Ghana - Vocational Skills and Informal Sector Support Project

Document of The World Bank Report No.13691-GH STAFF APPRAISAL REPORT REPUBLIC OF GHANA VOCATIONAL SKILLS AND INFORMAL SECTOR SUPPORT PROJECT MARCH 9, 1995 Population and Human Resources Division West Central Africa Department Africa Region  CURRENCY EOUIVALENTS (October 1994) Currency Unit = Cedis US$1.00 = 1,000 Cedis ACRONYMS AND ABBREVIATIONS BECE Basic Education Certificate Examination CAS Country Assistance Strategy CFC Chloroflurocarbon CIBA Council of Indligenous Business Associations CIDA Canadian International Development Agency DEO District Education Office EdSAC I Education Sector Adjustment Credit I (Cr. 1744-GH) EdSAC 11 Education Sector Adjustment Credit 11 (Cr. 2140-GH) GES Ghana Education Service GLSS Ghana Living Standards Survey ICB International Competitive Bidding IDA International Development Association ILO International Labor Organization ITTU/GRATIS Intermediate Technology Transfer Unit/Ghana Regional Appropriate Technology Industrial Service iSS Junior Secondary School KATTC Kumasi Advanced Technical Teachers' College MDPI Management D)evelopment and Productivity Institute MOE Ministry of Eclucation MESW Ministry of Ernployment and Social Welfare NIC Newly Industrialized Country NVTI National Vocational Training Institutes NACVET National Council for Technical and Vocational Education and Training NGO Non-Governmental Organization PBME Planning, Budgeting, Monitoring, and Evaluation Unit of MOE PPF Project Preparation Facility PMU Projects Management Unit ODA Overseas Development Administration OIC Opportunities Industrialization Center PNDC Provisional National Defence Council PY Project Year SDR Special Drawing Rights SSS Senior Secondary School USAID United States Agenicy for International Development FISCAL YEAR SCHOOL YEAR January 1 - December 31 September - June (Basic and Tertiary) January - December (Senior Secondary) STRUCT'URE OF EDUCATION IN GHANA Years 1-6 Primary 7-9 Junior Secondary 10-12 Senior Secondary 13-16 University  REPUBLIC OF GHANA VOCATIONAL SKILLS AND INFORMAL SECTOR SUPPORT PROJECT' Table of Contents Page No. CREDIT AND PROJECT SUMMARY..i-i 1. INTRODUCTION.1 11. THIE EDUCATION AND SKILL TRAINING SECTOR I A. Overview I 13. Previous Bank Operations in the Education Sector .. 4 C. Future Bank Strategy in the Education Sector 5 1). Other Donor Support for Government's Education Reform Program . .5 Ill. VOCATIONAL SKILLS TRAINING AND INFORMAL APPRENTICESHIP PROGRAMS . . 6 A. Background ................................................. 6 B. The Urban Informal Sector ...................................... . 7 C. Iornnal Education and Skill Training ................................ . 9 D. rhe Role of the Private Sector in Vocational Skill Training ....... .. .......... 11 E. Shlort Training Programs to Support the Informal Sector. .......... ........... 11 F. Key Issues ........................ .............. .......... 12 G. Rationale for World Bank Involvement .............. .. ................ 13 Ft. Country Assistance Strategy (CAS) .............. .................... 13 IV. TIE PROJECT ................................................. 14 A. Project Objectives ............................................. 14 3. Project Description ............................................ 15 C. ProJect Components ............................................ 16 1. Apprentice Training .16 2. Training of Masters .17 3. Financing the Training .18 4. Support to Apprentices and Masters .18 5. Training Program Development .19 6. Training of Instructors .19 7. Institutional Strengthening of NACVET .19 8. Tracer Studies .20 9. Labor Market Data Base .20 D. Project Costs and Financing ................. ..................... 21 fl ris report is based upon the findings of an appraisal mission which visited Ghana in July 1994. The mission members consisted of Messrs./Mmes. Nicholas Bennett (Mission Leader/Principal Planner, AF4GA), P. Stephens (Project Officer, AF4GA), J. Angers (Operations Analyst, AF4PH), S. Berkman (Technical Training Specialist, AFTHR), A. Komenan (Labor Market Specialist. AFTHR), and J. Cresswell (Technical Training Specialist-Consultant); and a post-appraisal mission composed of Messrs. Nicholas Bennett (Mission Leader/Principal Planner, AF4GA), S. Berkman (Technical Training Specialist, AFTCB), and Tsri Apronti (Project Officer, AF4GA). Messrs. Ian Morris (SA3PH), John Middleton (SA2PH), and Joseph Bredie (AFTHR), are the Peer Reviewers for the project. The report was written by Mr. Bennett, with contributions submitted by the rifissiloi memilbers and processed by Mss. Sheila Eghan and Rebekah Kirubaidoss. Messrs. Ian Porter and Olivier Lafourcade are the managing Division Chief and Department Director, respectively, for the operation.  Table of Contents (Cont'd) V. PROJECT IMPLEMENTATION ..................................... 22 A. Project Preparation ............................................ 22 B. Project Managcment and Coordination ....... . . . . . . . . . . . . . . . . . . . . . . . . . 23 C. Project Sustainability and Recurrent Cost Implications ..... . . . . . . . . . . . . . . . . . . 23 D. Project Monitoring. Reporting, and Evaluation ...... . . . . . . . . . . . . . . . . . . . . . 23 E. Mid-Term Review ......... . .. . . .. . . .. . . .. . .. . . .. . . .. . . .. . . .. . 24 F. Environmental Aspects .................. ........................ . 25 G. Procurement .......... ...................................... . 25 H. Disbursement .......... . .. . .. . .. . .. .. . .. . .. . .. . .. .. . .. . .. . . . 27 1. Accounting, Auditing, and Reporting ....... . . . . . . . . . . . . . . . . . . . . . . . . . . 29 VI. PROJECT BENEFITS AND RISKS ....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 A. Project Benefits ......... .. . .. . ... I. . .. . .. . .. . .. . .. . . .. . .. . .. . . 29 B. Project Risks .......... .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . .. .. . 29 VII. AGREEMENTS TO BE REACHED AND RECOMMENDATION 30 ANNEXES 1-1 Social Indicators 2-1 MOE 1994 Summary of Recurrent Expenditures by Programs and Objects, and 1994 Public Investment Program 2-2 Structure of the Ministry of Education, Projects Management Unit, Ministry of Employment and Social Welfare, and National Council for Technical and Vocational Education and Training 2-3 Draft Letter of Informal Sector Training Development Policy 3-1 Employment Statistics from the Ghana Living Standard Survey (GLSS) 3-2 Results of Minimum Wage Survey 3-3 Statistics on Other Government Skill Training Institutes and on Private Technical Institutions 3-4 Statistics on GES Technical Institutes 3-5 Enrollment in 1994 in the National Vocational Training Institutes (NVTI) 4-1 Draft Contracts for Participating Institutions 4-2 Eligibility Criteria for Institutions to be Supported 4-3 Institutions Selected to Provide Training (GES and Private) 4-4 Required Number of Training Hours per Trade 4-5 Description of the Training Program (Course Content for Carpentry and Joinery as Sample) 4-6 Implementation Plan - Targets of Numbers of Trainees by Trade 4-7 Opportunity Costs of Training of Apprentices and Masters 4-8 Proposed Equipment Kit Content for Apprentices and Masters, and Optional Items 4-9 Detailed Project Cost Estimates 5-1 Project Performance Indicators 5-2 Supervision Plan and Mid-Term Evaluation Criteria 5-3 Procurement and Disbursement Schedules 5-4 Implementation Schedule of the Physical Infrastructure Component DOCUMENTS IN THE PROJECT FILE MAP: IBRD 26746  REPUBLIC OF GHANA VOCATIONAL SKILLS AND INFORMAL SECTOR SUPPORT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Ghana Beneficiaries: Informal Sector Mastercraftsmen and Apprentices Credit Amount: SDR 6.6 million (US$9.6 million equivalent) Terms: Standard, with 40 years maturity Proiect Description: The project aims to improve informal sector productivity in selected occupational areas, and to reorient the vocational skill training system away from a supply-driven to a demand-driven system. In particular, the project would focus on: (a) strengthening the capacity of NACVET to respond to the short-term training needs of those employed in the informal sector; (b) involving indigenous trade associations in designing competency based training programmes, in selecting participants for training, and in choosing the tools to be included in equipment kits; (c) creating closer links between trade associations, public and private training institutions, and the Government; and (d) re-orienting the focus of private and public training institutions away from the provision of long pre-employment training to the provision of short post-employment competency-based training for those in the informal sector. To achieve this, the project would include the following basic components: (a) practical skill training of 20,400 informal apprentices in five skill areas; (b) practical skill training and entrepreneurship training of 4,500 informal sector master craftsmen and women in five skill areas; (c) ensuring that trainees have access to essential high-quality tools; (d) support to 40 public and private training institutions; and (e) training program development, evaluation, and monitoring. The project is targeted at informal sector workers who are among the poorest urban dwellers. Proiect Benefits and Risks: An awareness will be created of the inefficiencies of long, largely theoretical vocational skill training for a modern sector employment that does not exist. Government will begin to redirect a part of the resources it currently devotes to this long duration training to more effective, short, competency-based training for those already in informal sector employment or apprenticeship programs. Both public and private training providers will become more responsive to labor market realities. Training beneficiaries, represented by the informal sector trade associations will play an increasing role in determining training course content and trainee and equipment selection as well as program monitoring. The quality of goods and services produced by the informal sector will improve and productivity and earnings will increase, which will in turn lead to an expansion in informal sector employment. The institutional structures for managing an effective vocational training system will be strengthened, and eventually only those institutions that offer meaningful training will be accredited. Finally, donors will redirect some of their support for vocational and skill training towards short demand driven programmes. The project has four main risks. First, the key implementation agency, NACVET, though created in 1990, has up to now played almost no role in the technical and monitoring aspects of managing the vocational skill training system in Ghana. Second, public and private training providers are not yet fully committed to the provision of practical competency-based training for masters and apprentices who might have very  - ji - low academic qualifications. Third, participants in the new short courses might not always be drawn from apprentices or others who are already employed, but from the unemployed who are ready to grasp at any low-cost training that might lead to their eventual employment. Fourth, the unclear division of responsibility between the Ministry of Education and the Ministry of Employment and Social Welfare in the area of vocational and skill training might lead to a dissipation of energies by these agencies on matters not directly relating to project implementation. The first risk has been mitigated by a tranisfer of key management and professional staff to NACVET. The second risk will take some time to be reduced, as only when the institutions have experience in providing new short, competency-based training will they be able to make a judgment as to how they might manage such training in the long run. The third risk will be minimized by distributing "intake vouchers" to trade associations for onward distribution to their members. As far as the final risk is concerned Government is hiring an independent consultant to make recommendations to cabinet as to the delineation of responsibility in skill training between the two Ministries.  - 111 - ESTIMATED PROJECT COSTS BY COMPONENTS (INCLUDING TAXES AND DUTIES) Local Foreign Total (US$ million) 1. Provision of Training A. Provision of Training for Apprentices 2.2 3.6 5.8 B. Provision of Training for Mastercraftmen/ Women 1.0 1.5 2.5 2. Institutional Framework A. Technical Implementation (NACVET) 0.6 0.2 0.8 B. Strengthening of the PBME 0.2 0.1 0.3 C. Project Management and Coordination 0.5 0.1 0.6 3. Labor Force Database 0.5 0.1 0.6 Total Base Costs 5.0 5.6 10.6 Physical Contingencies 0.4 0.6 1.0 Price Contingencies 0.4 0.4 0.8 TOTAL PROJECT COSTS 5.8 6.6 12.4 (Totals may not add up due to rounding) PROJECT FINANCING PLAN (US$ million) Taxes and Local Foreign Duties Total IDA 3.4 6.2 - 9.6 Government of Ghana 0.3 - 0.6 0.9 Trainees 1.5 0.4 - 1.9 TOTAL PROJECT COSTS 5.2 6.6 0.6 12.4 ESTIMATED CREDIT DISBURSEMENTS (US$ MILLION) IDA Fiscal Years FY96 FY97 FY98 FY99 FY00 FY01 Annual 2.4 1.8 2.0 1.3 1.2 0.9 Cumulative 2.4 4.2 6.2 7.5 8.7 9.6 Economic Rate of Return: Not applicable Map: IBRD 26746  I  REPUBLIC OF GHANA VOCATIONAL SKILLS AND INFORMAL SECTOR SUPPORT PROJECT 1. INTRODUCTION 1. 1 The Government of Ghana, in its efforts to re-orient the vocational skill training system in order to increase the productivity of those already in informal sector employment and apprenticeship programs, has requested IDA assistance of SDR 6.6 million (US$9.6 million equivalent) to finance a project to support short, competency-based training and related activities. II. THE EDUCATION AND SKILL TRAINING SECTOR A. Overview 2.1 For there to be productivity gains, it is not only essential that labor is trained in modern skills but also that new entrants to the labor force have passed through a quality basic education. In the decade preceding the 1987 educational reform the effectiveness of public basic education sank to such a low level that it is likely that the majority of children completing six years of primary education learned nothing. Most were leaving primary school illiterate. Only now, seven years into the reform, are the first signs of a resuscitation of primary education becoming apparent, and only now is Ghana beginning to reclaim its 1960s position of having one of the most effective educational systems in Sub-Saharan Africa. The educational reforms have not only strengthened primary education, but extended basic education to include three years of Junior Secondary Education, where, in addition to normal academic subjects, there are practical subjects in agriculture, technical drawing, and prevocational training, all designed to create a familiarity in the use of hand tools. 2.2 Despite a reform of the formal education system--involving a shortening of pre-university education from 17 to 12 years; a lengthening of the school day and year; the implementation of a new, more relevant curriculum; and an increasing level of cost sharing--the formal skill training system in specialized vocational and technical training institutes has remained virtually unchanged for 20 or more years. Almost all of the 155 public institutions and the 250 private and NGO institutions offer three, four, or even five-year courses to transmit the most rudimentary basic vocational skills, with hardly any attempts being made to find out whether or not the graduates of these programs are finding appropriate employment. 2.3 Since the introduction of the Economic Recovery Program in 1983, the people and Government of Ghana have been engaged in a far-reaching program of economic recovery and structural adjustment. The Ghanaian program has always placed great emphasis on the social sectors, and has succeeded in reversing the precipitous fall in the provision of education and health services that preceded its introduction. As the adjustment program has deepened, Government has placed increasing emphasis on poverty alleviation, launching the Program of Actions to Mitigate the Social Costs of Adjustment in 1988, and by choosing the theme "Accelerated Growth and Poverty Reduction" for its medium term development strategy. There is thus an awareness that only through increases in labor productivity will formal and informal sector employment increase and poverty be alleviated.  2.4 The Bank carried out its first sector study and analysis of the Ghanaian educational system in 1985, and the need for urgent reform and rehabilitation of the entire system became apparent. At that time, in the majority of primary and secondary schools there were no textbooks, no chalk, no equipment, and no materials. Teachers were conspicuous by their absence. The majority of primary school teachers were untrained and many had been employed through under-handed methods. Most schools were over- staffed not only with unqualified teachers, but also with huge numbers of non-teaching personnel. In some secondary schools the number of staff outnumbered the students, while all the universities had considerably more staff than students. At the same time as this general education sector study was carried out, the Bank commissioned International Labour Organization (ILO) to carry out a sub-sector study of Vocational and Technical Education which drew attention to the poorly qualified staff; the broken down or inappropriate equipment; and the lack of any agency responsible for curriculum development and quality control. In 1989, the Bank completed a further sub-sector study on "Basic Education for Self Employment and Rural Development" (Report No. 7593-GH) which, among other things, emphasized the importance of providing short courses from existing Technical and Vocational Training Institutes to master craftsmen and their apprentices to help increase the earnings and productivity of informal sector workers. 2.5 The education reform had four main objectives corresponding to some of the key problems of the system namely: (a) To reduce the previous inordinate length of pre-university education. This was taking up to 17 years, against an international norm of 12 years, and consisted of short school days and years. As a result of this reform, there is an increase in access to secondary education as well as a release of public resources to be used for basic education. (b) To improve pedagogic efficiency and raise the quality and relevance of educational outcomes. The old curriculum emphasized rote recall; textbooks and other instructional materials were scarce; buildings were poorly maintained; the proportion of untrained teachers was high; and school leavers received an academic training which prepared them only for a modern sector clerical wage employment, which did not exist; (c) To contain and partially recover costs. Over-staffing was significant, especially of non- teaching staff and untrained teachers; feeding and lodging costs of secondary and tertiary students accounted for a significant proportion of Government expenditures; cost recovery for textbooks was derisory; and funds were often misappropriated; and (d) To enhance sector management and budgeting procedures. Physical and financial norms did not exist or were not enforced; planning and budgeting were separated; budget uncertainties hindered planning; management decisions responded only to crises; and monitoring was insufficient, especially at the school level. 2.6 Under the Educational Reform the structure of the educational system has been changed to six years of primary, three years of junior secondary (JSS), three years of senior secondary (SSS), and four years of tertiary education. The implementation of the reform program was divided into phases; JSS from 1987 to 1990; SSS from 1991 to 1993; while the tertiary reform program was started in 1994, and covers the next four years. Reform and improvements at the primary level have taken place continuously since 1987, and have intensified since 1994. 2.7 Enrollment increases have been substantial at all levels of education after a long period of stagnation. The gross primary enrollment ratio reached a peak of 82 percent in 1990/91, with the  - 3 - more rapid increases taking place among girls (44 percent of total enrollment) and in previously under- served areas. Grade 1 intake fell by 4 percent in 1991/92, and 1 percent in 1992/93 leading to a fall in the enrollment ratio to 80 percent in 1992/93. JSS enrollments are 51 percent of the 12-14 age-group, while around one-third of JSS students have been progressing to SSS. Tertiary enrollments are increasing significantly, but still only a little under 1 percent of the 20-24 age-group is enrolled at that level. Since the beginning of the reform in 1987, full-time enrollments in MOE Technical and Vocational Institutions have increased by 5.0 percent per annum, and part-time enrollment by 4.2 percent per annum. 2.8 The curriculum has been reformed at both primary and secondary levels to be less theoretical and more relevant to Ghanaian development problems and prospects. Ghanaian languages and agriculture have been made compulsory. SSS offer both a common core and some of five areas of focus for elective program options. Most SSS offer general arts and science and vocational options, half of them agriculture, and one-third technical options. The elective program options being offered aim at preparing children for both a wide range of occupations and post-secondary education and training. New textbooks have been written for all school levels. Equipment has been provided for prevocational and science teaching in JSS and SSS. A major effort in both pre-service and in-service teacher training, along with new curricula, has reduced the proportion of untrained teachers to below 30 percent at primary, 20 percent at JSS, and only 10 percent at SSS. 2.9 Costs have been contained in several ways. The proportion of boarding students in secondary school is being reduced through concentrating all new expansion on day schools. Staffing of GES was regulated by a freeze on hiring between 1987 and 1992. This has resulted in significant increases in pupil: teacher ratios. About 13,000 non-teaching staff were laid off at the secondary and tertiary levels. Many temporary untrained teachers with low academic qualifications were also laid off. Costs have been partially recovered in a number of areas. Food subsidies have been eliminated at both secondary and tertiary levels. School supplies are now sold at cost. There is partial cost recovery for textbooks in basic education, and full cost recovery at SSS. At the tertiary level, an innovative student loan scheme was introduced in 1988 which, though highly subsidized as in other countries, provides for an element of cost recovery. In public Technical and Vocational Institutes up to now, few conscious efforts have been made either to recover or contain costs in the full-time regular program, though the expansion of enrollments in the face of constrained budgets have led to a reduction in unit costs. In addition, significant fees are now charged for part-time afternoon and evening classes. In private vocational schools students have to pay fees of C20 - C30,000 per term (US$20 - US$30). 2.10 The Government has dramatically increased its budgetary allocation to the education sector, from 1.4 percent of GDP in 1983 to 3.8 percent of GDP in 1993 (Annex 2-1). Education's share of the national recurrent budget (excluding debt servicing) has risen from 27 percent in 1984 to 40.7 percent in 1994. However, only 1.3 percent of MOE budgets in 1993 went to Technical and Vocational Institutes. Of the amount devoted to directly running these institutes, 72 percent is for staff salaries and only 11.4 percent for supplies and stores. This is a better proportion than found in other types of schools and colleges run by the Ministry of Education. Whereas in 1990, 22 percent of the education budget was devoted to non-salary items, this had fallen to less than 12 percent in 1994, the lowest level since 1986 4(Annex 2-1). The increasing predominance of salaries in the education budget is one of the key issues of sustainability that has to be resolved in the near future if the education system is to avoid entering a further period of decline. 2.11 Despite the impressive progress being made in formal education, two-thirds of the population remain functionally illiterate. Even of those who have completed primary school, more than 40 percent are illiterate largely due to the poor quality of instruction in primary schools. The  - 4 - Government therefore launched a mass literacy program in 1991 to significantly reduce illiteracy by the year 2000. B. Previous Bank Operations in the Education Sector 2.12 Though the Bank started supporting Ghana's development activities in 1962, it was not until 1986 that the first credit was provided to the educational sector. This came after 50 loans or credits had been granted to Ghana in most other sectors for a total of more than US$1.0 billion. Since then seven credits in the educational sector have been approved for a total of over US$230.0 million. 2.13 The first credit for an emergency Health and Education Rehabilitation Project with US$5 million allocated to education (Cr. 1653-GH, closed on December 31, 1991) was approved early in 1986, and was designed merely to get text and library books, writing materials, and other essential supplies into the school system as quickly as possible. The Project Completion Report (Report No. 1 1080-GH) concludes that the project met its objective in getting the necessary materials into the school system in a short time. The project was followed by a series of programs and projects to support the Government's 1987 education reform program. In 1987, the First Educational Sector Adjustment Credit (Cr. 1744-GH, closed on December 31, 1991) for US$34.5 million was approved. This was a broad, policy-based Sector Adjustment Credit, covering the whole of the educational system, but with the resources generated from the credit being concentrated on the JSS level (grades 7-9). The Project Completion Report (Report No. 12622-GHI) concludes that the impact of the project was positive and laid a strong foundation for further reforms in the education system. It also emphasizes the importance of project implementation activities falling under the direct and day-to-day leadership of a high level political appointee. In 1990 the Second Education Sector Adjustment Credit (EdSAC II) (Cr. 2140-GH) for US$50.0 million was approved, based on the model of Cr. 1744-GH described above, but with the policy framework dealing only with school education, and resources generated from the credit being concentrated on the SSS and primary levels. All three tranches of this credit have been released, and the program closed on December 31, 1994. In 1992, EdSAC II funds were used to finance a small pilot for this project in 16 public and private vocational institutes and two subject clusters. 2.14 In 1991, the Community Secondary School Construction Project (Cr. 2278-GH) for US$14.7 million was approved. This involved supporting 150 rural communities in the construction of facilities needed for new Senior Secondary Schools. By early 1995, over half the schools have been fully completed, and over 90 percent of the credit has been disbursed. According to the Ghana Living Standards Survey, in 1987/88, only 32.5 percent of the population aged 8 and above were functionally literate, even though 55 percent had been or were in school. Thus in 1992, the Literacy and Functional Skills Project (Cr. 2349-GH) was approved for approximately US$17.4 million, designed to support the Government's mass literacy program in fifteen of the most widely used languages. Already a second group of 165,00)0 participants is studying in its own language in 9,000 classes. Beneficiary evaluation shows that a high proportion of learners are becoming functionally literate. In 1993, the Tertiary Education Project (Cr. 2428-GH) for US$45 million was approved, designed to help extend the reform process into the universities and other tertiary institutions and rehabilitate their facilities. Also in 1993, the Primary School Development Project (Cr. 2508-GH) for US$65.1 million was approved. This was designed to increase the involvement of the local communities in the management of the school, the construction of almost 11,000 classrooms with community involvement, giving the headteacher prime responsibility for school supervision, and the construction of 2,000 headteachers' houses.  C. Future Bank Strategv in the Education Sector 2.15 The Government announced during the 1991 Consultative Group meeting its resolve to attempt to increase the GDP growth rate from its current levels of 4-5 percent per annum to at least 7-8 percent by the year 2000. To support this strategy, the Bank carried out jointly with the Government and published (February 1993) a study "Ghana 2000 and Beyond--Setting the Stagefor Accelerated Growth and Poverty Reduction". As outlined in the CAS (see para. 3.39), all future Bank lending to Ghana is being evaluated against this strategy. In the education sector, the highest priority is given to the expansion of enrollments at the basic education level, as "the Asian NICs (New Industrializing Country), as well as Thailand and Malaysia, had all achieved universal primary education by the time they began their industrialization. Today Ghana has lower primary enrollment and literacy rates than the NICs had when their economic growth began to accelerate." The accelerated growth strategy also emphasizes improvement in educational quality. "Besides expanding enrollments, improvements in quality remain a major goal. If Ghana is to achieve some of the dynamic growth of the East Asian NICs, the quality of instruction and completion rates must rise." In addition, the report emphasized the importance of "short skill specific training courses and in-service training programs which provide a quick route for raising the skills of the labor force. With these programs, mobilization and effective use of private sector education training resources for technological capacity building is essential." This is the aim of this project. 2.16 It is proving considerably more difficult to improve the quality of basic education than was originally anticipated at the start of the educational reform in 1987. Despite the fact that there has been a very significant improvement in the qualification of the teaching force, and all teachers have benefitted from in-service training; that all students now have access to textbooks; that all teachers have rudimentary teaching aids; and that external supervision has been strengthened and supervision made more mobile, the quality of public basic education remains very poor. Despite some progress over recent years, there are also very wide differences in both access to schooling and educational achievements in different parts of the country. Children in the districts with the lowest enrollment rates (in the Northern region) have about one-quarter the chance of going to school as children in the better endowed districts. Results from the examinations at the end of JSS, show that in one region many children from urban schools had the highest possible marks-while in the rural areas of the same region the scores were significantly lower. The Government of Ghana is thus faced with a huge challenge in uncharted waters - how to resuscitate an educational system that had largely died during an earlier period of severe economic decline. Teachers got out of the habit of teaching, or even turning up at school at all, and the school was closed more often than it was open. Key donors, including the Bank, are currently assisting the Government in developing a comprehensive basic education development program. This program, which is likely to be supported by the Bank through a Basic Education Sector Investment Credit, is designed to assist in tackling a number of outstanding issues in basic education, especially those dealing with school-based management; planning, evaluation and monitoring systems; supervision; curriculum simplification and development; teacher education, training and placement; and the regional inequalities in access to schooling and educational achievements. The Basic Education Sector Investment Credit is likely to be followed by second phases of the ongoing Functional Literacy and the Tertiary Education Projects. D. Other Donor Support for Government's Education Reform Program 2.17 Since the start of the Education Reform Program there has been a revival of donor interest in the educational system in Ghana, with the focus being on primary education, tertiary education, and vocational and technical training. The most significant donors apart from IDA have been United States Agency for International Development (USAID), which has allocated US$35.0 million to primary  - 6 - education; African Development Bank with US$20.0 million for tertiary education; Canadian International Development Agency (CIDA) with US$14.0 million for basic and technical education; British ODA with US$8.0 million for literacy and teacher education for basic education; Norway with over US$8.0 million for literacy and school pavilions for basic education; and the Organization of Petroleum Exporting Countries Fund with US$4.4 million for school pavilions and school sanitation. Other donors include the World Food Program for school feeding, United Nations Children's Fund for primary and pre-school education; Switzerland for secondary school equipment; and the Saudi Fund for secondary school development. 2.18 In the area of Technical and Vocational training there have been a number of donors who have been supporting a few institutions for many years leading to concern over the long-term sustainability of these institutions. CIDA is currently supporting two technical institutions, one low-level polytechnic and five Intermediate Technology Transfer Unit/Ghana Regional Appropriate Technology Industrial Service (ITTU/GRATIS) centers; Kreditanstalt fur Wiedreaufban (Germany) is supporting one Technical Institute; German Agency for Technical Cooperation and German Agro Action are financing virtually all recurrent and capital costs at 8 National Vocational Training Institutes (NVTI); Japan is providing equipment to a further 6 NVTIs; and the European Union is supporting 8 ITTU/GRATIS centers; and various christian organizations are supporting a number of private vocational training institutes. Finally United Nations Development Programme/ILO is providing curriculum development assistance to NACVET; and assistance in developing policies for informal sector employment. 2.19 In order to sensitize other donors to the benefit of delivering the competency-based, short-term training for informal sector financed under this project, and to eventually agree on a common approach for the informal sector, it is essential that dialogue between the Government, the Bank and the other donors be strengthened. Part of this dialogue is already taking place at the monthly education donor coordination meetings held in Accra. The progress and results of the program once they can be demonstrated will be presented to the donors interested in this area and requests for funds to support the expansion of the program will be made. In addition, a Government/Donor conference to establish new criteria for assistance in the sub-sector would be held near the mid-term review of the project. Furthermore, the Government has developed and signed a Letter of Informal Sector Training Development Policy (Annex 2-3) which lays out the principles of Government's overall strategy for vocational and technical education with special emphasis to the development of the informal sector. This policy provides a clear signal to donors of the Government's change in policy towards skill training. III. VOCATIONAL SKILLS TRAINING AND INFORMAL APPRENTICESHIP PROGRAMS A. Background 3.1 Food processing and other agro-based industries are the most important small-scale and informal industrial activities, followed by tailoring, bakeries, wood-related industries, shoe making and repair, construction-related trades, motor repair and body works, and electrical fitting and repairs. 3.2 According to the 1991/92 Ghana Living Standards Survey (GLSS), 28.2 percent of informal sector workers are in the Greater Accra Region, 14.6 percent in Ashanti Region 11 percent in each of Western, Central, and Eastern Regions; 7.5 percent each in and Volta, Brong Ahafo, and Northern Regions; and negligible numbers in the upper regions (Annex 3-1).  - 7 - 3.3 Manufacturing enterprises are concentrated in the Greater Accra Region and to a lesser extent in Takoradi and Kumasi. Greater Accra accounts for over 50 percent of manufacturing employment and about 60 percent of value added; the Western Region about 14 percent and 20 percent; Ashanti Region about 15 percent and 10 percent; and Eastern Region, about 10 percent and 3 percent respectively. 3.4 The 1987 industrial census showed that state-owned firms or those with government participation still dominate the medium and large-scale manufacturing sector, i.e. 28 percent by number, 63 percent in terms of gross output and 53 percent in terms of employment. Although privately owned Ghanaian companies represent some 41 percent of the total number of firms, their share of output, value- added and employment is relatively small. Private joint Ghanaian-foreign enterprises, are considerably larger than wholly owned Ghanaian ones. Output, value added, and employment are roughly in proportion to their 33 percent share of all firms. This census identified 6,213 small-scale establishments employing 1 to 5 people compared with 665 enterprises employing more than 30 people. Earlier, more comprehensive surveys suggested that there were 28,230 urban small-scale and informal enterprises, and 98,000 small scale rural enterprises. 3.5 Formal training for productive employment takes place in government and private (for profit) institutions. Informal apprenticeship plays a far more important role in skills training for productive employment. According to most estimates, master craftsmen provide at least 90 percent of all skill training in Ghana. According to the 1991/92 GLSS, 25.7 percent of all employed workers (skilled or unskilled) had participated in some apprenticeship training program. Given the growing importance of training in the informal sector and its contribution to the economy of Ghana, it is strange that this type of skills development has never received support from existing formal skill training establishments. B. The Urban Informal Sector 3.6 Little comprehensive and reliable data are available on the informal sector. However, the GLSS has shown that in 1991/92 about 32 percent of urban employment was in the infortnal sector while according to the Job and Skill Program for Africa (JASPA) in 1989, 38.3 percent of the urban labor force, or 911,000 people were employed in the urban informal sector, excluding those involved in the informal sector on a part time basis. The same report estimated that urban informal sector employment was growing at about 5.6 percent per annum, while employment growth in the formal sector was less than 1.0 percent per annum. The JASPA report also estimated that the urban informal sector in Ghana was contributing about 22 percent of GDP. Trade and commerce make the largest contribution of total informal sector earnings (52 percent), industry (28 percent), services (12 percent) and transport (8 percent). Despite the crucial role that the urban informal sector plays in employment, employment creation, and GDP, virtually no training schemes exist that are tailor-made to upgrade the skills of those working in the informal sector. For example, only 6 percent of the skilled and semi-skilled informal sector workers had ever attended a Vocational or Technical Training Institute. 3.7 Another indication of the increasing importance of the informal sector is the fact that the majority of informal sector enterprises have been recently established. For example, in 1990/91, a special survey in Accra showed that 41 percent of all informal sector enterprises were less than five years old. 3.8 Of the informal sector workers, 14 percent are unpaid family members, 58 percent are paid employees, and 26 percent are unpaid apprentices. All available evidence suggests that paid employment as opposed to apprenticeship is becoming increasingly important in the informal sector. For  - 8 - example, in 1979, 66 percent of informal sector employees were apprentices, in 1985 this had fallen to 39 percent, and had again fallen to 26 percent in 1990. Young people are now less willing to become unpaid apprentices in informal sector workshops than they were in the past. A special survey of earnings in micro enterprises commissioned as a part of project preparation showed that 30 percent of these enterprises were paying their workers less than the minimum wage of C790.00 (US$0.75) per day with only 35 percent of enterprises in Accra paying this level (Annex 3-2). 3.9 Most informal sector workers have learned their skills from informal apprenticeship programs (55 percent), with very significant proportions being self-taught (35 percent). Currently, 19 percent of informal sector entrepreneurs in Accra have less than a full primary education, and 36 percent have completed grade 10. Surprisingly 10 percent had completed 1-5 years of tertiary education. Forty- eight percent of informal sector entrepreneurs have gained their skills through informal channels. 3.10 The informal apprenticeship system operates in roughly the same way as do similar systems in other parts of the world. The apprentice makes a one-time payment to a master craftsman for an agreed length of training. Depending on the skill required, and the reputation of the master craftsman a fee of US$50 to US$200, bottles of alcohol, and sometimes a goat is charged for training for an apprenticeship of between two and a half and five years. In some cases the apprentices also have to provide their own tools, eg. sewing machines for dressmaking. The apprentice, who is usually unpaid, is taught a few simple tasks at a time, and repeats these over and over again in the master's workshop. Often the apprentice will even sleep on the floor of the workshop. In male-dominated trades the master often provides C200 - C500 per day for food. The master is in no hurry to teach all the skills needed to his apprentice as he might then loose a useful unpaid worker. The apprentice receives no entrepreneurship training and, normally, the technical training given lags behind any changes in technology, and thus provides incomplete skills for the apprentice. 3.11 Currently, the majority of informal sector employees and enterprises do not pay taxes or social security contributions. This was one of the main reasons why the establishment of the Council of Indigenous Business Associations (CIBA) has been supported by the Government. Eventually it is hoped that each trade association will be responsible for collecting taxes from its members. The central organization, CIBA now represents 2.4 million informal sector employees in 35 indigenous associations, including those from the Ghana National Association of Garages (which was supported under Transport Rehabilitation Project I and II), the National Association of Refrigeration Mechanics, the Ghana National Tailors and Dressmakers Associations and others directly related to the trades covered in this project. The Trade Associations have now expanded their activities considerably beyond tax collection. For example the Refrigeration Mechanics have already run training in the technology for replacing chloroflurocarbon (CFC) with ozone-friendly alternatives, and the Garagists have been involved in selecting items to be included in tool kits for newly trained apprentices. 3.12 Master craftsmen and informal sector operators welcome the establishment of CIBA and proposals to provide training for them and their apprentices; however, they insist that this is not enough. They feel that they are often harassed by government officials and ejected from lucrative sites as a part of urban beautification programs; they face continuous difficulties in finding suitable places from which they can operate; they often lack a familiarity with simple and basic tools such as electric drills; and they find it almost impossible to obtain credit. The Government is responding to these concerns. For example, the National Advisory Committee on Labor, with the assistance of ILO, is developing policies to support and encourage the informal sector. Government is establishing light industrial areas where some informal sector operators can locate. Finally, Government has established the National Board for Small-Scale Industries which has started making small loans to informal sector operators under the framework of the Program of Action to Mitigate the Social Costs of Adjustment.  - 9 - C. Formal Vocational and Skill Training 3.13 There are 156 government vocational training institutions run by nine different agencies throughout the country; as can be seen in Annex 3-3, there is also a fluctuating number of private institutions currently estimated at a minimum of 250. The majority of people who are presently being trained in vocational skills are enrolled in the twenty Technical Institutes under the Ministry of Education, with a significant but smaller number in the nineteen (NVTI) in the Ministry of Employment and Social Welfare. In 1991/92, the Technical Institutes enrolled 12,000 full-time and 5,800 part-time students (see Annex 3-4 for details of current enrollments by institution and year), while in 1994 the NVTls enrolled 3,800 students (see Annex 3-5 for details of enrollments by institute). 3.14 Both the Technical Institutes and the NVTls run long duration training courses lasting between 3 and 5 years. The three-year program involves continuous training towards a certificate, the four-year program is used in the rare cases where a one-year block release in industry is possible, and the five-year sandwich program (NVTI only) in the even rarer cases where there is a modern sector formal apprenticeship program. All courses are much too long, with far too much attention paid to theory, and not nearly enough to appropriate practice. Many participants in the training actually leave after two years, as they do not feel that the additional time will give them additional marketable skills. The quality of instruction is variable ranging from good to very poor, depending largely on the extent to which external aid agencies or religious institutions have been involved. 3.15 Many of the centers operated by NGOs are offering useful and innovative training. For example, the Opportunities Industrialization Center (OIC) runs vocational training courses in three centers for youth between sixteen and twenty years old. Training is offered in blockmaking, carpentry, electricity, plumbing, secretarial skills, catering, textiles, ceramics, and graphic arts. The duration of training is from 12 to 15 months. OIC places emphasis on job counselling and placement as well as on regular micro labor market surveys in order to adjust training courses according to the labor market needs, especially in the informal sector. Due to this flexibility, OIC has been successful in job placement of trainees. As no fee is charged, the OIC programs are very popular, especially since assistance is also provided in obtaining suitable employment for the graduates of the program. OIC in Accra accommodates 300 trainees. The other two centers in Kumasi and Takoradi have about 120 trainees each. OIC shows that effective pre-employment training can be completed in 15 months. It also shows how important it is to continuously adapt the training offered to meet current labor force skill requirements. 3.16 The National Youth Organization Commission operates four centers in Greater Accra, Ashanti, Volta, and Eastern Regions. The main objective of their courses is to train JSS school leavers and drop-outs for productive employment in the informal sector. In addition to skills training, the curricula also include basic business administration, accounting, and leadership training. The courses are of two years duration and their effectiveness is variable. 3.17 The Department of Social Welfare has 10 training centers offering training for approximately 2,000 boys in carpentry, blockmaking, welding, tailoring, crafts, and agriculture. There are also four training centers for girls with a total intake of 300 trainees. The centers are largely understaffed and unequipped. 3.18 The Department of Community Development offers training for women in 15 institutions with a total capacity of about 1,000 trainees. The courses offered are in catering, dressmaking, hairdressing, child care, primary health care, and home science and are of two years duration. There are also four training centers for rural industries for male JSS leavers and drop-outs, offering a two-year  - 10 - course in farming combined with one non-farming skill. Again, these centers are understaffed, unequipped and ineffective. 3.19 The Ghana Regional Appropriate Technology Industrial Service (GRATIS) has started a training program to assist the JSS leavers with some apprenticeship experience to be engaged in self employment. Presently it has two training centers, each for 20 students, in Tema and Tamale with a plan to establish one center per region in the near future. The training course of one-year duration ends by assisting graduates in securing bank loans and purchasing equipment to set up their own businiess. The GRATIS centers also provide some training for master craftsmen in the informal sector. The training. though on a very small scale, is effective. 3.20 The majority of the private training institutions concentrate training on secretarial and accounting skills. Those that deal with other artisanal skills often have no workshop of their own and carry out the required practical work in neighboring informal sector workshops. Such institutions often charge high (by Ghanaian standards) fees on the order of US$20-US$30 per term. In theory, any private vocational institution must be approved by the GES, and sometimes also by NVTI before they can be established. Some institutions are of such low quality that is difficult to see how they received approval. A few do manage to provide effective training, especially in the area of catering and dressmaking. Similar to the public sector institutes almost all courses in private institutions are of long duration, namely 3 or 4 years. There is an Association of Proprietors of Private Vocational Training Institutes whiicl is involved in improving the quality of private sector training. 3.21 There are two pre-service teacher training institutions for training technical and vocational teachers - the Kumasi Advanced Technical Teachers' College (KATTC) and Technical Teachers' College at Mampong. Because of the lack of previous industrial experience of trainees, the colleges operate bothl as Technical Training Centers and as a Teacher Training Centers. The KATTC is well equipped witlh a large number of power tools which are rarely found in the technical training institutions or formal or informal workshops. The college is in the process of being integrated as a University College undler the University of Science and Technology in Kumasi. 3.22 The majority of instructors in public and private institutions are drawn directly ftrom] graduates of Technical Institutes and Polytechnics and have rarely had industrial experience or pedagogic training. From time to time NVTI offers short, in-service training programs for both public and private instructors. There are many difficulties in obtaining participation of private school instructors, as the owners of the private institutions are often unwilling to provide the necessary night and transport allowances for their staff. 3.23 Currently there are two competing examination/certification systems in operation. Firstly, the GES Technical Institutes use localized City and Guilds examinations; while NVTI and niuclh of the private sector use specially developed NVTI trade tests. Few small-scale and informal sector employers pay any attention to the certificates a person has, but insist on seeing the competencies and skills he can show. Ghana like many other countries will have to move away from formal examinations in the skill training area towards a process of continuous assessment of specific competencies gained in anid out of training institutions. 3.24 In 1990, the Government established the National Council for Technical an d Vocational Education and Training (NACVET) which is jointly under the Ministry of Education and the Ministry of Employment and Social Welfare and whose structure is shown in Annex 2-2. Eventually it will be responsible for school accreditation, curriculum development, testing, statistics, and industrial relations. It will also be responsible for monitoring and evaluation, policy analysis, and for assessing the quality  - 11 - of the training programs carried out by the institutions supported by the project as well as those financed by other donors. An Executive Director and his Deputy have been formally appointed and are in post and NACVET has recently been allocated adequate professional staff to carry out its project-related mandiate. D. The Role of the Private Sector in Vocational Skill Training 3.25 Apart from the 250 private training institutions discussed in para. 3.13 and 3.20 above, there are a number of larger or well established employers which run their own training centers. For examiiple, both Mercedez Benz and Mechanical Lloyd (for BMW) run training schools for mechanics for their vehicles. Other large private companies have formal apprenticeship programs for their staff. 3.26 NVTI has, as a major part of its original mandate, the running of in-plant training programs for private enterprises which are ready to pay the full costs of the training. Because in many areas NVTI does not have suitably qualified and experienced staff, the demand for such training is limited. More significant are the informal linkages that exist between various Technical Institutes and the largest private and parastatal organizations. For example, a significant proportion of the output of St. Joseph's Technical Institute, Kukurantumi, is absorbed by the Volta River Authority. However, there is currently no contract training done for private companies by technical institutes. E. Short Training Programs to Support the Informal Sector 3.27 In recent years, the Government has designed and run three different types of short training programs to support the informal sector which have provided some guidance in the preparation of this project. The first of these involved training redeployees, using master craftsmen; the second involved training master craftsmen and apprentices in the garage business; while the third was a pilot for this project in which informal sector apprentices were trained in public and private training institutions. 3.28 Redeployment Training Program--Structural Adiustment Program. As a part of a downsizing exercise of the public service, about 50,000 persons have been redeployed since 1987. Of these, 16,000 indicated an interest in being retrained in vocational skills. Short training programs (from 3 weeks to 6 months) were designed to be implemented in 43 existing government training institutions but were poorly patronized. An innovative approach was then developed using local master craftsmen who were selected and contracted to train the redeployees, 50 percent of the contract fee was paid up- front, and the remaining 50 percent on completion of the training. A limited number of small equipment kits were also provided to the redeployees at half the cost of their procurement. To date, no evidence is available in terms of the number of trainees that were working productively in the field of their training on co[impletion of their training. However, the demand for the equipment kits was less than anticipated as the tools wvere not of high quality. 3.29 Master Mechanics and Apprentices Training Program--Transport Rehabilitation Projects (TRP). A pilot program was carried out under IDA's First and Second Transport Rehabilitation Projects which provided short-term training for master mechanics (6 weeks) and apprentices (12 weeks) at the Kumasi Technical Institute. A competency-based learning approach was used throughout the program. This method made it possible to teach both literates and illiterates in the same classroom. A key element of the traininig program were the incentives provided through allowances given to the instructors, master craftsmiien, and even apprentices attending the program. The institute was also supplied with training equipmenit while small tool kits were given to the participants at the end of the training. The average class size was about 10 for master mechanics and 20 for apprentices. The subject areas covered under the program included autobody works and repairs, auto mechanics and auto electrical repairs. This  - 12 - program was expanded to Accra Technical Training Center and Ho Polytechnic. An additional 2-week component covering a management and entrepreneurship for master craftsmen was run by the Management, Development, and Productivity Institute (MDPI). 3.30 This program was important as it was the first training program in Ghana that was designed and implemented with the full involvement of a trade association (the Ghanaian Association of Garages); was entirely competency based., trained both master craftsmen and apprentices; and only trained those who were already in employment. The program was very popular, especially with the apprentices who were provided with an allowance of US$1 per day which was higher than their normal earnings, and at the end of their training were also provided with tool kits costing about US$75 at no cost. Apprentices in other trade areas are well aware of the generosity of the TRP supported training and hope that they will receive the same benefits. A survey of those who passed through the training showed that about one-fourth of apprentices trained had established their own business within a year of completing the training and that the masters wanted more frequent training and would be willing to attend without any allowances or equipment kits if necessary. However, wanted only half-day training, so they would have time to look after their workshops while they were in training. 3.31 Post-JSS Apprentices Training Pilot Program--EdSAC II. The third of these short training programs was designed specifically to upgrade the skills of young apprentices, most of whom were graduates of JSS and had spent at least 18 months either as apprentices or employees in informal sector workshops. Training took place between September 1992 and March 1993 in 16 private and public institutions in two areas, namely, electrical wiring and appliance repair; and arts and crafts (carving, leather work, and weaving). 3.32 The program was organized and run by an ad hoc task force which was responsible for the selection of the institutions, the training of trainers, and for developing the necessary instructional materials. The heads of the institutions were in turn responsible for selecting the instructors and apprentices. These institutions were responsible for promoting the program using mass media, churches and other local media. The trainees were then selected through a competency assessment and interviews. There was an average class size of 20. The instructors were paid daily allowances while heads and proprietors were given a lump sum payment at the end of the three-month term. The institutions were also supplied with training materials and equipment. An evaluation at the end of the training showed that trainers were satisfied with the training given. Again, there is no information on whether or not graduates increased their productivity or established their own businesses. F. Key Issues 3.33 The visits to dozens of public and private training institutions which took place during preparation and appraisal identified a number of key issues that will have to be addressed in any project that is designed to provide high-quality, competency-based training, namely, obsolete training facilities/workshops, inadequate equipment and tools, lack of up-dated modules of employable skills, lack of a comprehensive system of national examinations, testing and certification; and inadequate training programs for instructors. As far as staffing of the institutions is concerned, there is poor job definition, inadequate delegation of roles and responsibilities, inadequate supervision of staff, poor staff appraisal procedures, and few staff development opportunities. Even the better staffed and equipped centers are using curricula and methods more than 20 years out-of-date and are hardly helping graduates find productive employment. The duration of training is universally too long, and the training too theoretical. 3.34 The traditional apprenticesDhip system also has deficiencies. In this period of technological advancement, it still relies on very basic techniques of production and out-of-date technologies.  - 13 - Normally, only the crudest of tools are used. The apprentice tends to learn through repetition of a limited of number or tasks, without seeing how any one task fits into a total system. Entrepreneurship, estimating, and marketing are not dealt with at all. 3.35 The findings of the appraisal mission are consistent with the Bank's Skills for Production paper namely "the high opportunity and direct costs of long formal programs, combined with comparatively low earning in the informal sector are likely to lead to low (social) rates of return." The employment potential and the huge training need in micro-enterprises suggests that existing vocational and educational training institutions should indeed be encouraged to provide short, appropriate, and productivity-enhancing training to informal sector workers in a flexible way at convenient times. 3.36 Successful training for the informal sector is dependent on getting a number of vocational institutions to move from a supply-driven to a demand-driven approach, getting institutions to respond to the needs of formal and informal sector employers, rather than merely turning out large numbers of youths with inappropriate formal qualifications. It is thus considered crucial for these institutions to become involved in training those already in employment, so that the reality of the Ghanaian employment situation can be brought into the classroom. This raises two further issues - how to attract those already in employment to attend vocational training institutions; and how to persuade some of the more established training institutions to take such people in, given the complications they will face in dealing with trainees of differing background and needs. G. Rationale for World Bank Involvement 3.37 Data from the 1991/92 GLSS and recent government macro-economic policies have shown that the modern wage sector in Ghana cannot absorb more than a small fraction of those who enter the labor market. This is attributable to the relatively small size of the wage economy, the downsizing of the public sector, the divestiture of state enterprises, the closing of inefficient industries, and increased capacity utilization of private enterprises, combined with the rapid growth in the number of newly educated entrants to the labor force. 3.38 According to recent labor market analysis, the total number of jobs in the activities to which basic school leavers might aspire is only twice as high as the annual number of school leavers. A modern labor force attrition rate of 3 percent per year and 5 percent growth rate would provide only 30,000 jobs per year. The analysis rightly concludes that even if all jobs were taken by JSS leavers, only about 15 percent would find regular paid employment. It is thus only the agricultural sector, and the rural and urban informal sector which has major potential for employment growth over the next few years. Despite this, very little attention is devoted to training for the informal sector. Only if the majority of Ghanaians can be productively employed can the Government's and the Bank's objectives of poverty reduction and accelerated growth have a chance of being achieved. This support to enhance the productivity of the informal sector must be an integral part of the Government's longer-term development strategy. H. Country Assistance Strategy (CAS) 3.39 The project is specifically mentioned in the CAS that was discussed by the Board on April 14, 1994. Specifically, it aims to reduce poverty (para. 40 of the CAS); support the provision of training services through private sector institutions (para. 42 of CAS); increase the capacity of local institutions to manage the economy (para. 43 of the CAS); and assist in technology diffusion (para. 31 of the CAS).  - 14 - 3.40 A comparison of the 1987/88 and the 1991/92 GLSS shows that an increasing percentage of the population in Accra and other large cities are classified as poor. Informal sector apprentices are among the urban poor and this project, by increasing the productivity and eventual earnings of these informal sector workers, will help reduce urban poverty. The project will support a total of about 40 training institutions, of which 26 will be private. This is the first Bank education project in Ghana that will provide direct assistance to private sector education and training institutions. To date, there has been an almost complete lack of labor force, employment, and earning statistics. The project will support both the Ghana Statistical Service and the Labor Department of MESW in developing a capacity to provide such data on a regular basis. It will also enhance the capacity of the MOE to carry out tracer studies to find out what is happening to graduates of various programs run by the Ministry. 3.41 This project has taken a long time to develop in order to ensure that the quality at entry (para. 50 of CAS) is high. According to the CAS, projects should have shorter life spans - this project is to be implemented over five and a half years. The CAS also emphasized that there should be greater Government involvement in project preparation - the project was entirely developed by a Government task force. There should be involvement of implementing agencies in the project design stage - not only were there four workshops involving beneficiaries, but also the leader of the Government task force has since been appointed as the Project Manager for all vocational projects under the MOE. 3.42 Given the paucity of reliable data on the informal sector and its training needs, it is felt that the first project in this area should be relatively small, dealing with a limited number of trades and institutions. The effectiveness of this approach and the degree of resistance from institutions as they move away from time-based to competency-based training will be carefully monitored. In addition, labor force data will be collected and used to identify skill areas that should be dealt with in any future programs. IV. THE PROJECT A. Project Obiectives 4.1 The project has three main objectives. First, to redirect the focus of both public and private vocational training institutions towards the provision of short, focused, practical, competency-based, demand-driven training for people already in employment. Second, to improve informal sector product quality and productivity in five selected occupational areas. Third, to ensure that an institutional capacity is created that will ensure that Government has access to regular labor force, employment, and earnings data that will enable it to make rational decisions as to the types of training that should be supported. 4.2 To achieve the above objectives, a number of secondary objectives have been defined to (a) strengthen the linkages between trade associations, and public and private training institutions; (b) improve the content and relevance of training activities including entrepreneurial training; (c) ensure that graduating trainees have the necessary tools to productively apply what they have learned; and (d) establish a viable system for monitoring and analyzing the labor market on a continual basis. The success of these activities will be measured by (a) improved quality of products and services in the selected occupational areas; (b) a more efficient transition by workers from apprenticeship to master levels; (c) increased numbers of small business start-ups as more apprentices become fully qualified; and (d) an increased concentration of training resources on short-term, clearly-focused programs for those already employment.  - 15 - B. Project Description 4.3 The project is comprised of the following basic components designed to achieve the objectives noted above: (a) apprentice training; (b) mastercraftsman training; (c) support to public and private training institutions; (d) the provision of: workplace, tools, and equipment for trainees; (e) training program development; (f) the strengthening of NACVET, including for curriculum and materials development, monitoring and evaluation; (g) the establishment of a dynamic labor market data base system; and (h) support for project management and coordination. As a result of surveys carried out during project preparation, the occupational areas selected for inclusion in the project are the following: (a) Electrical Installation based upon the anticipated expansion of employment in this occupational field as a result of the national electrification program; (b) Refrigeration and Air Conditioning as an extension of electrical installation and the anticipated expansion of the electric power network, and also to meet the environmental needs to introduce non-CFC technologies; (c) Carpentry and Joinery based upon the potential for expansion of these occupations following new export regulations designed to increase the value added of timber exports; (d) Dressmaking and Tailoring to improve quality, productivity, and efficiency in these occupations, and to increase the earning power of women; and (e) Blockmaking and Concreting to improve the quality and durability of housing and public infrastructure, and increase the efficiency of the construction industry. 4.4 Support in the above occupational areas will focus on (a) short duration courses for apprentices and master craftsmen and women; (b) assistance in obtaining tools and equipment to improve the quality of their production when they return to the workplace; and (c) through an accreditation process, and tracer studies to enable the program to be continuously improved. As the project is primarily designed to assist persons already employed, extensive participation of the relevant trade associations in (a) training program content; (b) tool and equipment specification; (c) trainee selection; and (d) program evaluation will be an essential aspect of project implementation. The trade associations have reached different stages of development in different trade areas. The most highly developed are in the fields of refrigeration and air conditioning, and dressmaking and tailoring, where there are national executives, and branches throughout the country. The least developed is in the area of blockmaking and concreting where there are only highly localized small-scale associations. The other two trades are somewhere in between. The differing state of development of the associations is one of the variables that will be looked at during program evaluation. 4.5 The delivery of training services to the target population will be carried out by at least 14 Government and 26 privately-owned training institutions who are expected to conduct an average of three training cycles per year in each trade for approximately 5,000 apprentices and 1,000 masters. Over the four years of full-scale project implementation, it is anticipated that roughly 25,000 persons will be upgraded in the various occupational areas. 4.6 These institutions have been selected after an extensive survey of a much larger number, including an analysis of the facilities, equipment, and staffing at each center and the geographical distribution of training places compared with the distribution of informal sector employees from the 1991/92 GLSS; and from the membership of the trade associations. This can be seen in Table 1.  - 16 - Table 1. Regional Distribution of Training Places and Informal Sector Employment GlAccra Ashanti Eastern Western Central Volta B/A Northern Upper/E Upper Wcst Region Region Region Region Region Region Region Region Region Trade Association Members 42.6 20.5 8.1 8.0 7.4 5.2 4.6 2.0 1.6 1.6 GLSS Informal Sector 31.8 19.3 8.6 9.6 10.3 6.8 9.3 3.9 0.4 0.4 Employees Training 31.4 15.1 14.0 2.3 7.0 8.1 7.0 9.8 9.3 9.3 Places 4.7 Support for the various training institutions will be given once a contract agreement has been signed by the MOE and the institutions (Annex 4-1) and will encompass (a) rehabilitation of the physical infrastructure; (b) the provision of tools and equipment; (c) staff training; (d) the development of course content; and (e) tuition fees. As part of the training program, apprentices and masters will be assisted in obtaining relevant tools and equipment at subsidized prices, which will be provided to those who successfully complete the training. Training of Master Craftsmen and Women 4.8 Although there will be some imbalances in the provision of training places due to geographic and demographic considerations, attempts will be made to ensure some degree of equity through the use of "intake vouchers" (see para. 4.10 below). In addition, training institutions may be added to the program if they meet the predetermined eligibility criteria (although this will be somewhat restricted to those schools that require little or no rehabilitation works), while others may be dropped if they do not maintain acceptable instructional delivery standards (Annex 4-2). C. Proiect Components 1. Apprentice Training 4.9 This component is the heart of the project and will provide short-term, competency-based practical courses to be conducted by selected government and private training institutions. A list of the institutions and the courses that they will offer is found in Annex 4-3. These courses will focus entirely upon the development of occupational skills and will center around demonstrations by the instructors to be followed with practical exercises carried out by the trainees. Depending upon the competencies to be covered, course duration will vary from 12 to 24 weeks, with trainees attending some form of block or time release arrangements that have already been mutually agreed between representatives of the trade associations and the training institutions Annex 4-4. All instruction will be evaluated according to the trainees' ability to perform clearly defined tasks Annex 4-5. Course duration will be based upon actual course content and not upon pre-determined or arbitrary time frames. As shown in Annex 4-6, 20,400 apprentices and 4,500 masters will be trained. 4.10 Only apprentices or those working under masters who are members of the trade associations will be eligible for admittance into these short training programs. At the beginning of each year, NACVET will distribute a number of "intake vouchers" to local or national executives of the trade associations, the number of these vouchers being dependent on the number of available training places  - 17 - in that subject area. The association will distribute these to their member mastercraftsmen, who will then distribute to deserving apprentices or workers. The voucher will include the name and address of the master, and the name of the selected apprentice. The apprentice will then be responsible for finding his own training center in a public or private institution near his place of work. The institution will only be allowed to accept trainees who have the intake vouchers, as fees from Government will be paid against validated intake vouchers. The institutions with the better reputation will also be able to administer a skill test to potential candidates, and select these with the highest skill levels. 4.11 Public Training Institutions. Fourteen public training institutions have been selected and are willing to carry out this short competency-based training. Ten of these are Technical Institutes being run by GES, and four by NVTI, providing in total 53 percent of training places under this project. Two of the institutes will be providing training in all five areas, and a further six in four areas (Annex 4-3). In each area there will be three courses per year. Funds for building rehabilitation and maintenance not exceeding CIO million (US$10,000 equivalent) will be provided for each subject area in each school, and in addition equipment and tools not exceeding US$12,000 will be provided for each subject. Two instructors per subject area will be retrained, and fees of between C30,000 and C60,000 (US$30 and US$60) per apprentice per course will be charged. C 10,000 (US$10) of those fees will be paid up-front by the apprentice and used to defray the initial investment in works and equipment. 4.12 Private and NGO Training Institutions. Eleven NGO and fifteen private for-profit institutions have been selected and are willing to run short, competency-based courses. Only two of these institutions are competent to carry out training in four subject areas, with the rest only able to run courses in one or two areas. The private institutions will be provided with the same level and type of support as the public institutions, except that private institutions will only be provided with a building rehabilitation and maintenance allocation of C3 million (US$3,000) per subject. Again, fees will be charged and used to defray the initial investment in works and equipment. 2. Training of Masters 4.13 The mastercraftsman or woman is the key trainer of all informal sector workers. It is thus important that he/she is kept abreast of new appropriate technologies. During the preparation of this project there were frequent discussions of the precise skills in which the masters would like to be trained. In addition to technical skills, there was an almost universal demand for training in entrepreneurial, cost estimation and accounting skills. 4.14 When possible the training of masters should precede that of the apprentices, so that it can reinforce the apprentice training. As with apprentice training, "intake vouchers" for master training will be distributed by NACVET to the trade associations for onward transmission to their members. The training of masters is considerably more complex than that of apprentices for several reasons. First, there are only about 9 public and no private institutions that are suitably staffed to run the higher level of training required by masters, and for some masters there will be no nearby institutions. Second, masters require both technical and entrepreneurship training; the former will be run by technical institutes, the latter will be run by the (MDPI) in Accra, Kumasi, and four other regional centers. Third, the master cannot be absent from his workshop or business for any length of time. Thus, in general, courses have to be provided in a more flexible way than is the case with apprentices. In some trades, masters require training every other week, in others three hours a day, and yet others three days per week. Masters will also be expected to pay a fee of C20,000 (US$20) for participation in the training. However, where management training is far from their workshops they will be provided with rudimentary accommodation and meals.  - 18 - 3. Financin,e the Training 4.15 All institutions participating in this program will sign a contract agreement, committing themselves to provide a given number of courses (in a limited number of subjects) for a given number of students in return for receiving facility rehabilitation funds, equipment, and staff training. Private schools that fail to deliver the specified training will be committed to (a) return the tools and equipment to the MOE or pay the full or prorated cost of these items; and (b) pay the full or prorated cost of facility repairs and renovation. A draft framework contract agreement to be used with the selected institutions has been presented to IDA and is included in Annex 4-1. 4.16 All trainees, both masters or apprentices will normally pay a fee of C20,000 or C 10,000 (US$10 to US$20), respectively, to the institutions where the training will take place. This fee will be used by the institutions to purchase the necessary consumable materials needed for the training. Upon successful completion of the training, certification of the trainees, inclusion of their names for potential tracer study follow-up, and presentation of the validated "intake voucher" to the Government, the institution will be provided with an additional fee to defray the incremental cost of training provided, ranging from C20,000 and C50,000 (US$20 and US$50) per trainee, depending on the length and level of the training. Approximately C5,000 (US$5) of this will be paid directly by the Government from its own matching funds, and the remainder drawn from the proceeds from the sale of tool and equipment kits, deposited in the revolving fund as described in para. 4.19 below. 4.17 For entrepreneurship training, proposals were invited from a shortlist of four local training institutions. MDPI submitted the most appropriate proposal which will last for two weeks. MDPI's proposed training will last for two weeks. MDPI will be paid a fixed fee of C60,000 (US$60) per trainee for courses run in Accra and Kumasi (where they have training centers), and C150,000 (US$15) per trainee elsewhere, the additional C90,000 (US$90) to cover the boarding and lodging of the masters and their staff, and the hiring of a training venue. 4. Support to Apprentices and Masters 4.18 Experience has shown that a skill not used is easily forgotten. Trained workers soon lose acquired skills and have difficulty in improving their productivity when they lack the tools and equipment in the work place needed to practice the new skills. For this reason, an important component of the project will provide tools and equipment to the apprentices and masters participating in the training program. Following recommendations by the trade associations on the types of tools and equipment most needed in the selected occupations, the project will procure basic tool kits for the apprentices and master trainees. These tool kits will be available for purchase by the trainees at a subsidized cost at the end of their training. During the series of workshops held with beneficiary groups the ability of apprentices to pay for the tools was investigated. This varied from C25,000 (US$25) for masons to C100,000 (US$100) for refrigeration technicians and is combined with the opportunity cost of the training (Annex 4-7) which establishes the maximum cost of the tool kit in any area. The content of each of these tool kits within the cost parameters has been decided in consultation with the trade associations. A similar process has been followed in determining the size and composition of the tool kits for masters (Annex 4-8). The actual ability to pay for the kits by apprentices and masters will be closely monitored during the early years of the project and, if necessary, the size of the kits will be adjusted to ensure that they are affordable. 4.19 The tool kits will be sent to the institutions as soon as NACVET is informed of the actual enrollment in a particular course. Each kit will be numbered and accompanied by a numbered waybill and a numbered receipt. The C10,000-C20,000 (US$10-US$20) fee that the apprentice or master pays  - 19 - at the beginning of training will be considered as a down payment for the kit. At the end of training, in order to obtain the kit, the trainee will deposit in a designated bank account the balance that he/she owes, and present to the school this deposit pay-in slip and a copy of a certificate of full-time attendance from the school, endorsed by the local trade association. The amount deposited will go into a revolving fund which will be used for future purchases of tool kits and to pay the training fees. This revolving fund and the accounting for the distribution of the tool and equipment kits will be audited annually. During the first training cycles there will also be very closing monitoring by NACVET. Each apprentice and master will also receive a training record card with a photo at the end of training. The composition of the tool kits is found in Annex 4-8. 4.20 The actual tools that the trade associations claimed were needed by apprentices and masters were considerably more than could be provided taking into account the opportunity cost and the ability of the trainee to pay. Thus, a small quantity of higher cost supplementary items will be available for sale through NACVET and the trade associations to masters and apprentices who have completed the training at cost (Annex 4-8). The project will only finance such items for 5 percent of the masters and apprentices to be trained through the project. If demand is greater, the proceeds from the sales will be put into the revolving fund as discussed above (managed by NACVET) and additional items procured. In purchasing these items, masters and apprentices must make a direct deposit into a specified bank account and obtain the item of equipment on presentation of the deposit pay-in slip. 5. Training Program Development 4.21 In a departure from previous curriculum development exercises carried out in the vocational and technical education sub-sector, course content for the five occupational areas supported by this project will be developed by NACVET in close cooperation with the beneficiary groups represented by the trade associations. Since the instruction delivered under this project will be of direct practical use on the job, the trade associations will play a key role in defining those occupational skills most needed by apprentices and masters. Working through NACVET and the training institutions supported by the project, course content will be defined in detail and will be based primarily upon (a) the use of tools and equipment; (b) production techniques; and (c) quality control. In addition, masters will be given instruction in small business management. In all cases, the content, emphasis and duration of training will be consistent with trade association recommendations, and the associations will be consulted on a periodic basis to obtain feedback on the effectiveness of the training and the use of the skills gained. The development of these new courses is currently underway using PPF resources. 6. Training of Instructors 4.22 KATTC will be responsible for training the instructors for this program. The instructors for each trade will be trained for two weeks at the start of the project, and for a further week after two years. Separate courses will be run for instructors of each trade, some at KATTC in Kumasi and some through polytechnics or their participating institutions elsewhere in the country. The training will be entirely practical and project-based. Annex 4-5 outlines the instructional methodology that will be imparted. 7. Institutional Strengthening of NACVET 4.23 NACVET will be the organization responsible for all technical aspects of project implementation. Its role will include (a) servicing the council, participating in terms of policy analysis, (b) determining and directing all foreign assistance in the area of vocational and technical training, (c) curriculum and materials development, (d) contracting with public and private technical institutes to be  - 20 - supported by the project, (e) monitoring and assessing the quality of the training provided, (f) checking the extent to which institutions are meeting the established eligibility criteria, (g) developing accreditation criteria for selected disciplines, and carrying out accreditation, (h) maintaining regular contacts with trade associations, and (i) monitoring the adherence of the training institutions to their contracts. In order to carry out these tasks the staffing of NACVET has been substantially increased; but staff still needs to be trained; and short-term consultants recruited. NACVET will also be provided with office space, essential vehicles, equipment, and operational support. Recently the Minister of Education assigned 21 professional and administrative staff to NACVET and a qualified executive director and his deputy have been appointed. 8. Tracer Studies 4.24 Despite the fact that over 400 public and private skill training institutions have been training thousands of young people over the past four decades, except for the OIC centers described in para. 3.14, there is no evidence as to whether or not this training is leading to employment, and whether the skills learned are used. The project will thus support the strengthening of the capacity of PBME to carry out tracer studies, which will not only follow-up and evaluate the effectiveness of the training under this project, but also of longer term formal technical and vocational training. By following up graduates the comparative effectiveness of each of the two systems can be analyzed, and a decision made as to where resources should be concentrated. Additional staff will be appointed to PBME, and in the 9 training institutes offering courses in four or more trades a full-time institutional tracer studies officer will also be employed. In other institutions national service personnel will be assigned or regular instructors given responsibility for follow-up on a part-time basis. The full and part-time institutional representatives will be trained early in the project and closely monitored by PBME staff. They will attempt to follow-up a 20 percent sample of master and apprentice trainees over a year, and also a smaller sample of regular long-term students in the same trades and institution. 9. Labor Market Data Base 4.25 There is a lack of comprehensive labor force, employment, and wage earnings data available in Ghana. For this reason, a baseline labor force survey is being financed through the ongoing Economic Management Support Project (Cr. 2224-GH) but managed by this project. This work is being conducted by the Ghana Statistical Service with regular updating to be done by the Labor Department of MESW. It is planned that NACVET will interface with these two agencies so that relevant information can be used in the design and implementation of future training strategies. Work on this comprehensive labor force survey has already started with the hiring and training of the field surveyors. First results should be available by mid-1996. 4.26 Labor Force Survey. This comprehensive labor force survey is the first such survey carried out over the past two decades. It will be an in-depth inquiry into the structure and distribution of wages and working conditions of the country's labor force. It will provide comprehensive bench-mark data for use in the compilation of current statistics on average earnings, hours of work, and rates of wages and salaries so as to indicate wage/salary differentials between branches of industry, geographic regions, occupations, and sexes. Also to be compiled are statistics on: establishments by size and type of labor employed; educational background and skills of the labor force; time use; job characteristics, hours of work, activity status and employment search, and employment history. For the purpose of formulating and monitoring employment policies and programs, income-generating and maintenance schemes, vocational training and other similar programs, the Labor Force Survey will also collect information regarding the measurement of the relationship between employment, income, training and  - 21 - other social and economic characteristics. It will gather information on establishment practices with respect to wage/salary, payment schedules, shift operations, payments of overtime, and incentive bonuses. 4.27 The Labor Force Survey has been planned in such a way as to provide the framework for the collection and compilation of mutually consistent data on employment, unemployment, and wage statistics in both the formal sector (using the establishment survey approach), and the informal urban and rural and small-scale non-agricultural industrial sector (using the household survey approach). The decision to integrate these two approaches has been conditioned by a number of factors, including the relevance of the information to current users and the availability of a good statistical sampling for both household-based and establishment-based surveys. The survey will be managed through this project, but financed through the ongoing Economic Management Support Project (Cr. 2224-GH). 4.28 Labor Department (MESW) The labor department has staff in the 62 most urbanized districts in the country. These staff are currently collecting data for the project on the location of all informal sector workshops in the five trades in their area, and will soon be collecting employment and earnings data on a regular basis which will be sent for processing to the Employment Information Branch in the Department. They will be provided with information from the Statistical Service of the sample households and industries they used for the labor force survey, and carry out twice yearly surveys of the same household and industries. This information will be passed on to one of five preliminary data processing centers in the larger district centers, and then on to the Employment Information Branch for further processing and publication. The project will support computers, bicycles, motorcycles and other vehicles, staff training, field allowances and consultancies for this work. However, currently the background and qualification of the staff in the Employment Information Branch and the five preliminary processing centers is too low for there to be reliable data processing. Thus, as a condition of disbursement of funds to MESW, at least one qualified computer programmner must be employed in each of the five preliminary processing centers and two in the Employment Infornation Branch. D. Project Costs and Financing 4.29 Proiect Costs. The following table summarizes the costs of the project. Table 2. Project Costs Total Costs Percentage of US$ millions Total Costs Training Of Masters and Apprentices Strengthening of Training Institutions 1.6 12.9 Training Fees 1.1 8.9 Entrepreneurship Training for Masters 0.7 5.7 Subtotal 3.4 27.5 Tools and Equipment for Masters and Apprentices Tools Kits for Apprentices 3.9 31.5 Tool Kits for Masters 2.2 17.7 Distribution of Tool Kits 0.3 2.4 Subtotal 6.4 51.6 Institutional Stren2thening NACVET 0.9 7.2 MOE PBME 0.7 5.7 MOE PMU 0.6 4.8 MESW Labor Force 0.4 3.2 Subtotal 2.6 20.9 GRAND TOTAL 12.4 100.0 Of Which Contingencies (1.6) (12.9)  - 22 - 4.30 Physical contingencies were estimated at 10 percent for goods and works. Price contingencies have been derived from the implementation schedule and the following expected price increases: foreign prices 2.2 percent per annum throughout; local prices 20 percent in 1994, 15 percent in 1995, 12 percent in 1996, 8 percent in 1997, and 5 percent per annum thereafter. The project will be implemented over a five and a half year period, with an expected completion date of December 31, 2000. Detailed project cost estimates are shown in Annex 4-9. 4.31 Financing Plan. The following table summarizes the financing of the project. Table 3. Financing Plan Local Foreign Taxes and Duties Total Percentages IDA Credit 3.4 6.2 - 9.6 77.4 Government Matching Funds 0.3 - 0.6 0.9 7.3 Beneficiary Trainees 1.5 0.4 - 1.9 15.3 Total Project Costs 5.2 6.6 0.6 12.4 100.0 Percentages 41.9 53.3 4.8 100.0 4.32 The Government's allocation of US$0.9 will be used to pay part of the training fees for the training of apprentices and masters: to cover 10% of the costs of works, local purchases, and operating costs, and to pay taxes and duties. The project will require annual budgetary allocations from Government of around US$150,000 per year over the life of the project. The beneficiary trainees' contribution will be used to pay fees to training institutions, and to pay for the cost of the tool kits less the opportunity costs of the training. V. PROJECT IMPLEMENTATION A. Project Preparation 5.1 The preparation of this project has been notable in two respects. First, it was developed by a team of local officials and consultants with little input from the Bank or other donor agencies. These preparation and consensus building activities took a long period of time. The first Government committee started work in 1991, and a draft project proposal was not produced until February 1994, with the final proposal officially submitted to the Bank in September 1994. Second, there was a high level of participating institutions and client involvement in project preparation. Government organized four workshops of training providers and trade association representatives during its preparation activities; the appraisal mission organized a further workshop with involvement of all stakeholders. Government also attempted to pilot the concepts in 1992/93, but devoted insufficient attention to evaluation of the outcomes. 5.2 During pre-appraisal (February/March 1994), appraisal (July 1994), and post appraisal (October 1994), task force and mission members visited most of the proposed training institutions and also visited workshops and trade associations in different parts of the country to assess (a) the feasibility for public and private institutions to carry out short-term training courses; (b) the level of response from  - 23 - mastercraftsmen and apprentices towards attending short-term training and their willingness to pay for the courses; (c) past experiences of short-term training programs carried out by some institutions; and (d) the willingness of selected trade associations to participate in the elaboration and implementation of key elements of the project. B. Projects Management and Coordination 5.3 In September 1993, the Government established a Projects Management Unit (PMU) as an integral part of the Ministry of Education responsible for managing all externally-funded projects in the education sector. The core of this PMU has been drawn from the EdSAC Projects Management Unit which was created in 1987, and has been functioning successfully with responsibility for the IDA-financed EdSAC I, EdSAC II, Community Secondary Schools, Primary School Development, and USAID-financed Primary Education Project managed by the School Education Division. The Unit also includes staff working on the IDA-financed Literacy and Functional Skills project managed by the Non-Formal Education Division; and the Tertiary Education project managed by the Higher Education Division. The PMU, which is headed by a Director General, falls under the overall responsibility of the Minister of Education. It has an efficient accounting and disbursement system and has demonstrated considerable experience in procurement and civil works administration. In order to effectively manage the project, the PMU will be strengthened with the addition of a dedicated project manager, and three project officers to be added to existing units. In addition, part-time accounting and evaluation consultants will be recruited. The organizational structures of the Ministry of Education and the PMU are found in Annex 2-2. A Project Manager for this Vocational Skills Project, with qualifications and experience acceptable to IDA, has already been appointed. C. Proiect Sustainability and Recurrent Cost Implications 5.4 It is expected that the project's long-term sustainability will be achieved through (a) forging links between training institutions, the trade associations, and the informal sector in general; (b) establishing competency-based training as an effective and viable approach to improve worker productivity; (c) strengthening labor market data collection and analysis; (d) creating incentives for training providers to shorten traditional long-term training programs; (e) the existence of the revolving fund for equipment kit purchases and future training provision; (f) the Government providing a fee to the institutions of around C5,000 (US$5) for each master or apprentice being trained; and (g) creating an awareness that training must be complemented by improvements in equipping the work place if it is to be effective. Through the nurturing and acceptance of these concepts, it is hoped that they will become part of the education and training system and will remain as such beyond the life of the project. 5.5 It is expected that the impact on the Government's recurrent budget of carrying out this short training in 14 public institutions included in the project will be minimal since each public institution will be asked to reduce their current total regular enrollment to free space for the short-term training. Apart from the normal incremental creep in salaries, various overtime and other allowances, and additional allocations for recurring materials due to the practical nature of the training, little increase in recurrent costs is unexpected in the project institutions. Details on the 1994 total recurrent budget approved for the Ministry of Education is found in Annex 2-1. D. Project Monitoring. Reporting, and Evaluation 5.6 The process of technical evaluation has been discussed in paras. 2.4 and 4.23 above. In addition, the PMU will prepare and submit to IDA annual progress reports on project implementation by the end of September each year, covering the period up to June of the same year. These annual reviews  - 24 - will concentrate on the ability and willingness of participants in training to pay fees for training and tools. On the basis of this annual evaluation the budgetary allocations for the following year will be prepared. The Project Manager will liaise with the other implementing agencies to ensure that they submit timely written progress reports on the components for which they are responsible. A draft Implementation Manual and Plan containing details on the physical and technical aspects of the project as well as key performance indicators has been discussed in detail with IDA. The manual will be updated annually to reflect delays or progress in project implementation. The MOE will also provide its own evaluation report on the project which will be part of the Implementation Completion Report to be completed within six months of the closing date. Some project performance indicators are found in Annex 5-1. E. Mid-Term Review 5.7 A joint Government/IDA mid-term review will be carried out at an appropriate time between July and December 1997 to assess the overall progress made in implementing project development and performance objectives; and to verify the validity of the project design in the light of implementation experience. At least two months prior to the review the Government will prepare and present to IDA a report in sufficient detail to form the basis of the review. In particular this report will consider a separate analysis of tracer study results from a sample both of long-term skill training graduates, and from the first two cycles of short competency training completed under the project. It will also note schools that have not maintained implementation standards and for which IDA support might be withdrawn. 5.8 During the mid-term review IDA and the Government will attempt to answer the following questions in order to determine the extent to which there should be any significant change in the focus of the project: (a) How many masters and apprentices are enrolled in training courses by trade, and school? Are the schools maintaining acceptable standards of instruction? What actions are being taken with below standard schools? (b) How effective has the short-term training been? Have the skills learned by the trainees been used in the workshops? (c) Are the tool kits being purchased and used by the trainees? What is the distribution of tool kits by trade? Are there any items which are not being used? Why not? Are the optional items being purchased by the trainees? (d) Have the trade associations been involved in all aspects of designing and implementing the training programs? Are there significant differences in participation by trade? (e) Is the labor force data system being used? By whom? Is it being regularly updated? 5.9 Based on the outcome of the review, the Government will promptly prepare and implement an action plan, acceptable to ID)A, to improve the project's implementation. The Government will also organize a conference with other donors to examine progress on this and other projects in the subsector and develop an overall sector program that all donors can support.  - 25 - F. Environmental Aspects 5.10 The project, designed to offer short-term competency-based training to mastercraftsmen and apprentices, is classified as category C and will have no impact on the environment. G. Procurement 5.11 The following table summarizes the project components, their estimated costs and proposed methods of procurement. The Procurement and Disbursement Schedules, which allow sufficient time for all the key procurement steps, are presented in Annex 5-3. Table 4. Summary of Proposed Procurement Arrangements (USS million equivalent, including taxes and contingencies) Procurement Method TOTAL Project Element ICB LCB OTHER N.I.F. COST 1. Works 1.1 Rehabilitation 1.041 1.041 (0.937) (0.937) 2. Goods 2.1 Workshop Equipment for Training Institutions 0.855 0.855 (0.855) (0.855) 2.2 Office Equipment and Furniture 0.171 0.171 (0.153) (0.153) 2.3 Toot Kits for Trainees 5.008 1.118 6.126 (5.008) (5.008) 2.4 Vehicles, Motorcycles 0.217 0.037 0.254 and Bicycles (0.217) (0.037) (0.254) 3. Consultancies 3.1 Project Supervision, ImpLementation and 0.599 0.599 Monitoring support (0.599) (0.599) 3.2 Institutional Development 0.121 0.121 (0.121) (0.121) 4. Training 4.1 LocaL Training/Workshops 2.242 2.242 (0.746) (0.746) 4.4 Training Abroad 0.021 (0.021) (0.021) (0.021) 5. MisceLlaneous 5.1 Field ALLowances 0.079 0.079 (0.079) (0.079) 5.2 Honorarium 0.058 0.058 (0.058) (0.058) 6. IncrementaL Recurrent Costs 0.735 0.081 0.816 (0.735) (0.735) TOTAL 6.080 1.212 3.892 1.199 12.383 IDA Financing (6.080) (1.090) (2.396) (0.000) (9.566) Note: Totals may not add up due to rounding. Figures in parentheses are the respective amounts financed by the IDA credit. N.I.F. = Not IDA-Financed. Includes contribution by trainees, taxes and duties and Goverrnment financing of equipment distribution.  - 26 - 5.12 Civil Works. The civil works included under the project are for the construction ot offices for NACVET, and for the rehabilitation of the selected public and private institutions. A survey has bee n carried out by a team of quantity surveyors out to assess the physical facilities and rehabilitation needs ot the first ten public schools and fifteen private training institutions. From this survey it was decided to restrict rehabilitation work to C3 million (US$3,000) per subject per school in private schools and CO() i[illion (US$10,000) per subject in public schools. For these small works LCB advertised locally accordinig to procedures acceptable to IDA will be used. These contracts, each estimated to cost less than US$100,0R)( will total a maximum of US$0.5 million for 14 public institutions, and US$0.1 million for 26 private institutions. The office block for NACVET (US$0.35 million), and various small rehabilitation works will be awarded on the basis of normal competitive bidding advertised locally in accordance with procedutres acceptable to IDA. The phasing of civil works procurement is included in the implementation plan and summarized in Annex 5-4. 5.13 Goods. Goods financed under the project would include: computers, vehicles, motorcycles. furniture, tools, equipment, training, and operational materials for a total value of US$6.4 tnillion equivalent including contingencies. Goods valued at US$100,000 or more per contract would be procured througlh ICB using Bank's standard bidding documents. Contracts for goods procured through ICB would total abhout US$6.1 million, representing 96 percent of the total value of goods financed by IDA. Office equipmiienit and furniture which can be competitively procured locally and which cannot be grouped into bid packages olf at least US$100,000 equivalent each will be procured through local competitive bidding (LCB) under procedur-es acceptable to IDA. In aggregate these will not exceed US$0.2 million equivalent and would represenli 3 percent of the total value of goods financed by IDA. The remaining 1 percent of the total value of goo(ds, for items such as motorcycles and bicycles as well as materials used in training and in project managenent which cannot be grouped into bid packages of at least US$50,000 equivalent will be procured on the basis of price quotations obtained from at least three reliable suppliers, provided that the aggregate amount of sucl procurement does not exceed a total of US$0.25 million equivalent. LCB procedures will include: (a) explicit statement to bidders of the evaluation and award criteria; (b) local advertising with public bid opening; (c) award to lowest bidder; and (d) foreign bidders would not be precluded from participating in [.C(13. Government has confirmed the above LCB principles. 5.14 Services. Consultants financed by IDA, totalling US$0.7 million equivalent would be contracted in accordance with IDA's "Guidielinesfor the Use of Consultants " (August 1981). The consultancy services required under the project would be mostly for project management, supervision and implementatioin, surveys and research and for architectural and engineering services. They would include, specifically, the services of locally recruited consultants and training institutions to carry out activities suchl as: (a) development of tracer studies; (b) training of trainers, mastercraftsmen, and apprentices; and (c) annual project audits. Terms of reference for major consulting services and details on consultancies are available in the project file. Details on the training program are found in paras. 4.8-4.21. 5.15 Procurement Arrangements. The procurement activities of this project will be straightforward for civil works. The rehabilitation work will be supervised by project engineers and payment will be miade to contractors only when the work is complete according to specifications. Only for the office block will mobilization advance be given and this will not exceed 20 percent. Goods procurement will be carried out by the staff of the Procurement Section of the PMU. To facilitate procurement, tool and equipment kits will be procured for the first four training cycles (one year and four months) with an option to buy up to twice as many kits over the following three years. The Project Manager will liaise closely with the Procurement Section for handling all matters related to the preparation, implementation and monitoring of work plans for the smooth execution of procurement of all works, goods, and services, including the preparation of bidding documents, launching of tenders, evaluation, and reporting the results to the Government and to IDA for  - 27 - review. During negotiations, Government agreed, that in order to expedite project implementation, it would endeavor to maintain the following times for key procurement steps: Table 5. Timetable for Key Procurement Steps From Bid Opening to Completion From Government Approval or or Official Submission of IDA's No Objection of Bid Bid Evaluation Reports to IDA Evaluation to Contract Signing Goods under US$100,000 30 days 30 days Goods over US$100,000 60 days 30 days Works under US$100,000 45 days 30 days Works over US$100,000 90 days 30 days Consulting services 30 days 30 days 5.16 In addition, adequate records on procurement progress, including staff reports on site visits, the timing of works and goods procurement; and compliance with agreed methods of procurement will be maintained by the office of the Project Manager. These will be used in MOEs project monitoring system. The Project Manager will update the project cost estimates annually, including his best estimates of allowances for physical and price contingencies and report these to IDA not later than October 31, each year for the succeeding year. 5.17 A project launch workshop will be organized by the Government and IDA shortly after Board presentation with the assistance of the PMU staff as soon as all key project staff are in post. This workshop will be attended by staff from all project entities and deal with all aspects of project implementation, and will especially concentrate on procurement, disbursement, monitoring, and reporting. A final version of the Implementation Manual will be circulated at the launch workshop. This will be followed by training in competency-based instruction of teaching staff of the selected institutions. 5. 18 Bank Review. Prior review by IDA would be required for procurement of packages of works and goods which exceed US$100,000, of consultant services to firms of US$50,000, and to individuals of US$10,000. All consultancy service terms of reference and standard contract forms will be subject to IDA's prior review. The review process would cover over 68 percent of the value of the amount contracted for works, goods and services financed by IDA. All bidding documents will be based on the Bank's Standard Bidding Documents for each type of ICB procurement have been prepared and presented to IDA. H. Disbursements 5.19 The project is expected to be completed within five and a half years by December 31, 2000, with all disbursements made by June 30, 2001. The estimated disbursement schedule is given in Annex 5-3. 5.20 The following table gives the categories and amounts to be financed out of the IDA credit, and the percentage to be financed in each category.  - 28 - Table 6. Summary Disbursement Schedule Amount of the Credit Allocated Percent of Expenditures Category of Expenditures (US$ Million) to be Financed by IDA I. Civil Works .86 90% 2. Equipment. Vehicles and Furniture 5.55 100% foreign expenditures 90% local expenditures 3. Training .74 100% 4. Consultant's Services .65 100% 5. Operating Costs .58 90% 6. Refunding of PPF .23 7. Unallocated 95 Total Credit Amount 9.56 Note: As a condition of disbursement for the release of operating costs to the Ministry of Employment and Social Welfare tor its Labor Force Data System, the Govermment will have appointed qualified staff to the Employment Information Branch and the five preliminary processing centers. 5.21 Disbursements of the IDA credit will be fully documented except for: payments under contracts of goods of less than US$50,000 equivalent and works of US$100,000 equivalent, which may be disbursed against Statement of Expenditures (SOEs). Documentation for withdrawals under SOEs would be retained at the PMU for review by IDA staff during supervision missions and by auditors during annual audits. Disbursement and withdrawal procedures are detailed in The World Bank Disbursement Handbook (1992 edition). All disbursements are subject to the conditions of the Development Credit Agreement and the procedures defined in the Disbursement Letter. 5.22 Special Account. To facilitate disbursements of eligible expenditures for works, goods and services, the Government will open a Special Account in a commercial bank to cover part of IDA's share of eligible expenditures to be managed and administered by the PMU. The authorized allocation for the Special Account would be US$0.5 million; IDA will make an initial deposit of 50 percent of that amount from the proposed credit immediately upon credit effectiveness and the remaining balance will be made available when the project implementation has fully taken off. IDA would replenish the Special Account on a monthly basis upon receipt of satisfactory proof of incurred eligible expenditures. Replenishment requests would be accompanied by up-to-date bank statements and reconciliations of the Special Account. All payments under US$50,000 equivalent must be made through the Special Account; payments above that amount may be made through direct payment or special commitment procedures. According to the procedures set out in The World Bank Disbursement Handbook (1992 edition). Funds in the Special Account cannot be mixed with other funds (such as matching funds or funds fromn other donors); nor can they be advanced to project entities prior to expenditures taking place. Any special account for which no replenishment requests have been received by IDA for six months becomes inactive, and may have to be repaid.  - 29 - 5.23 Project Account. The Government will establish a Project Account in cedis in a commercial bank for local matching funds. It will be required to make quarterly deposits in advance on the basis of an agreed budget for the project, proposed by Government, and accepted by IDA by October 31 of each year. All local matching funds and most IDA eligible expenditures paid in local currency would be disbursed from the Project Account. Any advances to project entities will be from this account. IDA eligible expenditures disbursed in local currency from the Project Account would be replenished from the Special Account as required. I. Accounting, Auditing, and Reporting 5.24 Overall responsibility for the project's financial management would rest with the PMU, which would maintain the consolidated project accounts for the entire project. The accounting for all Special Account and Project Account transactions would be maintained in accordance with international accounting standards. Annual financial statements of IDA-financed components would be prepared and audited in accordance with auditing guidelines by suitably qualified independent auditors acceptable to IDA. This audit would cover all activities of the revolving fund; of the distribution of, and payment for, the equipment and tool kits; and the use participating training institutions make of fees from participants, and from Government and the revolving fund. By June 30th of each year, PMU would submit to IDA an auditor's report, management report and audited financial statements for the Special Account, Project Account and for payments made through Statement of Expenditures procedures for the preceding fiscal year. Audits of Credits 2140-GH, 2278-GH, 2349-GH, 2428-GH, 2508-GH implemented by the MOE are current. VI. PROJECT BENEFITS AND RISKS A. Proiect Benefits 6.1 An awareness will be created of the inefficiencies of long, largely theoretical vocational skill training for stagnant modern sector employment. Government will redirect a part of the resources it currently devotes to this long duration training to more effective, short competency-based training for those already in informal sector employment or apprenticeship programs. Both public and private training providers will become more responsive to labor market realities. Training beneficiaries, represented by the informal sector trade associations will play an increasing role in determining training course content and trainee and equipment selection. The quality of goods and services produced by the informal sector will improve and productivity and earnings will increase, which will, in turn, lead to an expansion in informal sector employment. 6.2 The institutional structures for managing an effective vocational training system will be strengthened, and eventually only those institutions that offer meaningful training will be accredited and supported. A system will be developed and put in place that will provide the Government with a regular source of up-to-date labor force data, including data on changes in employment and earnings in different skill areas. Finally, donors will redirect their support for vocational and skill training towards short demand-driven programs. B. Project Risks 6.3 The project has four main risks. First, the key implementing agency, NACVET, though created in 1990 has, up to now, played little role in the technical and monitoring aspects of managing the vocational skill training system in Ghana. Second, public and private training providers are not yet fully  - 30 - committed to the provision of practical competency-based training for masters and apprentices who might have very low academic qualifications. Third, participants in the new short courses might not always be drawn from apprentices or others who are already employed, but from the unemployed who are ready to grasp at any low-cost training that might lead to eventual employment. Fourth, the unclear division of responsibility between the Ministry of Education and the Ministry of Employment and Social Welfare in the area of vocational and skill training might lead to a dissipation of energies by these agencies on matters not directly relating to project implementation. 6.4 The first risk has been mitigated by a transfer of key management and professional staff to NACVET. The second risk will take some time to be reduced, as only when the institutions have experience in providing new short competency based training will they be able to make a judgement as to how they might manage such training in the long run. The third risk will be minimized by distributing "intake vouchers" to trade associations for onward distribution to their members. As far as the final risk is concerned, the Government is hiring an independent consultant to make recommendations to cabinet as to the delineation of responsibility in skill training between the two Ministries. VII. AGREEMENTS REACHED AND RECOMMENDATION 7.1 During negotiations, the Government provided assurances that it will: (a) submit by September 30 of each year, the budget for the project for the following year, which will show the needed Government matching fund contributions to project activities by quarter, and thereafter implement such budget (paras. 5.6 and 5.23); (b) carry out a mid-term review between July and December, 1997 focusing on overall progress made in implementing project development and performance objectives; the effectiveness of the training programs; and the quantitative deliveries. The MOE will prepare, two months before the review, the report in sufficient detail for a comprehensive review. Based on the review, an Action Plan, acceptable to IDA will be prepared by MOE for the further implementation of the project (paras. 5.7 - 5.8); (c) in addition to the mid-term review, carry out annual reviews to be held no later than October 31 of each implementation year to assess progress and evaluate performance during the past year and review and agree on the work program and budgetary allocations for the following year (para. 5.6). (d) use standard bidding documents as approved by IDA for all LCB and ICB procurement; (e) ensure that the Government shall maintain qualified and experienced management personnel, assisted by competent staff in adequate numbers in NACVET; and (t) complete the comprehensive labor force survey not later than August 31, 1996. 7.2 As a Disbursement Condition, for the release of operating costs to the MESW for its Labor Force Data system the Government will have appointed qualified staff to the Employment Information Branch and the five preliminary processing centers (para. 5.20).  - 31 - 7.3 Audit Agreement. After credit effectiveness, by June 30 of each year, the MOE will submit to the IDA an auditor's report, management report and audited financial statements of the Special Accounts, Project Accounts, tool equipment distribution and sales and SOEs for the preceding calendar year, audited by an independent accountant acceptable to IDA (para. 5.24). 7.4 Recommendation. Subject to the above agreements, the proposed project is suitable for an IDA credit of SDR 6.6 million (US$9.6 million equivalent) to the Republic of Ghana on standard IDA terms with a maturity of 40 years. Population and Human Resources Operations Division West Central Africa Department Africa Region  - 32 - AN?NEX 1-t REPUBLIC OF GHANA VOCATIONAL SKILLS AND INFORMAL SECTOR SUPPORT PROJECT SOCIAL INDICATORS ,Name (year) Measure Indicator Source Total area km2 239,000 (a) GNP per capita (1993) USS 430 OP 3. 10 Total population (mid-1992) ('(00) 15,788 (b) Urban population (1992) (as % of total pop.) 34.9 (b) Total fertilitv rate (1992) (av. number of live births per woman) 6.1 (a) Crude birth rate (1992) (per 1.000 pop.) 41 (a) Crude death rate (1992) (per 1,000 pop.) 12 (a) Infant mortalitv rate (1992) (per 1,000 live births) 81 (a) Life expectancy at birth (1992) (years) 56 (a) Annual Population GrowNth Rate (1987-92) (%) 3.0 (b) Gross Enrollment Ratios (1990): (%,o of relevent pop.) (c) Primarv: Total 77 Female 69 Secondary Total 37.8 Female 28.8 Pupil-Teacher Ratio (1990) (tot. pupils/tot. teachers) (c) Pnnmarv 29 Secondary 19 Adult Literacy Rate (1992) (% of relevent pop.) (d) Total 63 Women 54 Source: (a) World Development Report 1994, World Bank (b) Social Indicators of Development 1994, World Bank (c) UVESCO, 1994 td) Human Development Report 1994, United Nations Development Programme  REPUBLIC OF GHANA VOCATIONAL SKILLS AND INFORMAL SECTOR SUPPORT PROJECT MOE 1994 Summary of Recurrent Expenditure by Programs and Objects IISUB I i TOTAL M B II II AINTENANCE HEAD IPHEAD I PiOGRAuMES 1I RECURRENT 11 PERSONAL 1J TRAVELUNG 11 GENERAL I REPAIRS & SUPPLIES 11 SUBVENTION H I II f11 EXPENDITURE 11 EMOLUMENTS 11 EXPEN,,TURE 11 EXPENDITURE II RENEWALS I & STORES -11 .l-Il -