with internationalbest practice in terms of performance;

• all stakeholders seem to agree that partnerships(among the public sector, the private sector and civilsociety) will be key in making any TVET reform pro-cess succeed;

• ensuring that the rural and poor majority is not leftbehind in this process remains one of the majorchallenges ahead for any country.

Output-based funding mechanisms

Poverty (equitable access)• If the performance of TVET institutions is only mea-

sured in terms of how many of their students passstandard-based assessments, there is a risk that theinstitutions will select high performers, who tend tobe from higher income families.This can be overco-me by creating specific rewards/incentives for insti-tutions who take in poor students.

Performance – Effectiveness (relevance, quality) • The effect that output-based financing mechanisms

have on training quality is a contested issue.Competency-based quality assurance standards part-ly address these concerns but miss other means ofappealing to teaching staff to delivery quality (“innersprings of professionalism”).

Performance – Efficiency (output per unit costs) • Several mechanisms exist to stimulate efficiency in

(public) TVET institutions by making resource alloca-tions depending on actual training outputs. Outputcan be estimated based on SGHs, EFTSs and fundingrates. Increasing efficiency in the TVET system as awhole may be achieved through performance- ratherthan input-based public budgeting.

Partnership (fair sharing of rights and respon-sibilities)• Many different examples exist across the world on

how partnerships can be used to support an output-based funding mechanism to work in terms of fun-ding sources, disbursement mechanisms, funding

rates, management autonomy for TVET institutions,quality assurance mechanisms, and accountabilitymechanisms.The use of competence-based standardsand assessment is a means to ensure the relevanceand quality of TVET and allows to measure outco-mes, rather than just outputs.

Cost-sharing with trainees

Poverty (equitable access)• Access is limited by multiple dimensions of poverty

(information, prior educational level, geographicaccess, cultural preparedness to assume risk ofdebts, etc.).

• Expectations that student loans contribute to moreequitable access to TVET may be overrated.

• Combination with exemptions and proactive targe-ting can improve equity impact of loans and/or hig-her fees.

Performance – Effectiveness (relevance, quality) • Additional (albeit limited) resources in the TVET

system raised through cost-sharing can be used toincrease quality and relevance of training.

Performance – Efficiency (output per unit costs) • Setting up and implementing student loan or gradua-

te tax schemes is costly (initial capital, administra-tion, default loans, subsidised interest rates) whilerate of repayment remains low.They do not generallyreduce overall cost of TVET.

Partnership (fair sharing of rights and responsibilities)• Student loan or graduate tax schemes require robust

administration capacity. Getting private banks onboard for disbursement and collection might increa-se returns.

• Expectations that student loans contribute to a sha-ring of TVET costs and/or the increase of the totalamount of resources available for TVET financingshould be cautious.The main burden of financing isstill shouldered by the government.

• Establishing (moderate) fees may be more effectivethan loans in terms of cost-sharing or cost-recovery.

Cooperative TVET

Poverty (equitable access)• Cooperative training reduces the share of training

costs borne by trainees and can increase access forpoor students.

• Access is limited by multidimensional poverty (infor-mation, prior educational level, geographic access,etc.).

• Combination with additional education and traininginput and proactive targeting can improve equityimpact of cooperative TVET.

Performance – Effectiveness (relevance, quality) • Cooperative training can make TVET more relevant

by providing world-of-work experience to trainees.• Instructors need appropriate pedagogical and tech-

nical expertise to make cooperative training effecti-ve.

Performance – Efficiency (output per unit costs) • The opportunity to combine learning in the school

and productive work at the enterprises reduces netcosts of TVET per trainee.

• Managers and instructors both at the school and inthe enterprise require new management skills inorder to increase efficiency of cooperative TVET.

Partnership (fair sharing of rights and responsibilities)• Cooperative training (apprenticeships, internships,

in-company training) increases the share of costsborne by employers and trainees.

• Cooperative training does not necessarily mean‘German dual system’. It is important to look at ele-ments that can be adapted (apprenticeship, trainees-hip, internship, industrial attachment, etc.)

IGAs and increased capacity utilization

Poverty (equitable access)• Income generated and cost recovered by TVET insti-

tutions can be used to reduce the share of trainingcosts borne by trainees and can thus increase accessfor poor students.

• A combination with exemptions, work-for-fees andproactive targeting can improve equity impact ofIGAs.

• In rural areas, IGAs can be a vehicle to channel andimplement local development projects.

Performance – Effectiveness (relevance, quality) • Production units can be useful to provide world-of-

work experience to teachers and trainees in areaswith limited opportunities of attachment to com-mercial enterprises.

• If not well managed, IGAs may jeopardise the qualityof training (low training value, competing for resour-ces).

• Diversified training offers and consultancy servicesappear to be more suited to raise income and increasecapacity utilisation of TVET institutions.They are lesslikely to distract the TVET institutions from their coreobjective (provision of formal and non-formal TVET).

Performance – Efficiency (output per unit costs) • Expectations of cost-recovery rates should be cau-

tious (estimations are below 15% of total trainingcosts).

• Setting up and implementation of production unitsseem to require considerable investment and assis-tance over a long time, to become sustainable.

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• Whether production and training should be integra-ted or separated remains a contested issue andneeds to be carefully assessed for each particularsituation.

Partnership (fair sharing of rights and responsibilities)• IGAs are one way of relatively reducing the state’s

share of the TVET financing burden.• Granting TVET institutions autonomy in their financi-

al management is an incentive for IGAs and increa-sed capacity utilisation.This requires appropriateaccountability mechanisms as well as managementcapacity.

• Production units tend to raise concerns among localcommercial enterprises regarding unfair competi-tion.Appropriate policies, trust and cooperation canlead to win-win solutions.

Private investment in TVET provision andfinancing

Poverty (equitable access)• Private TVET delivery can contribute to increasing

access to TVET in terms of total enrolment andregional coverage.

• Special instruments are necessary in order to ensureaccess to TVET for disadvantaged groups: sponsoringby government, employers, NGOs, work-for-fees orpayment in-kind. Proactive targeting can improve theequity impact of any of these measures.

Performance – Effectiveness (relevance, quality) & Efficiency (output per unit costs)• PTPs are not per se more effective or efficient.

Although there is a great variation, they often facesimilar challenges as public TVET institutions interms of training relevance, quality and management.

• Strong professional associations of PTPs can bepowerful vehicles to increase quality of their mem-bers’ services.

• On the overall TVET system level, the governmentpulling out of training provision in specific sectorssufficiently covered by PTPs can increase effective-ness and efficiency. Corresponding measures have tobe developed, however, in order to ensure equitableaccess.

Partnership (fair sharing of rights and responsibilities)• Good incentives for private TVET provision are

necessary and effective. Malawi and Uganda arepowerful examples of that.

• Acceptance for levy schemes seems to be higherwhen they are sector-specific and their use is ear-marked for specific purposes.

• Both PTPs and employers need their own strong,professional and representative associations to beidentifiable as interlocutors for the government andother stakeholders.

Standards-based or outcome-based TVET

Poverty (equitable access)• Standards-based training is a good basis for the deve-

lopment of modularised courses.These are oftenmore affordable for poor trainees than longer cour-ses.

• Outcome-based TVET provides mechanisms for therecognition of prior learning.This offers opportuni-ties for poor people who often acquire relevantknowledge, skills and abilities in the informal sector.

• Assessment can be rather costly. Depending on whohas to bear the fees, this might exclude poorer can-didates.

Performance – Effectiveness (relevance, quality) • CBET is internationally recognised as best practice

in terms of assuring a level of quality agreed by allrelevant stakeholders.This is not least due to the factthat competence standards are defined in coopera-tion among stakeholders.

Efficiency (output per unit costs) • Focus on outcomes rather than inputs allows diffe-

rent pace in acquiring relevant skills and recognitionof prior learning.This can avoid redundancies in trai-ning delivery and reduce costs.

• Setting up, implementing and regularly updatingstandards-based TVET systems are costly and timeconsuming. It is important to strike a balance bet-ween cost and degree of detail and ‘perfection’.

Partnership (fair sharing of rights and responsibilities)• The whole process of development, governance and

implementation of a standards-based TVET systemrequires systematic and professional engagementand mutual trust by all stakeholders.

Managing the reform process

Poverty (equitable access)• Rural areas, the informal sector and SMEs need speci-

fic approaches but should be integrated into an ove-rall TVET strategy and its financing framework.

• The current focus of public TVET on formal post-secondary training is likely to exclude the poormajority. Exemptions from fees and payment of allo-wances will not suffice (multidimensional poverty).

• Non-formal and informal approaches are more likelyto adapt to the prior educational level and life cir-cumstances of disadvantaged target groups.

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• It is important to pilot and closely monitor theimpact on equitable access of any financing instru-ment chosen.

• Means testing requires the development of indica-tors and reliable information and accountability at avery local level – it may be difficult to scale up.

Performance – Effectiveness (relevance, quality) & Efficiency (output per unit costs)• All major decisions on TVET financing should be

underpinned by training needs assessments whichreliably reflect the true demand of the labour market(employers and trainees).

• The current focus of public TVET in Ethiopia on for-mal post-secondary training fits the need to fill theskills gap at middle level.

Partnership (fair sharing of rights and responsibilities)• TVET can play a crucial role in the achievement of

national development goals and poverty reductiontargets.This is often underestimated and it is impor-tant that all TVET stakeholders and the wider publicrealise this.

• A fundamental and comprehensive TVET reform pro-cess – such as currently undertaken in Ethiopia –needs the acceptance and support from all stakehol-ders: different government bodies at all levels, priva-te sector (PTPs and employers), civil society (NGOs,religious bodies, communities), households (traineesand their families), and the wider public.

• Creating awareness and advocating for this reform isthe responsibility of the government.

• The preparedness of the different stakeholders toparticipate in financing and delivery of TVET willdepend on the degree in which the government isprepared to share governance and management ofTVET with them.

• TVET financing is a powerful tool to find the rightbalance between the three P’s of poverty, performan-ce and partnership. It is important that all stakehol-ders understand and buy into this balancing act.

• Partnerships should not only be viewed as a meansto increase the total inflow of funds into the TVETsystem, but also as an opportunity to foster innova-tion and improve the quality and flexibility of for-mal, non-formal and informal TVET provision.Themeaning and practical implications of partnershipwill evolve along the way.

• For a fruitful partnership all stakeholders need tocontribute: commitment to ‘the cause’ of TVETreform, active participation (time, expertise andresources), open communication, transparency,mutual trust, professionalism and representativity(mandate to represent the interests of a certain con-stituency of stakeholders).This may be easier todevelop by starting off at a local level and graduallyscaling up.

• Adapting the diversity of international best practiceto the Ethiopian context will require a lot of dialo-gue on technical and political issues.This sympo-sium has been one of several opportunities for this.Joint study tours and systematic opportunities toexchange views can enhance the learning processand build trust.

• The reform of any TVET system and its financingshould be regarded as a journey. It needs both timeand continuous learning.

• In order to be able to learn from experience (positi-ve and negative), it is important to set up reliableM&E systems and to develop a learning culture.

• Ambitious targets need to be regarded as long-termgoals (5 to 10 years) to be achieved by a series ofclearly defined milestones. Unrealistic expectationsmay erode commitment to the reform process byputting unnecessary pressure on emerging partners-hips.

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At the end of the symposium participants were askedto fill in a questionnaire as a structured means of givingtheir feedback on the content as well as the organisa-tion of the symposium.

The vast majority of the participants judged that theirexpectations had been largely met and that after atten-ding the symposium they were better prepared to dealwith issues related to the implementation of diversifiedfinancing strategies for TVET.

Overall, the symposium was rated as a very interestingand useful opportunity to share experience and learnon an international level.The combination of plenarypresentations by international experts and panels illus-trating specific examples from other countries was con-sidered particularly valuable. It helped participants togain a comprehensive understanding of TVET financingissues as well as to learn about specific practical aspectsof the implementation of different TVET financingmechanisms.The fact that most panels presented expe-riences from other developing countries was highligh-ted as positive.

The symposium was also valued as an opportunity tofoster the dialogue between representatives of theGovernment of Ethiopia and other Ethiopian stakehol-ders, such as TVET providers (public and private) aswell as the private sector. Several participants expressedtheir hope that similar events might be organised againin the future.

The following section presents the feedback of thesymposium in more detail.Annex 18 contains the feed-back questionnaire used.

Questionnaire return rate: Out of a total of 93 registe-red participants of the symposium, 50 returned a filled-in feedback form, representing 54% of the total registe-red participants.The actual return rate of questionnaires(people who actually did receive a questionnaire and fil-led it in) is probably higher, since not all participantswere able to stay throughout the two-day event and thequestionnaires were handed out and collected at theend of the last session.

Stakeholder representation: Nearly half of the respon-dents indicated that they worked for the Governmentof Ethiopia (46%).The other half was comprised of indi-viduals working for academic institutions (22%), interna-tional development agencies (12%), private sector asso-ciations (8%), and other employers (12%) such asRegional Government of Ethiopia, a consulting compa-ny, ECBP, Government of Sri Lanka,TEVETA Malawi andMinistry of Education of Rwanda. None of the respon-dents identified themselves as representing a private

sector company (0%) or civil society/NGO (0%).Amongthe registered participants, however, there were repre-sentatives of private sector companies.

International representation: The vast majority (78%)of participants named Ethiopia as their country ofwork. Five of the remaining respondents work in SriLanka, two indicated that they work in various coun-tries, and the following countries were represented byone respondent each: Norway, Uganda, Malawi, andRwanda.

Expectations vis-à-vis the symposium: The two mostfrequently cited expectations regarding the symposiumwere to have the opportunity to share experience withexperts and practitioners from other countries (24%)and the wish to identify TVET financing mechanismssuitable for Ethiopia (24%). Gaining a comprehensiveunderstanding of TVET financing issues was mentionedby 12% of the respondents, while 8% expressed theirwish to receive practical input on how to implementdifferent financing mechanisms for TVET. Some respon-dents mentioned specific topics they wanted to learnabout during the symposium, such as: cooperative TVET,financing of TVET institutions, income-generation byTVET institutions, financial management of TVET institu-tions, cost-sharing, financing non-formal TVET, costdetermination, ROI (rate of return on investment).Thesymposium was also seen as an opportunity to improvethe basis for a public-private-partnership.

Meeting expectations: 72% of the respondents regar-ded their expectations as met completely or to a largeextent, while 26% considered they had only partly beenmet.

Better prepared: 90% of the participants felt that afterattending the symposium they were better or to someextent better prepared to deal with issues related to theimplementation of diverse financing strategies for TVET.About 8% felt they were only partly and one person felthardly better prepared than before attending the sym-posium.

Best experience in the course of thesymposium/particularly interesting session: Thewording of these two questions appears to have beensomewhat misleading and therefore the answers tend tooverlap. Most respondents mentioned more than onesession, topic, country, or speaker.Wherever that wasthe case, each of them was treated as an individual ans-wer. Since both questions were formulated as open

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10 Participants’ feedback to the symposium

questions, the answers were subject to interpretationand therefore the figures given here should be under-stood as estimates rather than accurate quantitativedata.

The panels are repeatedly mentioned as particularlyuseful in understanding practical aspects of TVET finan-cing. More than 50 entries give credit to the high quali-ty and usefulness of all panel presentations in general orto the usefulness of specific presentations.The twomost frequently mentioned topics are income-genera-ting activities (IGAs) and cooperative/dual training, fol-lowed by capacity utilisation in TVET institutions, andprivate sector involvement in TVET.

The more academic plenary sessions were also ratedvery positively, with close to 30 mentions highlightingtheir importance and the professionalism of the spea-kers.The interest of the participants appears to be quiteevenly spread across all topics treated in the plenarysession.A number of Ethiopian participants valued theopportunity to learn about the new Framework forfinancing TVET in Ethiopia.

The opportunity to learn from, exchange ideas andnetwork with the international participants is repeated-ly mentioned as very positive.

At least four respondents considered the incipient dia-logue between the public and private sector as positive,welcoming the public endorsement of private publicpartnerships for TVET by the GoE.

The reporting back of lessons learned from the diffe-rent panels into the plenary was also mentioned as use-ful.

Not so good experiences: Nearly half of the respon-dents left this field blank – this may suggest that theyhad no negative experiences but may also have otherreasons. Of those respondents who did answer thisquestion, 16 (32%) state that all was fine and they haveno negative experiences to report; 4 mention differentaspects related to the quality of the presentations.Thetension among public and private stakeholders is alsomentioned as a problem. One participant points outthat there was hardly time for discussions or to developnew insights in workshops and another that the summa-ry session did not offer as much as it could have.

Topics found missing: This field was also left blank bynearly half of the respondents – again, this may suggestthat they didn’t find any topics missing, but may alsohave other reasons.A total of 12 respondents (24%)indicate that there are no topics or issues that had notbeen dealt with as they expected.The following issueswere listed by single respondents as topics they foundmissing: detailed material on TVET financing and itsmanagement, financing for self-employment of TVETgraduates, partnerships with the industry for skills stan-dard setting, specific difficulties encountered by develo-ping and developed countries during the actual processof introducing IGAs and cost-sharing mechanisms, howto build professionalism by means of an appropriatefinancing method, tax policy on training expenditures,ROI. On respondent felt that there had not beenenough opportunities to share the Ethiopian experien-ce with the international guests and another felt stillunable to identify which income-generating schemeactually fit Ethiopia in general and his/her institution inparticular. Some people appear to have understood thequestion as meaning which sessions they had not beenable to attend.

Further comments and suggestions: The participants’feedback to this question can be clustered around thefollowing four issues. Regarding follow-up to the sympo-sium and stakeholder involvement, the feedback recei-ved (19 entries) clearly calls for transparency and invol-vement of TVET stakeholders other than central govern-ment, such as regional governments, private sector, andoperators of TVET institutions.The organisation of thesymposium (13 entries) is praised as highly professio-nal, although some participants judge that the time wastoo short to allow in-depth discussions and that oneparticipant feels that more time should have beeninvested in wrapping up specific conclusions of thesymposium with regard to the draft TVET FinancingFramework for Ethiopia.There are several calls (7 ent-ries) for ECBP to host similar events in the future, inorder to continue the international exchange of infor-mation, and to look into specific topics. In this context,participants highlight the importance of maintaining aflow of information down to the grass root level.Theimportance of documenting the symposium’s results ishighlighted by 6 mentions.

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List of Annexes30 Annex 1

Symposium agenda 32 Annex 2

Profiles of presenters, facilitators and resource persons

34 Annex 3Welcome address by H.E. Minister of Education (Ethiopia)

Dr. Sintaheyu W/Michael

35 Annex 4Presentation:The new Framework for FinancingTVET in Ethiopia by Dessalegn Mulaw (Technical and Vocational

Education and Training (TVET) System Reform

and Capacity Building Department of Ethiopia’s

Ministry of Education)

38 Annex 5Presentation:The Ethiopian Financing TVETFramework in an international perspective by Dr.Arvil Van Adams (Senior Consultant, ECBP)

40 Annex 6Presentation: Mechanisms of financing TVET by Dr.Vladimir Gasskov (International Labour

Office)

43 Annex 7Presentation: Cost-sharing with trainees/students:International experienceby Prof. Dr.Adrian Ziderman (Bar-Ilan University,

Israel)

51 Annex 8Paper and selected diagrams: Costs and benefits ofvocational education and training in the dualsystem of Germany (Panel 1)by Folkmar Kath (former Head of the Costs and

Financing Department of the German Federal

Institute for Vocational Training, BIBB)

60 Annex 9Presentation and speaker’s notes: Experience withthe dual training system in the Philippines (Panel 5) by Roberto Niez (Vocational School Administrator

of the Jacobo Z. Gonzales Memorial School of Arts

and Trades, Philippines)

67 Annex 10Paper:Training with production in the BotswanaBrigades (Panel 2)by Bester Mahube (Coordinator of Tswelelelopele

Brigades Centre in Ramotswa, Botswana)

72 Annex 11Paper: Increasing training activities and income: theexample of Lilongwe Technical College, Malawi(Panel 3)by Godfrey Kafere (Principal of Lilongwe Technical

College (LTC), Malawi)

75 Annex 12Paper: Improving capacity utilisation in publicTVET institutions in Sri Lanka (Panel 8)by Gaminie Gunasinghe (Consultant to REVO

(Rehabilitation and Modernization of TVET

Institutions) Project, Sri Lanka)

81 Annex 13Presentation: Promotion of private training provi-ders in Uganda (Panel 4)by Yusuf Bachu (General Manager of the National

Secretariat of UGAPRIVI, Uganda Association of

Private Vocational Training Institutions)

85 Annex 14Paper: Promotion of employers’ involvement inTVET in the formal and informal sector in Malawi(Panel 7)by Elliot Mulanje (Coordinator of the Blantyre

Service Centre of TEVETA (Technical,

Entrepreneurial and Vocational Education and

Training Authority) in Malawi)

93 Annex 15Presentation: Costs of standard setting and compe-tence-based assessment (Panel 6)by Gerhard Kohn (Senior Partner in INBAS:

Institute for Vocational Training, Labour Market

and Social Policy, Germany)

95 Annex 16 Presentation: Lessons and questions learned by Prof. Dr. Jon Lauglo (University of Oslo)

97 Annex 17Concluding Remarks by Teshome Zawde (Ethiopian Employers

Federation)

99 Annex 18 Questionnaire used to collect participants’feedback

100 Annex 19 List of participants

29

30

Symposium Agenda Implementation Issues of Diversified Financing Strategies for TVETAddis Ababa, Hilton Hotel, November 20-21, 2006

Symposium Day 1: Monday, 20 November 2006

8.30 – 9.00 Registration of participants9.00 – 9.20 Welcome adresses

H.E. Minister of Education Dr. Sintaheyu W/Michael

Martin Müller, Director ECBP

9.20 – 9.30 Introductions into the symposium programmDr.Andreas König, ECBP/TVET

9.30 – 12.00 The Ethiopian approach to financing TVET Presentations: The new Framework for Financing TVET in Ethiopia

Dessalegn Mulaw, Ministry of Education

The Ethiopian Financing TVET Framework in an international perspective Dr.Arvil Van Adams

Chair: Dr.Andreas König

Tea break during the session 12.00 – 13.30 Lunch13.30 – 15.00 Promoting efficiency and effectivenes in public TVET Institutions Presentation: Mechanisms of Financing TVET

Dr.Vladimir Gasskov, ILO Geneva


15:00 – 15.30 Tea break

15.30 – 17.00 PanelsPanel 1: Financial implications of cooperative TVET (I)

Presentation: Employers’ Contributions to TVET in the German Dual SystemFolkmar Kath (formerly BIBB), Germany

Chair: Julia Schmidt

Resource Person: Dr.Vladimir Gasskov

Panel 2: Promoting income-generating activities in TVET institutions (I)Presentation: Training with Production in the Botswana Brigades

Bester Mahube, Tswelelopele Brigade, Ramotswa, Botswana

Chair: Dr. Jutta Franz

Resource Person: Prof. Dr. Jon Lauglo

Panel 3: Increasing efficiency and capacity utilisation in public TVET institutions (I)Presentation: Increasing training activities and income:The example of Lilongwe Technical College, Malawi

Godfrey Kafere, Lilongwe Technical College, Malawi

Chair: Dessalegn Mulaw

Resource Person: Prof. Dr.Adrian Ziderman

Panel 4: Promoting private investment in TVET (I)Presentation: Promotion of Private Training Providers in Uganda

Yusuf Bachu, Uganda Association of Private Training Providers

Chair: Gerhard Quincke

Resource Person: Dr.Arvil van Adams

18:30 Joint Reception with national skills competition,Addis Ababa Hilton

1

31

Symposium Day 2: Tuesday, 21 November 2006

8.30 – 9.00 Welcome and Introduction to second dayW/ro Genet Meseret, ECBP/TVET

9.00 – 10.30 International experience with cost-sharing with trainees/studentsProf. Dr.Adrian Ziderman

Chair: Genet Meseret

10:30 – 11.00 Tea break

11.00 – 12.30 PanelsPanel 5: Financial implications of cooperative TVET (II)

Presentation: Cost implications of dual training in the PhilippinesRoberto Niez, Jacobo Z. Gonzales Memorial School of Arts and Trades, Philippines

Chair: Julia Schmidt

Resource Person: Dr.Vladimir Gasskov

Panel 6: Financial Implications of standard-based TVETPresentation: Costs of standard setting and competence-based assessment

Gerhard Kohn, Consultant, INBAS, Germany

Chair: Dessalegn Mulaw

Resource Person: Prof. Dr. Jon Lauglo

Panel 7: Promoting private investment in TVET (II)Presentation: Promotion of Employers’ Involvement in TVET in the Formal and Informal Sector in Malawi

Elliot Mulanje, Blantyre Service Centre, TEVETA, Malawi

Chair: Gerhard Quincke

Resource Person: Dr.Arvil Van Adams

Panel 8: Promoting income-generating activities in TVET institutions (II)Presentation: Improving capacity utilization in public TVET institutions in Sri Lanka

Gaminie Gunasinghe, Consultant (formerly DTET), Sri Lanka

Chair: Dr. Jutta Franz

Resource Person: Prof. Dr.Adrian Ziderman

12.30 – 14.00 Lunch14.00 – 16.30 Consolidation of findings and lessons learnt

Summaries from panel sessionsPanel Chairs

Summary evaluation of the findings and their relevance for the further development of the TVET financing framework in EthiopiaProf. Dr. Jon Lauglo, University of Oslo


Tea break during the session16:30 – 17.00 Closing remarks

Concluding Remarks Teshome Zawde, Ethiopian Employers Federation

Closing of the Workshop H.E.Ato Wondwossen Kiflu, State Minister of Education for TVET

Chair: Genet Meseret

18:00 Dinner

Dr. Arvil Van Adams used to work as Senior Advisorand Sector Manager for HumanDevelopment in the Africa Region ofthe World Bank (retired). He is co-author of Skills Development in Sub-

Saharan Africa (World Bank 2004).Formerly, he was Professor ofEconomics at the George Washington

University, University of Utah and the Ohio StateUniversity. He now works as senior consultant.

Yusuf Bachu is the General Manager of the NationalSecretariat of UGAPRIVI (UgandaAssociation of Private VocationalTraining Institutions (UGAPRIVI). Heis an Industrial Engineer (majored inPlant Maintenance) by professionwith 27 years of industrial experien-ce in various industries and serving

in different capacities all over East Africa. On retiringfrom industrial service, he established a private voca-tional training centre in his home area, Iganga.

Dr. Jutta Franz has worked for many years as a consul-tant in TVET development, in particu-lar policy and system developmentincluding financing. She has suppor-ted the Ethiopian government in theformulation of the National TVETStrategy, and is the author of thestudy underlying the TVET Financing

Framework for Ethiopia, which was discussed duringthe symposium.

Dr. Vladimir Gasskov works as Senior Training andSkills Development Specialist for theSkills and Employability Departmentof the ILO (International LabourOffice of the International LabourOrganization) in Geneva. He holds anAdvanced Degree in IndustrialSociology and a PhD in Management

Sociology. His major field of specialisation is TVETpolicies, systems, and funding. He has recently editedthe book Vocational Education and Training

Institutions: a Management Handbook.Gaminie Gunasinghe works as a consultant to the

Rehabilitation and Modernization ofTVET Institutions Project. He is theformer Director for Research andDevelopment of the Department ofTechnical Education and Training(DTET) in Sri Lanka. He is a CharteredMechanical Engineer by profession

with 19 years of experience in process industryincluding 4 years in power generation in the King-dom of Saudi Arabia and further 17 years serving inthe TVET sector in Sri Lanka. He holds a PostgraduateDegree in Hydraulic Engineering and MSc in Com-bustion and Energy from Leeds University (UK).

Godfrey Kafere is the principal of Lilongwe TechnicalCollege (LTC), one of the leadingpublic TVET institutions in Malawi.He is an Electrical Engineer by pro-fession and has worked in variouscapacities for the Ministry of Labourand Vocational Training and LTC, suchas board member of TEVETA

(Technical, Entrepreneurial and Vocational Educationand Training Authority) and also as local consultantfor DANIDA and the British Council.

Folkmar Kath recently retired from his post as Head ofthe Costs and Financing Departmentof the German Federal Institute forVocational Training (BIBB). He is alsoa specialist on the sector levy systemin the German construction industry.

Dr. Andreas König holds a PhD in Education from theUniversity of Cologne and a Master’sin Special Education from theUniversity of Frankfurt/Main. From1988 to 1996 he worked for theVocational Rehabilitation Branch,Training Department at the Inter-national Labour Office (ILO), Geneva.

For the following 10 years, he worked as a freelanceconsultant for GTZ, ILO, UNHCR, UNESCO, Misereorand others in the fields of skills development,employment generation and entrepreneurship pro-motion in more than 50 countries in Africa,Asia aswell as Central and Eastern Europe. He joined theECBP in Addis Ababa as Coordinator of the TVETReform Component for German DevelopmentCooperation.

Gerhard Kohn is a Senior Partner in INBAS: Institutefor Vocational Training, Labour Marketand Social Policy, a German consult-ancy company. He has worked in thedevelopment and implementation ofstandard-based TVET systems in manycountries, and is now also engaged insupporting Ethiopia in the setting up

of a competence-based assessment system.

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Profiles of presenters, facilitators and resource persons

33P R E S E N T E R S

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Prof. Dr. Jon Lauglo is a Professor of Sociology ofEducation at the Faculty of Educationof the University of Oslo. He alsoworks as Senior Researcher of twoindependent research institutes inOslo. One of his most recent publica-tions is Vocationalisation of Secon-

dary Education Revisited. He hasworked for six years as Senior Education Specialistfor the World Bank. His work focus lies on educationpolicy and private education development.

Bester Mahube has worked as a teacher and adminis-trator in vocational education andtraining schools in Botswana since1980. He is currently working as theCoordinator of TswelelelopeleBrigades Centre in Ramotswa. He isthe Chairman of Coordinators Forumcomprising 41 Centres across

Botswana. He is the author of two novels: The Pick

Pocket and The White Collar Criminal.Genet Meseret currently works as Coordinator TVET

Reform for ECBP. She holds an MSc inDevelopment Management and a BAin Educational Planning and Manage-ment. Her professional experienceincludes work as Deputy Head,AddisAbaba Education Bureau,TVET sector;Deputy Head, Social and Civil Affairs

Bureau; Head, Social and NGOs Affairs Office; andDean,Addis Ababa Tegbared TVET College.

Elliot Mulanje is Co-ordinator of the Blantyre ServiceCentre of TEVETA (Technical,Entrepreneurial and VocationalEducation and Training Authority) inMalawi.The service centre is a kindof implementing arm of TEVETA inthe economically most activeSouthern part of Malawi, charged

with implementing quality assurance (includingtesting), support to the TEVET system and imple-mentation of TEVETA policies.

Dessalegn Mulaw is the Head of the Technical andVocational Education and Training(TVET) System Reform and CapacityBuilding Department of Ethiopia’sMinistry of Education. He holds aMaster’s degree in Comparative andInternational Education from theInstitute of Educational Research at

the University of Oslo, Norway. He has extensivelystudied the features of TVET programmes as well asthe implementation and challenges in his country. Inhis current position he is leading the policy andsystem reform of TVET in the country.

Roberto Niez is the Administrator of the Jacobo Z.Gonzales Memorial School of Artsand Trades (JZGMSAT), a public TVETschool in the Philippines. He holds aMaster’s degree in Technician Educa-tion at the Marikina Institute ofScience and Technology (MIST),Philippines and studied Project

Development Management at the Asian Institute ofManagement (AIM) in Manila. He is one of the advo-cates of the Dual Training System for public institu-tions and has successfully implemented DualTraining in Laguna, Philippines.

Julia Schmidt is currently working for the ECBP TVETReform Component as Senior Advisorto the Ministry of Education. She isresponsible for TVET policy andsystem development including TVETFinancing,TVET QualificationsFramework,TVET law as well as sup-port to the implementation of the

TVET reform. She has worked for the InternationalAtomic Energy Agency (IAEA)’s Technical Coopera-tion Department in Vienna. She has Master’s degreesin TVET and in Civil Engineering from the TechnicalUniversity Berlin and Stanford University, respectively.

Gerhard Quincke is Project Manager of the Partner-ship Project between the EthiopianChamber of Commerce and theGerman Chamber for Skilled Crafts ofthe Rhein-Main area which is desi-gned to make Ethiopian Chamberscapable to provide business develop-ment services. He is a mechanic and

holds a Master’s degree in Political Science. He hasworked in several countries mainly in Africa but alsoin Central America and South East Asia in the areasof (especially non-formal) TVET, promotion of craftsand of small and medium enterprises, organizationdevelopment (not only for business membershiporganizations), planning, monitoring and evaluation.

Prof. Dr. Adrian Ziderman is Sir Isaac WolfsonProfessor in Economics and BusinessAdministration at the Bar-IlanUniversity, Israel. His main fields ofspecialty are: labour markets andlabour force participation; the econo-mics, evaluation and finance of voca-tional education and training; and

university funding, including student loans and cost-sharing. His many publications include his work aseditor for the International Journal of Manpower andthe book Financing TVET in Sub-Saharan Africa

(World Bank 2003).

Distinguished International Guests, German Partners in Development Cooperation, TVET Experts and Stakeholders from Ethiopia, Representatives from the Private Sector, Representatives from the Media,Ladies and Gentlemen!

It is a great honour for me to welcome you all todayand to open this very important international sympo-sium on “Implementation Issues of Diversified FinancingStrategies for Vocational and Technical Education andTraining”.

We have lately embarked on a major reform of theTVET system.We are very grateful to the Germangovernment who is assisting this process with substanti-al technical and assistance.And we are proud that wehave recently developed a comprehensive and modernNational TVET Strategy that is – as international expertshave confirmed – very appropriate and fully in linewith international best practice in this field.This strate-gy aims at developing a demand-driven, flexible, integra-ted and high quality technical and vocational educationand training system relevant to all sectors of the econo-my, including all kinds, levels and types of TVET andaccessible to all Ethiopian in need of training.The coreof the reform strategy is to develop an outcome-basedTVET system based on an Ethiopian TVET qualificationsframework, to involve stakeholders in all aspects ofplanning, policy making, training delivery and monito-ring of the system, to invest in capacity building, tostrengthen the involvement of companies and theworld of work, to encourage public-private partnershipand to increase efficiency in the system wherever possi-ble.The strategy is well accepted by all stakeholders,and with the support of German development coopera-tion, we are currently well in the process of implemen-tation.

There is no doubt, however, that one of the biggestchallenges of the TVET reform is its solid and sustaina-ble financial base.The implementation of the reform isvery expensive and the Ethiopian government is dedica-ted to invest more resources than ever into the furtherdevelopment and expansion of TVET. However, govern-ment engagement alone will not be sufficient, and the

invested resources will have to be spent wisely, effi-ciently and effectively.We have therefore worked duringthe last months on a Financing Framework for TVET.Astudy has been prepared and its recommendations arecurrently discussed among decision-makers.This frame-work is based on the principles of efficient and effecti-ve use of resources and a diversification of fundingsources.We are planning to support the private trainingsector to invest in new TVET centres and programmeseven more than it has done already.We will invite com-panies to cooperate with training centres and share theresponsibility in training delivery.We have already andwill further encourage TVET centres to increase theirown income potential and to use public allocations effi-ciently.And we also expect trainees, who benefit fromgood training, to share the cost, however in a way thatwill not exclude poor students from participating.Wehope that these mechanisms will broaden the financialbase of our TVET system and will enable us to eventual-ly provide more and better training to the youth ofEthiopia and all other Ethiopians who require trainingto improve their productivity and secure their liveli-hoods.

I hope that this Symposium will assist the Ethiopiandecision-makers and stakeholders in clarifying and fine-tuning our financial framework.We are extremely eagerto discuss our ideas with international experts, to learnmore about how other countries have approached theirfinancial challenges and to benefit from lessons learntin these countries.And I hope that everybody, weEthiopians and our international guests, will benefitsfrom this important opportunity of internationalexchange. Let me therefore express again my sinceregratitude to the ECBP to have organised such an impor-tant event with such an impressive list of participantsand topics.

I wish all participants fruitful and interesting discus-sions during the next two days, and I hope that ourinternational guest will fully enjoy the warm hospitalityof our capital city Addis Ababa. I herewith declare thissymposium officially opened.

Thank you very much.

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Welcome addressby H.E. Minister of Education (Ethiopia) Dr. Sintaheyu W/Michael

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Draft Financing Framework for the TVET Reformin Ethiopiaby Dessalegn Mulaw

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The Ethiopian Financing TVET Framework in an international perspectiveby Dr. Arvil Van Adams

1. Introductiona. Recognition of dignitaries and guestsb. My assignment today: talking about TVET financing from an int’l perspective and lessons for Ethiopiac. Topics covered:

i. Why the emphasis on skills?ii. Challenges to be met and lessons for financing from int’l experienceiii. The three P’s for financing in Ethiopia: poverty, performance, and partnership

2. Ethiopia has been engaged in a major TVET reform program as part of the Government’sEngineering Capacity Building Program launched November 2005 with German technical cooperation

a. A TVET strategy is now under consideration by the Council of Ministersb. Strategy reflects best international practice in its content

i. Shared governanceii. Decentralization of managementiii. Diversified financingiv. Strengthening of private deliveryv. Expansion of cooperative training

vi. Focus on quality assurancec. Ethiopia is joined by other countries in pursuing TVET reforms

3. Why the emphasis on skills?a. Success in Education For All and in meeting Millennium Development Goals calls for providing choices

in further educationb. Not all youth will enter higher education, only half in advanced countries and less in low-income

countriesc. The missing middle in skills for Ethiopiad. Providing youth with a skill opens the way to employment and income for reducing povertye. The critical foundation of education for skillsf. Skills will enable Ethiopia to attract added investment and expand the economyg. Ethiopia is competing in a global economy

4. Challenges faced in financing and lessons from other countriesa. TVET has to compete with other sectors for public expenditure b. Low income is a constraint to household financing, limits on fee incomec. Rural communities face more serious constraints than urban areas for household financing and income

generationd. Readiness of the private sector as a partner in Ethiopia presents a challenge, importance of building

its capacitye. Borrowing against future income requires well functioning capital marketsf. Diversifying financing does not mean withdrawal of government financing g. How financing is done may improve quality, efficiency, and relevance

5

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5. The three P’s for financinga. Poverty: assuring attention to the poor

i. Looking at the equity of financing policies across education sectorii. Awareness of the impact of cost-recovery on access of the poor to private trainingiii. Role of the State in promoting access for the pooriv. How to go about protecting the poor

1. Community-based targeting and selective waivers2. Geographic targeting and cost-recovery waivers3. Institution budgets weighted for the share of the poor

b. Performance: creating the right incentives with financing for getting resultsi. Supply-driven systems have no accountability for failure to meet market needsii. Shifting the financing focus from inputs to outcomes: standards-based training systems as an

outcomeiii. Performance-based budgeting with accountabilityiv. Vouchers: U.K., Chile, Kenyav. Competitive procurement of training: SENSE and Training Funds

c. Partnership: creative involvement of the private sector as a partner in financingi. Conditions under which enterprises will finance trainingii. The challenge in Ethiopia where quality is not valued by consumersiii. Strategies for encouraging SME’s to train: Malaysia, Singapore

1. training voucher for less than 50 workers – SDF2. use of excess training capacity in large firms with training grants – HRDF3. grants for training needs analysis – SDF and HRDF4. pre-approved public courses –SDF and HRDF5. support for education equivalency programs

iv. Other ways for partners to contribute than tax-based and contract financing1. Board of governors for training institutes2. Consultations on curricula and certification instrument3. Cooperative training4. Instructor internships in industry5. Industry craftsmen as instructors6. In-kind support with equipment

6. Looking at TVET reforms as a journeya. Establishing early milestonesb. Building a learning culture for adapting lessonsc. Awareness of the importance of the roles of the State and partnersd. Using financing to address the three P’s

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Mechanisms of financing TVETby Dr. Vladimir Gasskov

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Cost-sharing with trainees/students: International Experienceby Prof. Dr. Adrian Ziderman

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8

The meaning of cost and benefit in company-based VET-systems

Cost-benefit analyses investigate the value of vocatio-nal training as perceived by the state, employers andindividuals in terms of the life income of working peo-ple, the labour productivity of each company providingtraining, and state infrastructure spending, tax revenuesand the level of social transfer payments and social sta-bility. Because of the predominant role of employers inthe German vocational training system with its dualstructure and individual-employer-based financing arran-gements, the economic dimension of three parameterscost, benefit and funding is much more important thanin the case of a school-based, publicly financed vocatio-nal training system. In the latter type of system, costproblems are felt only indirectly, but in the former thesehave an immediate and palpable impact on the compa-ny’s financial accounts. If costs which are relatively easyto quantify are not reflected by corresponding benefitsgenerated by training in the medium term, there is alatent danger that corporate investment in training willno longer adequately meet the demand for training wit-hin the younger generation.

The fact that in Germany companies themselves forthe most part decide whether and to what extentyoung people receive vocational training accounts for adependence on market conditions, growth and employ-ment dissimilar to state-organised and financed vocatio-nal training. Firms finance training costs, which theyaffect as an investment in human capital with the goalof optimising their operating resultants through perso-nal qualifications.With an annual expenditure of morethan 27 thousand million Euro projected by the FederalInstitute for Vocational Training (BIBB) in 2000 on thebasis of a representative survey, one should actuallyassume that companies orient their vocational trainingdecisions on a cost-benefit analysis.This is not the case,however, because the parameters must be convertedinto money in order to be able to compare expenditureand return.Attempts to register completely the benefitor income side of vocational training fail because ofmethodological problems of benefit measurement. Onthe other hand, the statistical description of the cost orfunding side does not present any insoluble methodolo-gical problems.

Methodological approach to determining training costs

Most enterprises in Germany do not have separateentries for training costs in their costing.To the extentthat internal company training costing does take place,which is generally the case only in larger enterprises,the procedures differ widely and the results in the diffe-rent enterprises are hardly comparable. In a representa-tive study of company training costs it is thereforenecessary to record the individual cost components –quantity and value – in each enterprise and then to con-vert them into cost variables using a uniform system.

The cost model derives from the value-basis cost con-cept that is usual in business administration, accordingto which cost is taken to mean the assessed consump-tion of goods and services to generate the goods andservices produced by the company. It follows the con-cept of full or absorption costing whereby all the costsentailed in producing the company’s goods and servi-ces, both the variable and the proportionate fixed costs,are attributed to the cost units, that is, the individualproducts.Applied to in-company training, this meansthat the entire process of vocational qualification of atrainee in the enterprise is to be seen as a performanceto be coasted and the overall deployment of personsand resources that this requires has to be determinedand evaluated. Not only all the costs additionally occa-sioned by the training are included (variable costs) butalso a proportionate share of the personnel and materi-al costs that would arise for the enterprise even if it didnot provide training (fixed costs).

In in-company vocational education and training, thefollowing major cost pools have to be distinguished:

• The personnel cost of trainees consist of the trainingremuneration cost elements, that is, the “pay” for thetrainees, as well as the statutory and standard socialcontributions and fringe benefits.

• The personnel costs of instructors are wage and salarycosts including employee benefit costs of all personsinvolved in training in the enterprise.The proportionof personal costs corresponding to the time spent ontraining was determined, with the distinction beingmade between full-time and part-time instructors.Whereas the central task of the full-time instructorswas to do the training, the part-time instructors only

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Costs and benefits of vocational education and training in the dual system of Germanyby Folkmar Kath

do training work temporarily in addition to their actu-al tasks in the framework of the production of compa-ny goods and services.

• Plant and material costs are incurred at the differentin-company learning venues. For training at the com-pany workplace, the costs of tools and equipment spe-cifically at the disposal of the trainee were recorded.

Methodological approach to determining direct costing

The full cost principle takes into consideration to ahigh degree- especially with the incorporation of thecost of part-time training personnel- costs that the com-pany would incur even if it did not provide training.Thetraining costs arrived at thus does not reflect the actualsupplementary cost burden that is relevant for the com-pany when deciding whether or not to provide training.Therefore over and above the full costing, direct costingwas also carried out, covering only the types of costsactually incurred as supplementary costs by the compa-ny as a result of training.

For direct costing it is first of all necessary to dividethe costs up into costs incurred by the company inde-pendently of training, that is, the fixed costs, and thosethat are occasioned additionally by the training provi-ded, i.e. variable costs.There is no general answer to thequestion of whether and to what extent the costs of thepart-time instructors are to be seen as fixed or variable,however.The part-time instructors in particular oftendevote a considerable part of their working time to trai-ning. If the company stopped providing training andthus relieved those employees of their training responsi-bilities, however, that might lead to a reduction of thecompany personal requirements and thus to cost-savingin some companies and not in others. In most of thecompanies by far, termination of training would resultin no savings in personnel resources worth mentioning,since the volume of original work done by part-timeinstructors differs little or not at all from that of

employees not providing instruction.Therefore thecosts of personnel engaged part-time in training can becompletely ignored in direct costing. It is therefore asimplified calculation in which the tendency is to slight-ly underestimate the cost burden of the companies.

Procedure of determining the returns during training

In in-company vocational education and training, lear-ning and working are closely interconnected.As a rulethe trainees perform productive work, that is, work thatthe company can put to economic use, during the in-company training period.The productive work reducesthe cost burden of the companies and is therefore sub-tracted from total costs as returns from training.However the returns cannot be recorded directly butcan only be deduced indirectly from substitution requi-rements.The assumption is that if the company did nothave anyone to train it would have to hire normalemployees to do the work.Thus the value of the pro-ductive work of the trainees for the company is equalto the amount it would alternatively have to pay tothose employees in wages and salaries for the samework performance.

Returns are determined as follows: First the amount oftime is determined during which the trainees weredoing productive work in the company during the indi-vidual training years.

And how that productive time was distributed among

activities that are normally performed by unskilled semi-skilled workers, and activities otherwise performed byskilled workers. Productive times are assessed at thelevel of efficiency that the trainees attain in comparisonto the employees otherwise used for the same work.Whereas the lower level of efficiency of the trainees forskilled worker activities is differentiated by years of trai-ning, the level of efficiency in the case of unskilled andsemi-skilled work is generally taken to be 100 %.The so-called equivalent times calculated on that basis corres-

52

pond to the time skilled or semi-skilled and unskilledworkers would have taken to do the same work. Byassessing the equivalent times with the wages and sala-ries, including employee benefit costs, of skilled orsemi-skilled and unskilled workers the costs that thecompany would have incurred if it had employed nor-mal workers are determined.The alternative costs thatthe company saves through the productive utilisation oftrainees are regarded as returns from training.Thereturns are subtracted from the total training cost to thecompany, that is, the gross cost determined by fullcosting, or direct costing.The remaining net costexpress the actual cost burden connected with training.

Problems of estimation

One difficulty with the determination of training costsis the part of the required individual data in the compa-nies is not available in the form of systematically recor-ded data but can only be estimated.This applies in parti-cular to the time expended by the part-time instructors.The companies do not generally register precisely howmany hours the individual employees spend on cateringfor trainees.The data are therefore subjective estimatesof the respondents and can be influenced by their idealconceptions of good training. It should therefore beassumed that the tendency would be to overestimatethe time spent on training by part-time instructors.

Another estimation problem arises above all whendetermining the productive performance of the trai-nees, which is likewise not as a rule precisely recordedby the companies.The volume of productive time andthe level of efficiency of the trainees when performingskilled worker activities must therefore also be estima-ted by the survey persons.All data on the productiveperformance of trainees are therefore subjective judge-ments to a certain extent, although here underestima-tion is more to be expected.

Results of full costing

As elucidated above the total deployment of personsand material was registered and assessed in order todetermined in-company training costs by full costing.Not only the costs additionally occasioned by training(variable costs) but also the proportionate personneland material costs that the company would have incur-red even without training (fixed costs) were taken intoconsideration.The following results of full costing showwhat resource consumption is connected with trainingin the companies.

For the year 2000 the gross costs of in-company voca-tional education and training in Germany calculated byfull costing averaged EUR 16,435 per trainee and year.The largest cost pool consists of the personnel costs of

trainees at EUR 8,269, corresponding to 50 % of grosscosts.Training pay, averaging EUR 6,042 per trainee andyear, makes up the largest part of this sum by far; italone accounts for 37 % of the gross costs. Unlike othercost elements of in-company vocational education andtraining, the company has little or no influence over theamount of training pay. In most branches of industry,collective agreements determine training pay.Companies with collective agreements are obliged topay trainees at least the sum set forth in those agree-ments.The statutory social employer’s contribution cal-culated on the basis of the training pay was about 21 %.

The second largest cost pool consists of the trainingpersonnel costs.Averaging EUR 5,893 per trainee andyear, they account for 36 % of gross costs.The mainitem here is the cost of part-time trainers, that is, thecompany personnel who spend some time on trainingtasks in addition to their actual work, averaging EUR 5,419.The cost of full-time instructors, on theother hand, is relatively low, averaging EUR 453.The reason for this is that full-time instructors are generallyonly employed in larger enterprises. Only 11 % of thetrainees receive instruction from full-time instructors, sothat in most cases these cost are not incurred. If onlythe companies where full-time instructors are actuallyemployed are considered, the average cost is EUR 4,098per trainee and year.

The plant and material costs of training play only asubordinate role, averaging EUR 545 or 3 % of grosscosts.The remaining 11 % of gross costs go for othertraining costs, consisting of a number of different costelements and amounting to a total of EUR 1,728 pertrainee and year.

As elucidated above the returns from training aredetermined by recording the productive time of traineeand then calculating the wage of salary that would bepaid to the workers who would otherwise be perfor-ming the same tasks. For work that would normally bedone by skilled workers, the level of efficiency of thetrainees is also taken in consideration. For the year 2000the trainees’ time spent in the enterprises averaged 133days, or 55 % of total training days per year. So duringmore than half the in-company training time (53 %) thetrainees do productive work; they do the work of semi-skilled or unskilled workers (54 %) somewhat more fre-quently than that of skilled workers (46 %).The level ofefficiency of trainees performing skilled worker activi-ties averages 50 %.The total returns from training calcu-lated on that basis amount to EUR 7,730 per trainee andyear.Thus 47 % of the gross costs are met by the return.Once the return has been subtracted from gross costswe are left with net costs averaging EUR 8,705.

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8

Overall distribution of trainees by cost level

The cost results presented up to now have in eachcase been average values that tell us nothing about theoverall existing cost differences.The deviation can beshown by means of distribution structures, where welook at the number of trainees for whom costs reach agiven amount. For this purpose the costs are grouped inintervals in order to show in greater detail the distribu-tion of gross costs and returns as well as the net costsas the most important value expressing the actual costburden borne by the enterprises.

The total gross costs are of the order of EUR 10,000 toEUR 20,000 per year for 59 % of the trainees. For 15 %of the trainees the gross costs are rather low, less thanEUR 10,000. For 22 % of the trainees, on the other hand,the gross costs are comparatively high, between EUR 20,000 and EUR 30,000.The highest figure forgross costs is about EUR 103,500, the lowest EUR 1,535.The considerable deviations in gross costs can be tracedto a large number of factors: Firstly because of theGerman pay scale system there are large differences intraining pay from one economic sphere, branch andregion to the next.The same applies to the wages andsalaries of the personal involved in training. Secondlythe training in enterprises can be organized in very dif-ferent ways. For instance, training that takes place inlarge part in a company training workshop generallyinvolves considerably higher costs than production rela-ted training at the company workplace.The groups ofemployees deployed for training and their respectivetraining times can vary widely as well, having a substan-tial influence on the amount of costs.Added to this arethe differences from one training year to the next thathave entered into the total distribution.

The returns from training, that is the productive per-formance of the trainees, also vary widely on the whole.38 % of the trainees bring returns amounting to bet-ween EUR 5,000 and EUR 10,000. For 30 % of the trai-nees the returns are comparatively low, less than EUR5,000. On the other hand, the returns were relativelyhigh, between EUR 10,000 and EUR 20,000 in the caseof 25 % of the trainees.The highest rate of returns wasjust under EUR 40,000.

The differences are considerably greater for net costthan for gross cost since the proportion of return fluctu-ates substantially.The total net cost for half the trainee’slies between EUR 5,000 and EUR 15,000.Very high netcosts of over EUR 20,000 are incurred for 8 % of the trai-nees. Net costs are relatively low, less than EUR 5,000,for just one-fifth of the trainees. Finally no net costing isincurred for 11 % of the trainee, who instead generatenet earnings.All in all, the net cost varies between EUR91,400 as the highest value and – EUR 19,295 as thelowest value.

Extrapolation of costs of the economy as awhole

On the basis of the average gross and net costs pertrainee and year the total cost of in-company vocationaleducation and training to the German economy, that isprivate business and the public service, in the year 2000can be calculated.At the beginning of 2000 there werea total of 1.7 million trainees in Germany.The gross costincurred by the companies for these trainees amounted

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to EUR 27.7 billion.The net cost totalled EUR 14,7 bil-lion.This was equivalent to 1.4 % of the gross nationalproduct (GNP) with reference to gross cost and 0.7 %with reference to net cost.

Resultants of direct costing

As elucidated earlier, when the company training aredetermined by direct costing only the additional costsare considered.The fixed costs of training, which thecompany would incur even if it did not provide trai-ning, are not taken into account.This is the case for thecosts of personnel engaged part time in training.Theresults of direct costing thus show the extent of theadditional cost burden borne by the companies owingto training, i.e. to what extent costs are incurred thatthe company would save by not providing training.Theamount of direct costs is presumable the cost factorthat is decisive for the company’s decision whether ornot to provide training.

The gross costs determined by direct costing for theyear 2000 averaged EUR 10,178 per trainee and year.After subtraction of returns from training totalling EUR 7,730 we are left with net direct costs averagingEUR 2,488.This in the case of direct costs more thanthree quarters of the gross costs is covered by the pro-ductive performance of the trainees.

Distribution of trainees by cost level

The gross and net cost spread is very great for directcosts as well.There is a high concentration in the costrange between EUR 5,000 and EUR 10,000; for 57 % ofthe trainees the gross costs per year are of this order ofmagnitude. High gross direct costs of over EUR 20,000and very low costs of less than EUR 5,000 are excep-tions, with a proportion of trainees of 3 % in each case.Compared with the full costs, the direct costs are consi-derably more strongly concentrated in a few cost inter-

vals.The reason therefore is that strongly fluctuatingcosts of part-time instructors are not taken in considera-tion in direct costing.

Because of the very pronouncedly varying share ofthe returns, substantially greater difference occurs innet costs than in gross costs. One third of the traineesgenerate net returns according to direct costing, mostlyof the order of up to EUR 5,000. Returns of more thanEUR 5,000 are generated by 10 % of the trainees.Theseresults make it clear that the enterprises often incuronly a relatively slight additional burden of costs as aresult of training and that to some extent the trainingeven already yields dividends during the training periodby generating net earnings. On the other hand, howe-ver, a relatively large proportion of the enterprise incuradditional costs owing to training that can only yieldreturns through utilisation of the skills imparted aftercompletion of training when the trainee is taken on inan employment relationship.

Training benefits

In principle the following three components of thebenefit of training can be distinguished:

A) Benefit from those being trainedDuring training a benefit for the enterprises is producedby those being trained in that returns are generatedthrough productive work.These returns are assessed onthe basis of a concept already used and proven in ear-lier surveys.The returns from the productive performan-ce of the trainees are a part of the concept for determi-ning training costs. If the returns are subtracted fromthe gross cost determined the result is the net cost.Some important returns from training have already beenpresented in the discussion of the of in-company voca-tional education and training.

B) Benefit from those trained When the company hires persons trained in the compa-ny, the company benefits because the qualificationsimparted during training can be used to good purposein the work process. Such benefit can only arise if theperson trained by the company is indeed hired by thecompany.These directly need-oriented elements ofbenefit are that what we call utilisation benefit. Benefitafter training is most easily determined indirectly, bycomparing it with the alternative possibility of recrui-ting personnel.Training benefit arises for the companyonly to the extent that it is cheaper for the company todo its own training than to recruit skilled workers fromthe external labour market. Quantity and quality of theexternal labour supply are thus an important determi-nant of the benefit the company can draw from doingits own training. Since the external supply of manpower

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is determined by the training behaviour of all enterpri-ses and the government, the benefit for the individualenterprise depends on the final analysis on the trainingcommitment of business in general.The less training isdone by other enterprises, the greater the possiblebenefit for the individual enterprise if it does its owntraining. If there is not enough qualified manpower onthe external labour market as an alternative recruitmentpotential, considerable costs may ensue due to loss ofproduction to a company that does not provide trai-ning.These costs can take on substantial proportionsand must be considered when counting the possiblebenefits of in-company education and training.

Part of the benefit of training ensues from a compari-son between doing one’s own training and the cost ofalternative recruitment and qualification. If manpoweris drawn from the external labour market, personnelsearch and especially personnel break-in and qualifica-tion costs are incurred.The costs saved in this regard bydoing one’s own training are an indirect benefit of trai-ning.

In the proficiency level of the externally recruited skil-led workers after in-company qualification is similar tothat of those trained by the company itself, there is nofurther benefit of training.This is probably more theexception than the rule, however. In general the qualifi-cation courses are likely to impart only those skills thatare absolutely essential for performing the tasks requi-red for a specific job. In that respect long-term perfor-mance differences are to be expected between manpo-wer trained in the company and manpower recruitedexternally, documented in different knowledge, skills,capabilities and patterns of behaviour.These performan-ce differences are relevant for the company to theextent that they influence the success or the develop-ment of the enterprise.A distinction should be made inthis context between manifest and latent performancedifferences. Manifest differences are already discerniblein the context of the concrete and ongoing work pro-cesses and therefore of immediate importance for theenterprise.The performance differences can also belatent, however, and only have an effect when the enter-prise has to adapt new market constellations and thecorresponding adaptation services have to be perfor-med. Since it is becoming less and less possible forenterprises to expect stable environmental conditions,they cannot afford to underestimate the significance oflatent performance differences.

Existing performance differences between company-trained and externally recruited skilled workers can bereflected in a multitude of effects that are of considera-ble economic significance for the company. In additionto the higher productivity of the company-trained skil-led workers we might mention less fluctuation, a higherquality of work and faster adaptation in the event of

conversion of production and changes in market con-stellations. In-company training is also likely to lead togreater identification with the aims of an enterprise andfavour adaptation to the specific corporate culture.

When comparing the alternatives “external recruit-ment” and “training by the company itself” one has toconsider possible wage differences in calculatingreturns.A clear-cut cannot be given for those wage dif-ferences. Both a higher wage rate -owing to better per-formance- and lower wage rate -greater adhesion to thecompany- for the company-trained skilled workers areconceivable.

C) Benefit from the trainingA benefit of training also comes about owing to thevery fact that the enterprise decides to carry out oroffer training.These are elements of benefit that resultfrom merely dealing with training questions.We descri-be this benefit as “supply benefit”. First of all we canspeak of a strengthening of the company’s position onthe external labour markets.Thus a renowned training-providing enterprise can be expected on principle tofind it easier to obtain productive manpower for itselfin other fields of qualification as well.A high degree ofcommitment to training also has a positive influence onthe image of the enterprise among the public at largeand among potential customers or business partners. Inaddition to this dimensions geared to outward presenta-tion of the enterprise, training can also have a positiveeffect on the quality of work within the enterprise. Firstof all, it can be assumed that the special competencebuilt up in the context of initial training activity can beused to good effect in structuring in-company continu-ing education and training as well. In this regard, dea-ling with questions of initial vocational education andtraining can lead to increase professional in continuingeducation and training. Finally, in-company initial voca-tional education and training can be seen as an institu-tionalised rejuvenation of an enterprise. In view of theincreasingly rapid changes in the markets and the greatdifferences in consumer behaviour between individualage groups, a guaranteed influx of younger skilled wor-kers is useful for the long-term existence of an enterpri-se. In addition to that, preoccupation with matters oftraining obliges one to modernise the knowledge athand.

Basic orientation of in-company education and training

The net benefit of training to an enterprise resultsfrom the balancing of all relevant cost and benefitdimensions. In principle there are two possibilities of apositive benefit balance that need to be distinguished.On the one hand such a net benefit can already be attai-

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ned during training.The precondition for this that thereturns from productive activity by the trainees exceedtotal training costs. If such a net benefit is not attainedduring training, the training is a paying proposition forthe enterprise even if the trainee is taken on as employ-ee and a further benefit from the training can be inter-nalised by the enterprise owing to recruitment and per-formance advantages of company trainees over externalskilled workers or a generally inadequate supply of skil-led workers.The terms “production model” and “invest-ment model” of initial education and training have beencoined for these two possibilities of profitably engagingin training. In the former case the training costs can becompensated for by efficient use of trainees; the trai-ning strategy of the enterprise is geared to the mostprofitable possible deployment of the trainees in cur-rent production. In the other case, in contrast, trainingis regarded as a long-term investment that will be onlybe profitable for the enterprise later, when the trainee istaken on as an employee.

Training as an alternative to recruiting skilledworkers via the external labour market

One way of determining the benefit of in-companyeducation and training is by comparing it with the alter-native, the recruitment of skilled workers. For that pur-pose, analogously to determining the costs of in-compa-ny training, the recruitment costs for hiring an externalspecialist are determined or estimated. By doing one’sown training and taking the trained person on as anemployee one can save those costs.They can thereforebe counted among the benefits of in-company training.In addition to this monetary assessment of a part of thebenefit of training, geared to a fundamental comparisonbetween doing one’s own training and external recruit-ment and taking dimensions into account that go furt-her than just considering the recruitment costs saved.Here we are concerned, for example, with the funda-mental question of what the effect on the enterprisewould be if personal recruitment in the skilled workersegment were exclusively external. First, however, itmust be dealt with the results with the regard to theamount of the recruitment costs saved.

Benefits of training through saved costs ofrecruiting skilled workers

The data for the average costs of hiring an externalskilled worker were asked by the enterprises distinguis-hed in the following specific cost components:

• Advertising costs Data provided by the enterprises on newly to-be hiredskilled workers.

• Job interviewsThe time expended in the enterprise on preparation,holding, post-processing and administrate processingof job interviews.

• Working inThe average working-in time and the average outputdeficit for the skilled workers during the working-inperiod.

•Continuing education and trainingThe extent to which external skilled workers still takepart in special continuing education and training cour-ses for working-in purposes.

•Wages and salary differencesIn calculating recruitment costs one must take intoaccount whether company-trained and external-skilledworkers are paid different wages and salaries.Therecruitment costs are higher or lower depending onwhether external skilled workers are paid more orless wages.

The average total estimated value of recruitment costssaved through training was found to be about EUR5,800 per skilled worker to be hired. Regarding the ave-rage values for the individual cost components we seethat on average the main item in an alternative calcula-tion is the high break-in costs of almost EUR 4,000incurred when an external skilled worker is hired.

Accounting of costs and benefits of training

The total benefit of training consists of the followingtypes of benefit:

• returns from productive performance of the trainees• (saved) costs of recruiting external skilled workers • (saved) outage costs when skilled workers are in short

supply• performance differences between company-trained

and external skilled workers• Supply benefit (e.g. image improvement).

As reported above the returns from the productiveperformance of trainees comprise the difference bet-ween gross and net cost.A balancing of training costsand the other mentioned types of benefit of tradingthus follow implicitly from a consideration of the netcost.The direct costs are best suited for the intendedbalancing since they provide the best information aboutthe extent of which the enterprises are really burdenedby the training activities. Projected into a three – yearstraining period, we arrive at an average of EUR 7,344 forthe net direct costs. In terms of figures, this is the

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amount of costs that the enterprise would be left withat the end of the training period if only the returns ofthe productive performance of the trainees were consi-dered as a training benefit. Proceeding from the present-ed study findings, this net cost figure can be comparedon average with a monetarily quantifiable sum of EUR5,765 in saved recruiting costs for each company-trai-ned specialist actually hired. Of course the other benefitdimensions also have to be taken into account for thebalancing, but they cannot reliably be assessed and eva-luated monetarily. One can therefore conclude that as arule the benefits of training in its totality would proba-bly appreciably exceed the training costs.A precise figu-re for the amount of the total benefit, however, cannotbe given.

Conclusions

The results presented show that a comparison of thebenefit and the cost of training for the enterprises canusually be expected to be positive.When doing such acalculation, however, the broad spectrum of benefitdimensions connected with training has to be takeninto account and too narrow a view of the benefit oftraining has to be avoided. In particular one should con-sider that a substantial part of the benefit of training ishard to quantify in monetary terms, and yet is of consid-erable importance for the enterprise.

Proceeding from the distinction in education econo-mics between production-oriented and investment-oriented training models, the results show that a clearmajority of the enterprises have a longer-term invest-ment interest in doing their own training. Not only theindustrial training in large enterprises but also the trai-ning in many craft enterprises is usually investment-oriented.There is a clear connection between theamount of training costs and the basic orientation oftraining.The training costs in enterprises with produc-tion-oriented training tend to be lower than in thosewith investment-oriented training.This connection,

however, is far from being an equitation such as “pro-duction-oriented training = low training costs” and“investment-oriented training = high training costs”.

It should be noted that the training benefit is probablynot independent of business fluctuations.The returnsfrom the productive performance will tend to fall off ina period of business downturn owing to decliningorders and the concomitant limitations on the producti-ve deployment of trainees.The gross cost of trainingremains constant, but the net costs, as the differencebetween gross cost and returns will increase. For enter-prises that are primarily interested in the work done bythe trainees it would be a rational business move insuch a situation to reduce the number of trainees andadapt to be shrunken opportunities for productivedeployment until the returns hence the net costs aswell return to the old level.

A worsening business situation also has the effect thatthe benefit after training ends and the trainee is takenon, as an employee tends to decline.Thus in a period ofeconomic downturn the number of well-qualified skil-led workers seeking work on the external labour mar-ket increases and the productivity difference betweenthe company-trained skilled workers requirements decli-ne.That means that a deterioration in the economicsituation has a direct negative effect on the ration of thecost and benefit of doing one’s own training and redu-ces the incentives for the company’s own training acti-vities.The reduction in the supply of company apprenti-ceships observed in the last years is undoubtedly due inpart to such changes in the cost-benefit ratios. In addi-tion, the unfavourable economic situation directlyaffects the basis for company training.

Cutbacks in in-company for business cycle reasonslead to a future shortage of skilled workers on externallabour markets and thus in the medium term to impro-vements in the ratio of cost and benefit for companiesdoing their own training. If sooner or later a businessupswing occurs, there may be an intensified shortage ofskilled workers, which cannot be remedied in the shortterm through the expansion of in-company training acti-vities.Training markets like labour markets, are subjectsto the effects of business cycles, and it has not beenpossible up to now to lastingly stabilise company trai-ning behaviour. Indications of an immanent skilled wor-ker shortage in the future are obviously not enough toprevent adaptive reactions to changing short-termrequirements. It should be noted that enterprises couldalways change their training strategy and increase thenumber of trainees again in the longer term.

The present economic situation in Germany is not justleading to a training crisis but is primarily an employ-ment crisis.The overall demand of the enterprises notonly for current existing manpower but also for futuremanpower is falling off.The decline in company

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demand applies to manpower of various skills levelsand not just to skilled workers with dual training.

I think that over a prolonged period the ratios bet-ween cost and benefit of doing their own training willbe favourable for most enterprises and after the reco-vers the supply of company apprenticeships will proba-bly increase again. In the meantime, however, the statein particular is obliged to compensate for the companyapprenticeship deficit by means of suitable incentiveschemes.These include measures outside the compa-nies and in schools, which of course can appreciablyshift the emphases in the German vocational educationand training system.We cannot rule out the danger ofsome enterprises becoming habituated to this situation,which could lead to a permanent change in training andrecruiting policies. In that regard the longer-term effectsof the present economic situation cannot be assessedwith any degree of precision. In this respect any measu-res to stabilise the supply of company apprenticeshipare important.

There are good microeconomic reasons for the enter-prises to do their own training. But the German dualsystem of vocational education and training serves notjust company interests but also the interests of the eco-nomy and the society as a whole and produces signifi-cant results.These overriding interests are taken intoaccount by many enterprises. In that respect the dualsystem of vocational education and training cannotassessed exclusively in terms of microeconomic catego-ries. Fundamental to the system is rather the institutio-nalised cooperation between government and businessand the integration of the trade unions.This coopera-tion requires a strong economic basis.

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The school had focused its programs to the technical-vocational education and training providing a goodopportunity of its graduate for labor employment in thelocality.

The school is approximately 35 km South of MetroManila and the only technical-vocational school in theprovince of Laguna.

3 JZGMSAT is a TESDA administered school strategi-cally located in the first district of Laguna and is nestlein the area where industrial development is located.

The 1st District of Laguna is the gateway of industrialdevelopment in CALABARZON.

The school primarily served the town of Binan, SanPedro and Sta Rosa as well as in the neighboring townsof the 2nd District of Laguna and part of the CaviteArea.

It accommodate the graduates of 18 high schools wit-hin the vicinity and particularly supply the needed trai-ned workforce of the 184 companies in the surroun-dings. Likewise, the school also help the community byproviding relevant livelihood training programs.

2 The Jacobo Z. Gonzales Memorial School of Artsand Trades (JZGMSAT) is a government school manda-ted to provide trade technical curriculum for highschool graduates, post secondary trade curriculum andtrade opportunity for the province of Laguna. It wasestablished by virtue of Republic Act 1905 in 1960.

The school was formerly known as Biñan NationalSchool of Arts and Trades situated in San Antonio, Biñana municipality within the first district of Laguna,Philippines.Was re-named JZGMSAT (by virtue ofProvincial Council Resolution No. 97-A) in honor of thelate Congressman Jacobo Z. Gonzales.

After the tri-focalization of the educational system inPhilippines, and the passage of Republic Act 7786(otherwise known as TESDA Act of 1994) the schoolwas then transferred its supervision/administration toTechnical Education and Skills Development Authority(TESDA).

Experience with the dual training system in the Philippinesby Roberto Niez

4 JZGMSAT is an educational institution which man-dated to performed four major core business functionsnamely, a) provision of instruction, b) conduct of rese-arch and extension, c) provision of outreach programs,and d) implementation of income generation activities.

The schools’ major business is the provision ofinstruction, where all resources are poured in.The aimis to provide relevant training program that would giveopportunity to the beneficiaries for their employabilityas well as for the upliftment of their living conditions.In the area of instruction several programs were line-upto produce employable graduates such as: DIT, COT,Short Tech-Voc programs and competency assessment.

The conduct/provision of research and extension pro-grams is an activity which is installed for purposes oftechnology updates as well as information available out-side the school.This activity is conducted to provideguidance of the school what program to offer and whatare relevant technology and their employment require-ment.This program is conducted purely for informationupdates, research activity are purely for institutionalconsumption only.

The outreach program is offered by the institution forlivelihood activities.The training program conductedare brought out to the community to insure wide parti-cipation and for economy purposes.

While, Income Generating Program is one of the busi-ness installed by the institution for financial augmenta-tion purposes.The operation utilizes the students man-power to engage in entrepreneurship activities or pur-poses of training the students as well as providing themopportunity to earn while learning.

5 The operational function of the school is depen-dent on the national subsidies appropriated annually.The school budgetary requirement is fixed and aredetermine by the national office at the beginning of thecalendar year.A National Action Program is being desi-gned by the National Headquarter (TESDA) and beingdeployed in the provinces and the institutions. In returnwe (in the institution) planned training program thatwould respond to the national action agenda as prescri-bed by the national office for implementation.

The financial support is appropriated in four differentallocation such as: a) personnel salary, b) MOOE, c)Special Fund (financial augmentation), and d) capitaloutlay

These budgetary allocations is funded annually depen-dent of the needs or requirements.

The personnel salary is fixed and are appropriatedannually depending on the number of available perma-nent plantillaq positions.

MOOE is variable and is utilized to fund the schoolsoperations that covers: a) electrical consumptions, b)personnel official travel, c) training supplies and materi-als, d) facility maintenance, and e) others.

The special fund is rarely provided, but this is handleby the national office for special allocations and pro-gram purposes.The institution can tap this fund if theschool is mandated or ordered to perform additionalprograms other than the programs identified in theannual action plan.

The capital outlay is a lump sum fund provided to theinstitution for the establishment or expansion of trai-ning facilities such as: a) additional building, b) acquisi-tion of additional equipment, and c) other procurementthat requires bigger budgetary requirement.

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6 Shown in the slide is the historical budgetaryappropriation provided to the school from CY 2002 toCY 2005.

Historically the institutions’ PS budget on CY 2002 isquite bigger compared to other year, this was becausethe school at that time (CY 2002) were mixed with per-sonnel assigned to man secondary program.The follo-wing year it reduces since the secondary program werecarved out including those personnel manning the pro-gram and were transferred to the Department of BasicEducation (DepEd).

While budget allotment for MOOE slightly increases inCY 2003 to CY 2004 to enhanced the training programand the quality of the technical-vocational program.However, MOOE remain stagnant on the following year.This is because the national office encourages the insti-tution to engage in income-generating activities as wellas encourage student participation in paying the finan-cing of training expenses.

Having recognize the need the school had engaged indifferent fund sourcing methods.As shown in the slidethe revenue (income) of the school increase practicallyon CY 2005. It had increased it’s revenue collection tomore than 10 times than the previous year.The increaseof revenue was attributed to some income generationactivities as well as in the dual training system.

7 Realizing the need to be financially viable theschool had instituted several cost sharing schemes(fees).The students are required to pay certain amountfor the cost of maintenance of facilities such as electri-cal consumption and maintenance of facilities. Since thebigger part of training investment is on the budgetrequired for the consumable materials in the conduct ofskills training the students were required to supply theirneeds particularly for laboratory project constructions.

To insure that marginalized students who can notafford the expense of the training the school had insti-tuted training tie-up (sponsored) and scholarship pro-gram.To help some students with financial incapabilitythe school also set up an income generating activitieswhich provide opportunity to the students to earnwhile learning, as well as engaged in the dual trainingsystem.

8 The enrolment of the school has gone up due to theexisting training arrangement.As noted enrolment goesup at an average of 11% beginning CY 2002-2003.Theincrease as noted was attributed to a promised of assu-ring student-trainees for industry training deployment.

Likewise, the school program incorporate certificateof technology program and was able to graduate 101students.This is a new course offering to provide stu-dent a wide variety of options to take.

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9 The Dual Training Program (DTS) is a special typeof training delivery system for Technical-VocationalEducation and Training (TVET) that combines two pla-ces training; the in-school training and in-plant trainingbased on a training plan collaboratively designed andimplemented by an accredited dual training institutionand dual training business establishment.

The System established a shared responsibility of pro-viding trainees with the best possible job qualifications.

10 This program/system is enabled by virtue ofRepublic Act 7686 that outhorizes the training institu-tions and the industry partners to engaged in a dual trai-ning system.The act prescribe the roles and functionsof the key players (the educational institution, industrialestablishment and the student trainees) in relation tothe implementation of the dual training system.Thisalso authorizes some training incentives of the key play-ers in the course of implementation of the program.

11 Under the Dual Training System, JZGMSAT wereable to successfully market the program.The schoolstarted to engage in a dual training mode and was ableto successfully define a training plan that works boththe institution and company partner.This program isaggressively pursued and had gained reputation withseveral industry partners.

The school organizes training particularly on basic,common and core competencies for a duration of four(4) semester in-school program.While the partner com-pany accommodate trainees for a 7 to 10 months pro-gram that deals on honing the trainees skills and orien-tation to company operational standards.

12 Prior to the start of the program the institution andthe company shall discuss and agree the specific pro-gram and discuss among themselves the delineatedroles and function.This agreement should l be docu-mented in a form of Memorandum of Undertaking orUnderstanding and shall spell out specific agreementsas shown in the examples:

For institution• Provide trade-related theory and practical hands-on

exercises for common and core competency (pre-employment skills);

• Evaluate the trainees performance and insures that thecompetencies are fully achieved;

• Assist the trainees requirements such as parents con-sent, waiver and other in-plant training requirement;

• Mold the trainees work attitude consistent with thecompany/industry expectations;

• Monitor the trainees progress and provide remedialmeasures to further develop the trainees working atti-tude;

• Provide job induction and pre-deployment in-plantprogram;

• Pay the student trainees allowance; and Accommodateindustry trainer/workers for skills upgrading program.

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Company Partner• Accommodate in-plant trainees for a minimum of

1460 hours to a maximum of 10 months actualindustry experience;

• Provide the in-plant trainees opportunity to contributein actual job/activities and/or production;

• Provide the in-plant trainees opportunity to learn thecompany quality system;

• Orient trainees in work (industry) standards;• Assign training officer/coordinator to supervise the

trainees activities while in the company;• Permit training center in-plant coordinator access to

trainees work station for monitoring and counselingpurposes;

• Pay the school for the training allowance for studenttrainees.

• Evaluate the trainees performance; and• Provide input and suggestions to improve the training

program.

These roles are only examples and can be modifieddepending on the agreement as discussed during theinitial negotiation stage.

13 There were several advantages that the schoolwere able to harness out of the DTS implementation.Foremost is the relevancy of the program offering aswell as savings on the part of the institution.The cost oftraining are partly shouldered by the company speciallyduring the in-plant training portion.There is also adirect exchange between school and industry partnerfor other information and activity needed to improvethe program/curriculum.While graduates are readilyemployable.

14 In our experience as affirmed by our cooperatingpartners the systems had yield several advantages tothem.

It is less investment for the company in hiring pro-spective workers because right there in their shop floorare potential and trained workforce. Student-traineescan be groomed for as potential workforce alreadytested and trained in accordance with the companystandards and culture.A communication between trai-ning institution and company is already established,thus any improvement necessary can be relayed imme-diately.

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15 The system is very advantageous both the institu-tion and the industry partners.As experienced wenoted that the cost of training reduced additional bud-get requirement for the schools while the costs of trai-ning for new workers in the company likewise is mini-mized, these generate SAVINGS.While in the part of thecompany it also further reduce cost since they wereable to access and benefit the tax exemptions providedfor in the DTS Law.

16 With the Dual Training System the school able toreduce the cost of training.As noted the average costper semester runs to about PhP 120,00.00 for one parti-cular program at a class size of 20-25 participants.Thesupervised in-plant training of the DTS program hasenabled the school to save at least 1/3 of the intendedbudget to complete the whole course.

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17 The table provides a detailed information on a particular budgetary requirement for a particular cost centers.Thismaterial provides our faculty and staff a guide/advise to the prospective trainees who are potential to take skills pro-gram about the specific cost that they may incur.

Detailed cost estimate

18 In the supervised in-plant training program thecooperating companies had assumed costs such as sup-plies and materials, transportation allowance, meals allo-wance, trainees allowance, uniform allowance as well asthe payment for insurance.These cost are some incenti-ve packages offered to our students.

19 The training system were able to afford severalincentives, the institution were provided with traineesallowance at a minimum of 75% of the regular mini-mum wage (average of PhP 200.00 or USD 4.0).Theinstitution pay the student-trainee 90% of trainees allo-wance and retained 10% to be used for schools opera-tions.

Likewise some companies provided the school someequipment that can be used for training. One of theseare:• Automotive Engine and parts – Ford Philippines• Automotive Engine and parts – Honda Philippines• Computers and peripherals – Takata Philippines• Office equipment – Panasonic Imaging Corp, Phils.

20 To effectively handle the DTS fund retained by theschool the sum of money were further subdivided toseveral allocations.The bigger share were allocate tocapital expenses which will be used to improve theinstitutional facilities.While 20% were allocated to ope-rational expense to manage the dual training programimplementation.

To further motivate and encourage student to underta-ke DTS program a 20% scholarship allocation wereappropriate.This is utilized to award poor but deservingstudents to undertake dual training.The 10% allocationwas also appropriate for purposes of funding traineeswelfare and medical assistance program.

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1.0 Introduction

The first Brigade was founded in 1965 in the village ofSerowe, a year before Botswana attained independencein 1966.The founder, Mr. Patrick van Rensburg was thePrincipal of Swaneng Hill School.There were a limitednumber of both primary and secondary schools whenBotswana attained independence, and van Rensburg’sresponse was to initiate a centre which offered theoreti-cal and practical training combined with productivework, mainly to primary school standard seven dro-pouts in the form of the Serowe Builders Brigade hencethe concept of ‘training with production’ which he hadcopied from similar institutions in Ghana.

The first review on Education was in 1976 leading toa National Policy on Education adopted in GovernmentPaper No. 1 of 1977.This policy guided the develop-ment of education until a second review in 1993 thatled to the Revised National Policy on Education (RNPE)adopted in Government Paper No. 2 of 1994 [1].

The RNPE of 1994 guides the education policy ofBotswana inline with the National Vision 2016 develo-ped through extensive national consultation in 1997.The National Vision 2016 espouses seven pillars one ofwhich is the ‘creation of an educated and informednation’.

Recommendation no. 56 (e) in RNPE GovernmentPaper No. 2 of 1994 states that ‘ the capacity of Brigadesto provide vocational training should be strengthenedand expanded through increased central governmentdevelopment expenditure whilst not diminishing theircommunity based character’.

The National Vision 2016 and the RNPE, which resul-ted in the establishment of the Vocational Training ActNo. 22 of 1998, thus guide the Brigades ‘Training withProduction’ in Botswana.The Botswana TrainingAuthority (BOTA) was established in 2000 to coordinateand regulate vocational training.

2.0 Training with production:

Training with Production as conceptualized by PatrickVan Rensburg in 1965 has evolved due to the political,social, economic and technological developments of theera of a global village.

At inception the young primary school leavers wereenrolled into an on-the-job apprenticeship type of trai-ning under which they had 20% classroom learning and80% production work.The trainees engaged in buildingprojects for public authorities at relatively low costsand the earnings derived were used to cover costs oftraining they received.

In the eight years that followed, the Serowe Brigadestrained 150 builders of whom almost all found employ-ment. 75% of the trainees passed government trade testsexaminations.This was achieved at no cost to the Stateand it resulted in the construction of a number ofpublic projects in and around Serowe

Other rural communities throughout the countrycopied the concept of training with production as a via-ble alternative to mainstream education to;• Fill a vacuum in skills development for many young

people in rural areas by providing theoretical, practi-cal and on-the-job training for primary school leavers(Std 7) in fields such as construction, mechanical, tex-tiles and agriculture.

• Contribute to employment and income generation atvillage level through establishment of production acti-vities such as brick moulding projects, hardware retailand horticultural projects.

• Act as ‘social safety valve’ harnessing the energies oflarge numbers of rural youth who might have otherwi-se become idle, disaffected and alienated.

The Brigades as Community Based Organizations(CBO) received a lot of support from the InternationalDonor Community, which provided funding and techni-cal support up to the early 90s when they withdrewsupport on the basis that Botswana had developed tobecome a middle-income country.The drying up offoreign funding shifted the burden of support to

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Training with production in the Botswana BrigadesBester Mahube

This paper will discuss Training with Production in the context of Botswana from its inception in 1965 to the pre-sent.The writer will try to present a more practical approach to the discussion of training with production, citingpolicies and approaches that have contributed to modern day Botswana Brigades as proponents of the concept oftraining with production.The paper goes on to highlight the funding of the training with production programmesin the Brigades and its impact.The paper further highlights the achievements of Brigades over the years and spellsout the challenges for the future.

government especially in light of failure by the Centresto sustain their operations, which was adversely affec-ting training provision.

The National Brigades Coordinating Committee(NBCC) was set through Presidential DirectiveCAB.27/69 as an advisory body to the government onBrigades matters. It was hoped that the NBCC wouldcontribute to improving efficiency of Brigades byencouraging them to adopt, where appropriate uniformstandards and procedures.

Brigades Development Centre (BRIDEC) a Ministry ofEducation unit formed in 1977 coordinated the activi-ties of the Brigades by,• Disbursing government subsidy for training and moni-

toring the usage as per conditions set in theMemorandum Of Agreement on GovernmentSubvention (Subsidy)

• Carrying out leadership training, including training ofinstructors (short term or long term)

• Developing curriculum and upgrading syllabi, trainingmaterials and providing technical support.

• Giving advice to communities and government onestablishment of new Centres.Assisting in the fundingof various Brigades projects through the capital fun-ding.

BRIDEC was later merged with the Department ofTechnical Education to form Department of VocationalEducation and Training (DVET) in 1994 with dual res-ponsibility for technical colleges that are 100% govern-ment institutions and Brigades.

A study on Small Scale and informal Enterprise (SSE)revealed that in the 1990, production income from thethen 24 active Brigades amounted to 12,5 million pulagenerating a surplus of 4% on average, while some ofthem had achieved surpluses of as much as 12 to 15%.The report further stated that some brigades were inserious financial difficulties with their production activi-ties, mainly due to management problems. [2]

The introduction of the universal basic education upto Junior Certificate (JC) in 1991 shifted the targetcliental up the educational ladder from Std 7 to JC com-pleters.The Brigades though maintaining their areas oftraining were compelled to review their curriculum toaccommodate the upward shift of entry qualificationsfrom the new entrants.

The failure by a majority of Centres to run viable pro-duction activities which could keep the trainees fullyengaged and the shift from Std 7 to JC and later toO’levels changed the original concept of ‘Training withProduction’ in the Brigades.There was a need to find abalance between provision of quality training and pro-duction activities.The Gaborone Conference of Feb-ruary 1996 on Training with Production; Finding theBalance agreed that there was a need to strike a balancebetween training and production activities in theBrigades.

.3.0 Objectives

The Brigades in Botswana number 41 to date.Theobjectives of the Brigades have not changed over theyears and the main focus is still to:• Promote the social and economic development and

advancement of the people of Botswana with particu-lar regard to training and creation of employmentopportunities

• Provide general vocational training facilities and toorganize and arrange educational activities so as toequip people with highest possible degree of skills intheir chosen vocation

• Take all necessary steps to raise financial aid for theTrust and to use any funds so secured specifically forthe intended purpose.

• Endeavour to make the area and the nation more self-sufficient by producing goods and services that mightotherwise be imported.

• Establish measures and policies to ensure that lessadvantage groups such as women, remote area dwel-lers and people with disabilities benefit full from ope-rations of the Trust through admissions to training.

4.0 Implementation method/strategy

Brigades are governed by The Board of Trustees onbehalf of their respective communities and are electedevery three years.The Board of Trustees comprises;• Four elected Community Members• Three Ex-Officio Members (Chief, District

Commissioner and Council Secretary)• Two Ministry of Education nominees (from local

Community)• Staff and Trainee Representative (None voting)

The Ministry of Education pays Board members sittingallowances of US$105 each for four scheduled meetingsa year.The Board reports progress to the communitythrough public meetings twice a year.The Board ensu-res that books of accounts are audited every end offinancial year by qualified audit firms appointed by theMinistry.

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The main occupational fields of study are listed on table 1 below:

Occupational field No. Of Centre OfferingBricklaying & Carpentry 22Auto Mechanics 18Business Studies:Accounting & Computers 19Textiles 8Electrical & Plumbing 5Agriculture: Horticulture & Forestry 5

It is evident from the figures above that the construc-tion trades remain dominant.The Brigades have notbeen able to diversify into new programmes largelybecause of their over dependence on government fun-ding as it will be seen later on.

A Brigade Centre unit runs both the training and pro-duction function in the various fields of study i.e. aBuilders Brigade Unit offers both classroom and practi-cal workshop training following an approved curricu-lum by the Ministry of Education.• The unit must be headed by a competent manager

with skills in tendering and estimating and projectmanagement

• The unit is required to tender for construction jobs inthe open market.The Centre is required to registerwith the Public Procurement & Asset Disposal Boardto qualify to tender for government projects.

• The jobs secured by the unit are be done by the trai-nees as part of their on the job training.The Centreemploys extra labour for bigger projects.

• The trainees go out to the projects accompanied bytheir instructors or other experienced productionworkers.

• The funds generated from the projects are used toimprove training facilities such as buying special toolsfor trainees not provided through subsidy and mainte-nance of machinery and buildings. Successful Brigadeshave put up new classrooms and bought equipmentsuch as computers through such proceeds withoutgovernment assistance.

• The trainees are paid allowances when they engage inproduction activities and some clever trainees use theallowances to pay school fees, rent or buy food torelieve their parents/guardians.

• Securing big projects for the Centres increasesemployment opportunities for local communities.Some skilled members of the communities get con-tracts for service in areas where the Brigade wouldnot have readily available expertise.

The trainees view the exercise of training with pro-duction differently.There are those who view it as agood practice, which enables them to sharpen theirskills and gain experience, while there are those (usual-ly in the minority) who view the practice as an exploi-tative system intended to make money by the Brigadesat their expense.

The current system of training is guided by theTraining Guidelines issued by the Ministry of Education,which stipulates hours of study as shown on table 2below;

Subjects Year 1 Year 2 Year 3English 4.5Bookkeeping 4.5Maths/Trade 3 4 4Management 4.5Technical drawing 4 4 4Theory 6 7 7Practical 13.5 11.5 11.5Total per hours week 31 31 31On-the-job per year 8 weeks 16 weeks 16 weeksAll numbers relate to weekly clock hours on the basisof 42 weeks per year

The amount of time spent on- the- job training in thefirst year accounts to 19% and 38% in the second andthird years of training respectively.This is a big reduc-tion from the original 80% production and 20% class.Trainees currently spend more time in class and at prac-tical workshops thus reducing their exposure time onproduction.

The trainee/teacher ratio is 1:16 for trades groups and1:20 for Business Studies.

The government pays subsidy at different rates basedon the trade factor of the course taken and the level oftraining. Courses leading to a C or B certificate are paidless than those at National Craft Certificate level.Trainees with disabilities are paid at higher rates thantheir counterparts as shown on table 3 below

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Course Level Subsidy Bricklayers and Carpenters C & B $1217Bricklayers and Carpenters National Craft $1439Architectural Draughting National Craft $1827Hearing impaired Group (Carpenters) C & B $1495Auto Mechanics C & B $1667Auto Mechanics National Craft $1992Business Studies National Certificate $1217Currency in US$: Subsidy denotes grant per capita perannum

• The total disbursements for the year 2006/2007amount to US$9 607 104 for 7513 trainees enrolled inthe 41 Centres.

• This enrolment comprises 2708 female and 4805 maletrainees.

• The government subsidy accounts for about 80 to 90%of the Brigades recurrent Budgets.

• The individual Centres are required to raise the remai-ning 10 to 20% through their income generating acti-vities.

• The rate of success to raise the 20% differs from oneCentre to the other.

• Some Centres have resorted to setting up commercialactivities, which might not directly contribute to onthe job training for trainees.

The Brigades Centres charge fees as a way of cost sha-ring.These fees vary from one Centre to the other and arecent study carried out in August 2006 showed thatthe lowest fees charged was US$50 per annum and thehighest at US$125. Depending on the size of theBrigade in terms of student enrolment, Centres can raisebetween 3 to 5% of the total cost of training fromschool fees.

The government policy is that no child will be deniedschool for lack of school fees and trainees from destitu-te families are paid for by the social welfare system runby local authorities.

The Brigades are not exempted from paying the ValueAdded Tax, which is levied on a number of commoditiesused for training.

The government has set the following conditions forBrigades to qualify for subsidy;• The Brigade is registered under the Notarial deed of

Trust• The Brigade shall have functioning Board of Trustees

established according to criteria set in the Deed ofTrust

• The Brigade shall have its own defined policies cove-ring day-to-day management of the Brigade activitiesrelated to training.

• The Brigade shall offer approved training.

4.0 Results

The Brigades movement has experienced growth fromhaving 24 active Centres in 1990 to 41 in 2006 in spiteof the public perception that these institutions offerlow quality training and that some of them mismana-ged.Although Training with Production has undergonechanges over the years, Botswana has made the experi-ment distinctive over 40 years with its role as a signifi-cant formal training provider; the Brigades have a com-bined enrolment of 7513 full-time trainees.

4.1 Details

• The Brigades have successfully continued to providetraining with production programmes to many youngpeople.The number of programmes offered currentlystands at 20 different vocations.Three Brigades wereupgraded in 1999 to offer programmes up to NationalCraft Certificate, which has resulted in noticeable trai-nee progression from B Certificate to National CraftCertificate.

• The Business courses offered at the Brigades;Certificate in Business and Accounts and Certificate inSecretarial Studies are examined by the Institute ofAdministration and Commerce and the qualificationsgained is an entry requirement to a Diploma course atthe same institute.

• 30% of the Centres were registered and accredited byBOTA by the end of June 2006. [3] This is an indica-tion that Brigades meet BOTA standards and instruc-tors have applied in large numbers for registration andaccreditation as trainers and assessors.

• The government has relied on Brigades as vehicle forboth skills provision and rural development.With thecurrent unemployment estimated at 23%, the Brigadeshave continued to create employment opportunitiesin the rural areas and in some small villages theCentres remain the major employers.

• The Brigades serve the their respective communitieswith affordable goods and services in spite of the stiffcompetition which has forced some of them to scaledown their operations.The Centres still remain‘Centres of Development’ for local communities sincethere are able to adopt and adapt to new technolo-gies.

• Brigades graduates compete favourably in the job mar-ket with improved qualification.The introduction ofbusiness courses such as bookkeeping and accountsand entrepreneurship for all vocations has enabledsome graduates to successfully venture into self-employment.

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5.0 Challenges

The Ministry of Education commissioned a consultan-cy in 2001 undertake a comprehensive and indepen-dent evaluation of the Brigades in Botswana in order toevaluate their objectives and all aspects of their opera-tion with a view of finding the most effective model forthese institutions in serving the current and future soci-al, technical and economic needs of their Communitiesand the nation at large. [4]

5.1 Details

The Consultancy recommended a major re-alignmentof existing Brigades, which will necessitate the organisa-tional separation of training from production.• The training function of Brigades should in future be

subsumed into Community Technical Colleges to beregistered under the Education Act under portfolioresponsibility of the Department of VocationalEducation and Training.

• The Production to remain with Community BusinessBrigades, which shall be autonomous community, con-trolled retaining the original community ethos of earlybrigades. [5]

The Government is working on the viability of therecommendations and continues to consult communi-ties and other stakeholders.

The Income tax (Amendment) Act 2003 regardingPublic Trust, Charities, Sport Bodies etc which requiresthat ‘from tax year 2004-2005 onwards the charitable,religious, educational institutions and public trusts aswell as social or sporting associations will not enjoyblanket exemption from income tax as was the casebefore’. [6]

The Brigades which have not been tax in the past willhave to pay tax on surplus not ploughed back to deve-lop the Centres.

6.0 Conclusion

‘The basic purpose of any educational system shouldbe to prepare men and women who at every level ofeducation and whatever moment they go out of theschool, are able to integrate themselves into the activeand productive life of society’. [7]

The writer hopes that the issues raised above willassist the people of Ethiopia in their deliberationstowards the establishment of a workable and efficientTVET system which will go a long way in raising theskills level of its citizenry.

References

[1] Revised National Policy on Education (RNPE) adopted in Government Paper No. 2

[2] A Report of The Tracer and Evaluation Study of The Botswana Brigades, May 1995

[3] BOTA News; Issue Number 16. June 2006[4] Final Report;A Comprehensive Evaluation of the

Brigades in Botswana December 2001[5] Final Report:A Comprehensive Evaluation of the

Brigades in Botswana. December 2001[6] Incentives to investment in Botswana –An income

tax perspective: Botswana Unified Revenue Services[7] Education with Production:Volume 7 No 2

April 191 pp 7

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1.0 Lilongwe Technical College background

Lilongwe Technical College is responsible for provi-ding the vocational and technical training as demandedby industry in particular and the nation at large.TheCollege was established in 1963 with the overall goal oftraining and supplying craftsmen and women to meetthe never-ending industrial demands. It is the biggest ofthe seven Public technical colleges in Malawi and itdischarges its functions through six departments name-ly:Administration,Applied Sciences,Automobile,Commercial, Construction and Engineering.

2.0 Justification for the establishment of a production unit

The need for the Production Unit was based on thefact that the college faces problems of acquiring ade-quate materials and supplies especially hardware andraw materials for practical exercises, modern produc-tion techniques, and for the development of traineemanipulative skills.These shortages sometimes led totheoretical aspects gaining precedence at the expenseof the acquisition of vital practical skills.

The funds which are generated, are used to purchasetraining materials such as hand tools, equipment, andtextbooks plus paying utilities and part-time teachersand employees under the Production Unit.

3.0 Aims of the production unit

The aims of the Production Unit are as follows:

a) To enrich or revitalize vocational and technical trai-ning programmes conducted by the college;

b) To assist the college to generate extra funds throughthe production and sale of goods and services to thepublic;

c) To provide industrial attachments to the studentswho fail to get attached to industry; and

d) To promote self-reliance and entrepreneurial skillsamong trainees and their trainers by providing anopportunity to develop their attitudes towardsindustry, business, and producer-consumer relations-hips.

4.0 Advantages of the production unit

a) Training programmes have become meaningful astheoretical knowledge and practical skills are provento be useful by producing marketable items or ren-dering services.

b) Trainees are motivated to learn as the knowledgeand skills acquired enables them to see tangible evi-dence of the value of their skills in the form of aproduct;

c) The instructors derive professional job satisfactionfrom the unit because it provides them with realopportunity to demonstrate their technical knowled-ge and skills, and keeps them up-to-date with thecurrent technologies;

d) The funds supplement the low funding the collegegets from government;

e) It gives students hands on experience where the col-lege does not have training materials; and

f) Items for sale are displayed on public ‘open days’and act as an incentive to visit the college, as theitems are available at a quality and cost not availableelsewhere.

5.0 Limitations of the production unit

a) Most of the staff members are civil servants andtheir primary duty involves teaching or training andnot manufacturing or processing goods or renderingservices.This makes it difficult to meet a productionschedule.

b) The physical facilities including classrooms, works-hops, and machines are based essentially on a trai-ning need.Their quantity, location and type allreflect this and as such an instructor can interferewith learning if production orders are in progress.

c) Conscientious teachers try to make use of the trai-ning materials by designing suitable projects fortheir courses. But some teachers takes advantage ofthe production and use the materials for their ownprojects.

d) The college charges are very minimal and as such itgets less profits.

e) There are no specialized personnel and hence tea-chers end up handling the jobs.

f) Some departments at times contribute more thanothers and this is unavoidable and should be recog-nized at the outset.

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Increasing training activities and income: the example of Lilongwe Technical College, MalawiGodfrey B.C. Kafere

g) Another practice that hinders the effective opera-tions of the scheme is the widespread use of thefacilities of the college by staff members.To regulateor control such practices is a great challenge for theoperation of the scheme.

6.0 Share of training costs that are recovered

There are many ways of how the college generates itsincome and these are: hiring out facilities and offeringservices to the public, conducting consultancies,making items for sell and offering parallel programmesat economic value.The government authorized thepublic colleges to retain 100% of the funds realizedfrom Income Generating Activities. Sharing of the fundsis done as follows:

a) Category A:The funds are used to pay full-time andpart-time teachers per teaching hours of parallel pro-gramme courses and also paying members of stafffrom the Production Unit;

b) Category B:The department conducting the consult-ancy or work gets 60% of the profits and the collegeretains 40%;

c) Category C: Purchase of training materials, fuel andfood for the students plus paying of utilities such aselectricity, water, and phone bills; and

d) Category D: Staff loans are given to members of staffat a recovery rate of 5% and also the funds are usedfor staff development in areas of specialization.

7.0 Activities that can strengthen income generation

In order to strengthen the income generating activi-ties and to make production-supported training effecti-ve and efficient, the following guidelines should beobserved:

a) The primary function of the college is in trainingpeople for employment and the production of goodsand services for marketing is secondary.Accordingly,training must not be subordinated to production butallied to it and supported by it whenever it is quiteclear that the job has good training value.

b) Particular job orders from staff members or outsi-ders must be accepted only if the work requested,adequately reinforces the training objectives of thedisciplines involved.

c) Certain raw materials supplied for a specific and par-ticular production job order should be strictly usedfor that job.

d) It is extremely important to secure the cooperationand the participation of all staff members in suppor-ting and accepting the idea of establishing theProduction Unit.They must be quite clear of thebenefits, which will accrue both in job satisfactionand in monetary terms.

e) There is need to regularly advertise and market theProduction Unit through the media and holding ofOpen Days.

8.0 A suitable production order

The decision to what constitutes a suitable productionorder lies with the Heads of the Departments concer-ned as they use their professional and technical judge-ment.A suggested frame of reference of value to allorders including clients is as follows:

a) A suitable job does not contradict the stated aimsand objectives of the college, nor is its acceptanceor its rejection influenced by the social status of theperson requesting the job.

b) A suitable job uses trainees at the appropriate stagein their development. It should fit their level of com-petence or slightly exceed it.

c) The job will be more suitable if it uses less repetitivetask elements.

d) A job that requires an extended period of time tocomplete, is likely to be unsuitable (i.e. more thansix weeks).

e) A suitable job must cover at least the costs of materi-als, overheads expenses and labour.

f) A production order that does not accept any imper-fection in quality and workmanship is unsuitable.The customer should be made aware of this fact.

g) A customer must agree to pay in full for the cost ofthe goods or services at the time of collection.Thegoods should not otherwise be released.

9.0 Increasing non-formal and tailor made training programmes

The college has gone into partnerships with other sta-keholders in order to increase access and also improvecapacity utilization. So far the college is working withthe following:

a) Malawi Rural Livelihoods in offering vocational andentrepreneurial skills to the districts assemblies.Thisis an outreach programme where the district assem-blies identifies the people to be trained and the col-lege develops the courses to be offered.These cour-ses are offered in their respective districts and thishelps the trainees to see and own what they havelearned and produced.

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b) Malawi Industrial Training Association in offering tai-lor made courses at their factory premises.This is agrouping of the five major companies in Malawiwhich felt it important to train their employees rightat their companies.The trainees learn using theirequipment and machines and as a result they under-stand easily the various skills being taught.

c) Ministry of Health in offering upgrading skills totheir artisans in various fields of specializations.

d) CISCO International in offering ComputerNetworking, IT Essential and shortly the college willbe offering Wireless Networking.The agreement onthis is that 30% of every class should be female andthe college has seen a big jump in female enrolment.

e) The College Departments in offering new program-mes such as Marketing, Human ResourceManagement and Business Administration.

f) Parallel Programmes were introduced by the collegeas a means to increase access and generate income.On increasing access, the college has managed torecruit more than a 1,000 students on parallel pro-gramme as compared to 400 full time students.

g) Trainer of Trainers where the college trains trainersthat eventually go to the impact areas and train thebeneficiaries.The college has done so with the orga-nizations such as: District Assemblies,World VisionInternational, UNICEF, Malawi Social Action Fund(MASAF), Non-Governmental Organizations, etc.Thisis taking the college services to the rural masses the-reby increasing access.

10.0 Monitoring and regulating income generating activities

The college has a Production Unit Committee compri-sing of all Heads of Departments, the Principal, DeputyPrincipal, one Accounts Clerk and one member of theteaching staff and the Principal chairs the committee.AForeman was hired to see the day to day running of theProduction Unit and a teacher was assigned to be aCoordinator of the parallel programmes.The collegeopened a bank account specifically for the scheme.Monitoring on the Unit is through the issuing of gatepasses, job cards and receipts plus the reviewing of jobaudits, profits generated and quarterly financial reports.While monitoring on the parallel programmes isthrough the daily attendance registers, number of stu-dents per class (minimum 10 to run a class) and claimforms which the teachers fill at the end of the month.

11.0 Conclusion

There is potential in allowing public institutions toengage in income generating activities as it supple-ments the low funding they get from government.Theproduction units apart from generating income, providereal work experience and also attachment places forstudents who have failed to find attachment places inindustries.

On increasing access to non-formal training,TVETinstitutions play a major role of training trainers who inturn train others in the rural areas. In recent times,Malawi has seen a lot of districts establishing villagerural polytechnics that needs trainers.

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Background of the technical and vocationaleducation and training (TVET) sector in SriLanka

1.1 An overview of the sector

Sri Lanka is an island in the Indian Ocean and has aland area of 65,525 Sq Km with a population of 19.7million (2005). 21% of the population live in urbanareas.The adult literacy rate is 90.4%.The national avera-ge of unemployment rate is 8.8%. Per capital grossnational income is US$ 1010 in 2004.Around 450,000students sit for General Certificate of Education(Ordinary Level) examination annually. 24% to 30% ofthem qualify to continue to do G.C.E.(Advanced Level)examination expecting to get enrolled in university edu-cation.Although 50% of them qualify for enrollment,universities could accommodate only about 16,000 to17,000 students only.

The Technical and Vocational Education and Training(TVET) has a long history in Sri Lanka, dating back to1893 when the first Technical College was establishedin Colombo. Since then TVET has grown substantially.TVET plays an important role towards employabilityand productivity of individuals, the competitiveness ofenterprises as well as on the national economy.As indi-cated earlier, the lack of places for GCE (A/L) passedout students in the conventional universities has led tofurther expansion of TVET as skills training is the onlyalternative channel for the youth and the school lea-vers. In addition, a large number of youth annuallycoming out of different points of school system are insearch of avenues of education and training leading togainful employment.To a lesser extent TEVT also provi-des opportunities for working adults to gain furtherqualifications through skills upgrading and further trai-ning and also retraining for new occupations.At pre-sent, there are about 1200 public and private sectorTechnical and Vocational Education and Training (TVET)institutions registered to conduct pre-employment trai-ning programmes.

The Ministry of Vocational and Technical Training(MVTT) has the major TVET providers under its wingaccounting for most of the public sector TVET enrol-ment. MVTT has overall responsibility for policy formu-lation and coordination, provision of quality TVET and

other related services such as setting skills standards,accreditation of courses, testing and certification, tea-cher training and staff development, curriculum deve-lopment and research and MVTT facilitates the abovethrough the organizations under its purview.

The government sector TVET providers could basicallybe identified as Government Departments and statutorybodies.The Department of Technical Education andTraining (DTET) as the only department under MVTThas an island-wide network of 38 technical colleges.TheVocational Training Authority (VTA) which caters mainlyto the rural youth provides training through a networkof 218 Vocational Training Centres. NationalApprenticeship and Industrial Training Authority(NAITA)established to broad base the traditional apprenticeshiptraining to make it accessible to a wider section of thepopulation, deliver the industry based on-the-job trai-ning to the school leavers and has 3 national level trai-ning centers. Beside these institutions,Tertiary andVocational Education Commission (TVEC) function asthe apex body of the TVET sector and is responsible forpolicy formulation, registration of providers and accredi-tation of courses. National Institute of TechnicalEducation (NITE) is mainly responsible for technical tea-cher training and curriculum development.The latterfour are falling under the category of Statutory Bodies.

This categorization is based on where and with whomthe powers are vested with regard to the general andfinancial management matters. Both categories getfunds from government consolidated fund (Tax reve-nue) voted into the respective Ministries andDepartments and Ministries, in turn allocate funds topublic sector TVET providers. However, the TVET provi-ders differ in;

i. Governing Council/Board of Management: DTET hasno governing council whereas statutory bodies aregoverned by such councils appointed for a fixedterm.

ii. Flexibility in financial and administrative regulations:DTET is not flexible whereas statutory bodies havelimited flexibility as governing councils or board ofmanagement can take decisions on general andfinancial matters.

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Improving capacity utilization and income in TVET institutions in Sri Lankaby Gaminie Gunasignhe

iii. A statutory authority can introduce its own financialrules and regulations or adopt Government Financialrules and regulations.

iv. Departments are given the financial allocationsthrough annual estimates voted by the parliamentunder various vote numbers and headings wheretransfers cannot generally be made from a capitalitem to recurrent item.

v. Statutory bodies are given block grants for capitaland recurrent costs

vi. Any generated income needs to be sent to consolida-ted fund by Government Departments,Authorities/Boards can retain same to meet theirown expenses. However Treasury will deduct theestimated annual income from the annual grant.

In addition to MVTT, Ministries of Skills Development,Education, Sports, Fisheries, Housing and Social Servicesare also involved in TVET to a certain extent.

1.2 Major issues in TVET

i. Public Sector TVET providers cannot meet the everchanging skills need of the industry. Employers areconcerned over inadequacy of the quality and rele-vance of the products of the training.

ii. Lack of unified system for quality assurance makethe comparison of the products from different trai-ning providers a difficult task.

iii. The curriculum content and the modes of deliveryof training is lacking in work place ethics due toinadequate relationships with the world of work.

iv. Lack of resources, mainly funds for upgrading ofequipment. machinery and curricula.

1.3 Reforms introduced

Presently, the TVET sector reforms are being imple-mented and a number of significant changes relating toquality and relevance aspects have occurred.

The Major reforms include;i. Developing a National Policy on TVET and adopting

of a unified National Technical and VocationalTraining System introducing Competency BasedTraining (CBT) and establishing a National VocationalQualifications (NVQ framework).

ii. Rationalization and coordinating training activitiesimplemented by TVET providers

iii. Promoting private sector participation in TVETiv. Changing the role of government from provider to

facilitator and standard setter and the related encou-ragement for cost-recovery, self-financing, autonomyand cost sharing by beneficiaries.

2.0 Funding for TVET.

2.1 Main source of funding

Government is the main funding source for thepublic training providers.

Comparison of Allocation of Funds to TVET sectoragainst that of HRD , Ministry of education and thetotal allocations to all Ministries

Year 2004 2005 2006 2007 LKR ‘000 LKR ‘000 LKR ‘000 LKR’000

estimate estimate

Allocations 481,587,521 609,122,026 721,661,931 628,451,306to all MinistriesHuman 60,677,871 73.171,011 93,674,458 114,223,668resource Development% 12.6% 12.0% 13.0% 18.2%Ministry of 13,850,590 16,822,900 22,127,710 24,909,640EducationMVTT 1,845,943 2,722,270 4,441,750 5,085,950and DTET% 0.38% 0.45% 0.62% 0.81%

It is clear that there is a steady increase of funds forTVET sector over the years

The funding for TEVT is 0.20% in terms of GrossDomestic Product in 2006

In addition, this public funding is supplemented byfunding from donor and lending agencies/developmentpartners and usually this funding is utilized for procure-ment of advanced training equipment (support for initi-al capital expenses) and staff development programs inselected areas.

2.2 Funding issues

It has been an accepted fact for the last one-decade ortwo that government funding alone cannot be justifiedfor the enhancement TVET in Sri Lanka.

Service oriented operation of the Government TVETproviders does not promote or emphasize the need forcost effective mechanism where as the need for suchmechanism has repeatedly emphasized by some donorsand lending agencies Thereby finding ways and meansfor implementing the TVET reform components of cost-recovery, self-financing and autonomy came in to affect.

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2.3 Alternative funding methods

Identifying alternative methods for financing TVETand exploring how the existing financial resourcescould optimally be utilized, depend on methodologiesof training delivery and the venues where the TVET isdelivered.

The modes of delivery of TVET have a direct impacton the cost of training, the control and regulatorymechanisms, responsibility for training provision andalso to who contribute towards the cost.

Institute-based face-to-face delivery

This is the method mainly adopted by majority ofthe training providers and the institutes have theirown staff for this mode of delivery.This training deli-very is comparatively expensive and courses areconducted on full-time and part-time basis.As thepart- time courses are meant for employees from theindustries course fee is levied by the providers.

i) Increasing of course fees charged from studentscoming from industry on a part time basis tofollow courses during week ends and evenings

Experience of DTET

DTET conduct part time courses of 3 and 2 yearduration through the Technical Colleges, and theannual expenditure is about LKR. 21 Million. In 2002the cost recovered was just LKR 2.8 Million by levy-ing a course fee of LKR 750 per student year.As theexpenditure is very high, to recover a significant por-tion of the cost, the course fee was increased to LKR2000 in 2004 .The table given below explains theincrease in course fee.

Course fees charged by DTET

1998 1999 2000-2003 2004Long term LKR. LKR. LKR. LKR. courses duration 450.00 675.00 750.00 2000.001 year or above

ii) Examination fees from part-time students andthe repeaters in full time courses – experiencefrom DTET

All part time students who are sitting for the finalexamination and the full time students who arerepeating the examination are charged examinationfees based on the number of subjects as detailsbelow:

• One subject- LKR 25.00• Two subject-LKR 50.00• Three subject-LKR 65.00• More than Three subjects-LKR. 85.00

iii) Conducting fee levying courses – experiences ofDTET

Courses in information technology offered to schoolleavers on fee levying basis generally are popularand costing of the courses is done considering theexpenditure for remuneration of personnel, material,electricity, water and telecommunications etc. andincludes an additional amount for maintenancerequirements with a certain percentage of income tobe sent to the government revenue ,as explained inearlier.The charges will be per student basis and allincome will be credited to the government revenueand required expenses will be borne by the treasury.

Income generated (IGA) by technical colleges-comparison for three years in LKR ’000

Year 2003 2004 2005Total 16,446,761 21,539,054 21,461,625Received in LKR ‘000Annual budget 419,054,070 425,482,665 602,305,000expenditureIGA as a % of 3.92% 5.06% 3.56%annual budget

The amount remitted by the technical colleges toDTET account includes collection of student regis-tration and course fees, examination fees, and moneyreceived by selling products made by studentsduring their practical work etc.

Income generated by NAITA in LKR’ million

Year 2003 2004 2005 2006Estimate

Income Generated 7.4 16.0 8.5 13.0Total Expenditure 225 257 288 380IGAs as % 3.2% 6.2% 2.9% 3.4%

Income generated by VTA in LKR’ million

Year 2004 2005 2006 Estimate

Income generated 16 16 22Total budget 278 298 445IGAs as % 5.8% 5.4% 4.9%

IGAs of NAITA and VTA are mainly through registra-tion fees, course fees, and trade testing etc.

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iv) Technical colleges as Production and ServiceCenters- Examples from DTET

The technical colleges (TCC) operating under DTETwill undertake possible production or service orien-ted activities from out side.This method was devisedto serve the following purposes;

1. Student learn in simulated world of work enhan-cing their chances for employability throughdeveloping self-confidence and entrepreneurialcompetencies

2. It will create entrepreneurial management cultu-re in TCC

3. It will also optimize human and physical resour-ces utilization

4. It acts as an income generating (cost recovery)exercise.

The work undertaken depends upon the type oftechnology and skills taught in the TCC. It alsodepends on the capabilities and attitudes of the rele-vant teachers and the TCC management.

TCC generally lack in entrepreneurial skills or attitu-des for such ventures.There are no motivations forcolleges to undertake such work because any inco-me generated will be remitted to government reve-nue and the treasury provides funds for this kind ofactivity. However the income generated will coveronly the cost of services plus an additional 10 % forthe amount of funds utilized for the purpose.Although this method has been evaluated as aninsignificant mean of income generation it keeps tea-chers in the TCC for longer period than their con-tact hours with the students and provides additionalincome for them and a remuneration for the servicesrendered by the students. It is expected that onlythe students just completed the courses will be utili-zed in the production work, but some times suchcourse completers are not available. DTET regulatesthe work in production units through circularsgiving guidelines.

Furniture making or repairs , auto servicing &repairs to vehicles, production of metal parts in themachine shops, material testing for civil construc-tion , service contracts for servicing of electronichouse hold items, refrigerators and air conditionersare good examples.The table given below shows towhat extent the provisions for Production Units arebeing made used by TCC. It is apparent that,TCC arenot yet motivated to generate income and to lookfor income generating opportunities.

Year 2004 2005 2006Funds allocated 2,000 3,000 4,000LKR’000% Utilized by TCC 7% 42% 49%

v) Commercial Arm

Establishment of Commercial arms in two collegeson pilot basis

Giving autonomous status to two technical collegesis a condition agreed on for a loan given toGovernment of Sri Lanka (GOSL) by the AsianDevelopment Bank (ADB) to develop TechnicalEducation and Vocational Training through SkillsDevelopment Project in 1999.Two separate commer-cial arms have been established in the two collegesas the first step in 2005 .The TechnologyDevelopment & Training (Guarantee) Limited (TDT),Commercial arm of the TC in Colombo was establis-hed in December 2006. It is a limited liability , fullygovernment owned business undertaking underDTET and the Ministry of Vocational and TechnicalTraining, registered under the Registrar ofCompanies. It has a Chairman, Board of Directorsand a CEO.The chairman is assisted by an AdvisoryCouncil comprising representatives from industry.

TDT has developed its marketing plan outlining theapproach to obtain a significant growth in TVET byplanning implementing and managing VT program-mes and their services. It is expected to enhance theinternal efficiency of Technical College.The surplusincome will be reinvested in vocational training andother activities.

TDT has been granted approval in the use of allassets at the College in the implementation of pro-grammes by TDT, once Board of Directors approvesuch activities. However all current programmesimplemented by Technical College will remain unal-tered and undisturbed.

TDT offers a mix of TVET programmes over theweek ends and as evening courses as suitable.

Presently pricing is on a cost plus marginal profitbasis with a facility to increase pricing based ondemand and popularity.

Teachers designing and managing new programmesare being adequately compensated with financialprospects and opportunities for professional deve-lopment.

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Current status

The income generated in its first year is LKR. !.5 mil-lion through offering training programmes, conduc-ting examinations for various organizations for staffrecruitment, efficiency bar and staff promotionalpurposes, offering courses for different target groups, preparing students for professional examinationsboth national and international and providing con-sultancy services to small and medium enterprisesetc: Presently about 1/3 of full time teachers areinvolved in the activities of TDT

vi) NGO sponsored courses Tailor made courses or regular short term coursesare conducted on the request of Non GovernmentalOrganization or sponsors.Alternatively, managers ofthe technical colleges may also approach such orga-nization to get sponsorships for courses that are indemand. Here all recurrent cost and capital expendi-ture excluding the cost of infrastructure will beborne by the external agencies.As per existing regu-lations of DTET, fees for the use of resources of theVTI will be charged and remitted to the governmentrevenue.This method is widely used by TCC in tsu-nami affected areas in the coastal belt of the countrywhere the demand for skilled manpower for recon-struction and rehabilitation activities is very high.Conducting short-term courses in building trades isan excellent example.

vii) Public Private Partnership (PPP):All income generated needs to be directed togovernment coffers and nothing can be made usedeven for remuneration for personnel for any extrawork, let alone plowing back to cater to develop-ment/maintenance needs of the college, courseslevying fees from individual students are not beingfavored by TCC . Instead such part-time courses aretailor made to the requirements of organizations andthrough an agreement or memorandum of under-standing with such organizations, whether professio-nal bodies, government institutions or even compa-nies in the private sector.The fees could be chargedas per the agreed rates to cover cost for remunera-tion of personnel, utilization of equipment & facili-ties, material cost, utility costs like electricity, waterand telecommunications with additional amount forpurchasing consumables, maintenance work whichare all being laid down in the Agreement with somepercentage of income to be sent to the governmentfunds also being indicated.This way institutionscould recover cost of offering such tailor made cour-ses. Signing a MoU is a way forward for making useof part of the income back in the college once the

items for cost recovery are clearly written in theagreement, without diverting all income to thegovernment. Here the partner organization usuallyadvertises, recruits and collects the fees from thetrainees and pays for the agreed items in the costestimation.In some instances, the partner may provide resourcepersons, equipment consumables and also reprodu-ce teaching materials which call for changes accor-dingly in conditions in the agreement.

viii) Donor FundingDonor support has also been vital for TVET develop-ment. Funding will usually be for providing equip-ment, infrastructure facilities, staff training andupgrading. Most donor support is for short term andmainly for capital costs and helps the TEVT systemto receive advanced technology. DTET institutionsare presently being supported by donor funding asindicated below.

Funds from German Federal Ministry for EconomicCooperation and Development and implemented byGTZ during the period from July 2005 to December,2008 up to euro 10 million

Funds from government of Japan through JICA to beutilized from July, 2005 to June , 2009 costing US$5.0 Million

Funds from South Korea from 2005 to2007 throughKOICA costing Us$ 2.30 Million

Conclusion

Overall cost of technical and vocational training is onthe increase and budgetary constraints are more severein Sri Lanka, where vocational training is mainly finan-ced by the state funds. It has been an accepted fact forthe last one-decade or two that government fundingalone cannot be justified for the enhancement TVET inSri Lanka. Staff emoluments and fixed costs consumethe major share of the cost. However service orientedoperation of the Government TVET providers does notpromote or emphasize the need for cost effectivemechanism. In most instances training is provided ent-irely free of charge, few courses are fees levied , whilemany trainees also receive a stipend during training.Theneed for cost recovery mechanism has repeatedlyemphasized by some donors and lending agencies.Thereby finding ways and means for implementing theTVET reform components of cost- recovery, self-finan-cing and autonomy came in to affect.

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Income generation was never considered as a priority,Recovery of the cost is the term usually used for variousinitiatives promoted. IGAs account around 5 to 6% ofthe total annual budget of the public TVET providers.

Some of the initiatives like Production Unit conceptswere introduced for the purpose of maximizing the uti-lizations of both physical and human resources and alsoto give the world of work experience to trainees whohave completed the courses.

Course fees levied to recover the cost needs to beremitted to state coffers and cannot be retained andused by the training centre.The IGAs account for only5-6% of the total annual budget of all training providers.Obviously there is no incentives for institutions to gofor income generating activities.

Conducting of fee levying tailor made courses foridentified target groups in collaboration with privatesector and public sector organizations, and professionalbodies where agreements or Memorandum ofUnderstanding signed seems a better option as part ofincome could be utilized for maintenance/developmentactivities if identified in the agreement.

The recent initiative of establishing commercial arms,the fully government owned business undertakingunder DTET, registered under the Registrar ofCompanies has potential to be accepted by both tea-chers and DTET officials.

However the success of such ventures depends to alarge extent on the capacities of the managers and theteachers of technical colleges to accept the challenge ofbeing entrepreneurs.There is great need for having pro-per performance appraisal system for staff where per-formance will be measured on outcome and quality andhere due recognition could be given to individuals whoreally take up the challenge to be innovative and entre-preneurial.The government of the day should developan conducive environment with adequate changes inorganizational system and procedures such that staffand the institutions are motivated to look for opportuni-ties for cost recovery, and income generation and incre-asing of capacity utilization thus improving efficiencyand effectiveness of technical education and training.

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Promotion of private training providers in Ugandaby Yusuf Bachu

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1.0 Introduction

Technical Vocational Education and Training (TVET)has of late taken a very important role in most develo-ping countries with more pronouncement, visibility andcontributions to the social and economical develop-ment of the Countries. Particular emphasis and effortsare being made on the enhancement of partnershipamongst the different players i.e. Government, the trai-ning providers and the private sector or indeed bet-ween the public and the Private Sector.

In Malawi, backed by the TEVET Act, active governan-ce and management structures, effective implementa-tion of meaningful training programmes, and aggressiveInformation, Education and Communication (IEC) cam-paigns, both the TEVET System as well as the Authorityhas settled in very well in the social and economiclandscape of the country.As opposed to the previoustechnical and vocational training and education system,which was characterized by minimum involvement ofthe private sector, non-responsive institutional structu-res, outdated curricula, inappropriate legislation, andunsustainable financial base, the current TEVET Systemis enjoying reasonable recognition and support inMalawi.Through the act, the TEVET system is anchoredby a policy, which has put in place Governance andmanagement Structures complete with funding arrange-ments to ensure the sustainability of the System.

The pedestal of the TEVET System in Malawi stands tobe the TEVET Fund which supports the implementationof the TEVET Programmes.The Employers in the Privateand Public Sectors, through the TEVET Levy, largely con-tribute to this Fund. Employers in the Private Sectorcontribute over 80 % of the TEVET Levy. Similarly, mostof the TEVET Programmes can only excel with the sup-port from the Private Sector Employers.This being thecase, a lot of effort and thrust is placed on strengthe-ning the partnership between the TEVET Authority andthe employers in the private sector.Among otherthings, this entails development of Programmes andstrategies that enhances the involvement of the privatesector employers in TEVET, both in the formal and infor-mal sector. Our experiences in this respect have been acombination of success, and a stride through problemsand challenges.

In line with the theme of this Symposium, this presen-tation focuses on Malawi’s experiences in the promo-tion of Employer’s involvement in the Formal andInformal Sector as a means of promoting private sectorinvestment in the TEVET System.The salient issuesinclude; the Governance structures institutionallyanchoring the involvement of the employers, the extentof the involvement, services and/or type of partnershipsoffered by the TEVET Authority to stimulate the employ-er’s involvement, incentives incorporated, experiences,lessons learnt as well as challenges being faced.

2.0 Background

The Technical, Entrepreneurial,Vocational Educationand Training Authority (TEVETA) in Malawi was establis-hed by an Act of Parliament in July, 1999 and chargedwith the responsibility of promoting, facilitating andregulating technical, entrepreneurial and vocational edu-cation and training.The major purpose is to contributeto the human resource development (skilled workforce)in the areas of Technical, Entrepreneurial and VocationalEducation and Training.

Prior to the establishment of the new TEVET Systemand the Authority in Malawi, through studies and practi-ce on the ground then, government realized that thetechnical and vocational training was facing seriouschallenges and needed a reform.These challenges ema-nated from;• An existence of a fragmented System• Lack of national coherent, demand driven policy• Minimum involvement of the Private Sector –as major

users of the skills• Inappropriate legislation, guidelines and by laws• Limited national technical qualification system based

on outdated curriculum and without recognized stan-dards

• Non-responsive, non-flexible institutional structures• Insufficient, unsustainable financial base and effective

financing mechanisms.

The process, therefore, included conducting studies ofthe previous system, development and launching of theTEVET Policy, formulation and passing of the Act, andestablishment of the TEVET Authority.

Promotion of employers’ involvement in the formal and informal sectors in Malawiby Elliot Mulanje

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2.1 Objectives the TEVET system in Malawi

In line with the TEVET Act and policy, the objectivesinclude:• To promote an integrated, demand-driven, competen-

cy –based modular technical Entrepreneurial andvocational education and training system;

• To monitor gaps between supply of and demand forskills;

• To support the adoption of and application of appro-priate technologies;

• To promote managerial and business skills and the spi-rit of entrepreneurial culture with regard to bothwage and self employment;

• To facilitate sound and sustainable financing and fun-ding mechanisms; and

• To facilitate and bring together the expertise andmoderate the different interests of all stakeholders.

2.2 Guiding principles

The TEVET System and Programmes in Malawi areimplemented based on the following guiding principles:• Integration of the formal and non-formal training pro-

grammes;• Demand -driven provision of the training and services;• Establishment and maintenance of a private- public

partnership, with shared responsibilities between thepublic and the private sector leading the partners towin-win situations;

• Comprehensiveness in nature;• Equitability;• Independent and autonomous management and gover-

nance.

2.3 TEVETA programmes

Based on the objectives and principles governing theTEVET system, there are a number of programmes thatare being implemented by the TEVET Authority inMalawi which are aimed at the human resource skillsdevelopment for both the Formal and Informal Sector.Amongst these, the main programmes are:1. The Private Sector Training Programme2. The Informal Sector Outreach Programme3. The Apprenticeship Training Programme4. Quality Assurance (Standards and Curricula

Development,Assessment & Certification ,TEVETQualification Framework, Registration andAccreditation of the Training Providers )

5. Levy Collection and Fund Management6. Planning and Monitoring7. Teacher Training8. Information, Education and Communication (IEC)

2.4 Governance and management structures

The TEVET System in Malawi is led by the TEVETAuthority which is an independent and autonomousgovernance structure, set-up by Government, supportedby responsive and flexible management system whichensures strategic relationships and linkages based onsmart partnerships with other stakeholders.TheAuthority is charged with the responsibility of formula-ting policies, strategies and facilitating the implementa-tion of the TEVET Programmes.The Governance andManagement structure includes ;• The TEVET Board – This is a supreme governing body

of the Authority, on TEVET matters including policy,with membership by representation Of stakeholdersfrom the Private and Public Sectors, Civil Society andNGOs.The Board gives directions on the TEVETProgrammes, scrutinizes, approves and monitorsAnnual Budgets and Plans.

• The TEVET Secretariat – This is headed by theExecutive Director, and is responsible for the day-to-day management and implementation of the decisionsmade, and programmes approved by the Board, andsupports the Board.

• The Resource/Service Centres – 3 No, one in eachregion of the country, viz, Blantyre, Lilongwe andMzuzu, for the South, Central and Northern Regions,respectively.These are multi-functional TEVETResource centres, which serve as Satellite Centres forspecialized TEVET services, implementation units forTEVET Programmes, and bring the activities and servi-ces of the TEVET Authority closer to the people.

3.0 TEVET programmes/activities and the invol-vement of the private sector employers

The success of the implementation of the TEVETProgrammes and activities in Malawi has largely depen-ded on the support and involvement of the PrivateSector Employers.This will continue to be so, recogni-zing the pivotal role the Private Sector plays in theTEVET System.The involvement and support by thePrivate Sector’s Employers to the TEVET System andProgrammes spurs from:• Their inclusion in the Governance and Management

Structures of TEVETA • Contributions to the TEVET Levy• Advisory roles to the few SACs that have been establis-

hed i.e. the Catering and Hospitality SAC and theMalawi Industrial Training Association (MITA)

• Their plausible and active participation in theApprenticeship Training Programme

• Curricula Development;Assessment and Certification

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• Informal Sector Outreach Training Programme’sTraditional Apprentice Training Programme, namelyOn-the-Job Training Programme (OJTP)

• Teacher Training• And the formidable partnerships in the implementa-

tion of the Private Sector Training Programme itself.

In general, the employers have shown willingness andpreparedness to work in partnership with TEVETA andcontribute to the TEVET system despite some exceptio-nal situations and occasions.The catch principles havebeen accountability, desire for tangible results in termsof availability of competent and skilled artisans on thelabour market, and realization of direct benefits.

3.1 Funding and financing

The major source of funding and financing TEVET inMalawi is the TEVET Levy.This is as provided by the lawthrough the TEVET Act No. 6 of 1999 demanding bothGovernment and Private Sector employers to oblige inpaying the levy. Currently, the TEVET levy is calculatedand paid at 1% of the total annual wage-bill based onthe pay roll by both the Private and Public Sector.Thiswas initially proposed to be at 2% of the total annualwage bill, but had to be reduced due to private sectorresistance, as they viewed the levy as simply anotherform of tax. Currently, over 80% of the levy is contribu-ted by the Private Sector.

Through vigorous Information Education andCommunication (IEC) campaigns, private sector’s invol-vement in contributing to the TEVET levy has been gro-wing over the past years.The levy contribution fromthe Private Sector has been very phenomenon with anannual average growth rate of over 50% per year for thepast five years. For instance, the Financial year 2004/2005 the total contribution amounted toMK180,000,000 and later exponentially grew to overMK350,000,000 in the year 2005/ 2006.Also the num-ber of private companies paying the levy has beenincreasing every year.The private sector, in general, nowunderstands the need to have the fund that is used totrain the workforce in the country.

To involve the Private Sector more on the running ofthe TEVET system, a number of positive contributionsto the Private Sector by TEVETA have been includedreciprocal to the TEVET Levy, both as an obligation andto bring immediate benefits to the Private Sector. Someincentives, in the form of reimbursements of direct trai-ning costs on the implementation of tailor –made shortterm courses at the workplace were introduced tobenefit the levy-compliant companies.This incentivehas assisted to boost the levy collections and enhance-ment of the partnership between TEVETA and thePrivate Sector. However, a good number of the employ-

ers are still generally contributing to the Levy from thelegal obligation point of view. It is viewed that the suc-cess and sustainability of the TEVET Funding mecha-nism lays on balancing the legal obligation/ aspect, withtangible results or benefits and incentives.

Another form of funding that is increasingly gettingpopular in Malawi is the donation of equipment in thetechnical colleges and provision of scholarships to beststudents in some trades by some companies in the pri-vate sector. For instance, one company, namely PressTrust Ltd has disbursed about MK 20,000,000 (USD144,000) to technical colleges for workshop equipment.Another company in the cement manufacturing –LAFARGE Ltd has offered scholarships to one best stu-dent – pursuing Bricklaying Apprentice Course at eachTechnical College in Malawi.

As technology advances, companies are replacing theirworkshop equipment frequently.The old equipment isthen donated to the technical colleges to be used fortraining.This form of funding is ensuring that the gapsbetween the technologies that the trainees use in colle-ges are in tandem with the ones at the industry.TheILLOVO Sugar Company and others has made positivecontributions on this aspect. Some have donated newequipment ie CISCO donates computers to the colleges.

3.2 Governance and management

The involvement of the Employers from the PrivateSector in the TEVET System and programmes in Malawiis well institutionally anchored by presence and partici-pation of private sector representatives in the variousbodies or organs of the Governance and Managementstructures of the TEVET Authority.This puts the privatesector to have a position of influence to the implemen-tation of the TEVET system and programmes in Malawithat are beneficial and have a positive impact to theirSector which is the engine for economic growth in thecountry.

Their representation are in the TEVETA Board (cur-rently, most members in the Board are from the PrivateSector), and in the Sector Advisory Committees (SACs).The SACs are small out-put oriented working groupswithin a sector in the private sector with the aim ofdetermining sector-specific training needs, settingTEVET standards and modules for occupations and pro-moting TEVET programmes and qualifications withinthe sector.

The formation of the SACs in Malawi has faced a num-ber of challenges, and continues to be so.To date, only afew SACs have been formed and are operational.Themost active one is the Malawi Industrial TrainingAssociation (MITA), though not being a full SAC as such,as per the requirement.This is a grouping of now tencompanies from the Manufacturing/Production and

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Engineering services sector with the common objecti-ves of up-skilling and multi-skilling of artisans at theworkplace for purposes of improved productivity andperformance.This group was pioneered by three largecompanies, namely: Carlsberg/Sobo, Illovo Sugar andPortland Cement. So far, this Association has trainedover 200 Artisans since 2003 in various occupations i.e.Welding, General Fitting, Boiler operations and mainte-nance etc.

The establishment and growth of the Sector AdvisoryCommittees (SACs) has generally been slow in Malawi.

Among other factors this has been due to the following:1) This a new concept and therefore has taken more

time to be appreciated and accepted by the PrivateSector

2) The Private Sector also seems to have capacity limi-tations to cope with the requirements of the SACs.

3) The Private Sector itself does not seem to have awell defined and Proper demarcation of sectors wit-hin itself.

3.3 Participation/involvement of the private sectoremployers in the formal sector/training

Apart from the levy contributions and the participationin the governance and management structures, theEmployers in the Private Sector are largely involved inthe following Formal Sector programmes and activities:

3.31 Implementation of the private sector training programmes (PSTPs)This is one of the major and priority programmeswithin the TEVET System in Malawi which aims atpromoting skills at the workplaces for purposes ofimproved productivity, performance and delivery ofquality goods and services. Under this programmeTEVETA assists the companies in conductingTraining Needs Analysis (TNAs), actual implementa-tion of the training programmes, and reimbursementof part of the training costs to only the companieswhich are Levy – compliant. In a way, this program-me is being implemented as a stimulant to the invol-vement of the Private sector in the TEVET program-mes and an enhancement to the partnership.Skills of conducting appropriate and effective trai-ning needs analysis are noted not to be wide spreadin the Private Sector.TEVETA therefore assists byconducting TNAs in various companies in collabora-tion with the employers. Further TEVETA has nowintroduced tailor made courses in conducting TNAs;targeting the Human Resources and TrainingManagers in the various companies in the PrivateSector to equip them with relevant skills for conduc-ting own TNAs in their respective companies.

The actual PSTP programmes are often short-termtailor made courses in both technical and vocationalskills at all levels in the Companies.Additionally, thecurrent policy provides for 33% of the total trainingcosts incurred in the implementation of the PSTPsas reimbursable by TEVETA.This acts as an INCENTI-VE for both the implementation of the training pro-grammes in the various companies and also theircontribution to the TEVET Levy. In the past fiveyears reimbursement claims for implementation ofPSTPs have grown quite substantially.These havemostly been enjoyed by the larger companies thatoften implement more PSTPsMany Companies from the Private Sector have bene-fited from this program in terms of conductingTNAs, training implementation and reimbursementshence reduction of training costs.They perceive thisas a way of deriving direct benefits from the TEVETsystem and its fund.TEVETA, in collaboration withthe Private Sector Companies, has geared up toimprove further the provision of short-term tailor-made private sector training courses aimed at skillsdevelopment. Currently, the PSTP programme isbeing further developed to include the implementa-tion of commonly demanded short-term tailor madecourses in various occupations for joint participa-tion of all companies at one go.The other strategy on this PSTP window is the MITAtraining programme, as already explained in the ear-lier sections of the paper.Though specific to a parti-cular Association through a memorandum of under-standing, the terms governing the implementation ofthe training programmes are similar to the PSTP.However, the reimbursement enjoyable in the imple-mentation of training programmes through this win-dow is 50 %.Our experience on both the implementation of thePSTP and MITA programmes has been successfuland encouraging. Overall, these programmes havepromoted the trainings and skills development at theworkplace, and greatly boosted the support of theprivate sector employers to the TEVET system in theMalawi.This is evidenced by the fact that most of theCompanies that are active to the TEVET system andcontribute more and regularly to the TEVET levy arethose that often implement the Private SectorTraining Programmes. Both the implementation ofthe PSTPs and claims for training costs reimburse-ment are popular amongst the Banking Sector,which also lead in the contribution towards the levy,as a sector.

3.32 Apprenticeship training Apprenticeship training is one of the major forms of

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formal training that is immensely supported andanchored by the employers in the private sector.Amongst others, part of the TEVET Levy is used inproviding training materials subsidies to the collegesto assist in the effective delivery of theApprenticeship training programme, development ofequipment for training and provision of Bursaries forneedy students.The need for participation by the private sector iseven greater now, in view of the newly introducedCompetency Based Education and Training (CBET)approach being implemented in the reformedApprenticeship Programme in Malawi.This requiresa MUST coverage and attainment of both“Institutional Modules” (attained and assessed at thecolleges) and “Industrial Modules” (attained andassessed at the industry).The private sector provides the most needed attach-ment places for apprentices under this training pro-gramme.Technical teachers during vacations periodsare also attached to the industry for upgrading inskills to ensure that their course delivery in collegesis in line with the industry demands.The industryfurther assists in payment of fees to the colleges forapprentice students attached at their companies.Though this is perceived as an additional financialburden on their part, most companies oblige.However, this is facing some challenges as it is seento limit the availability of the needy places forattachment.The private sector is also involved in what is refer-red to as “direct recruitment” for the employees wor-king with them for a long time without proper trai-ning and qualification, and requiring training andartisans qualifications.This ensures ready availabilityof attachment places and assists in the upgrading oftheir unskilled workers into skilled and qualified arti-sans.The demand of this facility is overwhelmingand limits competition and equal opportunities forentry into the apprenticeship training programme.Professions from the private sector, in various fieldsi.e. business management, health and safety etc arealso, sometimes, engaged to teach at the collegesFundamental Modules required in the new CBETsystem when teachers in these areas are not availa-ble at the colleges.

3.33 0ther special apprentice training program-mes driven by technological changes These are private sector driven initiatives responsiveto demands and technological Changes, very welco-med within the TEVET system. So far, the DaimlerChrysler, the makers of Mercedes Benz cars inGermany (a private company) in collaboration withthe local franchise holder, Stansfield Motors Ltd

(another private sector company in Malawi) andTEVETA through support from GTZ have introduceda course in MECHATRONICS.This course aims attraining apprentices right at Stansfield Motors majorelements of modern car mechanical and electronicdevelopments so that the artisans are able to serviceand maintain cars that are becoming more electro-nic based in most of their systems.This cooperationis in the framework of Public Private Partnership(PPP).The aim of this PPP cooperation is to providepractical training experience in line with the requi-rements for trainers and trainees in the field of auto-motive mechatronics. Malawi has been selected toserve as the centre for Angola, Zambia andZimbabwe.TEVETA has been incorporated to ensure that thecourses offered meet the requirements of theMalawi TEVET Qualification Framework.The trainingwill commence in January 2007.Technical teachersfrom Malawi will also be trained to ensure that theyare able to train and supervise mechatronic studentsin their colleges in future when the mechatronicsprogram will be integrated into the current apprenti-ceship training programme.Other such technology changes-driven special trai-ning programmes are looming in the PaintingIndustry and Building Industry’s sub–sector ofBuilding fittings and Cabinet Making.

3.34 Curriculum developmentAs Malawi has embraced the Competency BasedEducation and Training (CBET) which emphasizesdemonstration of competence by the trainees andensures life long learning, its curricula – by design –has to be developed in close collaboration with the“end users of the product that the system is tryingto produce”.The private sector is therefore directlyinvolved in the curriculum development process toensure that the needs of the private sector are takencare of right at the very beginning of the develop-ment of the courses that will eventually be used toshape the future employee of the private sector.In this case, the Private Sector releases its experts invarious fields and occupations to curricula develop-ment workshops to develop Standards, Modules,Assessment Tools etc for respective curricula. So far,a numbers of curricula in various occupations havebeen developed in Malawi with remarkable partici-pations and contributions by the Private Sector.Thissignifies the Private Sector’s commitment and recog-nition of their valuable role to the curriculum deve-lopment process. However, capacity limitation fromthe companies in the Private Sector have been notedto impede the Curriculum Development and otherquality assurance activities.

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3.35 AssessmentThe CBET approach that is used in Malawi also ent-ails that the students are assessed in colleges bytheir instructors.An External Verifier then verifiessuch assessment.This ensures that the competencethat the student is certified to have attained isindeed the one required at a particular level on theNational Qualifications Framework (TQF).The priva-te sector is the major partner in this process ofVerification. Similarly, when the trainees are at theindustry for attachment (covering industrial modu-les), the employers become the trainers and theInternal Verifiers at the industry. The involvement ofthe private sector in the assessment brings confiden-ce to the student results as it shows that the studentis ready to joint the private sector or indeed anyother sector and perform according to the standardsexpected of a graduate of a particular level.

4.40 Participation/involvement of the private sector employers in the informal sector/training

In Malawi, the Private Sector’s involvement is appropri-ately entrenched to the extent that it is involved in theInformal Sector Training.This has been seen to be a verygood and welcomed development as the informal sec-tor forms a big part of the demand for TVET. In the past,it was very difficult to convince the private sector to beinvolved in the informal training.The mere use of TEVETlevy funds for informal sector training, initially caused anuproar in the private sector because it was consideredthat the informal sector was a competitor.The privatesector now recognizes the importance of training in theinformal sector and the synergy that exists between theinformal sector and the private sector.

One of the popular and successful training program-mes being implemented in the informal sector with thesupport of the private sector is the modernized traditio-nal apprentice training approach; namely,“On–the–jobtraining” (OTJTP). In this training approach,TEVETAgoes into a Memorandum of Understanding with donororganisations such as DFID, Norwegian Church Aid andother national projects such as the Malawi Social ActionFund (MASAF) and the Secondary Centres DevelopmentProject (SCDP) that construct infrastructure such asschool blocks and other community amenities to trainyouths from around the areas where these constructionprojects are taking place.The youths are trained in tra-des or occupations like bricklaying, carpentry, plumbingand many more, following a properly developed curri-cula and set modules. Such training is delivered by pri-vate sector contractors that are engaged in the con-struction of the infrastructure – through their Foremenand Supervisors as the Trainers.TEVETA facilitates the

implementation of all activities from sensitisations andrecruitment to certification, and provides the trainingmodules and assessment and certification of the trai-ning.

Provision is also now being considered to give anopportunity for the willing graduates from this OJTP toenter into the formal apprenticeship training by exemp-ting them from some of the learning outcomes alreadyacquired through this programme. In a way, this willalso assist in the integration of the formal and informalsector training.

5.0 Challenges

The involvement of the private sector Employers inthe TEVET activities in Malawi has not been withoutchallenges.Among others, the following have been themajor challenges and the efforts being made to addressthem:

5.10 Low quality of trained artisans

There appear to be a continuing lack of sufficient des-irable quality of skilled and competent Artisans, as wellas technicians and other technical staff responsive tothe market.This need is seriously felt in the produc-tion/Manufacturing and Engineering services sector.This challenge is mainly being addressed by the newapprenticeship reformed programme that embraces theCompetency Based Education and Training (CBET)approach.

5.20 Lack of skills development in the private sector

It is noted that still a good number of the private sectorcompanies are not training their employees enough tocope with the ever-changing world technology and eco-nomy. Some reasons given for not training employees isthat private companies easily lose them when theirskills are upgraded because they look for better pay andconditions of services else where.This is a self-defeatingstrategy on the part of the private sector as they renderthemselves uncompetitive even within their own sectorthereby risk going under.

5.30 Poor technical and vocational training infrastructure

Though efforts to develop the colleges offering techni-cal and vocational skills are being pursued, the infras-tructure are still generally very poor and not up to therequired standard. Most colleges do not have good trai-ning workshops for practical work and even those thathave do not possess the requisite and adequate equip-ment for training in the courses they offer.This situation

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undermines the effective delivery of the Apprenticeshiptraining programme which is key to the partnershipbetween the private sector and the TEVET Authorityand system.The situation also hinders the registrationand accreditation of the technical and vocational colle-ges, as a lot of them do not meet the minimum stan-dards for registration.

5.40 Private sector’s reluctance to be involved

Reluctance by the private sector to release their mem-bers of staff to be involved in the development of theTVET curricula or even participate in Sector AdvisoryCommittee (SAC) where the private sector are mem-bers of the TVET Boards or Committees, affects the pro-gress and success of the TEVET system.This is evidentas we struggle to form the required SACs in Malawi orset into active gear the existing SACs, with exception ofthe MITA SAC. This is so mostly because private sectorseems to be busy and not having time to spare for theseactivities, and that the people that would be sent foractivities like the standards and curriculum develop-ment are usually the ones the private sector relies on inthe day-to-day work of the companies.

5.50 Lack of culture and attitude of working together amongst the private sector

It is also a notable fact that some companies do nothave a culture of working together within their sector.Companies in most sectors seem to be myopic aboutbusiness being competition and that working togethercan jeopardise the business.They appear to value less inworking together, identifying and sharing common pro-blems and solutions, and indeed training together redu-ce to costs.This problem has contributed to the slowpace in the formation of SACs in Malawi.

5.50 Lack of coordination between the privateSector, TEVET Authority and the training providers

Although a number of programmes are being imple-mented involving the combination of the Private Sector,TEVET Authority and the Training Providers (TechnicalColleges), such as the Apprenticeship TrainingProgramme, there appears to be lack of proper co-ordi-nation and sharing information to bring the requiredinterface.This is mainly between the industry and theTechnical Colleges whereby, generally, the industry doesnot seem to know what is happening and required atthe training institutions, and vice-versa. Proper mecha-nisms to improve the flow of information, co-ordinationand indeed the interface between the industry and thetraining institutions are still desirable.

5.60 Lack of positive dialogue between the TEVETAuthority, the private sector and government

Our observations has also been that most of the pro-blems that currently sometimes emerge between theprivate sector and the TEVET Authority, as a regulatingbody, are exacerbated by lack of communication.Theprivate sector may be deemed as not interested in parti-cipating in TVET yet the private sector does not knowwhat the current TVET system entails in terms of possi-ble inputs from the private sector.

This affects their active participation and levels oftheir involvement.The mere indication and understan-ding of the importance of TVET to the national econo-mies and breadth of the Private sector, through properpolicies and mechanisms may do wonders in enticingthe private sector to participate more actively in theTVET activities.

5.70 The burgeoning demand for PSTP reim-bursement incentives

The introduced Private Sector Training Costs reimburse-ment as an incentive has received an overwhelmingdemand to the extent that there are fears that this maynot be sustainable in the long run. Most and largeamounts of claims are being processed and enjoyed bythe Banking Sector and the other large companies.Whilst the reimbursement is a very big incentive forPrivate Sector’s involvement in the TEVET system andprogrammes, it is also viewed as a recipe for de-capitali-sation of the TEVET Fund in the long run as demandsgrow at par with the funds. However, a re-think andwithdrawal of such incentives, at some point in future,may be equally damaging to the TEVET programmesand our relationship and partnership with the privatesector.The cautious solution is to be continuously revie-wing the guiding principles and rules. Currently, this isbeing limited by a maximum reimbursable amount of33% of the total levy contribution by the respectivecompanies, as a ceiling.

6.0 Conclusion

The challenges outlined in this presentation are notexhaustive, but appear to be the most critical ones inMalawi. Hopefully, these may also be typical in most ofthe countries. I hope, through this symposium, theMalawian experiences and challenges being faced, willassist and guide the Ethiopian decision-makers, imple-menters, and stakeholders at all levels to develop andimplement sustainable mechanisms of financing TVETwith a good emphasis on the public- private partners-hip.

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In Malawi today, despite the challenges that are beingfaced, the new reformed TEVET system has made head-way.The involvement of the Private Sector Employers inTEVET programmes and activities is encouraging andever growing.There is a general realization that thePrivate Sector cannot work in isolation from TEVETsystem, and vice-versa.This is being affirmed by therecent inclusion of the TEVET Authority in most of theprivate sector activities and programmes, and policymaking bodies within the private sector.Amongstothers, these include the Malawi ConfederationChambers of Commerce and Industries (MCCI) – a consortium of the private sector companies and orga-nisations, the Trade Policy National Working Group(TPNWG) and Malawi National Export StrategyCompetence Development Working Group.

However, despite the increased level of participationand involvement by the private sector employers in theTEVET system, government is still being considered akey player as most of the Training Institutions(Technical Colleges) are still under government.Theinvolvement of the Private sector is therefore not beingconsidered as a replacement of Government supportand involvement in the TEVET system in Malawi.Government needs to continue complementing the pri-vate sector efforts by maximising its attention on keystrategic areas of funding and capacity development inthe Public Training Institutions, plus obliging consistent-ly to the TEVET Levy.

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Costs of standard setting and competence-based assessmentby Gerhard Kohn

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Lessons and questions learned by Jon Lauglo

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Your Excellency Ato Wondwossen, State Ministerfor Education,Dear specialists and practitioners from abroad whogave us so many new insights in the challengingarea on how to practically finance TVETDear representatives of stakeholders of theEthiopian TVET system from the Government, theprivate sector, from TVET institutions and frominternational cooperation partners,Ladies and Gentlemen,

Thank you for these very instructive two days and forthe efforts, MoE and ECBP undertook to enrich the dis-cussion about how to make the TVET system underreform financially sustainable.We appreciate the ope-ning of the discussion which made us learn from theexperience of such competent resource persons fromcountries nearly all over the world.

Thank you as well for allowing us to give some con-cluding remarks just before the State Minister in chargeof TVET will officially close this conference.Questions on how to practically finance TVET are ofhigh concern for the business community in Ethiopia.Not everybody has understood it already, since many dostill believe that the development of skills is the respon-sibility of the Government alone. But this is “old thin-king” and I can speak not only as the President of theEthiopian Employers Federation, but also with a manda-te from the Ethiopian Chamber of Commerce and theEthiopian Manufacturing Industries Association, when Icome to give some concluding remarks to this sympo-sium.

EEF, ECC and EMIA, the three business membershiporganisations in Ethiopia which work on Federal leveland across the sectors know how important TVET is forthe socio-economic development of the country.Weshare the belief that strong and competent organisa-tions of the enterprises are needed in order to come toagreements with the government.We are also aware ofthe fact that TVET is expensive and that theGovernment can not shoulder the burden alone.

Changes are already on the way. Even with our historyof developments being brought about by the State, evencentre-based formal TVET is increasingly delivered byprivate providers.We have reason to believe that alreadytoday there are more trainees in private training institu-tions – admittedly often in the less costly business- andmanagement skill related courses – than in public-ones.This indicates also that the families are already investing

a lot in the development of the skills of their young-sters, because training in private colleges is sometimesrelatively expensive.

But also the enterprises are increasingly contributingtheir share: Internships in enterprises for trainees ofpublic and non-public centres have been introduced.The strategy papers under consideration these daysforesee a considerable extension of the time traineeswill be attached to enterprises in the course of theirTVET “carrier”.

In addition, I have to mention, that in our country,where 90% of the population lives in the countryside assmall holder farmers, knowledge and skills are usuallypassed on in more or less informal ways.This is alsotrue for the numerous yet uncounted traditional appren-ticeships in the urban and rural areas.Another area,where VET is funded by (small-scale)-enterprises, theirtrainees/apprentices and their families.

Even according to the draft strategy of the MoE onhow to finance TVET, by the year 2008 (EC) and withregard to formal, middle-level TVET, private TVET provi-ders and firms would be almost equal to theGovernment if recurrent costs and capital costs arecounted.What does that mean? We are already in a situationwhere the contribution of families and of the privatesector (leave alone for a moment the role of publicenterprises in the provision of TVET and of industrialattachments) is very important in terms of quantity andquality.

We heard about the importance of partnership bet-ween the Government and other stakeholders, especial-ly the private sector. In the light of the situation descri-bed above we ask: Is the present setting for governingthe TVET system reflecting the real role and importanceof the private sector? At the moment, I’m afraid that theanswer is no.We have no living and continued dialoguebetween the Government and the business communityon the issues raised in this symposium.We appreciatethat we had open discussions in the course of the lasttwo days, but we really have to improve especially thequality of our dialogue very soon! We know that alsowe, the business membership organizations have to pro-fessionalize our interventions in the area of TVET. ECChas established a pretty active TVET-unit and ECC, EEFand EMIA have forged a strong union where issues rela-ted to TVET are discussed and common activities areplanned.This is not enough but we are already on a pro-mising path into the right direction.

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Concluding Remarks by Ato Teshome Zewde, Ethiopian Employers Federation

But also the Government has to pay more attention tothis dialogue.We need this dialogue also because manyof our members do not feel a commitment of gettinginvolved into TVET with time and money.The best wayto convince them is demonstrating that positive actionis honoured. Let us finish the search for scapegoats andlet us start with regular, professional – and decision-making! – TVET council meetings in all regions! We areready to play a constructive role.

What else will we take from this symposium backinto our daily TVET-discussions in Ethiopia? Let me high-light four points:1. The idea of associations of (private) TVET providers

as a tool to improve quality (and the bargainingpower) appears worth to be followed up moreintensively.We do already have an association of pri-vate training providers of education, but we wouldlike to continue learning from such experiences ashighlighted by our colleague from Uganda wherethe association did not only deliver needed servicesto its members but also became a strong and estee-med interlocutor to the Government.

2. With regard to the income-generating activities ofTVET institutions, we admit that there has been sus-picion in Ethiopia. Enterprises fear unfair competi-tion. But we have also said at various occasions thatwe believe in the possibility of a win-win situationin this context. Pre-requisite is – once again – asound and participatory governance at the respecti-ve operational level of an income-generating TVETinstitution as required in the TVET strategy and inthe TVET proclamation.Also should – as discussedwith the colleagues from Botswana – the productsand services of TVET institutions be offered at realcosts.

3. The promotion of cooperative forms of deliveringTVET is welcome and we listened with interest tothe experience brought to our attention fromGermany and the Philippines. But when it comes tofinancing this kind of training, its trainers, the equip-ments, consumables and so on, we have to be awareof the Ethiopian context, where there are notenough strong Chambers and Associations to whomTVET-related tasks can be delegated. GermanChambers for instance can deliver important servi-ces in the area of TVET because the system of man-datory membership provides for regular income. Butthe Ethiopian proclamation on the establishment ofChambers of Commerce and Sectorial Associations,does not provide for financially sustainable businessmembership organisations.We wonder, if an appro-ach concentrating on relatively few and mostly big-ger enterprises will have sufficient impact. Dualapproaches of TVET require proper dialogue and ifsuccessful cooperation between TVET institutions

(public or non-public) with enterprises has to beco-me a reality, then the conditions have to be discus-sed mutually and in an atmosphere of trust.This cli-mate needs to be established yet.The upcomingpublic private partnership fora where the Ministryof Trade and Industry and UNDP are willing to play afacilitation role may serve also that purpose.

4. We do not have an operational system of competen-cy-based assessments yet. But Ethiopia has a lot tolearn and in this sense I was happy for the conside-ration of “costs of standard setting and competency-based assessment” and the respective experienceshared from Uganda.We nearly got our fingers bur-ned on that issue. Given the difficulties of makingsuch a system self-reliant and given the present delayin the implementation of such a system here, Iwould like to appeal to those who fund its introduc-tion here to be patient – not only with theGovernment.We were foreseen to run one of thetrade testing centres from the private sector but wefeel that – besides our own shortcomings – also thedonors came up with unrealistic time lines and unre-alistic expectations for the financial viability of com-petency-based trade testing.We accept that he envi-saged outcome based system has its price. But allclients, trainees as well as enterprises need transpa-rent and realistic assumptions on this issue. Let usreview the approach soon and in a climate of mutualcooperation!

Ladies and Gentlemen,

In general, the last two days were a striking example ofhow we can learn by sharing experience and by discus-sing even critical issues openly and with experiencedresource persons from inan outside the country.Wethank you for that and we are now looking forward tocontinue such discussions in the fora foreseen for thatin the TVET strategy to which we have also contributedour view.

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1. What kind of organisation do you work for? (please mark the appropriate answer): Government of EthiopiaAcademic InstitutionPrivate Sector Company Private Sector AssociationCivil Society (NGO)International Development AgencyOther (please specify):

2. Which country do you work in?

3. What were your expectations vis-à-vis the symposium?

4. To what extent did the symposium meet yourexpectations?

met completely largely met partly met not at all satisfied

5. After attending the symposium, do you feelbetter prepared to deal with issues related tothe implementation of diverse financing strategies for TVET? (please mark the appro-priate answer)yes to some extent partly hardly

6. What was…the best experience in the course of the symposium?

not such a good experience?

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We would like your feedback ...We are interested in your thoughts and suggestions. Please leave the filled-in form at the registration desk.Thank you!

7. The following session was particularly interesting for me:

Because

I missed the following topics, issues, etc.

My further comments and suggestions:

Thank you. For further feed back, please email:[email protected]

Name Institution E-mail

A. L. Badurdeen GTZ REVO Project Sri LankaA.Van den Hoevel ECBP – GDC Ethiopia andreasvandenhoevel@

googlemail.com

Adebabay Abay Ministry of Capacity Building Ethiopia [email protected] Ziderman Bar Ilan University Israel [email protected] Mohammed Regional TVET Commissioner Harar EthiopiaAlemayehu Eshete Ethiopian Electric Power Corporation

(EEPCo) EthiopiaAmare G/Wold Ministry of Revenue Ethiopia [email protected] König ECBP – GDC Ethiopia [email protected] Getnet Ethiopian Teachers Association EthiopiaAnteneh Mohammed Kombolcha ITC TVET College Ethiopia [email protected] V.Adams Consultant USA [email protected] Abebe Ethiopian Manufacturing Industries Ethiopia [email protected]

AssociationBernd Sandhaas Institut für Internationale Zusammen- Germany [email protected]

arbeit des Deutschen Volkshochschul- [email protected] (IIZ/DVV)

Bester Mahube Tswelelopele Development Trust Botswana [email protected] Tegegne Ethiopian Electric Power Corporation Ethiopia [email protected]

(EEPCo)Bizuneh Debebe Ministry of Education Ethiopia [email protected] Yai Regional TVET Commissioner Oromia EthiopiaDagnachew Yilma Private Higher Education Institution Ethiopia [email protected]

Association (PHEIA)Daniel Assefa Regional TVET Commissioner Dire Ethiopia [email protected]

Dawa Daniel Belay Bureau of Finance and Economic Ethiopia [email protected]

Development (BOFED),Addis AbabaDaniel Mulugeta EthiopiaDemelash Megersa Ministry of Finance and Economic Ethiopia [email protected]

Development (MoFED)Dereje Belachew Entoto TVET College Ethiopia [email protected] Mulaw TVET System Reform and Capacity Ethiopia [email protected]

Building Department,Ministry of EducationDinknesh Mulugeta EthiopiaElliot P.W. Mulanje Technical, Entrepreneurial and Vocational Malawi emulanje@scblantyre1.

Education and Training Authority (TEVETA) malawi.netErhard Lehmkuhl ECBP – GDC Ethiopia [email protected] Ayele Amhara TVET Promotion Agency EthiopiaEshetu Mulugeta Awassa TVET College Ethiopia [email protected] Castañer Consultant Germany [email protected] Evelyn Stöckle ECBP – GDC Ethiopia [email protected] Hailegiorgis Higher Education System Reform EthiopiaFeleke Department, Ministry of EducationFekadu Asrat ECBP – GDC Ethiopia [email protected] Kath Consultant Germany [email protected] G/Kristos W/Michael Hosana TVET College Ethiopia

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List of Participants


Gaminie Gunasinghe GTZ – REVO Project Sri Lanka [email protected] Meseret ECBP – Ministry of Capacity Building Ethiopia [email protected] Lenain Association pour la Promotion de Rwanda [email protected]

l'Education et de la Formation à l'Etranger (APEFE)

Gerhard Kohn INBAS (Institut für berufliche Bildung, Germany [email protected] und Sozialpolitik -– Institute for Vocational Training, Labour Market and Social Policy)

Gerhard Quincke ECC (Ethiopian Chamber of Commerce) Ethiopia [email protected]– HWK (German Chamber for Skilled Crafts of the Rhein-Main area) Partnership Project

Godfrey Kafere Lilongwe Technical College Malawi [email protected] Specht PLANCO Consulting GmbH Germany [email protected] Workeneh UNICEF Ethiopia [email protected] Feleke Higher Education System Reform Ethiopia [email protected]

Department, Ministry of EducationHanno F. Knaup ECBP – GDC Ethiopia [email protected] Stichel Oromiya Education Bureau-TVET Ethiopia [email protected] Afework Ministry of Education Ethiopia [email protected] Ropertz SNNPR Regional Education Bureau,Awassa Ethiopia [email protected] Knechtel KfW Ethiopia [email protected] Heisel Amhara TVET Promotion Agency, Ethiopia [email protected]

Bahir DarJon Lauglo University of Oslo Norway [email protected] Most ECBP – GDC Ethiopia [email protected] Schmidt ECBP – GDC Ethiopia [email protected] Franz Consultant Germany [email protected]örg Schrader Tigray TVET Commission Mekelle Ethiopia [email protected] Wolde Regional Education Bureau Addis Ababa EthiopiaKiros Teka TVET College Bahir Dar Ethiopia [email protected] Brehm GTZ – REVO Project Sri Lanka [email protected] Sifir SNNPR Regional Education Bureau,Awassa Ethiopia [email protected] Lemma Walta Information Center Ethiopia [email protected] Yigzaw College of Telecommunication and Ethiopia [email protected]

Information Technology (CTIT) of Ethio-pian Telecommunications Corporation (ETC)

Massresha Tadess Ethiopian News Agency (ENA) Ethiopia [email protected] Tadesse Ethiopian Employers Federation (EEF) Ethiopia [email protected] Ehissu Walta Information Centre Ethiopia [email protected] Assefa Ministry of Labor and Social Affairs (MoLSA) Ethiopia [email protected] Shimeles Ethiopian Chamber of Commerce (ECC) Ethiopia [email protected] Dangelmeyer Oromiya Education Bureau-TVET Ethiopia [email protected] H/Slassie Adigrat TVET College EthiopiaMuzeyen Ahmed Technical College Maichew Ethiopia [email protected] Fernando ECBP – GDC Ethiopia [email protected] Okello TVET coordinator Ethiopia

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Oliver Ahnfeld PLANCO Consulting GmbH Germany [email protected]. Rajapakshe GTZ – REVO Project Sri LankaPhanuel Getahun Construction Contractors Association Ethiopia [email protected]

of EthiopiaRobel Metiku Technical College Maichew Ethiopia [email protected] Niez Jacobo Z. Gonzales Memorial School of Arts Philippines [email protected]

and TradesRomina Kochius Bahir Dar University Ethiopia [email protected]. Samarakoon GTZ – REVO Project Sri LankaSappa Satta TVET College Arbaminch EthiopiaSeife G.Kirstos Ethiopian Customs Authority Ethiopia [email protected] Mohammed Regional TVET Commissioner Harar EthiopiaSemahagn Mengistu Ministry of Water Resources EthiopiaShimeles Worku World Bank Ethiopia [email protected] Demeester Association pour la Promotion de l'Education Rwanda

et de la Formation à l'Etranger (APEFE) Sister Almaz Siraj Federal Ministry of Health (FMoH) EthiopiaSolomon Hailu General Wingate TVET College EthiopiaSuleyman Harari Education Bureau EthiopiaTakele Alemu Gender and Educational Equity Department Ethiopia [email protected]

Ministry of Education Tamiru Kassa Seheen Business College Ethiopia [email protected] Tamrat Difabachew Ministry of Agriculture and Rural Ethiopia [email protected]

Development, (MoARD)Tesfaye Ayele Universal Electricity Access Program Ethiopia [email protected]

(UEAP) of Ethiopian Electric Power Corporation (EEPCo)

Tesfaye Yeshanew Tegbareid TVET College Ethiopia [email protected]

Teshome Alemu TVET College Asella EthiopiaTeshome Zawde Ethiopian Employers Federation EthiopiaTibebu Tegegne Ministry of Education Ethiopia [email protected]. D. Kuruppu Department of Technical Education Sri LankaUte Hoffmann GTZ Rwanda [email protected] Gasskov Skills and Employability Department Switzerland [email protected]

International Labour Office (ILO)Wanda Moennig Addis Abeba Education Bureau – TVET Ethiopia [email protected] Demeke Ministry of Education Ethiopia [email protected] Kiflu ECBP – Ministry of Education Ethiopia [email protected] Tamrat Private Higher Education Institution Ethiopia [email protected]

Association (PHEIA)Workineh Wubshet Dire Dawa TVET College EthiopiaWorkneh G/ Selassie Axum Business Service College Ethiopia [email protected] Bachu Uganda Association of Private Vocational Uganda yusufbachu2002@

Institutions yahoo.co.uk

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AcronymsADB Asian Development BankAIM Asian Institute of Management (Philippines)BIBB Bundesinstitut für Berufsbildung (Federal Institute for

Vocational Education and Training, Germany)BOTA Botswana Training AuthorityBRIDEC Brigades Development Centre (Botswana)BTVET Business, technical and vocational education and training

(Uganda)CBET Competence-based education and trainingCBO Community-based organisationCBT Competence-based trainingCEO Chief executive officerCO Capital outlay (Philippines)CoT Computer technology CY Calendar yearDANIDA Danish International Development AgencyDED Deutscher Entwicklungsdienst (German Development

Service)DepEd Department of Education (Philippines)DIT Directorate of Industrial Training (Uganda)DIT Department of Information Technology (Philippines) DTET Department of Technical Education and Training (Sri Lanka)DTS Dual training system (Philippines)DVET Department for Vocational Education and Training

(Botswana)EC Ethiopian CalendarECBP Engineering Capacity Building Program (Ethiopia)ECC Ethiopian Chamber of CommerceEEF Ethiopian Employers FederationEFTSs Equivalent full-time studentsEMIA Ethiopian Manufacturing Industries AssociationEQF European Qualifications FrameworkESA Education Standard Agency (Uganda)ETB Ethiopian Birr (approximately: 1 USD = 8.9 ETB; 1 EUR =

11.5 ETB) ETQF Ethiopian TVET Qualifications FrameworkEUR Euro (approximately: 1 EUR = 11.5 ETB; 1 EUR = 1.3 USD)GCE AL General certificate of education advanced level (Sri Lanka)GCE OL General certificate of education ordinary level (Sri Lanka)GDC German Development CooperationGNP Gross national productGoE Government of EthiopiaGTZ Deutsche Gesellschaft für Technische Zusammenarbeit

(GTZ) GmbH (German Technical Cooperation)HECS Higher Education Contribution Scheme (Australia)HRDF Human Resources Development Fund (Singapore, Malaysia)HRD Human resources development ICE Information, education and communication (Malawi)ICIA Instituto de Capacitación de la Industria Azucarera

(Training Institute of the Sugar Industry, Mexico)ICIC Instituto de Capacitación de la Industria de la Construcción

(Training Institute for the Construction Industry, Mexico)ICT Information and communication technologyIGA Income-generating activityILO International Labour Organisation/International Labour

OfficeINBAS Institut für berufliche Bildung,Arbeitsmarkt- und

Sozialpolitik (Institute for Vocational Training, LabourMarket and Social Policy, Germany)

InWEnt Internationale Weiterbildung und Entwicklung (CapacityBuilding International, Germany)

JC Junior Certificate (Botswana)JICA Japan International Cooperation AgencyJZGMSAT Jacobo Z. Gonzales Memorial School of Arts and Trades

(Philippines)KfW Kreditanstalt für WiederaufbauKOICA Korea International Cooperation AgencyLKR Sri Lankan Rupee (approximately: 1 USD = 109 LKR;

1 EUR = 141 LKR)LTC Lilongwe Technical College (Malawi)M&E Monitoring and evaluation

MASAF Malawi Social Action FundMCCI Malawi Confederation of Chambers of Commerce and

IndustryMIST Marikina Institute of Science and Technology (Philippines)MITA Malawi Industrial Training AssociationMK, MWK Malawian Kwacha (approximately: 1 USD = 140 MWK;

1 EUR = 180 MWK)MoA Memorandum of agreementMoE Ministry of Education (Ethiopia)MoES Ministry of Education and Sports (Uganda)MOOE Maintenance and other operating expenses (Philippines)MoU Memorandum of understandingMVTT Ministry of Vocational and Technical Training (Sri Lanka)NBCC National Brigades Coordinating Committee (Botswana)NCC National Crafts Certificate (Botswana)NGO Non-governmental organisationNITE National Institute of Technical Education (Sri Lanka)NQF National Qualifications FrameworkNVQ National vocational qualifications (United Kingdom,

Sri Lanka)NZ New ZealandODA Official development assistance OJTP On-the-job-training programme (Malawi)PPP Public-private partnershipPS Personnel salary (Philippines)PSTP Private sector training programme (Malawi)PTP Private training providerREVO Rehabilitation and Modernisation of TVET Institutions

(Sri Lanka)RM, MYR Malaysian Ringgit (approximately: 1 USD = 3.5 MYR;

1 EUR = 4.59 MYR)RNPE Revised National Policy on Education (Botswana) ROI Rate of return on investmentSAC Sector Advisory Committee (Malawi)SCDP Secondary Centres Development Project (Malawi)SDF Skills Development Fund (Singapore, Malaysia)SES Senior Experten Service (Senior Experts Service, Germany)SF Special funding (Philippines)SGHs Student guided hoursSME Small and medium enterpriseSNPL Study Now, Pay Later scheme (Philippines) SSE Small-scale enterpriseTCC Technical colleges (Sri Lanka)TDT Technology Development & Training (Guarantee) Limited

(Sri Lanka)TESDA Technical Education and Skills Development Authority

(Philippines)TEVET Technical, entrepreneurial and vocational education and

training (Malawi)TEVETA Technical, Entrepreneurial and Vocational Education and

Training Authority (Malawi)TNA Training needs analysisTQF TVET Qualifications Framework TVEC Tertiary and Vocational Education Commission (Sri Lanka)TVET Technical and vocational education and trainingUGAPRIVI Uganda Association of Private Vocational InstitutionsUK United Kingdom of Great Britain and Northern IrelandUNEB Uganda National Examination BoardUNESCO United Nations Educational, Scientific and Cultural

OrganizationUNHCR United Nations High Commissioner for RefugeesUNICEF United Nations Children's FundUPPET Universal post primary education and trainingUSA United States of AmericaUSD ($) United States Dollar (approximately: 1 USD = 8.9 ETB;

1 USD = 0.77 EUR)UVQF Ugandan Vocational Qualifications FrameworkVAT Value added taxVET Vocational education and trainingVMV Vision, mission, valuesVTA Vocational Training Authority (Sri Lanka)

Deutsche Gesellschaft für TechnischeZusammenarbeit (GTZ) GmbH

- German Technical Cooperation -

Deutsche Gesellschaft für TechnischeZusammenarbeit (GTZ) GmbHPostfach 518065726 EschbornT +49 6196 79-0 F +49 6196 79-1115E [email protected] I www.gtz.de

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