THE STUDY ON NATIONAL SKILLS DEVELOPMENT TO FACILITATE TANZANIA TO BECOME A STRONG AND COMPETITIVE ECONOMY BY 2025

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1 THE UNITED REPUBLIC OF TANZANIA PRESIDENT S OFFICE, PLANNING COMMISSION THE STUDY ON NATIONAL SKILLS DEVELOPMENT TO FACILITATE TANZANIA TO BECOME A STRONG AND COMPETITIVE ECONOMY BY 2025 FINAL REPORT Transport Resource Centre Ltd (Management-Consulting firm) City House, Mkwepu Street, P. O. Box 3101, Dar es Salaam, Tanzania Tel: Fax: Cell: nchlsmbwanji@yahoo.com June, 2014 Lead Consultant: Nicholas H Mbwanji

2 Table of content Abbreviations and Acronyms List of Tables Executive summary Chapter I: Introduction and background Tanzania aspires to attain Middle Income Status The roadmap for Tanzania in attaining MIC status 1.3 The concept of National Skills Development 1.4 Objectives and scope of Study 1.5 Structure of the report Chapter II: Methodology and Approach Study design 2.2 Pilot survey 2.3 Data collection, processing and analysis 2.4 Management of field work 2.5 Desk work and interviews Chapter III: Labour market situation in Tanzania Labour market concept 3.2 Overview of employment profile 3.3 Impact of economic growth on job creation 3.4 Assessment of labour market situation Employers Training institutions Employees 3.5 Main findings and observations i

3 Chapter IV: Levels and types of skills/occupations in the core areas Linkage of FYDP s core areas with occupations 4.2 Targets of labour force demands 4.3 Forecasting demands of skilled labour force using demographic indicators 4.4 Assessment of occupations current and future needs 4.5 Main findings and/observations Chapter V: Policies and the Legal framework Policies, strategies and interventions on skills development 5.2 Legal framework on skills development 5.3 Overall institutional arrangement 5.4 Main findings and/or observations Chapter VI: Institutional arrangement to facilitate skills development Overview on institutional arrangement 6.2 Key functional areas 6.3 Main findings and/or observations Chapter VII: Funding mechanism and modalities of skills development Human Capital Investment 7.2 Funding of training/skills development 7.3 Skills development Levy 7.4 Main findings and/or observations Chapter VIII: Private sector participation in skills development Overview private sector involvement globally 8.2 Overview private sector in Tanzania 8.3 Non-governmental organizations 8.4 Industry or Employers 8.5 Main findings and/or observations Chapter IX: Experiences and Lessons from other countries Singapore 9.2 South Africa ii

4 9.3 Malaysia 9.4 India 9.5 Summary of lessons and experiences Chapter X: Conclusions and Recommendations 101 Chapter XI: Proposed plan of action 115 Appendences: A Terms of Reference 116 B - Glossary 125 C List of reports/documents 127 D Detailed findings of the labour market survey 128 E Estimated labour force Demand for Tanzania to attain MIC status 136 F - Human capital investment 140 iii

5 ABBREVIATION AND ACRONYMS FYDP Five Year Development Plan MKUKUTA National Strategy for Growth and Reduction of Poverty GDP Gross Domestic Product POPC President s Office Planning Commission MICA Meddle Income Countries Average VETA Vocational Education and Training Authority NBS National Bureau of Statistics ILFS Integrated Labour Force Survey NGO Non Government Organizations ESDP Education Sector Development Programme PEDP Primary Education Development Programme SEDP Secondary Education Development Programme FEDP Folk Education Development Programme HEDP Higher Education Development Programme ANFEDP Adult and Non-Formal Education Development Programme TDMS Teacher Development and Management Strategy TVETDP Technical and Vocational Education and Training Development Programme HESLB Higher Education Student s Loan Board SDL Skills Development Levy ICT Information Communication and Technology NSDA National Skills Development Authority SDP Skills Development Plan SDF Skills development Fund NSDC National Skills Development Council TNA Training Needs Assessment iv

6 LIST OF TABLES I: Benchmarking of skills profiles for Tanzania and MICA II: Selected regions for the Study Tanzania Mainland III: Employment sectors by percentage IV: Distribution of employment by industry V: Linkage of core priority areas with occupations and field of education VI: Targets for selected occupations according to TVETDP VII: Comparison of Actual enrolment against Targets in the base year 2012/13 VIII: List of occupations currently available in the responding firms DSM Region IX: List of occupations currently available in the responding firms - for twelve regions X: List of proposed occupations in demand in the next 3 to 5 years DSM Region XI: List of proposed occupations in demand in the next 3 to 5 years other twelve regions XII: List of occupational areas for which there is currently demand for improved competences DSM XIII: List of occupational areas for which there is currently demand competences twelve regions XIV: Summary of policies, strategies and programmes on skills development XV: The results and performance trends of Form IV leavers XVI: The number of Folk and VET graduates XVII: Higher education outputs XVIII: Enrolment by major categories of academic disciplines XIX: Overall outputs of various education and training programmes XX: Legal framework governing skills development XXI: Summary of allocation of funds sector wise XXII: Funding of skills development in the education and training sector XXIII: SDL Collection and its utilization XXIV: Comparative comparison of private sector participation XXV: Summary of lessons and experiences from other countries 1

7 EXECUTIVE SUMMARY 1.0 The Concept of Skills Development Skills Development is about developing a set of skills, knowledge and attitude of the national labour force for the purpose of improving productivity and competitiveness. Skills development is a conceived concept and is inclusive of any skills which are useful for making a lawful living not only those transmitted in education and training programmes or earmarked for particular occupations. The term is not confined to institutional based training but includes industry and labour market training which may occur in different settings covering a full range of applied learning at all skills levels professionals, technical and vocational. 2.0 Objective and scope of study The National Skills Development Study is meant to identify the skills gaps and mechanisms for enhancement of skills development in Tanzania to make the transition innovative, participative, and knowledge-based and a strong competitive economy by Skills Gaps, therefore, mean the mismatch between the demand side of skills (by occupation in industries/sectors) and the supply side (educational and training outputs) of the same in the respective occupations in the sector. Through a survey-based-study, skills gaps have been identified and analyzed and appropriate interventions recommended. 3.0 Methodology and Approach In carrying out this Study, two main approaches have been used literature reviews and labour market survey. The sampling techniques had established that 300 employers for Tanzania Mainland is a reasonable estimate. The reasonability of this figure was based on three previous studies 2002 Annual Survey of Employment and Earnings, the Tracer Study conducted by VETA, and the Series of 2010 World Bank Enterprise Survey. The stratification of data was such that the Survey covered thirteen regions which were selected at random. Within each region the FYDP core areas and the respective sectors formed a strata, with a focus of having proper spread of sample of employers. List of employers were selected from the Central Register of Establishment as maintained by NBS. The survey instruments Employers Questionnaire, Employee Questionnaire and Training 2

8 Institutions Questionnaire were administered. Other instruments included the Training Manual and the TASCO List. The Census and Survey Processing System (CSPro) software package was used for data analysis. The management of the field work was by the 13 RSM. The survey was carried out in two phases D Salaam Region and then the other eleven regions. Desk work and interviews of key stakeholders were accordingly conducted. 4.0 Labour Market Situation in Tanzania: trends and skills needs (quantitative perspective) The realization of the objectives of the Vision 2025 is expected to be attained through the implementation of a series of three five year development plans and in summary the said Plans are: 1 st FYDP (2011/ /16) Unleashing the Growth Potential: - focuses on preparing the economy to tap into its rich natural resources by developing the country s primary industry in manufacturing and agriculture related sectors. 2 nd FYDP (2016/ /21) Nurturing an Industrial economy: - will be on agroprocessing industries and medium technology industries, 3 rd FYDP (2021/ /26) Realizing competitiveness Led export growth: - will aim at improving competitiveness in all sectors. Following from this, the skills development initiatives must be aligned to the anticipated socioeconomic development as it is the economic and social activities that determine the kind of skills and competences so required. Therefore, the linkage of national development plans and targets with skills development initiatives need not be over emphasized. The forecast of skilled labour force to attain MIC status by 2025 is as summarized hereunder: Projected targets of skilled labour force (professional level) in the selected occupations Selected Occupations / /25 Engineering, Manufacturing & Construction 14,196 17, ,800 Agriculture 3,717 4,175 15,130 Science 16,049 20,920 87,100 Health and Welfare 48,215 64, ,200 Services 105, , ,600 Social Sciences Business and Law ,089 Humanities and Arts 8,738 9,870 32,680 Source: Ministry of Education and Vocational Training (TVETDP 2013/ /18 of December 2012) and modified by the Consultant 3

9 The comparison of actual current enrolment (for selected occupations) against the projected targets above with a focus in the base year 2011/12, the situation is as follows: Comparison of Actual enrolment against Expected Targets in the base-year 2012/13 Selected occupations professionals Actual Enrolment* Expected Targets** Difference (times) Engineering: science, Manufacturing & Construction 2,540 14, times Agriculture 921 3, times Health & Welfare or Medical Sciences 2,141 48, times Sciences & ICT 3,860 16,049 4 times Social sciences, Humanities, Business Management 14,076 9, times & Law & Administration Source: Consultant s analysis (Based on Table VII) Indicatively, the said comparison show that the actual enrolment of professionals against expected targets in the base-year are far apart 5.6 times for engineers, 4 times for agriculture, 22.5 times for health or medical sciences, 4 times for science and ICT, and 0.6 times for social sciences, business administration, law and administration. By deduction the figures for technicians and vocational levels are likely to be much more. Lessons to be drawn from the above analysis, is such that the transformation path to the attainment of MIC status, on as far as skills development initiatives are concerned, dictates that the approach in attaining those targets can no longer be business-as-usual. The national approach on skills development initiatives calls for a total change ranging from policy formulation and implementation, institutional arrangement, funding mechanisms, private sector participation, and the like as has been proposed in this Study. Above all, the expected targets over a plan period are mammoth by any standards. As such it is recommended that further work need to be carried out of forecasting skills demands which would be aligned, among other considerations, to the Roadmap of Achieving the TDV 2025 The Tanzania Long Term Perspective Plan (LTPP) 5.0 Labour market situation qualitative perspective The labour market survey has revealed the following as being the main skills gaps or concerns: 4

10 About 70% of employers are of the view that, much as employees do generally have appropriate education qualifications, low levels or lack of soft or behavioral skills on the part of employees, is a matter of serious concern, as it affects labour productivity negatively. This same observation was made by the UDSM way back in in 2002/03 Tracer Studies in Quest of Academic Improvement. Again in 2006, a Study commissioned by NACTE focusing on Hospitality and Tourism sectors, observed more or less the same misgivings. In 2011 VETA vide its Tracer Studies for VET graduates again observed similar views that negative attitudes of its graduates was an issue. Impliedly the situation seems to have persisted for last ten years or so, and that no meaningful action has been taken to address these concerns. Now that the 2 nd and 3 rd FYDP intends to improve competitiveness an all sectors especially manufacturing and service sectors, action must be taken to address the above stated concerns. About 80% of the occupations currently available in the responding firms as well as for occupations in demand in next three to five years are based on science and mathematics related subjects. On the other hand pass rates of Form IV and VI were lowest in Mathematics and science related subjects. Government funding through HESLB was such that between 24 30% of the funds were channeled to science related, while between 76 70% went into non-science (education and non-priority programmes). Admission of students in higher learning institutions through TCU - were such that 20.5% were in science related subjects (engineering science, medical sciences, natural sciences, sciences and ICT), while about 79.5% were in non-science related subjects. These observations clearly show a mis-match as needs of the labour market (by occupations) not matching with government efforts in terms of funding (investment of resources) and enrolments (admissions). Skill gaps in the context of differing view-points industry (employers) pointing out that graduates from training institutions lack relevant and/or prerequisite skills and competences, while of the other hand training institutions (about 68%) claim that there is hardly any mis-match between training offered and to needs of the labour (at work places). Another dimension of skills gap is with regard to expectations of graduates. About 79% of the responding employees, expected to join wage employment upon completion of their basic training, while 17% were for self-employment. These expectations are in divergence from the national aspirations of promoting self-employment. 5

11 Duration of finding first gainful employment about 44% of graduates took about a year and above to get a job, implying most graduates are not readily absolvable by the labour market. The TELMO Report 2013 observes that about 9,250 graduates failed to get jobs in the formal employment within 2 3 years after graduation. Overall it was observed that vocational skills are potentially attractive to self-employment. And yet the VET sub-sector, among all other education and training sectors, had in fact stagnated in terms of enrolment levels. Degree-holder-syndrome general aspiration to acquire degrees or equivalent qualifications. In the last five years or so many institutions responsible for technical/tertiary education has been converted into higher learning institutions. Much as the Government has been discouraging such a move, many institutions have had the desire of enrolling degree courses at the expense of Diplomas or equivalent levels. And this has had far reaching implications on technical and tertiary levels education. The other dimension on this regard is for many graduates aspiring to acquire MBAs degree and the likes 1. To address the concerns in respect of inadequacy of soft skills, the Curriculums should include the teaching of life skills - focusing on communication skills, personal and interpersonal effectiveness, thinking and problem solving skills, team building skills, service excellence, and career development and planning. This be supported by extra-curricula activities such as Debate clubs enhancement of communication skills; students be encouraged to undertake community and/or cultural works so as to enhance leadership skills, team building and team work, self-initiatives, self-drive, ethical issues; sports and wellness activities, Consolidation and expansion of TVET system in a matter of urgency: VET system in particular is uniquely positioned to impact national development as it is responsible for producing the shop-floor workers an all sectors of the economy including the informal sector. It plays critical role on employment creation and can be a source of attracting foreign investment (like the case of India) 1 Professor Lettice Rutashobya, former Dean of University of D Salaam Business School (UDBS), in her Paper presented during 50 th Anniversary Celebrations 2011 had asserted that majority of students appear to be after certificates only 6

12 Following from this, the TVETDP 2013/ /18, save for the revision of projected figures to be reflective or in-line with the roadmap to TDV 2025, be given priority over the other education and training sub-sectors. 6.0 Policies impacting on skills development The Supply side of labour has all along been driven by the Education and Training Policy of The said policy has been revised - the Draft Education and Training Policy of Essentially this policy focuses on pre-employment education and training system. Ironically it is/or has been assumed or taken for granted that the pre-employment types of education and training would also address the concerns of the post-employment education and training system which normally focuses on addressing labour market related expectations. The Demand side of labour is mainly guided by the National Employment Policy (NEP). NEP is about employment creation initiatives and employment growth in Tanzania. Erroneously NEP asserts that the education and training system has not been able to supply the required skills and there is mismatch between the required skills in the labour market and the one supplied by the education system. In other words, NEP assumes or expects the pre-education and training system to provide skills and competences so required by the labour market. As it may be appreciated, employment issues are more relevant upon one completing the basic education - attained through pre-employment education and training system. Therefore, the missing link is the absence of a policy which would be focusing on addressing issues and/or concerns of the post-employment education and training system. The absence of a policy to guide post-employment education and training at all levels professionals, technicians, vocational - remain to be a serious challenge to skills development initiatives. In this connection, and like India and Singapore, there is justification to formulate the Skills Development Policy to address post-employment education and training system 7.0 Strategies and/programmes impacting on skills development The Education and Training Policy 1995 had occasioned the development of PEDP (I & II ), SEDP ( ), FEDP 2008, HEDP 2010, ANFEDP (2012), and Teacher Education (Teacher Development and Management Strategy ) to address challenges facing the education and training sector. These programmes have resulted into commendable enrolment ratios in the said sub-sectors basic, teacher and higher education. 7

13 Oddly the VET sub-sector has actually stagnated in terms of enrolment declining by 33.0% in 2009 and increasing by 35.6% in 2011). It is not clear under which policy was the TVETDP 2013/ /18 formulated on. Overall, and for Tanzania a labour/agriculture-based economy, the implementation of various strategies and/or programmes has resulted in the ratio of 1: 0.9: one university graduate, 0.9 technical, 0.7 vocational. the pyramid is definitely up-side down! Singapore a knowledge-based economy has a ratio of 1: 1.8: 1.2 Like South Africa, India, and Singapore skills development initiatives are an integral part of the national development plans and are well coordinated right from policy formulation, planning, and execution. The formulation of strategies and programmes must be a result of clear policies on skills development coupled with appropriate coordination at various institutional levels. Since skills development initiatives are cross-cutting, the coordination aspect of the same is being recommended to be placed in the Planning Commission and supported by the National Skills Development Agency (NSDA) newly proposed body to be established. The Tanzania Business Council (TBC) be mandated to include labour improvement initiatives as part of its main agenda. 8.0 Legal framework The establishment of training institutions under the Executive Agency Act of 1997 is rather peculiar (taking Livestock Training Agency and Water Resources Management Institute as examples). Administratively the functioning of such Agencies are under the parent Ministries. Much as such institutions enjoy some degree of autonomous authority, still the parent ministry of the institution has an overall mandate in all matters pertaining to the operations of the Agency. Funding of these institutions is done under the Ministry s general budget. Since the primary function of these Ministries is not training, training and education functions are perceived as supportive and complementary to the Ministry s core functions. As such less priority is given to training activities of the institute established under such arrangement. Legislations establishing and governing training institutions be revised with a view of ensuring the training functions are not regarded as supportive but are core functions within the respective sectors. 9.0 Institutional arrangement The institutional arrangement which facilitate skills development is vested into number bodies responsible for various functions. For purposes of the Study, three main functional areas were looked 8

14 into in detail: overall policy setting, regulation, and provision of training. The challenge with regard to institutional arrangement is inadequate coordination of almost all key functional areas and more serious is with regard to Technical and Tertiary education. As for the VET system being placed under the Ministry responsible for Education, it is unclear as to which Policy would this sub-sector to comply, since VET is supposed to be driven by labour market related policy. The challenge with regard to weak and/or lack of coordination on key functional areas justifies the establishment of a National Skills Development Authority (NSDA) to be under the Ministry responsible for Labour. NSDA s main responsibilities to include provision of leadership/guidance on skills development initiatives (guardian of the National Skills Development Policy), to translate national development plans into skills requirement and cascade the same to training institutions at all levels, develop occupational standards and monitor its implementation, provide guidelines and supervision of Continuous Training with a view of up-dating skills and competences, and to manage the Skills Development Fund. On the other hand, TaESA s mandate are essentially to monitor, regulate, administer, and coordinate all matters related to the provision of employment services. The management of LMI system is part of TaESA s responsibilities. The existence of the two organizations, among others, will complement in enhancing the attainment of skilled labour force Funding mechanism Major sources of funding of skills development are Government Budgetary process (Normal budget through the Ministry of Education, and Human Capital Investment directly through Treasury), Employers contributions (Skills Development Levy), Development partners, and End users in terms of fees. Overall budget allocations to sectors and/or training institutions, particularly with regard to Human Capital Investment, are arbitrary. Above all the allocations are resource driven rather than being demand driven. The Technical or Tertiary education in other sectors agriculture, health, natural resources ets had less than 13.4% of the total. Vocational education was not a beneficiary of the Human Capital Investment component, possibly on the assumption VET system gets SDL. The allocations of Funds from Government to sectors responsible for skills development need to be reviewed to be reflective of the roadmap to attaining the objectives of Vision This being the case, and for those aspirations to be attained, the balance of professional, technicians, and vocational must be reviewed the pyramid must be up-right! 9

15 Impliedly, Government funding through HESLB need to be scaled down, and that SDL should not fund higher education. The mandate of HESLB need to be re-examined in that HESLB to focus more on funding national priority programmes only. Science and mathematics related subjects, including research and development to be part of the priority programmes. Deliberate effort be made to unsure that TVET is not only adequately funded but is also well promoted. National Skills Development Fund (SDF) be established to essentially fund the post-employment education and training focusing on funding the following Technical education, Vocational training, and Continuous training Private sector participation in skills development The private sector in Tanzania constitute two broad categories namely industry/employers (mainly driven by business interests), and the non-governmental organizations (mostly motivated by their desire to address social economic challenges within society). Their contribution particularly the nongovernmental organization, on their role of provision of education and training at all levels has been commendable highest being in Folk/Vocational 77.8% and lowest was in Teacher education 19.4%. While in higher education and technical education was 31.2% and 19.4% respectively. As for industry/employers their role include enterprise training, sponsorship, participation in decision-making-bodies As a way forward it is recommended to Formalize relationships between industry and academia through strategic partnership built around shared research & learning vision, establishing deep professional ties, trust, and ensuring that goals and benefits are shared clearly. Enhancement and strengthen the good-will-of-doing-business on either party - industry (private sector) and training institutions that having concerted effort of working together, will ultimately be of beneficial value to all. Government on its part must play the role of a catalyst by ensuring that there is trust and transparency when it comes to addressing issues of national development. 10

16 CHAPTER ONE: 1.0 INTRODUCTION 1.1 Tanzania aspiration to attain Middle Income Status by 2025 The Tanzania Development Vision is to attain a middle income status by To attain and sustain this position, Tanzania need to realize the per capital growth of approximately 5% per year equivalent to an overall GDP growth of approximately 7.7%. The Five-Year-Development-Plan (FYDP: ) as well as the National Strategy for Growth and Reduction of Poverty (commonly known as MKUKUTA) both aspire to attain the growth target of between 8% and 10%. However, sustaining a 8% rate of growth, the national transformational path will require extra effort particularly, when compared to the country s recent economic performance. The 2012 GDP data showed that real GDP growth was 6.9% compared to 7.0% in Skills, knowledge and attitudes are catalyst in driving the economic growth and social development for any country. Countries with higher and better levels of skills respond and adjust more effectively to the challenges and opportunities of the world of work. It is for this reason that Tanzania s transformation path to Middle Income Status must address the skills levels of its workforce. In so doing, it is important that it compares and/or benchmarks itself with Middle Income Countries on as far as skilled force is concerned. According to the workings of the President s Office Planning Commission (POPC) through a study jointly executed with the International Growth Centre (IGC) of London School of Economics in 2012, and by using the Integrated Labour Force Survey (ILFS 2007) data, as well as the data from the benchmark of the Middle Income Countries Average (MICA) 2, has revealed that the division and comparison of working population into High, Medium, and Low reflects the following scenario: Table I: Benchmarking of skill profiles for Tanzania and MICA Skill level Occupation category Tanzania MICA Required skills increase in % of the working population by 2025 High (Professionals) Legislators, Senior Officials, Managers, times 10.2 times Professionals times 2 Countries and benchmark year: China (2000), Cote d Ivoire (1975), Egypt (1983), India (2007), Indonesia (2004), Jordan (1976), Korea (1968), Malaysia (1968), Morocco (1991), Philippines (1976), Sri Lanka (1975), Syria (1975), Thailand (1987), Tunisia (1974), and Vietnam (2009) 11

17 Middle (Technical) Technicians/Associate professionals times 2.6 times Low (vocational related) Clerks times 5.35 time Service workers & shop and market sale workers times Craft and related trade workers times Plant/Machine operator & assemblers times Others agriculture related n.a n.a - Source: POPC-IGC, ILFS 2007 with further adjustments by the Consultant and re-arranged. Overall the proportion of the high skilled working population will need to increase by about ten times (10.2) more, while middle and low skilled levels will need to increase by 2.6 times and 4.4 times respectively. On the basis of the analysis made in Table I, the overall skills position in Tanzania against benchmarking the same to the Middle Income Countries Average (MICA), clearly show that the transformation path to middle income countries will involve a considerable investment in terms of enhancing skills levels to its national labour force hence the need for this Study. It is interesting to note that, there is an ongoing debate on the order of occurrence of skill enhancement and economic development: - One school of thought portrays that skill levels are crucial determinant of economic performance (New Growth Theory 3 ); - While the other school of thought proposes that it is economic development that determines the skill levels of the population (Bils and Klenour 2000). Though, there is no definite answer to this debate, one can easily conclude that skills development occurs simultaneously with economic development. Therefore, skills development initiatives must support employment generation, economic growth and social development processes. 3 New growth theory argues that economic growth stems less from acquisition of additional capital and more from innovation and new ideas. Further the theory argues that innovation and new technologies don t occur simply by chance. Rather it depends on people seeking out new innovations or technologies. In addition, people also control over their knowledge capital ie: what to study, how hard to study. If the benefit incentive is great enough, people will choose to grow human capital and look harder for new innovation. 12

18 1.2 The roadmap for Tanzania in attaining the MIC status According to the Tanzania Long Term Perspective Plan (LTPP) 2011/ /26 (Consultation Draft), prepared by POPC, March 2012, points out that the realization of the Vision 2025 is expected to be attained through a series of three five year development Plans. These Plans are built upon each other and chart out a developmental path, as summarized here under: 1 st FYDP 2011/ /16: Unleashing the growth potential Essentially this Plan focuses on addressing the main constraints to Tanzania s growth. Those related to infrastructure focusing on energy (with special emphasis on diversifying the means of production, including renewable energies), ports, rural roads, railways, and other constraints related to skilled labour, science, technology and innovation, ICT, the general business environment, and the improvement of productivity in agriculture. These constraints are to be monitored throughout the entire LTPP meaning that the investments in each of the above will match the future needs. 2 nd FYDP 2016/ /21: Nurturing an industrial economy The second FYDP will focus on transforming the country s resources through the development of the industrial sector. This assumes that the country will have tacked the main constraints as outlined in the 1 st FYDP. The emphasis will be on natural gas based/fuelled industries, agro-processing industries (given the increase of the sector s productivity and the improved infrastructure) and medium-technology industries. Jobs will be created through the focus of the country on the industrial sub-sectors which will generate the highest employment. 3 rd FYDP 2012/ : Realizing competitiveness led export growth The third FYDP will emphasize on improving the competitiveness in all sectors especially manufacturing and services ones. The improvement in competitiveness will facilitate export oriented growth and significantly increase Tanzania s share of international trade. The target will be to transform Tanzania into the manufacturing hub of East Africa, while making sure that all gains made in terms of social services, business environment, infrastructure and productivity are promoted further. The linkages between these three plans are crucial, as the success of each of these plans depends upon the level of successful implementation of the previous plans. This course of development will ultimately lead to the realization of the development targets of Vision

19 1st FYDP: Unleashing the Growth Potentail: 2011/ /16 - removal of growth constraints, - improving agriculture productivity and competitivenes to become food basket for the region, - economy prepared to tap into natural resources, - creating training infrastructure to address skills deficit - conducive business environment 2nd FYDP: Nurturing an Industrial economy: 2016/ /21 - industrial sector growth based on inter-sectoral value-addition, - competitive agro-processing industries, - develop medium technology industries, - focus on natural gas, iron & steel and chemical industries - increase mineral beneficiation 3rd FYDP: Realizing Competitiveness: - improvement of competitiveness, - facilitate export oriented growth - significantly increase Tanzania's share of internal trade, - transform Tanzania into the manufacturing hub of East Africa Source: The Tanzania Long Term Perspective Plan (LTPP), 2011/ /26, POPC March 2012 Implications on skills development initiatives: The path to achieving the Vision 2025 as articulated above, also suggests that skills development initiatives must occur simultaneously with the anticipated socio-economic development. It is the economic and social activities that will determine the kind of skills and competences so required. Thus the linkage of national development plans and targets with skills development initiatives need not be over emphasized. 14

20 1.3 The concept of National Skills Development National skills development is all about developing a set of skills, knowledge and attitudes of the national labour force (also referred to as the economically active population) for the purpose of improving productivity and competitiveness. Skills development is a conceived concept and is inclusive of any skills which are useful for making a lawful living not only those transmitted in education and training programmes or earmarked for particular occupations Lauglo: 2005 P.3. The term is not confined to institutional based training but includes industry and labour market training which may occur in different settings covering a full range of applied learning at all skills levels. An effective national skills development system requires a holistic approach whereby the process involves continuous pathways of learning. It stars with pre-school, primary and secondary education that prepares young people adequately for higher education as well as preparing them for skills development at different levels. It provides career guidance, labour market information and counseling as young people prepare themselves to move into the labour market. It offers those already working with opportunities for continuous learning to up-grade and up-date their competences and learns new skills throughout their working life. It provides learners with core skills to enable them adapt to changes and apply knowledge and experience to new occupations and industries. Therefore, national Skills development study is essentially about forecasting trends in skills and labour market requirements in facilitating or enabling the implementation of the FYDP. It is about matching skills supply side with the skills demand side. In the context of this study therefore, essential skills are those required in the occupations within a defined sector. 1.4 Objectives and scope of the assignment The national skills development study is about identifying skills gaps thus develop a mechanism for enhancement of skills development in Tanzania to make the transition innovative, participative, and knowledge-based and a strong competitive economy by The Terms of Reference of the Study are Appendix A 15

21 The study is expected to suggest viable solutions to resolve the specific skills requirements in the medium term ( ) and long term ( ). As such the output of the study is expected to make positive contribution to National Skills Development for supporting the implementation of the country s Long-term Development Plan ( ). The study is mindful of the fact that the Long term Perspective Plan foresees a nation inspired with high quality livelihood, a well-educated and learning society, and a strong and competitive economy capable of producing sustainable growth and shared benefits. Further the study has taken note that the social-economic transformation and human resource capacity building is a prerequisite for the development of the country. As such the study has recognized that this can be achieved through transforming the education system that is the enhancement of skills, knowledge and attitudes as it has happened elsewhere in the world and in particular South Korea, Malaysia, Singapore, India and South Africa just to mention a few. An attempt has been made to draw lessons and experiences from some of these countries in recommending specific skills development strategies based on best practices. 1.5 Structure of the report The Study report is presented into two Volumes Volume I is the main report of the Study, and Volume II constitute the Statistical report including instruments of the field work. The main report has eleven Chapters. The first Chapter provides detailed introduction, elaboration of key concepts, objectives and scope of the Study. The approach and methodology is in Chapter Two. In each of the subsequent Chapters three to eight an attempt has been made to provide overviews of each of the subject concerned, and main findings and/or concerns have accordingly been identified. It is on the basis of these main findings and concerns the recommendations have been developed as detailed in Chapter Ten of this report. Chapter Nine points out lessons and experiences from other countries, and an attempt has been made to bring to bear some of the experiences Tanzania may wish to emulate. Last is Chapter Eleven where the Plan of Action has been proposed for implementing the recommendations of the report. 16

22 CHAPTER II: METHODOLOGY AND APPROACH In carrying out this Study, two main approaches have been used namely; extensive literature review and the field survey. The literature reviews include documents which are listed in Appendix C. The field work was on two parts namely labour market survey and carrying out of interviews of key stakeholders. The labour market survey assessed the demand side of labour, and on the other hand the supply side of the same, and an attempt to identify skills gaps was made. In carrying out this assessment, the following approach and methodology was used. 2.1 Study design The sampling technique was in accordance with the Sampling Technique 3 rd Edition by William G. Cochran too large a sample implies a waste of resources, and too small a sample diminishes the utility of the results. Therefore, the sample size for the survey was established to be around 300 employers countrywide and this has given a reasonable estimate for the study. The reasonability of this figure was based on three previous studies, namely the 2002 Annual Survey of Employment and Earnings which were conducted by the National Bureau of Statistics (NBS), the Tracer Study conducted by VETA in 2009/10, and the Series of 2010 World Bank Enterprises Survey. These studies had set a minimum sample of around 300 employers for a domain of study the geographical area for which an analysis is intended to be done. To ensure representativeness, and for the purposes of this study, the following stratification of data was adopted: First level: thirteen (13) regions were selected randomly, and for the purpose of this study, such regions were regarded as having the eighteen (18) FYDP sectors being predominantly or potentially active at the time of undertaking the Study as well as in the foreseeable future in Table II: Table II: Selected regions for the Study Tanzania Mainland Zone Regions within the Zone Selected regions Central 01.Dodoma, Singida, Manyara Dodoma, Singida Northern 02.Arusha, Kilimanjaro, Tanga Arusha, K Njaro, Tanga Eastern 03.Coast, Morogoro, Morogoro South East 04.Mtwara, Lindi Mtwara, Lindi 17

23 Highlands 05.Iringa, Ruvuma Iringa South West 06.Mbeya, Rukwa, Mbeya Lake 08. Mwanza, Musoma, Kagera Mwanza, Western 09.Tabora, Kigoma, Shinyanga Shinyanga D Salaam 10.D Salaam Dar es Salaam (Ilala, Kinondoni, Temeke) Source: Expert opinion Second level: within each of the regions, the FYDP Core priority areas and the respective sectors formed strata, with a focus of having proper spread of sample of employers across the various sectors. Framework for sample selection: list of employers (employing establishments) as maintained by NBS in the Central Register of Establishments was used as a guide and as such Regional Statistics Managers in the respective regions were accordingly consulted. Sample size and overall responses: As mentioned elsewhere in this report, the overall sample size of employers was 300 country wide. The sampling and hence the overall responses were as follows: - Employers - a sample of twenty (20) employers (employing establishments) was identified pro-rata (300 employers for 15 regions ) for each of the three Municipalities (Ilala, Kinondoni, and Temeke) in Dar es Salaam Region, and the same sample size was applicable for each of the other twelve regions. Overall responses works out to be 83 percent - For employees the sample size for Dar es Salaam and the other regions was a maximum of ten (10) employees per each employing establishment in the following categories: three (3) employees holders of Vocational qualifications (Level I - III), five (5) employees holders of Technical (Level IV VIII), one (1) holder of Professional (degree or equivalent and above), and one (1) employee be in others (not in any of the category mentioned above). Ideally, and assuming that the employing establishment has all these categories, the sample size per region is 200 employees, and thus for the whole study the sample size works to be a maximum 3,000 18

24 employees. Overall the responses of employees were 1146 which works out to be 38 percent. - Training institutions - sample of ten (10) training institutions was identified for each of the Municipalities (Ilala, Kinindoni, Temeke), and four (4) for each of the respective regions. Total sample was 78 with response of 73 which works out to be 93.0 percent. Survey instruments: The survey tools were developed in accordance with the TOR. In developing the said tools, literature from the following documents was used: National Skills Audit Report, the Republic of Rwanda January 2009, Skills Audit Survey, Romania (Editor: Mircea Badescu and Arjen Deij) European Training Foundation 2004, Report on Skills Audit (undertaken for the British Society for Plant Pathology Professor Geoffrey R. Dickson) November 2007, Tracer Study Report for Graduates of Vocational Education and Training, VETA Tanzania Mainland, December 2011 The Draft tools were shared with a broad cross section of stakeholders and were accordingly adopted, and thereafter used during the first phase i.e Pilot in Dar Salaam region. The second phase was the roll out to the rest of the twelve regions. Three survey instruments Employers Questionnaire, Employees Questionnaire, and Training institutions Questionnaire - were administered. Employers instrument focused on the demand side of skills. It solicited information on location, type of ownership, sector, number and characteristics of employees, employees qualifications and skills, procedure for recruiting staff, the skills endowment in the firm and skill needs, as well as employer training initiatives. Employees instrument was on current and future skills needs. Training institutions instrument was on the supply side of skills. It solicited information on location, selection and admission of students, responsibilities on curriculum implementation, job placement and follow up of graduates, as well as relationship with the labour market. It be noted that training institutions were at the same time treated as employers. The other instruments which supported the survey included the Training Manuals and the TASCO list. 19

25 2.2 Pilot survey Prior to carrying out a fully-fledged survey country wide, a pilot survey was done, as phase one of the study, covering Dar es Salaam Region the three municipalities Ilala, Kinondoni, and Temeke. Essentially this phase was to test various aspects related to the survey management and compliance including testing the survey tools. The overall responses were as follows: - Employers - Total sample size of study for employing establishment was 60. And an overall response was 51 which works out to be 85 percent. - Employees - Ideally, and assuming that the employing establishment had all the three categories (professionals, technicians, vocational), the sample size per municipality was 200 employees, and thus for the three locations the sample size worked out to be a maximum 600 employees. The responses as far as employees are concerned were 226 which work out to be 38 percent. - Training institutions - sample of ten (10) training institutions was identified for each of the Municipalities, and a total of 30 training institutions were identified to which an overall response was 25 training institutions and this works out to be 83 percent. In some aspects - and for reasons of establishing comparisons of Dar es Salaam region to the rest - the findings of the Pilot survey have been reported separately from those of the twelve regions. 2.3 Data processing and analysis The Census and Survey Processing System (CSPro) software package version 4.1 Microsoft Excel 2010 normally applicable for entering, editing, tabulating and dissemination of data - was used to capture and analyze data. The analysis thereof was mainly based on frequencies of responses. 2.4 Management of Field work: Regional Statistics Managers (RSMs) of the NBS of the thirteen regions were Supervisors of the field work. They identified and trained Enumerators from their respective regions to assist in carrying out the survey. Prior to carrying out this assignment, the RSMs were subjected to a three days training programme. 20

26 2.5 Desk work and interviews of key stakeholders The desk work to examine the 18 sectors focused on the following: An overview of each sector, National operational objectives and targets as well as the milestones identified for the sector growth and support, Strategic focus of the sector highlights on areas identified in the respective sector focusing on addressing the challenges of the sector, Implications on skills in the implementation of the sector plan highlights essential occupational areas and skills requirement at three levels professional, technicians, and vocational, Based on sector profile, essential occupations of the sector have been summarized. This (desk work) was followed by interviewing key stakeholders in the respective Ministries and/or organizations, through administration of a questionnaire or check list of questions. It be noted that, in the context of this study, sector is taken to mean the Ministry responsible for the sector. Private sector institutions/organizations were included where feasible. 21

27 CHAPTER III LABOUR MARKET SITUATION IN TANZANIA 3.1 Labour market concept Labour market is meant to be an area of economic exchange in which workers seek jobs and employers seek workers. Labour market then exists when the forces of supply (potential employees depending on their qualifications, skills and possibly geographical locations are looking for work), and forces of demand (potential employers looking for willing workers in the context of wage rates, condition of employment, level of competition, and job location) are brought in contact in an exchange. In the setting of this study, the Supply side of labour constitute the number of people who are able and ready to work and above all have the appropriate or right skills for the job and/or occupation in question. Rightful or appropriate skills mean the ability to apply knowledge and use know-how to complete tasks and solve problems. In this perspective therefore, skills are those which have been transmitted through the education and training systems either at the pre-employment education stage or the post-employment education and training stage. In this regard, the education and training systems plays very important roles in the formation of the human capital. On the other hand, and in the context of this study, the demand side of labour constitute the formal sector, which is, the employing agencies - enterprises or industry. Skills gaps, therefore, mean the mismatch between the demand side of skills (by occupation in industries/sectors) and the supply side (educational and training outputs) of the same in the respective occupations in the sector. Through a Survey-based-study, skill gaps will be analyzed and appropriate interventions recommended. 3.2 Overview of employment profile in Tanzania Mainland According to two Integrated Labour Force Surveys (ILFS) that of 2000/01 and 2006, indicate that the Tanzanian workforce ( labour force) increased by 2.8 million people the labour force of 2000/01 was 17.8 million while that of 2006 was 20.6 million. Some of the typical features of the said labour force were as follows: The 2006 survey indicated that agriculture was a dominant sector with about 76.5%; The Public sector share increased slightly from 2.7% in 2000/01 to 2.8% in 2006; Within the public sector, parastatal organizations employment declined from 0.5% in 2000/01 to 0.4% in 2006; 22