Vocational and Technical Training Centers
Vocational and Technical Training Centers
Business Model Description
Set up and operate private vocational and technical training centers for students at post-primary levels funded by tuition fees, including teachers and healthcare workers education facilities.
Expected Impact
Increase access to market-relevant education, improve human capital development and support service delivery in basic service industries, especially education and health care.
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
- Eswatini: Shiselweni
- Eswatini: Lubombo
Sector Classification
Education
Development need
Lack of access to education facilities in poorer regions (1, 2), the shortages of qualified teachers – especially for ECDE, STEM, ICT subjects (1, 2), and deficit of medical workers in the pandemic (12) run counter to SDG 4. At a secondary level, 50% of age-eligible students are out of school despite the high rate of literacy among the 15-24 aged population (1, 6, 7, 11).
Policy priority
The education sector has the largest budget allocation with 16% in 2020/21 (1). National Development Plan (2019/20-2021/22) sets a target to increase enrolments by 20% at all levels of education (1, 5). By 2022, it is also planned to have at least 10% of the adult population participating in education (7).
Gender inequalities and marginalization issues
The vulnerable situation of girls is evidenced by 33% of school-aged females having experienced sexual violence in their lifetime (9). This results in high rates of dropouts due to pregnancy. Children with disabilities are also more likely to drop out or repeat a grade due to lack of access or improperly trained teachers (1, 6).
Investment opportunities introduction
In its 2022 Budget, the government allocated E 4.05 billion (USD 269 million) to support the education system (50). Opportunities exist in restructuring and marketing TVET and higher institutions, establishing PPPs with telecom companies to facilitate online learning, and investments in early childhood development programmes (1, 2, 4).
Key bottlenecks introduction
High prevalence rate of HIV and AIDS (30% among 15-49 aged population in 2015) affects teaching staff availability (1, 2). The COVID-19 pandemic limited access to education for as many as 350,000 learners in 2020. Although the government established remote learning through TV and radio, only about 50% of the population has access to these (1, 3, 4).
Formal Education
Development need
There is an absence of a standardized Early Childhood Development Education (ECDE) curriculum (1, 2, 7). Formal technical and vocational education training (TVET) (1.7%) experiences underfunding, compared to tertiary education (21%) (1). There is a need for inclusive education due to the lack of specially trained teachers and inaccessible environment (2, 19).
Policy priority
In the context of the COVID-19 pandemic, the government sets a target to relocate resources within the education sector in favor of prioritized education levels, such as early childhood and development education (1). The National Education and Training Sector Policy 2018 aims to introduce a free secondary education by the year 2030 (2).
Gender inequalities and marginalization issues
18% and 35% of girls in primary and secondary school, respectively, drop out due to early pregnancy, with rural and poor girls at greater risk (1). A low female participation rate for formal TVET is observed (28%), although there is a gender parity within the tertiary level (1, 11). Merely 18% of Orphans and Vulnerable Children (OVC) students were enrolled in primary school and 50% at secondary school (8).
Investment opportunities introduction
Opportunities exist for investing in vocational education to increase enrolment (10), enhancing admission procedure for OVC grants, developing ICT curriculum for secondary education to facilitate blending learning, management and administration (11) as well as ECDE curriculum to better prepare children to enter the schooling system (1).
Key bottlenecks introduction
Challenges exist due to the high under-five mortality rate attributed to a shortage of clean water, which is induced by hazards such as the El Niño drought (1, 9). Lack of sanitation facilities poses a risk to well-being of children during the COVID-19 pandemic (1, 7). High prevalence of HIV/AIDS, tuberculosis and poverty lead to limiting students' access to secondary education (2).
Pipeline Opportunity
Vocational and Technical Training Centers
Set up and operate private vocational and technical training centers for students at post-primary levels funded by tuition fees, including teachers and healthcare workers education facilities.
Business Case
Market Size and Environment
< USD 50 million
6,881 trainees in TVET institutions
6,881 trainees are enrolled in total in public and private TVET institutions in Eswatini. Nearly half of them are enrolled in private institutions and pay on average USD 652 for a 12-month training period. The rough market size of private TVET in Eswatini amounts to over USD 2 million (14, 39).
Although Eswatini has a relatively high pupil to teacher ratio, 15.45 at secondary and 26.5 at primary levels in 2017 (51), the country has a shortage of skilled teachers with 30% of teachers at the secondary level having no teacher training (1). The country also experiences a shortage of skilled medical personnel, with 0.096 physicians per 1,000 people in 2016 (45).
The Ministry of Education's total expenditure allocated to TVET institutions reached USD 4.5 million in 2019, constituting 2% of its total budget (14).
Indicative Return
15% - 20%
An academic study on the case of National Handicraft Training Centre in Eswatini predicted up to 20% ROI within a 20-year period. The benefit-cost ratio was calculated as 4.66 based on total investment in the center and total income generated between 1995 and 2015 (40).
The same study states that the government of Eswatini can realize economic returns comparable to those invested by the United Kingdom TVET system of GBP 16-20 for every GBP 1 invested (40).
Investment Timeframe
Short Term (0–5 years)
Based on the examples of private vocational and technical training centers in Eswatini and across Sub-Saharan Africa, the estimated payback period for TVET investments is from the second year onwards (41, 42).
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Capital - Requires Subsidy
Capital - Limited Investor Interest
Market - Highly Regulated
Impact Case
Sustainable Development Need
Although Eswatini showed an 6% increase in Human Capital Index between 2010 and 2020, a child born in 2020 can be only 37% as productive when she grows up as a fully educated adult in optimal health. This estimate for the country is lower than the average for Sub-Saharan African (15).
Education is expensive in Eswatini, constituting 10% of a household budget on average (43). Private institutions report high drop-out rates due to high tuition fees (1, 44).
In 2017, the IMF identified a high skill mismatch in the country's labor market and ranked Eswatini 136th out of 139 countries. The shortage of supply of skilled labor forces is the result of low educational attainments at the secondary and tertiary level in particular (16).
Eswatini experiences a shortage of qualified teachers who can teach mathematics, science and ICT; only 15% of secondary teachers have a Bachelor's degree (1). A lack of healthcare workers is also observed with 0.096 physicians per 1,000 people in 2016 (45).
Gender & Marginalisation
Early pregnancy results in as much as 35% of drop-outs at junior secondary level and 22% at senior secondary level, consequently decreasing female applications to tertiary education, especially TVET. The share of female trainees in public TVET has not exceeded 28% since 2013 (1).
There is a substantial disparity in tertiary education attainment by wealth and by rural-urban location. 60% of the population in the poorest households never attended tertiary institutions, twice that of higher-income households (31%) and almost three times (21%) that of the urban population (1).
Skills development opportunities are limited in Eswatini for persons living with disabilities (14, 15). For example, the Kululameni Training Center for People with Disabilities had 0% employment rate for its students in the period between 2005 and 2017 (1).
Expected Development Outcome
Vocational and technical training centers provides access to occupation specific knowledge and work relevant skills, which improves human capital and leads to economic growth and stability (17, 18).
Vocational and technical training centers increase access of graduates to the labor market and reduce existing skills gaps and mismatches (7, 17).
Vocational and technical training centers increase the share of qualified teachers and medical workers in the respective fields as well as addresses skills shortages and mismatches (44).
Gender & Marginalisation
Due to greater accessibility, vocational and technical training centers promote equal entrance into work-related training for the Orphans and Vulnerable Children (OVC) and students with disabilities, and contributes to gender parity in education (7, 14, 19).
Vocational and technical training centers contribute to female participation in student enrolment and subsequent employment through enhancing the production of high-quality skills and ensuring the integration of necessary resources (14, 44).
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
4.5.1 Parity indices (female/male, rural/urban, bottom/top wealth quintile and others such as disability status, indigenous peoples and conflict-affected, as data become available) for all education indicators on this list that can be disaggregated
Gross enrolment rate for primary education of 85% for male and 78% for female students (2019); secondary education of 82.63% for male and 82.19% for female (2016); tertiary education of 7% for male and 6.6% for female (2013) (20). Adult and non-formal education enrolment stood at 4,291 students in 2017, compared to 11,378 students enrolled to Swazi universities (1).
Female school enrolment of 49.6% vis-à-vis 50.3% for male; rural secondary school enrolment of 62.5% vis-à-vis 78% for urban; senior secondary school enrolment for the rural poorest of 38% vis-à-vis 76% for the urban richest (1).
Reduce the national repetition rate for secondary schools to 5% (2). Increase secondary (junior and senior) net enrolment rates from 46.3% to 55%. Increase TVET enrolments by 20% (5).
Ensure that all learners of appropriate ages who have passed primary education have access to secondary school education within a seven-kilometers radius of their homes (2).
8.5.2 Unemployment rate, by sex, age and persons with disabilities
8.6.1 Proportion of youth (aged 15–24 years) not in education, employment or training
Unemployment rate for female population was 27.384% and 23.828% for the male working population in 2020 (21, 22). Youth unemployment rate stood at 47.4% (15-24 years) and 32.4% (15-35 years) in 2016 (23). Unemployment rate for persons with disabilities was 17.2% in 2016 (24).
Share of youth not in education, employment or training: 35.46% in 2016 (25).
Reduce youth unemployment from 47.4% (2017) to at least 42% by 2021 (5).
Increase secondary net enrolments by 9% and increase TVET enrolments by 20%; reduce youth unemployment to at least 42% by 2021 (5).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
People
Public sector
Outcome Risks
If the vocational and technical training centers do not offer quality services and the required skills, the mismatch may be reinforced and the centres' reputation may be undermined.
Private vocational and technical training centers may exacerbate existing wealth inequalities and urban / rural disparities in access to services, if they are not specifically targeting communities in need.
Impact Risks
Because the policy environment for vocational and technical training centers is not fully established, changes in regulations may impact the operations and have implications on the expected impact.
International competitors may outcompete national service providers with foreign qualifications at low costs, which may limit the domestic value addition and skills match and consequently reduce the expected impact.
If target groups do not join the vocational and technical training centers due to poor reputations or unaffordable fee structures, the impact may be limited due to low enrolment and attendance rates.
Impact Classification
What
Vocational and technical training centers increase access to market-relevant education, improve human capital development and support service delivery in basic service industries.
Risk
While the model of vocation and technical training centers is proven, the policy and regulatory environment, international competition and accessibility and uptake by target groups require consideration.
Impact Thesis
Increase access to market-relevant education, improve human capital development and support service delivery in basic service industries, especially education and health care.
Enabling Environment
Policy Environment
National Development Plan Towards Economic Recovery, 2019/20-2021/22: Places support for enhanced social and human capital development, with one of the sector-specific outcomes being improved access to quality, relevant and inclusive education, and lifelong learning opportunities (5).
Kingdom of Eswatini Strategic Roadmap 2019-2023: Defines the ambition to improve the delivery of services and fostering a culture of excellence through improved efficiency and effectiveness of the public sector and technological innovation (27).
National Education and Training Sector Policy, 2018: Is a strategic and visionary framework for the education and training sector, outlines sector-wide and sub-sector policy goals and objectives, and elaborates on policy implementation (2).
National Education and Training Improvement Programme (NETIP) II, 2018/19-2020/21: Presents the strategic objectives, priorities, strategies, and key activities to be achieved in technical and vocational education and training over a three-year period (7).
National Technical and Vocational Education and Skills Development (TVETSD) Policy, 2010: initiated the creation of a TVETSD system responsive to market demands (1). In 2020, the policy was revised and new goals to increase TVET provision and improve TVET governance were set (14).
Financial Environment
Financial incentives: The Industrial Development Company of Eswatini, which is partly government-initiated, provides E 1.5 million (USD 100,000) and above corporate loans in the education, energy, infrastructure and health sectors (35).
Other incentives: The government takes the responsibility to pay teachers' salaries in government-funded private schools, reducing costs for private operators who may top-up salaries depending on availability of resources (36).
Other incentives: The TVET Enhancement Project benefited two major local education institutions, namely the Eswatini College of Technology (ECOT) and Gwamile Vocational and Commercial Training Institute in Mastapha (VOCTIM), providing syllabus and teaching content in the fields of electric machinery, ICT and automobile repair and maintenance, reaching 223 qualified technicians as well as on-the-job training for professional teachers (50).
Regulatory Environment
Industrial and Vocational Training Act, 1982: Provides the framework on vocational and industrial training systems to formal and informal sectors, aims to meet the national human resource requirements for competitiveness recognizing technological innovativeness (28, 29).
Education Act No. 9, 1981: Defines the legal and the organizational principles of functioning and development of an education system, and establishes the National Education Board, School Committees, and Adult Educational Council (30).
Education Regulations Notice (Establishment and Registration of Private Educational Institutions), 2009: Outlines land and staff requirements, student-teacher ratio and facilities requirements; defines the provisions under which private institutions are allowed to function (31).
Teaching Services Act, 1982: Regulates functioning of teaching services, organizational and legal structures, functions of the main bodies and actors, and establishes the Teaching Service Commission. The Teaching Service Amendment Bill 2019 is under development and is to be implemented soon (32).
Marketplace Participants
Private Sector
Advanced School of IT, COT Management Training Institute, Linem training centre (Pty) Ltd, Waterford Kamhlaba, CIT College, BSA Training Centre, Southern Africa Nazarene University, Eswatini Medical Christian University.
Government
Ministry of Education and Training, Ministry of ICT, Ministry of Labour and Social Security, Ministry of Economic Planning and Development, National Education Board, Teaching Service Commission, Regional Education Offices, In-Service Education and Training (INSET) Department.
Multilaterals
European Union (EU), World Bank (WB), Global Partnership for Education (GPE), Government of Japan, Taiwan Technical Mission, UNESCO, UNICEF, United Nations Population Fund (UNFPA), World Food Program (WFP).
Non-Profit
Swaziland National Association of Teachers (SNAT), Swaziland Network Campaign For Education For All, Association for the Development of Education in Africa (ADEA), Tinkhundla Youth Associations.
Public-Private Partnership
The Advanced School of IT is a partnership between Aptech Limited, a global retail and corporate training solutions provider, and the government of Eswatini that offers relevant skills in software development, multimedia, cybersecurity and hardware development (38).
Target Locations
Eswatini: Shiselweni
Eswatini: Lubombo
References
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