Employment in East Africa: Lessons from a comprehensive skills and training programmeClient: Department for International Development | Sectors: Natural Resources, Economic growth
According to the World Bank, approximately 1.6 billion people in low- and middle-income countries will reach working age over the next 15 years. As a result, getting young people into work and overcoming the ‘entry-into-employment’ challenge sits at the top of the policy agenda for many developing-country governments.
Many developing countries also enjoy a wealth of natural resources, such as oil and gas. The extraction of these resources can attract investment from large, multinational companies. Despite this, local people may miss out on the jobs and economic opportunities these investments create. In many natural resource industries, multinationals tend to bring in a lot of their own workforce from overseas, import a lot of raw materials and re-export a lot of their final products, rather than hiring local workers, buying from local suppliers and selling to local buyers.
So why is this the case?
Low-income countries tend to suffer from weaker infrastructure, less competitive firms, less profitable domestic markets, and lower existing levels of the technical and vocational educational skills needed in the natural resource sector. As a result of these deficits, investing firms often hire overseas workers to work in jobs for which they struggle to hire locally, and buy from overseas suppliers to supply goods for which they struggle to procure locally. In order to counter the risk that locals do not benefit from the economic opportunities that are a result of substantial investments, governments often use legislation to require multinational companies to hire and buy locally, or provide wage subsidies to reduce the cost of hiring local workers. These measures however can be costly and also do not adequately address underlying deficiencies in the local economy.
The comprehensive Employment and Skills for East Africa (E4D/SOGA) programme was launched with the aim of addressing skills deficiencies in the local labour markets of four East African countries (Uganda, Kenya, Tanzania and Mozambique). Each of the selected countries were set to receive sizeable investments in the oil and gas sectors from multinational firms and there was a risk that, without intervention, local people would not access the employment opportunities generated as a result. The five-year programme delivered interventions across the four countries in employment promotion, targeted skills training, job matching and enterprise development, with the aim of generating meaningful local employment by increasing both the supply of and demand for skilled labour.
What did we find?
It was complex to evaluate a programme comprised of such a variety of interventions, however based on the interventions that were most successful, the evaluation was able to provide a number of important lessons for:
• Designing employment and skills interventions
• Capturing the benefits of natural resource investments
• Building effective partnerships with industry (which was found to be a key determinant of the success of interventions in terms of employment)
To reflect the lessons of these distinct topics and more widely disseminate the findings, the evaluation produced the following 3 learning briefs.
Learning Brief 1 – Skills Development
This brief outlines the evidence from the wider literature regarding the optimal design of skills training programmes in developing countries. It explains how the E4D/SOGA programme’s skills and training interventions were designed and provides the following lessons for achieving successful employment outcomes:
• Effective skills interventions are designed with the needs of the local labour market in mind
• Transferable character skills are better learned ‘while doing’
• Effective skills interventions should provide links to real jobs
Learning Brief 2 – Promoting Impact of Natural Resource Investments
This brief outlines the evidence from the wider literature regarding policies to encourage multinational firms to link more effectively with local individuals and firms. It explains how the programme’s approach was designed to facilitate this, and provides the following lessons for how policies can be designed to help developing countries capture the benefits of natural resource investments:
• A focus on meeting international standards can help promote links to local individuals and firms
• The most effective programmes reflect the needs of multinational investors
• An effective demand driven approach requires strong partnerships with the private sector
• Continuous analysis is required to build necessary flexibility
Learning Brief 3 – Industry Partnerships
This brief outlines the evidence from the wider literature regarding the role of industry partnerships in promoting local firm growth and employment . It explains how the programme built and incorporated industry partnerships into its skills training, enterprise development and job matching interventions. It provides evidence from the evaluation regarding the importance of industry partnerships for achieving successful employment outcomes and provides the following lessons for building effective partnerships:
• Effective relationships take time to build
• Targeting sectors that align with domestic government priorities is key for sustainability
• Targeting partners needs to be designed to adapt to changes in demand