TABLE OF CONTENT. Part I. VALUE CHAIN IDENTIFICATION & ANALYSIS REPORT
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1 TABLE OF CONTENT Part I. VALUE CHAIN IDENTIFICATION & ANALYSIS REPORT 1.1 Executive summary 1.2 Background of the study and the study area 1.3 Overview of the sub-sector(s) and VC Selection 1.4 Value Chain Analysis (to be done for each selected VC Mapping Quantification Economic analysis End market Value Chain Constraints Market Based Solutions Value Chain Governance 1.5 Value Chain Vision and Mission/Objectives 1.6 Upgrading strategies 1.7 Proposed Intervention Programs 1.8 Foreseen risks and mitigation mechanisms 1.9 Action Plan 1.10 Monitoring and Evaluation Labour Market Assessment report: 2.1 Overview of labour market demand and supply 2.2 Assessment of youth unemployment situation in the study area 2.3 The skill and knowledge gap of the youth to meet market demand Page1 1
2 2,4 Possibilities to migrate in search of job out of the area 2.5 Government intervention programs and their level of effectiveness 2.6 Recommendations to improve unemployment problem of the youth by responsible bodies 2.7 The role of your organization in improving the unemployment problem of the youth Page2 2
3 LIST OF ACRONYMS & ABBREVIATION WCAT = Wabe Children s Aid and Training ETB = Ethiopian Birr MSE = Micro & Small Enterprise NGO = Non-Governmental Organization TVET = Technical, Vocational & Education & Training TVETDE= Technical, Vocational & Education Development Enterprise 1.1 Executive Summary The VCD and labour market assessment was conducted in Debre Tabor Town Adminstration from 17 th - 23 rd June The assessment has two major parts: these are value chain identification and labour market assessment. Despite the limitations attempt was made in assessing the types of demandable skills and products in the area along with the labor market assessment. Checklists are used to collect information from the interview and focus group discussion. In addition, information has been collected from secondary sources and utilized in this report. During the assessment people were selected from Debre Tabor TVET College, Woreda Technical & Vocational Development Enterprise Office, Agriculture Office, Women, Children and Youth Affairs Office, and beneficiary youth. Focus group discussions were held separately for the sector office representatives and youth group so that the youth can provide Page3 3
4 input on employer perceptions of youth s skill. Moreover; interviews were made with the private traders and producers. The main objective of this assessment is to ensure that the training provided for the youth is demand based, and the project beneficiaries have a tangible outcome after training. It is important in determining the skills employers look for and what types of constraints exist for starting their business. The value chain selection result revealed that in Debre Town town in terms of competitiveness, targeting and favorable business environment, poultry and vegetable production are chosen. Statement of the problem Our life is an odd mixture of different moments of action and inaction, work and rest. Work/employment provides us with an inner creative joy. It saves us from the dullness and boredom of life. It puts our energies to a proper use. On the contrary, unused energies create disorders in us. Let us look at the unemployment rate at global, continental, national, regional, zonal and Woreda level. In its annual Global Employment Trends report, the ILO said an estimated million people were jobless in 2013, up by nearly 5 million in one year. Youth were the biggest casualties, with 74.5 million people aged unemployed in 2013, an increase of more than 700,000. There were a staggering 37.1 million fewer young people in employment in 2013 than in 2007 (World Socialist Web Site). Similarly, Africa is deeply affected with a high rate of unemployment especially among the youth. Africa is now having the most youthful population in the world with the youth covering close to between 60% and 70% of the continents population. Though unemployment is seen manifested all over the world, the case of Africa is very dilapidating to say the least (Modern Ghana). Page4 4
5 At regional level consideration, in sub Saharan Africa paid employment opportunities are scare and the vulnerable employment rate, at 77.4 percent in 2013, remained the highest of all regions (ILO). In Ethiopia unemployment rate was 5.4 from 2009 to 2012 (World Bank). Amahara region in general and Debre Tabor town in particular could not be immune from the consequents of unemployment rather they are being ravaged by the social and economic toils of the unemployment. All the paragraphs listed above attest that unemployment is an alarmingly growing and serious menace. The incidence of unemployment is caused by different factors like lack of job creation, vulnerability of young workers to layoffs when economic growth falters, high labor costs or unrealistic wage expectations on the part of youth, discrimination, poor access to fundamental education, rapid economic change, and the compounded labor-market disadvantages that accompany poverty (World Economic Forum). Its effect has serious result on the youth. Therefore it is vital to make an adequate and conscious effort to improve the situation: improve the educational level of youth, equip youth with marketable skill; engage them in the most profitable agricultural product; enhance their entrepreneurial skill and drafting school curricular around producing skilled individuals in the technical and vocational field. 1.2 Background of the Study and Study Area Labour market assessment is an analysis of available employment and self-employment opportunities where a program is operating. This type of study is usually done by sector, such as agriculture, manufacturing, etc. It involve detailed analysis of the types of skills employers look for, hiring trends, perceptions by youth of available employment and self-employment, and perceptions by employers and others about the willingness and ability of youth to engage in productivity in the workforce. It ensures that the supply of trained workers in a particular workforce program meets the demand for workers, and that the program beneficiaries have a tangible outcome after training. Ethiopia is among the poorest countries in the world. Although encouraging achievements in improving basic aspects of life were recorded in the last ten years, human development indicators still remain at very low levels compared with the rest of the Page5 5
6 world. Population is growing by around 2 million people annually, putting stress on the country s resource base, the ability to deliver services and the labour market. The town was established in 1327 E.C during the reign of Atse Seiphe Ardi. It is surrounded by Farta wereda. Debre-Tabor town is situated at 667 km away from the country s capital city Addis Ababa and 100 km from the regional town Bahir Dar. The town administration has 8 kebeles (4 rural surrounding and 4 urban kebeles). Attitudinally, the town is found at meter above sea levels. Its area is km2. According to the 2007 population census, the total population of the town is (35567 males and females). According to the information obtained from the town administration, about 85 % of the population is agrarian and 15 % of the population is engaged in trade, small and micro-enterprises and government, PLC and NGO work. Debre Tabor town is one of the towns with high unemployment rate in the region. Objective of the study To gather adequate data to identify profitable agricultural VCs and labor market To assist the targeted TVET to determine the type of trainings to be given to beneficiary youths Significance of the study Conducting this kind of assessment work have both practical and theoretical values. Practically the research will serve as source of information for law enforcing bodies; concerned government offices (Women Children Youth Labor and Social Affairs, Technique Vocational and Enterprises Development Office); unemployed and vulnerable youth; nongovernmental organization, researchers and others. For these people the research will improve their understanding on the magnitude of the unemployment; the nature of labor market; and preventive, palliative and curative measures to be taken in averting the problem. The theoretical contributions of the study could be that, conducting this king of research contributes to introduce some into the quantum of knowledge on the depth and gravity of the unemployment and ways of doing something about the issue. Scope and limitation of the study This labor market and value chain assessment focuses on Debre Tabor town. The assessment zeroed in on identifying potential VC, developing chain for the selected product, identify Page6 6
7 potential demand and skill gap o meet the demand. But the finding and recommendation of the assessment can be used for other parts of the country having similar socio-economic, political, administrative and ecological setting. Limitation of the study Our effort to find an organized data on labor market and VC related issue was with gap in having enough statistical data or study which indicates unemployment rate in general and youth unemployment specifically. Moreover, poor documentation with regard to employment particularly youth information was major challenge during the study. Therefore, it is difficult to indicate the unemployment rate and ratio against the population. Hence we could not substantiate our primary data with the secondary ones. This may have a little effect on the quality of the labour market assessment. Methodology The methodologies used in this assessment are conducting consultation workshop, FGD and analyze the value chain and market analysis, interview was also conducted with merchants and focus group discussion with the target beneficiaries. In addition to this, secondary sources are investigated. The criteria used to select the potential value chain to be worked on include: Major Criterion 1: Competitiveness Competitiveness is defined as a production ability to achieve and maintain an edge over market competitor through an optimal combination of efficiency, product differentiation and access to new or niche markets. Significant, sustainable increases in income and employment are dependent on small scale enterprise growth and competitiveness. When measuring competitiveness, it is important to remember that value chains and their end markets are dynamic, and that some possible chains may not exist or may be only nascent at the time of the analysis. 2. Major Criterion 2: Targeting Page7 7
8 Targeting can be measured by the product capacity to sustain income gains, employment and asset development. Growth in small scale enterprises with high rates of employment or micro and small enterprise (MSE) participation will impact (i.e., reduce) poverty more than growth in enterprises with low employment and minimal MSE participation. Assessing the potential breadth and depth of benefits resulting from the development of various sectors is an essential aspect of value chain selection. The following were lists of potential value chain raised in the FGD 1. Sheep fattening 2. Diary 3. Poultry 4. Vegetables 5. Beekeeping 6. Cattle fattening 7. Fishery 8. Plant seedling/nursery site 9. Floriculture 10. Ornamental plant 11. Fruits Using the above two criteria (i.e Competitiveness and Targeting), the selection is under taken as shown in below table High priority Poultry Vegetables Fruits Diary Cattle fattening Sheep fattening Plant seedling Page8 8
9 Low Priority Beekeeping Fishery Ornamental Low Medium High Table 1. Short-list value chain candidates (using matrix) among from identified candidate products, Since Poultry and Vegetables were Short-listed as final feasible value chain product using the above matrix among the identified candidate products, there was no need for the team to go on ranking short-listed candidates using scoring grid. The salient constraints identified and suggested possible market based solution were Selected Value Chain Identified Constraint Possible market based solution Poultry Management & Information - Access to appropriate tools for smallholders - Training farmers in technical skills with regard to fulfilling buyers specification - Establish resource centre in the TVET Disease Linking the youth with Agricultural office for regular follow up and Page9 9
10 vaccination like Bread selection should made in consultation with Woreda Agricultural office Skill - TVETs should be capacitated empowered and so that they can provide quality Training for the youth Disease - Linkage with Adet research centre for better seedling, follow up Vegetables - Linkage with woreda agricultural office for prior protection and medication Skill - TVETs should be capacitated empowered and so that they can provide quality Training for the youth Research Linking the youth with Adet research institute and strengthening the resource centre in the targeted Page10 10
11 TVET Table 2 The salient constraints identified and suggested possible market based solution End market The major end market identified includes Hotel, Café, Restaurant, Household in Debre Tabor town and neighbouring town particularly Umera and Bahir Dar. The suppliers/ competitor are mostly individual with different egg size and quality. They also have no organized value chain which will be great opportunity for this value chain. According to the participants of FGD the seasonal price inflation along with lack of availability in many shops could be a good indicator of better demand and poor supply. A. Poultry Basic Sequence of Functions in Poultry Production Value Chain in Debre Tabor Town Provide Input Production Manageme nt Whole - saler Retailer Consume r Feed egg production Hens and cocks Day old chicks Shelter Cleaning bulking distributing retailing harvesting Storing Storing Storing packing Storing into Baking wax small Supply units Page11 11
12 WAO Municipality Peasants, Individuals in D/T city, Enterprises Whole salers senders Shops Mapping with Basic Components of Egg Product Chain M I C R O Input Supplier Youth associations Wholesaler Retailer Consumer ACSI Traders union ACSI ACSI M E S O WAO D/Tabor TVET College ACSI & WAO TVEDE Technology Suppliers TVED WCAT (NGO) WCAT(NGO) Page12 12
13 M A C R O MOA D/T University MOA Cooperati ves Trade & Investment Office Tax Authority Amhara Regional State ACSI Office (General Board) Page13 13
14 Poultry Market Channel of Debre Tabor Poultry Producers Wholesalers Retailer Pastry Houses Distributers I. Producer consumers ( 31%) II. Producer wholesalers consumers ( 28%) III. Producer retailers consumers ( 19%) IV. Producers Distributors-consumers (22%) Local and neighbor city Consumers Page14 14
15 In the area, the price of egg differs seasonally. During holidays and special occasions with ceremony like wedding he price even goes to 3.50birr while normally the price is 3.00 birr. Moreover, during the cold season, productivity of the hen decreases resulting in price fluctuation. Calculation of Value-Addition and Operational Margin: of poultry (Egg) Production Production Wholesaler Retailers Consumer Sales/Killo Input cost 0.60 hen/feed/shelter Medicine Material cost 0.50 Feeding.15 boxes, equipment And shelter Net value added % of Value added Operational cost (labour, & transport, electricity (transport, load unload cost 0.10 Storage costs) & storage) Total Cost Operational Benefit Operational Margin Page15 15
16 The second value chain, vegetable production was also found to be interesting and promising business. Vegetable Market Channel of Debre Tabor Vegetable Producers Egg Retailer Hotels Consumers I. Producer consumers ( 28%) II. Producer retailers consumers ( 72%) Page16 16
17 Calculation of Value-Addition and Operational Margin: Vegetable Production Production Retailer Consumer Sales/liter Input cost Seedling composite Water Medicine Material cost 400 equipment Net value added % of Value added Operational cost 200 (labour & transport cost) 450 (storage, transport, load unload cost) Total Cost 850 2,250 Operational Benefit Operational Margin Page17 17
18 LABOUR MARKET ASSESSMENT Surprisingly the major job opportunity in the town was found to be government office. Unlike other woredas in the surrounding Debre Tabor town has little or no job opportunity in the private investment rather the youth migrate to work in border areas. The knowledge and skill gap of the youth to meet market demand The major knowledge and skills gap found were: 1) Loose link among training stakeholders There is relatively loose link between the TVET and external environment. The trainings provided were based on institutional decision other than an assessment of need in the side of the youth and the market. Moreover, the cooperation among major actors in the sector need to be strengthened as culture of inviting trainers from agriculture office and connection with different colleges and the university need serious attention. 2) Gap in entrepreneurial Knowledge, attitude and skills The lack entrepreneurial motivation, lack of vision/innovation and inability to produce good business plans or feasibility studies are all part of the problem youth are facing in starting their own business. 3) Lack of demand based training One of the greatest challenges we have come across during the study was that trainings provided by the TVET was not based on market study result of any kind. Mismatch of education and training skills with the requirements of the labour market is another important reason for the high level of unemployment. Young people who have attained high school or higher educational label is a mismatch between the type of education provided at skill training/school and the requirements of the labour market. Page18 18
19 In collaboration with concerned stakeholders, the role of WCAT is to provide marketable skill training including life skills on the identified value chain that can enable the youth to compete in the labor market. In addition the organization in collaboration with the concerned government bodies will facilitate the release of seed money and credit access and working place. Follow up and continuous support will also be one of the salient responsibilities of WCAT so as to ensure success of the program. Consultation Workshop with Major Stakeholders Page19 19
20 20 Page20
21 21 Page21
22 Reference 1. ILO: Global unemployment trends 2014: Where is the unemployment rate the highest? 2. Modern Ghana: Unemployment in Africa: what policy makers should know, 3. World Bank: unemployment total (% of total labor force), 4. World Socialist Web Site: Global unemployment rises above 200 million, 5. World Economic Forum: Youth Unemployment Visualization 2013, Page22 22
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