Financing for technical skills key to growth

Dar es Salaam. News that the Higher Education Students’ Loans Board (HESLB) expanded its scope of funding to include those studying for diplomas appeared like descended like a dove to a young student Mukrim Khamis of the Dar es Salaam Maritime Institute.

The commitment made on May 10, 2018 rekindled hope for the 21-year old Mukrim who studies Marine Engineering and brought relief to his six-member family which had been saddled with the burden of paying for his education.

However, that hope did not last long. It was dashed by another announcement a month later that the board had suspended issuance of loans to diploma students for the 2018/19 academic year.

“I was in the process of applying (for the loan) when I saw the news on social media,” says a hopeless Mukrim. “I couldn’t believe it.”

Much as the announcement Mukrim and his colleagues who were in a dire need of the government’s support, some people questioned the government’s commitment to strengthening technical and vocational education.

In 2014, the National Planning Commission acknowledged the importance of technical and vocational colleges not only for their potential in boosting self-employment but also in providing skills needed by employers.

It is estimated that 70 per cent of employers are of the view that lack of appropriate skills is a matter of serious concern, and affects productivity.

The government’s concept of “Skills Development” is that process which involves developing a set of skills, knowledge and attitude of the national labour force for the purpose of improving productivity and competitiveness.

The study, National Skills Development Study (published in 2014), reported that although the situation seems to have persisted over the last 10 years or so, no meaningful action has been taken to address those concerns.

Although there is a shared consensus that vocational and technical skills are potentially attractive to self-employment, yet the technical and vocational education stagnated in terms of enrollment levels.

‘Degree-holder-syndrome’ wrong?

Since 2010, many institutions responsible for technical education have been converted into universities. The study coined this tendency as “Degree-holder-syndrome,” which literally means the general aspiration to acquire degrees or equivalent qualifications.

The study warns against the trend’s far-reaching implications on technical and tertiary levels of education in the country.

The study made it clear that for the Tanzania Development Vision 2025 to be a reality, consolidation and expansion of TVET needs to be a matter of urgency.

The TVET system in particular, the study argues, is uniquely positioned to impact on national development for it is responsible for producing “shop-floor” workers in all sectors of the economy including the informal sector.

Giving a case study of India, the study reveals that TVET system plays a critical role not just on employment creation but also as a source of attracting foreign investment.

Arbitrariness budget allocation

But there’s a problem of funding that needs to be dealt with for the above aspiration to be meaningfully achieved.

Currently, the main sources of funding for skills development are government (normal budget through the ministry of Education as well as Human Capital Investment directly through Treasury), employers’ contributions (Skills Development Levy), development partners and end users in terms of fees.

But according to the study by the Planning Commission, the overall budget allocations to sectors and training institutions - particularly with regard to Human Capital Investment - are arbitrary.

Vocational education was not a beneficiary of the Human Capital Investment component, possibly on the assumption VET system gets Skills Development Levy (SDL). The above trend is worrying and the study calls for a review of the allocations of funds from government to sectors responsible for skills development so as to be reflective of the road-map to attaining objectives of Vision 2025.

This being the case, and for those aspirations to be attained, the balance of professionals, technicians and vocational level skills must be reviewed – “the pyramid must be up-right,” the study recommends.

Speaking specifically on the role of HESLB, the study recommends that government funding through the Board needs to be scaled down, and that SDL should not fund higher education.

HESLB should focus more on funding national priority programmes only. Science and mathematics related subjects, including research and development to be part of the priority programmes.