Training and upskilling centres
Business Model Description
Upscale technical and vocational education and training centres for adults and youth, offering different courses for improving technical skills and employment opportunities.
Expected Impact
Offer educational and training opportunities for professional self-development to promote more stable livelihoods.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Uganda: Karamoja
- Uganda: Central
- Uganda: Acholi
Sector Classification
Education
Development need
Uganda has a significant challenge meeting SDG 4 - Quality Education.(I) The inequality-adjusted education index within the Human Development Index (HDI) framework is only 0.371.(II) The quality of education is poor, which is showcased by low levels of literacy and numeracy, combined with high school dropout rates (around 40%).(III)
Policy priority
The National Development Policy III 2020/21 - 2024/25 identified several goals for education: increase labor force transitioning into gainful employment from 35% to 55%, increase average years of schooling from 6 to 11, increase learning adjusted years of schooling from 4.5 to 7 years, and reduce the gender gap index from 0.523 to 0.5.(III)
Key bottlenecks introduction
Uganda has inadequate training programs to support the transition from school to employment. Public services suffer significantly from lack of accountability, cumbersome procedures and corruption.(III)
Pipeline Opportunity
Training and upskilling centres
Upscale technical and vocational education and training centres for adults and youth, offering different courses for improving technical skills and employment opportunities.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
Financing for the technical and vocational education and training (TVET) sector grew between 2013 and 2019 and reached USD 75 million (45% of total education budget). However, a USD 175 million financing gap remains, which must be covered by private sector.(14)
81% of Uganda's technical and vocational education and training centres are private. There were an estimated 1,000 private centers in 2011.(1)
Enrolments for business, technical and vocational training grew from 25,000 in 2008 to 129,000 in 2017.(III)
Indicative Return
15% - 20%
Benchmark statistics for the private education sector estimate a return rate between 18% and 22%. This rate is a benchmark calculated as a cost of equity with a country risk premium, reflecting an average return required by investors.(9)
Investment Timeframe
Medium Term (5–10 years)
The total investment timeframe is expected to be medium term, reflecting the characteristics of the business model offering upskilling services.
Market Risks & Scale Obstacles
Limited or inadequate uptake due to social norms and poor quality examples
Business - Supply Chain Constraints
Market - Highly Regulated
Impact Case
Sustainable Development Need
Access to technical and vocational education and training (TVET) varies significantly between urban and rural areas.(14) Less than 50% of districts have access to at least one TVET institution supported by the government that could develop skills necessary for work.(III)
The World Health Organization estimated that with the current level of education and healthcare, Ugandan children aged 18 years can achieve only 38% of their potential productivity.(III)
Gender & Marginalisation
Although the level of illiteracy is similar for both genders, there is high gender disparity in enrolments in secondary schools, universities and technical and vocational education and training (TVET). The highest difference is in TVET, with only 61 women enrolled for every 100 men.(III)
Expected Development Outcome
Increased levels of literacy and numeracy, increased labour productivity, decreased skills gap in the market
Development of new opportunities resulting from highly educated staff, increased incomes and wages, increased access to education, increased chances for new innovations, discoveries or patents
Increased pace of growth in gross domestic product (GDP), increased employment opportunities for women, improved human capital
Gender & Marginalisation
More accessible and high quality technical and vocational education and training (TVET) opportunities for women and young adults
Primary SDGs addressed
4.3.1 Participation rate of youth and adults in formal and non-formal education and training in the previous 12 months, by sex
4.6.1 Proportion of population in a given age group achieving at least a fixed level of proficiency in functional (a) literacy and (b) numeracy skills, by sex
5.5.2 Proportion of women in managerial positions
8.5.1 Average hourly earnings of employees, by sex, age, occupation and persons with disabilities
8.6.1 Proportion of youth (aged 15–24 years) not in education, employment or training
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Outcome Risks
Some technical and vocational education and training (TVET) courses, despite their high costs, provide just certification instead of concrete skills.(2)
High cost of education often requires taking loans and increasing indebtedness of households.
Impact Classification
What
Providing technical and vocational education and training is likely to have a positive impact because it increases the productivity of the people and contributes to higher economic growth.
Who
Youth and underperforming adults who achieve only a fraction of their possible productivity and experience lower living standards
Risk
Although the business model is market proven, the negative reputation of TVET and its low quality may discourage potential clients.
Impact Thesis
Offer educational and training opportunities for professional self-development to promote more stable livelihoods.
Enabling Environment
Policy Environment
National Development Plan III (NDPIII) 2020/21 – 2024/25: This plan incudes the following goals: increase the proportion of labour force transitioning into gainful employment and enterprise development from 34.5% to 55%; increase average years of schooling from 6.1 to 11 years; and increase learning adjusted years of schooling from 4.5 to 7 Years.(III)
Technical Vocational Education and Training (TVET) Policy: This policy aims to create an enabling legal framework, increasing people's awareness of TVET benefits, raising involvement of stakeholders and expanding support for continuous learning.(2)
National ICT Policy: This policy recognises the importance of information and communications technology (ICT), emphasising both ICT education and the use of ICT in education.(7)
Financial Environment
Fiscal incentives: All educational articles and materials are tax exempt.(8) Exercise books are value added tax (VAT) exempt.(8) Mathematical sets, textbooks are VAT and import duty exempt.(8) Sewing machines and woodworking machines (frequently used for training) are VAT and import duty exempt.(8)
Other incentives: Taxpayers receive a 100% deduction for scientific research expenditures, as do employers who train permanent resident or provide tertiary education not exceeding 5 years.(8)
Regulatory Environment
The Business, Technical and Vocational Education and Training (BTVET) Act 2008: This Act is the general regulatory framework for BTVET. It defines the scope of education programs, their criteria and requirements for service providers.(1) It also introduced the Uganda Business and Technical Examinations Board (UBTEB), which establishes certification and examination standards.(1)
Education Service Act 2002: This Act specifies the functions of the Education Service Commission. It is responsible, among other things, for reviewing and formulating national standards for education services.(3)
The TVET Policy introduces the TVET Council, two-thirds of whom are industry employers. The council regulates the sector by implementing standards, qualifications, registration and accreditation of institutions. It also recommends beneficiaries of the Skill Development Fund.(2)
National Curriculum Development Centre (NCDC) Act Cap 135: This Act established the National Curriculum Development Centre, which supports curriculum development for TVET institutions.(2)
Marketplace Participants
Private Sector
African College of Commerce (ACC Kabale), Kabale Institute of Technology and Applied Sciences (KITAS), Agape International Children Ministries (AICM) Vocational Training College
Government
Ministry of Education and Sports (MoES), Directorate of Business, Technical and Vocational Education and Training (BTVET)
Multilaterals
World Bank
Non-Profit
German Corporation for International Cooperation (GIZ), Japan International Cooperation Agency (JICA), Korea International Cooperation Agency (KICA), GIC, Irish Aid, Industrial Training Council (ITC), Uganda Association of Private Vocational Institutions
Target Locations
Uganda: Karamoja
Uganda: Central
Uganda: Acholi
References
- (I) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. (II) United Nations Development Programme (2019). Briefing note for countries on the 2019 Statistical Update: Uganda. (III) National Planning Authority. National Development Plan III (NDPIII) 2020/21 – 2024/25. (IV) World Bank. The World Bank In Uganda. https://www.worldbank.org/en/country/uganda/overview
- (1) United Nations International Centre for Technical and Vocational Education and Training (2014). World TVET Database - Uganda. https://unevoc.unesco.org/wtdb/worldtvetdatabase_uga_en.pdf
- (2) Ministry of Education and Sports (2019). Technical Vocational Education and Training (TVET) Policy. http://www.education.go.ug/wp-content/uploads/2020/05/FINAL-TVET-POLICY_IMPLEMENTATION-STANDARDS_IMPLEMENTATION-GUIDELINES_19TH_MAY_2020.pdf
- (3) Government of Uganda (2002). Education Service Act 2002. https://ulii.org/system/files/legislation/act/2002/2002/education%20service%20Act%20%202002.pdf
- (4) World Bank database. https://data.worldbank.org/
- (5) World Bank (2019). Economic Development and Human Capital in Uganda: A Case for Investing More in Education. http://documents1.worldbank.org/curated/en/925741559163051034/pdf/Economic-Development-and-Human-Capital-in-Uganda-A-Case-for-Investing-More-in-Education.pdf
- (6) Uganda Bureau of Statistics (2017). Education: A means for Population Transformation. https://www.ubos.org/wp-content/uploads/publications/03_2018Education_Monograph_Report_Final_08-12-2017.pdf
- (7) Ministry of Information and Communications Technology (2014). National ICT Policy.
- (8) Uganda Revenue Authority (2019). A Guide on Tax Incentives /Exemptions available to the Uganda Investors. https://www.ebiz.go.ug/wp-content/uploads/2020/03/TAX_INCENTIVES_GUIDE_FOR_INVESTORS_IN_UGANDA_October_2019.pdf
- (9) PwC analysis based on Prof. A. Damodaran data, 2020.
- (10) Ministry of Education and Sports. Who We Are. http://www.education.go.ug/#eluidd49b9abd
- (11) World Bank (2013). Second Economic Update. https://www.worldbank.org/content/dam/Worldbank/document/Africa/Uganda/Report/uganda-economic-update-august-2013-summary.pdf
- (12) Daily Monitor (2019). Construction, manufacturing and tourism sectors 'scream' for skilled labour. https://www.monitor.co.ug/uganda/news/national/construction-manufacturing-and-tourism-sectors-scream-for-skilled-labour-1863246
- (13) Knoema database. https://knoema.com/
- (14) Ministry of Finance, Planning and Economic Development (2019). Business, Technical and Vocational Training: Are the objectives being met? BMAU Briefing Paper 26/19. https://www.finance.go.ug/sites/default/files/Publications/BMAU%20Policy%20Brief%2026-19-Business%2C%20Technical%20and%20Vocational%20Training-%20Are%20the%20objectives%20being%20met.pdf
- (15) Brandt, S. and Okello, O. (2019). Uganda’s Rising Middle-Class: A Roaring Lion or a Sleepy Kitten? Konrad Adenauer Stiftung. https://www.kas.de/documents/280229/280278/Uganda%E2%80%99s+Rising+Middle-Class+-+A+Roaring+Lion+or+a+Sleepy+Kitten.pdf/de73781c-8ac8-fdc8-856a-15f9999974b1?version=1.2&t=1567666972231
- (16) Rafa, M., Moyer, J.D., Wang, X. and Sutton, P. (2017). Estimating District GDP in Uganda.https://pardee.du.edu/sites/default/files/Estimating%20District%20GDP%20in%20Uganda%20.pdf