Mozambique - Technical and Vocational Education and Training Project

Page 1 PROJECT INFORMATION DOCUMENT PID APPRAISAL STAGE Report No AB Project Name Technical and Vocational Education and Training Project Region AFRICA Sector Vocational training Project ID P Borrower s GOVERNMENT OF MOZAMBIQUE Implementing Agency Environment Category A X B C FI TBD to be determined Date PID Prepared September Date of Appraisal Authorization October Date of Board Approval February Country and Sector Background Background Mozambique provides an example of steady economic recovery and social reconstruction after a prolonged period of war Since the country has sustained a period of rapid economic growth and marked poverty reduction Between and GDP growth averaged percent one of the highest growth rates in sub Saharan Africa Substantial economic growth was registered in construction tourism certain manufacturing sub sectors led by food and beverages transport services and certain agricultural sub sectors Key factors in the recovery include a combination of external aid and large foreign investment projects commonly referred to as the mega projects Economic forecasts indicate buoyant growth prospects for most sectors but particularly in mining transport tourism and services Over the same period equally important achievements were recorded in human development indicators and poverty reduction From to the proportion of people living in poverty declined from percent to percent and inequality measured in real consumption diminished across provinces and regions Notwithstanding the gains in poverty reduction more than half of the population still lives in poverty Moreover broad statistics on human development and poverty prevalence often conceal the complexity and diversity in the way in which poverty affects different groups in society and in the disparities that persist in terms of education opportunity gender and geographic equity Poverty in Mozambique remains predominantly a rural phenomenon being more widespread in the central and northern regions Mozambique has currently three mega projects the Mozal aluminum smelter the Cahora Bassa hydroelectric plant and Sasol gas Mozal the biggest one represents the single largest investment about USD billion ever made in Mozambique This investment is a consortium owned by London based Billiton percent Mitsubishi of Japan percent South Africa s Industrial Development Corporation percent and Government of Mozambique percent It has recently doubled this capacity by constructing a second phase of the smelter and now expects to produce tons of aluminum per year for export Page 2 than in the southern part of the country The impact of HIV AIDS on economic growth and social development adds to the complexity and poses an additional development challenge Broadening economic opportunity and social development reducing poverty and responding decisively to the HIV AIDS epidemic remain of paramount importance in Mozambique and the focus of the Government s development agenda for the foreseeable future Although the labor market in Mozambique is still characterized by a small formal sector employing about percent of the economically active population or about people data from the national household surveys of and indicate this employment segment is growing and demanding more skilled labor This shift in the skill profile demanded in the labor market has triggered a sharp increase in the return to post basic education particularly with respect to workers with little or no education and skills A sizable proportion of the new jobs created by the mega projects in the metal gas and telecommunication industries between jobs are for medium to high skill positions However the training system which is responsible for shaping the skills profile demanded in the labor market has been slow to respond to changing labor market demands in the formal sector Employer surveys and labor market studies in formal sector enterprises point to a mismatch between the labor supply and the evolving needs of labor market which require more skilled workers Overall the Mozambican workforce is poorly educated and lacks technical skills which acts as a constraint to further economic growth and investment Half of the population either has no education at all or merely basic literacy skills Although access to primary education has increased substantially in the last decade reaching near universal levels still less than one third of an age group reach Grade less than percent progress to Grade and less than percent of an age group completes years of education Girls have a significantly lower completion rate than boys In approximately percent of the Grade leavers continued their education within the formal technical vocational education TVE stream No information is available on learning achievement for any of the systems Small scale qualitative studies however indicate that learning outcomes are poor and further compromised by the poor quality of services TVE is mainly provided by the National Directorate of Technical Education DINET in the Ministry of Education and Culture MEC but there are also other government Ministries and a MOZAL I and II aluminum smelter the Sasol gas pipeline new coal and sand mining projects and infrastructure upgrading projects in Maputo and Beira industrial development corridors The contribution of the mega projects to GDP rose from zero in to about percent in and is expected to rise to approximately percent by the end of the decade They will add about percentage points annually to GDP growth on average until By they will probably account for some percent of private sector employment though it is expected that upstream and downstream linkages will increase in the future In this document the term Technical and Vocational Education TVE refers to formal education based on curricula approved by DINET Vocational Training VT refers to formal and non formal training on curricula approved by INEFP or training courses provided by NGOs churches and other enterprises using their own curricula Finally Technical and Vocational Education and Training TVET is used as an overarching term to describe the entire landscape of formal non formal and informal training and technical education Page 3 small number of training institutions that are providing post primary technical education DINET is responsible for approximately TVE training institutions offering pre employment training of which the great majority is equivalent to lower secondary level Grade The Ministry of Labor MINTRAB through the National Institute for Technical Training INEFP NGOs and churches offer non formal Vocational Training VT mainly short term training to different target groups of employed and unemployed mainly school leavers without alternative educational and economic options in the labor market Other Ministries such as Public Works Agriculture and Tourism also offer vocational training programs through a network of separately managed training centers While the DINET training institutions accommodate full time students annually the seven INEFP training centers offer short term courses to an estimated persons every year Overall more than percent of all TVE is provided by public schools In contrast the private training market is at an infant stage and employer based staff training is mainly found in large enterprises particularly in the mega projects Traditional artisan activities are widespread in the informal sector The likelihood of being under the poverty line is closely linked with educational attainment particularly post lower secondary education or training equivalent Grade More than ever workers who lack education and skills remain trapped under the poverty line At this juncture in the development of Mozambique it is imperative to maintain current growth rates in the formal sector to further stimulate and broaden economic opportunity It is critical therefore to ease institutional constraints in the training system to ensure it responds effectively and efficiently to the demand for medium to high level skilled people At the same time given the limited size of the formal sector it is also critical to foster economic and education opportunities for the percent of the labor force which accounts for approximately million people who have limited education and skills and depend on informal sector employment for their livelihood and subsistence Recent analytical work led by the World Bank with technical support from Cooperating Partners CPs in Mozambique identified the key issues and challenges that are vital for the future development of TVET to ensure it can be transformed into a system capable of responding flexibly and effectively to changing economic needs and labor market demands See World Bank Skills Development in Mozambique Issues and Options Washington DC Report No The sector analysis provided a foundation for the preparation of the proposed investment Key Sector Issues a Relevance The scattered information available on skills and qualification needs suggests there is a severe shortage of appropriately skilled and qualified workers Although the graduates from the public technical education schools seem to be rather easily absorbed into the formal sector of the labor market particularly at medium level or Grade equivalent many enterprises complain about a lack of relevant especially practical supervisory and foreign language skills of graduates This often translates into retraining costs for employers adding to their immediate operational costs and more broadly to the overall cost of doing business in Page 4 Mozambique One of the principal reasons for the lack of relevance is the lack of involvement from employers and industry representatives in defining occupational standards and learning contents in the public training system The current supply driven approach to planning and training delivery which is completely disconnected from industry needs has dominated government policy and planning practices since the establishment of the TVET system An additional cause of concern is the acute shortage of relevant training earmarked for employment and self employment in the informal sector particularly for school leavers who may have only attained primary education The situation is further compromised by the lack of recognition of informal training b Quality is perceived to be very low in the general public training systems offered by DINET schools and INEFP training centers a situation caused by under qualified and insufficiently skilled teachers instructors a shortage of teaching aids partly dilapidated workshops for practical training and an outdated curricula which is overloaded with academic subjects almost percent in some instances and few linkages with industry to strengthen the quality of student practices The poor quality of training often translates into low levels of internal efficiency as indicated by the high repetition as high as percent for some levels and dropout rates estimated at percent annually There are no studies available on the efficiency and quality of training in the private sector See Annex c Access and equity Generally there is an acute shortage of places in secondary and technical schools for graduates from the expanding primary school system with many learners choosing to enter the technical schools as a second best option even though the returns to TVET tend to be higher at the medium level compared to the same level in the general secondary academic stream at Grade See Annex Access to TVE schools is further compounded by the limited availability of relevant training opportunities for school leavers and other groups in need of training cultural and social barriers which discourage female participation in the TVET system an urban bias in that nearly all the formal TVET institutions are located in the major towns and cities and financial and social barriers resulting from poverty Moreover the HIV AIDS epidemic is resulting in teacher instructor absenteeism and premature death which exacerbates these inequities especially among vulnerable students who are directly or indirectly affected by HIV AIDS and are unable to afford tuition and or other direct costs associated with attending training courses d Governance and institutional arrangements A major bottleneck of the current TVET environment is its fragmentation and the uncoordinated manner in which each sub system is managed and administered This is caused by lack of an institutional framework that prevents TVET development in an articulated and integrated manner and leads to duplications and wastage of scarce national training resources Although the TVET institutions offer equivalency to academic qualifications the pathways to cross from one system to another are not always straightforward and there is no opportunity to recognize previous learning The system offers little flexibility to stimulate a continuous upgrading of skills to respond to changing labor market needs and innovation opportunities The persistent centralized decision making Page 5 structure in the formal TVET system and the weak management capacity at school and training institution level contributes to the inefficient use of resources and prevents public training providers from responding to the specific requirements of target groups and the needs of the local economic environment Historically the governance and management of the public training system has not involved employers industry representatives or civil society to any significant extent with the consequence that training programs and the curricula remain disconnected from the labor market context as outlined above e Sustainability Available information indicates that the entire TVET system is seriously under resourced In the Government spent percent of GDP or percent of the education budget on TVE training institutions Unit spending in public schools both formal and non formal is among the lowest in sub Saharan Africa negatively affecting the quality of training and capacity utilization on average the Government spent USD per student in and per student in compared to USD in and USD in in the general secondary education system Per student household expenditure on TVE institutions is already substantial according to the household survey annual average per student expenditure was USD at the basic level and USD at the medium level making up for slightly more than half the of the total unit cost of TVE Available information indicates public expenditure in Mozambique is less than that of Ethiopia between and USD per student in Tanzania to USD per student in Malawi between and USD per student in and Botswana between and USD per student in With the exception of some large well resourced enterprises industry s preparedness to embark on employee training is also constrained by a lack of resources There is a serious lack of data and information about the unit cost of training in different segments of the TVET system at different qualification levels and for different occupational specializations Clearly additional sources of revenue to finance a the training system need to be sought as a matter of priority Objectives In order to sustain the social and economic development of Mozambique of the past decade and thus continue contributing to the decline of poverty increasing employment growth and generally improving human development indicators it is essential that several internal and external challenges continue to be addressed Key internal challenges include raising the educational level of the general population particularly females minimizing the negative effects of HIV AIDS reducing regional disparities modernizing public management and service delivery and increasing the skills and employability of the workforce External challenges include integrating Mozambique into the global economy and knowledge society strengthening regional economic integration and improving the technological adaptability of the economy The Government s strategy to address these challenges is economic growth through public investment in social capital and productive infrastructure as well as institutional reforms to improve the climate for private investment In the light of this strategy the proposed investment will contribute to the equitable and sustainable social and economic development of Mozambique by developing a skilled population that is more responsive to the Page 6 needs of a more competitive economy and society This will generate greater economic and social opportunity Rationale for Bank Involvement The proposed investment supports the TVET reform efforts of the GoM which are firmly anchored in the PARPAII Action Plan for Reduction of Poverty and emphasize the investment in relevant quality skills development as a means to reduce poverty The investment is in accordance with the current Country Assistance Strategy CAS for Mozambique which envisages investment in the TVET sector reform as a means to improving access to post primary education and to increase graduation of Mozambicans with the skills practices and attitudes needed to fill technical positions and create value adding knowledge and innovation in production hereby overcoming the problem of the missing middle in Mozambique i e the shortage of skilled and qualified persons at secondary education level The investment is justified by its expected impact on poverty reduction through enhancement of the competitiveness and productivity in key growth economic sectors and increased opportunities for gainful employment in the formal and informal sectors The investment is complementary to the Bank s effort to develop the private sector and increase access and the quality of basic secondary and higher education Through a comprehensive and integrated investment approach it is envisaged that the proposed program will leverage technical and financial resources eliminating to the largest extent possible the duplication of efforts and contradictions in methodology and approach which are all too common in countries heavily dependent on external aid The Bank s comparative advantage derives from its experience in financing related investments including the Education Sector Strategic Program ESSP Cr the Higher Education Project HEP Cr and the Enterprise Development Project PODE Cr in Mozambique and similar programs in Zambia Lesotho Ethiopia Chile and Mexico Description PIREP will have the four components A Institutional Arrangements B Standard based Qualification and Training System C Quality Improvement in Training Institutions and D Skills Development Fund FUNDEC The combined investments under the four components will be instrumental firstly in establishing the most important key elements of the new demand oriented TVET system governance structure outcome based system of occupational standards modularized curricula and external assessment and certification secondly in starting in a targeted manner the improvements in quality and relevance of TVET course programs and thirdly in addressing the problems of access and equity The principal target group of PIREP are school leavers attending TVE and VT programs as well as other target groups in need of training In addition through FUNDEC Component D the program aims at opening access to training and obtaining recognized certification for target groups that previously have not been appropriately catered for by the TVET system in particular school Page 7 drop outs the unemployed the rural population and those people working in small and micro enterprises Component A USD million responds to the diagnosed weaknesses of the current institutional set up of the TVET system including problems of under funding lack of flexibility in curricula design and adaptation and excessive centralization The objective of this component is to reform the governance and management structures for the training system and develop options for the reform of a system of financing in collaboration with the relevant industry representatives and social partners Component A comprises three sub components addressing A the institutional framework for the governance of the TVET system A the mechanisms for providing a sustainable financing basis for the TVET system and A the arrangements for a decentralized management of TVET institutions A major thrust of the component is to encourage the involvement and active participation of industry and enterprises in the management of TVET institutions and to move towards the coordination and articulation of the different skills development programs offered by different providers Major inputs will be technical assistance consultancy inputs for problem diagnosis and conceptual work capacity building of stakeholders and administrator managers as well institutional development support system procedures and equipment Component A has a dual function firstly it is responsible for establishing the institutional funding and management framework of the reformed national TVET system and secondly it is responsible for establishing an Implementation Unit IU to coordinate the implementation of PIREP Accordingly both investment and operational costs associated with COREP are budgeted separately under Component A It is expected that by the end of the project period a new TVET governance and administrative structure National Training Authority would be established a decentralized administration system would be introduced and a strategy to diversify financing modalities would be prepared widely discussed and disseminated The development of standard based training and assessment which is supported under Component B USD million is considered key for the re alignment of the training system into a demand oriented one and raising relevance and quality of training The Government is committed to transforming its current curriculum based TVET system into a standard based system to ensure that enterprises and experts in the world of work have a strong influence in the definition of occupational standards and training contents that a transparent and legitimate assessment system can be established and that target groups with different training and learning backgrounds will be able to access the TVET learning system and get recognition for their skills regardless of where the learning skills acquisition takes place The component is divided into three sub components addressing B the development of occupational competency standards B the development of modularized training course It is envisaged that the existing PIREP Executive Secretariat which in was established to coordinate the preparation of f PIREP in close coordination with a an ad hoc TVET Working Group comprised by an array of stakeholders including CPs will be transformed into the Implementation Unit Page 8 programs based on these occupational standards and B the development of a standards based assessment and certification system The component includes support for developing and adopting methods and procedures for standard setting curriculum planning and development and assessment certification arrangements including the testing of the system that will target a minimum of occupational areas spread across four economic sectors viz tourism management administration industrial maintenance and agro industry Inputs include technical assistance to the design of the occupational standards curriculum and assessment design capacity building for Mozambican officials who will be directly involved in this process the development and establishment of necessary systems to implement the reforms as well as operational support for implementation at the pilot schools At the end of the project training and assessment based on occupational standards will have been fully implemented in four pilot sectors Component C USD million is designed to address the quality problems affecting DINET and the INEPF institutions It comprises five sub components C the development and piloting of courses for teachers and management staff C the supply of relevant equipment tools and learning materials C the necessary rehabilitation of the physical infrastructure C the development and piloting of new learning materials and C the development and piloting of student counseling and career path guidance methods including assistance in facilitating internship arrangements with industry Within the four selected pilot sectors the project will fund development and piloting of new learning materials teacher in service and pre service training improvement of management capacity and relevant upgrading of teaching facilities e g class rooms and workshops to respond to the new modularized training course programs based on occupational standards A selection of up to different DINET and INEFP institutions have been chosen as pilot sites for testing of the new competency based training CBT courses mentioned above These schools will specialize in skills development within particular industries or occupational areas e g agro processing or tourism Priority will be given to activities that support teacher training materials development rehabilitation of the educational infrastructure and investment in equipment targeted at the occupational areas selected for piloting Component D USD million is designed to assist the emergence of market responsive training initiatives in various occupational areas and for different target groups on a demand driven basis Unlike Components B and C where a whole re alignment is envisaged in selected sectors and institutions activities financed by FUNDEC are not limited to selected target sectors Instead the intention is to aim at both promoting innovation and initiatives for the improvement of quality and relevance of training and at increasing access to employment oriented TVET courses for the out of school children and adults population in the rural areas especially women The component will be implemented as a grant fund FUNDEC Fundo para o Desenvolvimento de Competencias Profissionais accessible to public and private training providers NGOs civil society organizations or trade associations on a competitive basis Page 9 FUNDEC consists of three funding windows one window is earmarked to fund capacity building of public providers of formal and non formal training not included in the pilot projects A second window is for capacity building of non public providers and a third window is earmarked to fund training delivery for the out of school population in the rural areas in particular girls and women Each window has a different upper ceiling for project costs between USD and USD per proposal depending on the window and type of provider FUNDEC will be managed by a small department within the COREP Implementation Unit Apart from evaluating grant applications and monitoring projects financed by FUNDEC the unit will also support potential beneficiary training institutions to develop good proposals For all components steps have been taken to ensure that transversal issues of gender equity and HIV AIDS are appropriately taken into consideration through establishing a HIV AIDS and gender coordination desk in the IU of COREP developing gender and HIV AIDS specific standards modules and training materials ensuring that HIV AIDS awareness training courses are made accessible to all learners and teachers in the pilot schools and where possible more widely in the larger network of TVET institutions and making it a condition that FUNDEC will only provide financial support to those training providers that have developed and implemented institutional HIV AIDS and gender policies Financing Source m Cooperating Partners BORROWER RECIPIENT INTERNATIONAL DEVELOPMENT ASSOCIATION Total Implementation During the initial stage phase and until a National Authority for Professional Education is created PIREP will be implemented and managed through an interim level institutional structure which was recently approved by the Council of Ministers Ministerial decree No July This level structure consists of i A political level which is known as the inter Ministerial Commission for the Reform of Professional Education CIREP composed exclusively of Ministers from relevant portfolios and chaired by the Prime Minister This body is responsible for the approval of policies which will guide reforms performed by the lower level bodies ii An executive level known as the Executive Commission for the Reform of Professional Education COREP which is composed of members of which are from government and are from the private sector organized labor and civil society The government representatives include the Minister of Education and Culture who chairs the body and five other high level officials from four different Ministries The private sector representatives include from the productive sector from the trade unions and from organisations of other civil society The function of COREP is to translate the policies approved by CIREP into strategies action plans and activities to set the rules and guidelines by which the system is regulated and to provide for periodical monitoring of the implementation process Page 10 They will also be responsible for approving the Annual Work Plan AWP which will be the instrument that highlights all activities to be undertaken financed and monitored for the year iii A management and technical support level unit performed by the so called Implementation Unit IU which is responsible for and the implementation of the daily activities included in an Annual Work Plans for PIREP The Implementation Unit IU is comprised of two departments the Qualifications Training Program Unit combined with the Institutional Development Capacity Building Unit Components B C and the FUNDEC Unit Component D The planning monitoring and evaluation functions the HIV Gender technical officer and the technical assistance for institutional framework decentralization and financing systems development Component A will be placed directly in the IU In addition there will be separate units for Finance Procurement located within the IU The Organizational chart included in Annex illustrates this arrangement The operational cost of COREP and its IU will be covered initially by funds allocated under PIREP Component A Although the IU is a self standing management unit responsible for executing the PIREP reform in coordination with several ministries and social partners the line budget and counterpart funds for the program are located under the auspices of the Ministry of Education and Culture Detailed implementation arrangements are included in the Operations Manual Sustainability In terms of financial sustainability the GOM has expressed its commitment to the PIREP by continuing to increase its allocation to the TVET sub sector from USD million in to USD million in and by covering additional recurrent costs associated with the new COREP structure The estimated contribution in new counterpart funds for the PIREP is USD million over the five year investment period This translates into about percent annual increase in public resources for TVET It should also be highlighted that initially some operational costs of COREP will be financed under PIREP to support the start up of the reform Additional resources are expected to be available for TVET in a sustainable manner from the second phase of REP onwards after a new financing system will have been developed and implemented In addition to financial sustainability it is important to outline the steps introduced to ascertain technical and implementation capacity throughout the preparation process The PIREP has followed a participatory planning process that included Government technical officials from DINET MEC and INEFP MINTRAB representatives from industry and civil society and representatives from international agencies including the World Bank GTZ Danida Spanish Cooperation Salesians Portuguese Cooperation Italian Cooperation and the Netherlands The PIREP s overall design components and activities were planned in a series of joint missions over a month period from August In between the joint missions the PIREP Executive Secretariat conducted several regional workshops with industry training providers and provincial technical officers from MEC and MINTRAB to share component design and objectives select economic sectors and occupations and increase the likelihood of participation Page 11 and ownership from industry and training providers The extensive participatory approach was intended to broaden ownership and maximize the likelihood of effective implementation thus ensuring the reforms take root Lessons Learned from Past Operations in the Country Sector Analytical work of the current TVET system in Mozambique indicate the main weakness of the current TVET system is the lack of stakeholder involvement in particular industry and enterprises in the governance and planning of the TVET system the fragmented structure of the TVET system and its under funding The Government s Programa de Reforma da Educa