NN38, February 2007
Technical and Vocational Skills Development
EXCITEMENT ABOUT GROWTH, DISAPPOINTMENT ABOUT SKILLS?
By Robert Palmer, Edinburgh University
KeywordsGhana, Skills development, Informal sector, private sector
Summary
This article examines recent developments in Ghana?s skills and private sector development (PSD) strategies. It argues that while sustained growth appears to have occurred hand-in-hand with an improvement in the enabling environment for formal PSD, the same has not been the case for the informal private sector. On the skills side there are some developments to be concerned about; e.g. a proposed formalisation of traditional apprenticeships, the politicisation of training schemes and the neglect of the lowest cost public training provider, ICCES. Nonetheless, the establishment in July 2006 of a Council for TVET could help to coordinate Ghana?s currently fragmented skills development system ? assuming it is not weakened through inter-ministerial wrangling.
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Since the early 1980s Ghana has experienced sustained GDP growth, averaging 4.9% per year in the period 1984-2005. In 2006 the Government of Ghana (GoG) made growth a much more explicit focus in its development strategy: clearly signalled, for example, in the renaming of the ?GPRS? acronym from the 2003-2005 Ghana Poverty Reduction Strategy (GPRS I), to the 2006-2009 Growth and Poverty Reduction Strategy (GPRS II).
Both the GPRS I and the GPRS II see the private sector, both formal and informal, as the main ?engine of growth? and poverty reduction. The theme of the 2006 National Budget - Investing in People, Investing in Jobs also underlines the government?s focus on jobs. The private sector development (PSD) strategy 2004-2008 outlines Ghana?s plans to achieve a ?golden age of business?. The PSD strategy underlines the importance of investing in the enabling environment for private sector growth and outlines policies concerning the macro-economic environment, financial sector reform, infrastructure development, public sector reform, contract enforcement/debt recovery and the land system and property rights.
Indeed, according to the World Bank?s Doing Business surveys, the business environment for formal enterprise is improving in Ghana (though Ghana is still halfway down the overall league table). The same, however, is generally not the case for informal enterprise. In practice, support to private sector growth is largely concentrated in the formal sector with informal micro-enterprises (IMEs) receiving little support from government despite the fact that the informal economy makes up some 90% of employment activities in Ghana.
Since 2001 there have been some general improvements in the enabling environment for IMEs, notably in transportation and mobile telecommunications infrastructure and in the extension of national health and social security insurance to informal sector workers (albeit only to a limited number). Politically also there appears to be more support for PSD than there was during President Rawlings? time. However, in general the IME environment remains disabling. Income tax and utility costs have increased significantly, and agencies concerned with delivering financial and non-financial business development services to IMEs have failed to make significant changes to their operation: access to formal finance, for example, remains out of reach for most. For the many thousands of youth graduating from skills training schemes, formal post-training support still remains fragmented and inaccessible. Most entrants into the IME sector, therefore, continue to rely on family and other informal networks to assist them in the process of securing resources for start-up.
Nonetheless, three developments in 2005/6 show that the GoG is starting to focus more on the informal private sector: the President?s Sessional Address to Parliament in February 2005 acknowledged the critical importance of the informal sector; a decision was made to establish a unit under the Ministry of Trade Industry and Private Sector Development (MoTIPP) which has responsibility for the informal sector; and a nationwide informal sector survey was due to take place 2006-2007. The latter development, however, has stalled (as of December 2006) due to lack of funding from the GoG to the implementing body (the Private Enterprise Foundation in Accra).
2006 also witnessed the launching of the National Youth Employment Programme (NYEP), which has added a third dimension to the GoG?s job creation strategy. While the provision of skills and education alongside the development of an enabling environment for PSD are still foremost among policy objectives, the GoG is also intending to create formal and informal jobs for 150,000 over the next year under the NYEP.
On the skills side, since 2001 there has been a renewed government focus on skills development and its relationship with combating unemployment (whatever ?unemployment? means in the Ghanaian context). The GoG continues to pursue the assumption that there is some semi-automatic link between the provision of skills training and the reduction of unemployment. This renewed focus has been reflected in both the GPRS I and GPRS II documents and has been driven by a series of democratic, poverty-reduction and economic imperatives. Technical and Vocational Education and Training (TVET), delivered through public and private schools, vocational training institutes and traditional apprenticeships, continues to be seen as an important link to work. Between 2003-2005 the GoG funded short-duration skills training through the Skills Training and Employment Placement Programme (STEP) ? a direct response to government concerns regarding unemployment (seen in the late 2001 ?unemployment? registration exercise). STEP was a highly political programme and the results appear to have been largely unsatisfactory: skills programmes were delivered in a top-down fashion leading some District Assemblies to complain that STEP has delivered ?useless? courses. More worryingly, the microfinance component of the STEP ? one of the original three principal components of the programme - has failed to materialise for most STEP graduates. As of October 2006, loans appear to have reached only 10% of those trained. Although the GoG has put an optimistic spin on the outcomes of STEP and it has been claimed that young people trained under STEP have started their own businesses or secured employment, it is probably telling that STEP was renamed the ?Skills Training and Entrepreneurship Programme? (in 2005), as it had signally failed to connect with job opportunities the very large number of young people who registered.
The 2004 education White Paper and the TVET Policy Framework have set a challenging agenda for skills reform in Ghana. Among other things, this involves developing a National Qualifications Framework, scrapping the vocationalisation of the Junior Secondary Schools and, instead, diversifying the Senior Secondary level and formalising traditional apprenticeships. The intention to formalise traditional apprenticeship training is of particular concern, given the problems associated with similar attempts in other countries (e.g. the Open Apprenticeship Scheme in Nigeria). What is particularly unfortunate from a poverty reduction perspective is that some components of Ghana?s TVET system, such as the Integrated Community Centres for Employable Skills (ICCES) - which appears to be the lowest cost public training provider of skills for poorer young people - have been the most neglected by the GoG. ICCES received a boost in 2002 when the GoG started to pay salaries of most instructors, but ICCES still remains chronically under-funded and suffers from acute managerial problems at the Directorate level.
In 2006 skills development has been a priority concern to national policy-makers. In July the Council for TVET (COTVET) Bill, which has been almost 10 years in the making, was passed by Parliament. Its function is to coordinate TVET provision across the formal, informal and non-formal arenas and to harmonize the skills strategies across multiple ministries. COTVET claims it will develop a comprehensive demand-driven skills system for Ghana. However, there remain some serious challenges to the successful functioning of COTVET; not least those related to inter-ministerial cooperation.
There is still a great deal expected of the education and training system as the solution to un-/under-employment and poverty reduction, but without the concomitant creation of a supportive pro-poor decent and productive work environment, especially for the informal economy, these expectations are unlikely to be realised. While the GoG?s attention to economic growth is important, what is equally essential, if education and skills training are to be fully utilised in the labour market, is that there are more and better job opportunities available and more supportive micro- and small-enterprise policies developed. The NYEP appears to be one step towards creating employment opportunities, but it remains to be seen how successful the scheme will be, what will follow it (i.e. a long term sustainable employment strategy) and where most of the 150,000 ?jobs? will actually be created: it might be that most ?jobs? created under the NYEP are in fact jobs in the informal sector, which brings us full circle to the need for better policies and programmes for the IME sector.
The New Patriotic Party (NPP)?s first term of office (2001-2004) did not bring about the kind of visible ?positive change? that much of the population expected. Now, mid-way through its second term, the NPP faces significant pressure noticeably to improve living standards and to follow-through on job creation pledges or else risk losing the 2008 elections. The effect such political pressure will have on policy formation and implementation is perhaps already being seen in STEP; and the launching of the NYEP may be another manifestation of emerging populist policies.
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For a longer discussion on these issues see: Palmer (2007) Skills Development, the Enabling Environment and Informal Micro-Enterprise in Ghana, unpublished doctoral thesis, University of Edinburgh. For more information or a copy email Rob.Palmer@ed.ac.uk.
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