Training for Work in the Informal Sector: Evidence from Kenya, United Republic of Tanzania and Uganda, International Training Centre of the ILO

Training for Work in the Informal Sector: Evidence from Kenya, United Republic of Tanzania and Uganda

At present the education and training sector in Kenya appears to be in a flux. For a number of years, efforts at sector planning have been underway¹, but the national policy on vocational training has not yet emerged. The process has been hampered by the government reshuffle in 1999. As one of the outcomes of this, the Ministry of Research Technical Training and Technology (MRTTT), which up to then was responsible for both technical training and the development of the jua kali sector was split up, with basic vocational training becoming the responsibility of the Ministry of Labour while the Higher Colleges of Technology went tot he Ministry of Education. As a result of the large number of training initiatives, the continuing institutional confusion on training responsibilities, and plain lack of time, the present study will touch only on two aspects of the current training sector, both of which represent attempts made to reorient student towards self-employment: the "8-4-4" and the introduction of business skills education.

Since the expanded education opportunities after independence did not result in the expected automatic employment of the primary school leavers, in 1984 a fundamental restructuring of Kenya's education system was decided. Known as "8-4-4" (replacing the "7-4-2-3" system), it places emphasis on attitudinal and skills preparation for the world-of-work and self-employment in particular. New subjects such as woodwork, metalwork, leatherwork, tailoring and business skills, together with agriculture, home science and art, were added to the curriculum. The new system encountered problems from the start: the implementation was done in a hurry without proper testing; most schools lacked teachers, workshops and equipment to implement practical education; technical subjects still form only a small part (15% of learning hours) of a broad curriculum offered in primary schools; and the curriculum appears to have been made in ignorance of the skill needs of the informal sector². Moreover, the attitude of pupils to technical education ... is further undermined by lack of basic facilities and qualified teachers to handle the practical subjects in most of the schools. Innovative attempts by some schools to use local craftsmen to demonstrate certain skills to the students have received negative reaction from the students who feel or believe that they know more than the local craftsmen. This has undermined the integrity of practical subjects in the eyes of the learners.... Teachers' and pupils' attitudes to learning practical subjects have remained negative... .

The results are consequently mixed: while the curriculum has a number of useful vocational elements, the students cannot link what they learn directly with employment or production; only a minority of school-leavers when asked to indicate the source of their skills mention practical subjects taught in school³. Even a high government official told the author once how his daughter had the item for her crafts examination made by a jua kali entrepreneur. Other observers feel that the curriculum is to broad and overloaded on core subjects such as English, mathematics and science⁴. It is seen likely that as one of the outcomes of the current debate on education and training in the country, some of the practical subjects will be reduced to optional status or disappear altogether⁵.

Furthermore, the new system is costly for the parents who, although voluntary in theory, have become central in the financial strategies of the schools. This might be one of the reasons for the apparent sharp decline in enrolments over the life of "8-4-4" and the continued failings of the Kenyan school system with regard to access, repetition and drop-out ⁶.

Possibly the major change in Kenya's education and training system in the past decade has been the introduction of business skills education at almost al levels of education and training - in primary and secondary education and from YPs to National Polytechnic. In addition, there is now a masters programme in entrepreneurship in the Jomo Kenyatta University of Appropriate Technology (JKUAT) and a higher diploma course at the Kenya Teachers Training College (KTTC).

This type of education appears to be widespread, although its quality is not known; there indications that it is not actively offered at all institutions due to staffing and other constraints, although a new cadre of well-oriented trainers and managers has been trained at KTTC and JKUAT⁷. It seems that some VTC principals refuse to employ qualified teachers, while the skills of the trainers are very marketable for which reason they are difficult to retain by VTIs. The impact of business skills education is not yet clear. Some of the students appear to more interested in obtaining the credentials than genuinely acquiring the skills and they copy existing business plans instead of developing their own.

There are a large number of public and private training institutions in Kenya that provide technical training, including: over 600 Youth Polytechnics, 20 Technical Training Institutes, 17 Institutes of Technology and 3 National Polytechnics; furthermore the National Youth Service operates training centres, and there are Industrial Training Centres, YMCA Vocational Training Centres and Christian Industrial Training Centres⁸. In addition there are a large number of private-for-profit training institutes, many of which have come up in recent years and concentrate on courses in office and business skills. The Youth Polytechnics (see case study A below) account for almost one third of all the trainees enrolled in these training institutions⁹.

The Institutes of Technology (before: the Harambee Institutes of Technology) were started in' the 1970s within the spirit of self-help: they were originally set up and funded by the local communities. They created a tradition of community involvement in the management of VTCs, ensuring that "the majority of Kenyan training institutions are not simply the statist enclaves common in... many other countries"¹⁰. ITs were to train schoolleavers as craftsmen to meet the growing demand for skilled manpower in the rural areas. They were to produce self-employable people at a higher level of skills and technology than the YPs; the training takes 3 years. Management skills were included as part of the curriculum. In the mid-80s there were 15 ITs with a total enrolment of 3,900 students. They attracted considerable funding from government as well as donors. Assessment studies of ITs found that they have to some extent achieved their objectives but many of their students, once graduated, fail to establish their own businesses, and that less than 10% become selfemployed. since the skills obtained in ITs refer to relatively capital-intensive equipment, the graduates require considerable amounts of capital to start up a business, and as this is generally not available many of them try to find wage employment.

There are in Kenya also 20 Technical Training Institutes (before: Technical High Schools) which essentially seek to upgrade the basic knowledge of school leavers to enable them to enter one of the country's 3 National Polytechnics. They offer a 4-year mostly theoretical programme, although they also provide some introductory training in workshop technology and the training includes attachment to an industrial firm. They tend to produce middle-level skilled manpower for the modern sector.

The National Youth Service (NYS) also provides technical training, and is, in fact, the second largest training programme for unemployed after the YP programme. It recruits youth up to 30 years, and stimulates good citizenship and provides work and specialized training. NYS operates a vocational training centre in Mombassa for training in masonry, carpentry, motor vehicle mechanics, fitting and plumbing, electronics, welding, panel beating and tailoring. In the mid-1980s it had an enrolment of some 7,000 students. NYS was originally directed at primary school leavers, but over the years has recruited more and more secondary school leavers. Also, while it started with a rural focus, it has gradually adopted an urban bias.

Statistics show that the large majority of youth from each level of education will not find a place in the next higher level of education, nor find a job in the formal sector¹¹. In 1995, enrolment in primary schools, secondary schools and universities was 5.5 million, 632,000 and 44,900 respectively. In 1996, almost 440,000 pupils sat for the Kenya Certificate of Primary Education, of whom only 150,000 (ie. less than one third) proceeded to secondary schools. In 1997, some 156,700 candidates sat for the Kenya Certificate of Secondary Education, of whom only 17,287 -of whom girls- (ie. 11 %) qualified for admission to public universities. The exact capacity of the training sector is not immediately known, but in 1995 about 33,000 trainees were enrolled in teacher training colleges (51%), technical training institutions (25%) and Youth Polytechnics (24%).

In Kenya there is a longstanding awareness that employment needs to be conceived in terms of more than formal and agricultural jobs, and training initiatives have included the development of Youth Polytechnics (YPs), community-based Harambee Institutes of Technology (now known as Technology Institutes), and various donor-funded Technical High Schools (now: Technical Training Institutes).

The private sector has in recent years filed part of the vacuum left by the public sector. There are no data on the number and quality of non-government training facilities. They include various church-owned and other NGO training centres; private-for-profit training providers, may of whom have come up in recent years and focus on the development of business skills; and the traditional apprenticeship system.

Most of the technical training in the MSE sector is carried out through the traditional apprenticeship system, particularly in manufacturing and services. A study carried out by the World Bank in 1992, estimated that 40% of all trainees acquire their skills through apprenticeship.¹²

The 1999 MSE Baseline Survey registered a total of almost 53,000 apprentices. Most of them were in wood-working (41%), retail (32%) and repair services, with minor numbers in pottery, construction and textiles.

The average period of the traditional apprenticeship depends on the economic activity is 6-12 months in textiles and 12-18 months in metal- and woodworking¹³.

A survey among mastercraftsmen and apprentices who participated in the Skills Upgrading Programme of SITE found that:

It is estimated that there are around 500,000 new entrants to the labour market every year, including some 10,000 university graduates, 120,000 secondary school graduates and 250,000 primary school leavers¹⁴. With the shrinking public sector and the severe economic recession undermining employment in the formal sector, there can be no doubt that the MSE sector will have to absorb the very large majority, some observers say even 80%¹⁵, of these new comers. Existing training capacity is by far inadequate to deal with such a high number of people who need to be prepared for informal employment.

Few studies were found that chart the exact training needs of the MSE sector. The National MSE Baseline Survey discussed earlier¹⁶ shows that the microand small entrepreneurs are relatively young: the mean age of male entrepreneurs is 36 years and that of female entrepreneurs 33 years. Their level of education is relatively low: just over 10% has no education at all, more than half of them (54%) has only education up to primary, and 33% has secondary education. The survey results indicate a relation between the level of education and the level of incomes. It was also found that entrepreneurs with higher levels of education are more frequently member of a membership organization, and those with university education remarkably often member of "other business associations" (as different from popular informal mutual insurance groups and regular, geographical MSE associations).

The survey also provides information on the role of training for the MSE sector in Kenya. A total of 85% of all IS operators have not received any training at all; the figures are slightly higher for rural and women entrepreneurs. Technical training is more frequently (8.3%) given than management training (0.9%).

Training is not deemed to be very important by the small producers: about half the MSE owners indicate that there is no need for training of their workers, 23% suggest management training for them and only 10% feel they require technical training. The training needs for themselves are almost identical, although in manufacturing and construction the entrepreneurs feel more need for technical than for management training. In other words, while relatively more technical training is given, entrepreneurs are more interested, for themselves as well as for their workers, in management training - with the exception of clearly technical trades. Two-thirds of those who were trained, sponsored themselves; 9% by private business institutions, 7% by the government and 6% by the church.

The survey results also suggest a relationship between the possession of vocational training certificates and income, but weaker than in the case of education.

Existing information does not permit a gender analysis of the training needs of informal sector operators. Even a specific study of training needs of informal workshops does not honour its objective to establish whether training needs vary by gender (see BOX).

Training needs of informal workshops in Nairobi

A recent study of training needs in informal workshop clusters in Nairobi found that in Ziwani, one of the oldest informal sector clusters in Kenya, consisting of metal working and car repair activities, more than three quarters of the enterprises had apprentices - ranging from one to 20 per firm. The owners of the firms obtained their skills predominantly (71%) "on-the-job", in various training centres (19%), and from friends (7%).

With regard to the recruitment of apprentices by these MSE owners, there does not appear to be a fixed set of admission criteria: the main entry requirement is actually their ability to pay the training fee (69%), completed primary (16%) and physical abilities (8%). Almost half of the apprentices who sign up for training, drop out before finishing the training period - in almost two-thirds of the cases as the result of difficulties in payment of training fees. Two-thirds of the masters provide letters of recommendations to their apprentices - but there is little testing of the training results, as only 10% of the apprentices are send for trade testing, and most are judged by the quality of the work they do.

Some of the apprentices receive payments during the training period, ranging from KSh. 2,000 to 3,000 (USD 25-40). More than 60% of the apprentices are said to stay on after completion of the training period - then they are paid between KSh. 2,000 - 6,000. The cost of the training is estimated by the MSE owners to range from KSh. 500 - 90,000, depending on the economic activity. The main problems mentioned in relation to providing apprenticeship training were lack of training tools and equipment, operating costs to run the training programme, and lack of workshop space.

The study concludes that

apprenticeship training programmes are rather static without any changes over the years
apprenticeship training focuses only on the technical aspects of production and repair
training methodology is practical `learning-by-doing'
many of the apprentices stay on after the training period
graduated apprentices who start a business up competing for the same jobs as their ex-masters.

Source: Mary Kinyanjui, A study of training needs and aspects of training in informal workshop clusters in Nairobi (1997).

The enormous influx of entrants in the jua kali sector in recent years clearly is threatening the absorption capacity of the sector. Already many of the markets for MSE goods and services are effectively saturated and the potential for gainful insertion of additional job seekers in the more traditional MSE trades has become extremely limited.

The concept of Youth Polytechnics (YPs)¹⁷ was developed and popularized in the mid-1960s by the National Christian Council of Kenya (NCCK) as a solution to the problem of education and employment of primary school leavers. In a study titled "After school, what?", it was argued that the school-leavers were unable to become self-employed or get wage jobs because of inadequate education and training. YPs (originally called `Village Polytechnics') were to provide rural youth with skills that could be used in the local economy. They would provide practical training, linked with production, and so assist in the formation of a cadre of trained artisans and other self-employed workers.

While initially the NCCK was the main sponsor of the YP programme, the YPs were gradually (1970-71) taken over by the government, which paid mainly for the salaries for the teachers. They were expected to become self-sustaining over time, on the basis of the production of goods for the local market.

The programme expanded massively over the years. There are now over 600 YPs. Most of them are small training centres that provide local youth with an opportunity to learn practical skills, usually in masonry, carpentry, tailoring, dressmaking, knitting, home economics and livestock raising. A survey of YPs conducted in 1989 registered a total of almost 24,000 students in 18 different courses, and puts the average output at an average of 6,379 per year for the 1987-92 period¹⁸. However, it would appear that less than 20% of total YP capacity is utilized: in 1995 YPs were estimated to have the capacity to absorb up to 40,000 school leavers, but actual enrolment was only 7,927¹⁹.

Earlier assessments of the YP programme found that they were successful in changing the attitudes of young people towards technical education and manual work, and that it had enabled many young people to engage in gainful employment. More recent studies indicate that the YPs have lost most of its original focus, without indicating a clear reason for this. Possibly this is related with the increased role of, and especially the decreasing contributions from GoK. The YPs now offer opportunities for training only to a small faction of the rural school-leavers and unemployed. They have become more attached to the formal trades certification system, and most of its trainees are now concerned about certificates and finding a wage job and less interested in entrepreneurial skills and self-employment.

The curriculum of YPs is too narrow and the skills in home economics and tailoring are not in high demand in the rural areas. The training in business skills is inadequate for those considering to enter into self-employment. In fact, in the early 1980s less than a quarter of the YP trainees were found to become self-employed. There is need for credit schemes to support the ventures started by YP graduates and assist them to purchase tools and equipment. This should be done on an individual basis, as it has been shown that while the government is encouraging them to work in groups, the trainees prefer to be self-employed individually.

A further problem of the YPs is their poor image in the community, where they are seen as catering only for school drop-outs who are generally considered as failures. Other problems include²⁰:

Possibly the most important problem of the YPs at this point in time concerns their finances. As the YPs are community-owned, GoK is not responsible for them. Still, it supports about half of the existing 600 YPs, supposedly the most promising ones, generally with a contribution to trainer salaries. In recent years this contribution has been starkly reduced. In a recent news article, the permanent Secretary of Labour, under which the technical training now resorts, is quoted as saying that

DANIDA, which started to support Youth Polytechnics already in the 1980s, has recently expanded its assistance to include YPs in Taita Taveta, Kitui, Makeuni, Kwale and Thika districts. This Micro-Enterprise Development Programme aims to strengthen the 17 YPs in these districts through:

The programme will furthermore establish links between the YPs, Self-Help Women Groups and Jua Kali Associations, and create Business Development Centres (BDCs). The latter will carry out market surveys, maintain a data base for use by the jua kali artisans and other stakeholders, conduct training in business skills and provide advisory services on business planning. Initially these services will be free Oof charge, but the long-term perspective of the BDCs is that they have to be run commercially and will become self-sustainable. One of the ideas is to register them as share-holding companies. Initially DANIDA would take 50% of the shares, while the rest is distributed to the other stakeholders (YPs, Women Groups, Jua Kali associations). After 2 years of operation, DANIDA would gradually offer its shares for sale to the private enterprises, jua kali associations and other suitable ventures in the districts.

According to recent news paper reports²¹, GoK plans to upgrade around 120 YPs to improve the quality of the training offered. The professed aim is to turn them into "centres of excellence in skills training". As part of the plan a new scheme of service (ie. salary payments) for the instructors is to be adopted, even though it seems that the funds still largely have to come from the communities that manage the YPs.

Since the early 1990s, the vocational training sector in Kenya has been dominated by the World Bank Small Enterprise Training and Technology Project (MSETTP). After lengthy preparations the project document was signed in 1994, financed with a USD 24 million loan. The main objectives of the project are:

MSETTP's includes a Training Voucher Scheme modelled after a similar scheme of the Inter-American Development Bank in Paraguay²². This component²³ was only started in 1996 as a pilot programme. It is directed at

It aims to develop a market for a broad range of training, technology and other business development services, by catalysing the demand for such services. Eligible MSEs can, purchase the vouchers to get training for its owner(s) or workers providers at 10-30% of the actual face value. The important point is that the vouchers can be used for any kind of training from any of the registered training providers. It was expected that by subsidizing the initial contacts between MSEs and (private) training providers, through a demonstration effect an environment would be created in which skills training is properly valued so that the MSEs are willing (and able) to bear a sizeable portion of the training costs (or even the total costs).

In all, a large number of different types of training providers were listed before the start of the pilot phase, including: mastercrafts(wo)men, private training institutions, public sector training centres, technology and financial institutions, consulting firms and individual trainers/consultants.

The project works with `allocating agents' who can be jua kali associations, NGOs and others able to liaise with the MSE sector and so facilitate the decentralization of the voucher scheme implementation. The role of these allocation agencies is

The pilot phase of the voucher scheme took place in Nairobi and Machakos, and covered 5 economic sub-sectors: textiles, woodworking, metalworking, motor vehicle mechanics and food processing. A tracer study of the pilot phase was carried out in August-September 1997²⁴. In all interviews were held with 369 respondents that could be traced from the original sample of 494 firms from whom baseline data were available. Its main findings include:

Interestingly, the study found that while the MSEs in the control group saw the mean of their sales decrease by 2%, possibly because of the worsening economic situation, the MSEs who participated in the training voucher scheme saw the mean of their sales more than double: from KSh. 8,342 to KSh. 18,235 per month. The beneficiaries of the scheme performed better than the control group on almost all variables studied (see table).

In sum, according to this tracer study, the beneficiaries of the voucher training programme became aware of the need to upgrade existing skills and acquire new ones, while the training providers and the training allocation agencies became sensitized to the specific training needs of the MSEs. The study notes, however, that further interventions, such as credit and technology upgrading, are required for the Jua Kali entrepreneurs to fully realize their potential, create more jobs and possibly graduate to the next layer of (formal) small and medium enterprises²⁶.

Public training institutes were found to have engaged least in public relations and marketing. Apparently they felt confident that the millions of shillings made available to jua kali operators would automatically fall their way. During the first phase, only 15% of the ME-vouchers went to buy training from public institutions²⁷.

There is considerable circumstantial evidence that mastercrafts(wo)men markedly changed their position vis-à-vis apprenticeship training. They adapted, condensed, costed and packaged their training offerings as specific products, and as a result the more successful mastercrafts(wo)men have turned apprenticeship training into a profitable business activity - some even found training to be more profitable than their manufacturing and/or repair activities - especially as apprentices set up their own businesses thereby increasing competition, and now see training as their principal business ²⁸.

The WB project has generated, right from its conception, considerable debate on its intentions, design and results, and over time positions appear to have become quite fixed. Whatever its merits, the sheer size of MSETTP means that its influence on the training sector in Kenya will felt for years to come. There can also be little doubt that the large sums of money, placed in the hands of the small producers themselves will have changed the perception of the role and format of training forever: by subsidizing demand for training, the preferences of MSEs have conditioned the form, duration and content of training courses, as well as the type of training providers, which together have lead to the provision of short, low cost (on average some USD 200 per course) and practical courses that impart readily useable skills. Already some of the training providers report that some of the MSE participants, after having received basic skills training, have paid the full costs to receive more advanced training - because they did not want to wait the 6 months required to pass before they are entitle to purchase another voucher²⁹.

Some observers in Kenya's training sector are less convinced about the projects short term results and long-term effects. The main notions that are traded, usually on the basis of pure hearsay with further proof than that there are a significant number of training professionals who give credence to these stories³⁰:

	Beneficiaries Group		Control Group
	Increase	Decrease	Increase	Decrease
Assets	65%	4%	40%	7%
Volume of sales	45%	6%	16%	6%
Diversification of products	13%	0%	2%	0%
Business liabilities	16%	17%	16%	13%
Business expenditures	30%	10%	28%	9%
Business creation (ie. women start-ups)	28%
Employment creation	42%	2%	22%	7%