Financing Technical and Vocational Skills Development
Despite the importance given to TVSD by many governments, the training system in Africa is largely underfinanced. Generally, the provision of technical and vocational skills and especially formal TVET is expensive, since facilities, material, equipment and maintenance costs are high.
On average, only about 2 to 6 per cent of educational budgets are devoted to TVSD, and in many countries, it is mainly channelled toward formal TVET. Limited public-sector budgets have seriously constrained the ability of governments to provide adequate and stable funding to public sector training institutions. In parallel, training budgets are accorded little priority in many enterprises, resulting in under-training by firms57. Donors’ support to training has been erratic and not sufficient to upgrade the quality and access to training. In addition to the general shortage of funds, the financing of formal TVET remains substantially fragmented, and piecemeal. The private training market does not operate with the same financing framework as public providers. A pressing issue for African countries is therefore not only to increase resources devoted to training but to make better use of existing funds. African countries are moving towards a greater diversification of funding sources for skill development (including cost sharing, payroll levies, and income generation activities), the development of private training markets, increased competition between public and private training providers, and encouragement of more and higher quality enterprise training. At the same time, the state retains the crucial role of designing financial support mechanisms to facilitate access by the poor, disadvantaged and vulnerable. The challenge is to adopt all those financing mechanisms in combination as an integrated financing framework that will ensure equitable contributions from government, local communities, industry and the beneficiary trainees. The national training authorities which are being set up in several African countries are increasingly seen as the overarching bodies in charge of integrating the different funding mechanisms.
In this light, the adoption of sectoral policies and action plans identifying the objectives and the financial resources available to achieve them is crucial to improve the transparency and clarity of the system, making the TVSD system “bankable”, and therefore more attractive to financial and technical partners, from the donor community, business associations and industry.