Transcript TEVET REFORM –SUCCESSES AND CHALLENGES

Funding of the TEVET System
in Malawi – Practice and
Experiences
A presentation by TEVETA to the Invited Guests at the
10th Anniversary Celebrations of the Botswana Training
Authority (BOTA) at BOTA House on
2nd March 2011
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Main Objectives of Presentation
•
To briefly articulate the role of TEVET in national
development
•
To provide an overview of the funding and financing
mechanism of the TEVET system in Malawi
•
To share some challenges regarding the TEVET funding
model used in Malawi.
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Layout of Presentation
•
Introduction
•
Establishment of TEVETA
•
Funding of the TEVET System
•
Levy Collection in practice
•
Uses of TEVET Levy
•
Successes and Challenges faced in collecting TEVET levy
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Introduction
•
Malawi is predominantly an importing and consuming nation.
Current development efforts are to shift to a producing and
exporting nation.
•
To be able to export the country has to produce products that are
competitive at the international market.
•
To be able to produce such quality products, the Malawi workforce
needs to be highly skilled.
•
The role of TEVETA is to create a conducive environment for private
sector led economic growth
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TEVETA Background

The TEVET Authority was established by the Act of
Parliament (Act No. 6 of 1999) after two studies conducted
with support from DANIDA and GTZ.

The studies indicated that Malawi required a rigorous
reform in the management of the TEVET system, including
the funding and financing mechanism.
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TEVETA - Objectives
1.
2.
3.
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5.
6.
To monitor gaps between supply of and demand for
skills;
To promote an integrated, demand-driven, competencybased modular technical, entrepreneurial and vocational
education and training system;
To support the adoption and application off appropriate
technologies;
To promote managerial and business skills and spirit of
entrepreneurial culture with regard to both wage and
self-employment;
To facilitate sound and sustainable financing and funding
mechanisms and;
To facilitate and bring the expertise and moderate the
different interests of all stakeholders.
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TEVETA’s Strategic Mission & Vision
The mission of TEVETA in the 2007-2012 strategic plan is:
“to
direct
sustainable
acquisition
of
internationally
competitive and recognizable technical, entrepreneurial
and vocational skills by the Malawian workforce”
The vision is:
“an adequate and sustainable generation of internationally
competitive skilled workforce capable of spearheading the
country’s production and export-led socio-economic
growth in a socially responsible manner”
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TEVETA Goals in the Strategic Plan
To maintain labour market information for policy and
program planning
To broaden equitable access to quality technical,
entrepreneurial and vocational education and training
To effectively regulate the training market
To maintain an adequate and sustainable funding and
financing mechanism for the TEVET system.
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Background of TEVET funding
•Technical and Vocational Education and Training in
Malawi was initially funded using the Industrial Training
Fund (ITF) defined under the Industrial Training Act.
•The ITF was only levied on employers who engaged
artisans in technical skills at workplace.
•The amount due to the Fund was based on a
calculation linked to wages of those skilled artisans.
•Those that did not engage artisans were exempted
from contributions to this ITF.
•The new Training Environment demanded different
approaches to training.
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Background – Financing of TEVET system

The study by GTZ and DANIDA in 1998 concluded that the
then Industrial Training Fund was inadequate for the new
desired training environment in the country.

The report showed that the Malawi Government was a
major investor in training in Malawi. Hence the introduction
of the new funding and financing mechanism
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Background – TEVET Fund
(a)
The TEVET fund, created by the TEVET Act, is nongovernmental and this levy does not go to Ministry of
Finance. It is collected by TEVETA.
(b)
The TEVET Fund is administered by the TEVET Authority
on the basis of Annual Action plan and Budget approved
by the TEVETA Board.
(c)
In this fund, Section 29 of the TEVET Act defines the
following components:
◦ TEVET Levy (from public and private sector)
◦ Parliamentary Appropriations
◦ Grants and donations from within and outside Malawi.
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Background – TEVET Fund
In practice, this fund has the following components:
◦
Government levy at 1% of total basic emoluments
◦
Private Sector employers at 1% of total basic
emoluments
◦
Specific interventions from donors for certain
activities. (DFID, CIDA, NAC, Global Fund, etc)
◦
Miscellaneous income from registration and
accreditation of training providers, grant or donations,
fees for programs, publications, seminars,
consultancy, etc.
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Achievements
Levy collection
•
More companies are becoming levy compliant due to
increasing understand of the use and value of levy and the
legal requirements
•
TEVET levy has been rising over the years from K30 million
in 2000 to the forecast of K680 million in 2010/11
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Levy Growth
600,000,000
500,000,000
400,000,000
300,000,000
Private Levy
Govt Levy
200,000,000
100,000,000
0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
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Year
10
Year
11
Year
12
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Uses of TEVET levy

TEVET levy is used to fund programs approved by the
TEVETA Board.

As TEVETA advocate demand-driven approaches to
program implementation, programs range from
demands from Private Sector Employers who pay the
TEVET levy to demands from the various groups from
the informal sector who do not pay the levy.
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TEVETA Programs

Private Sector Training Programs consist of :
 Common Tailor-made courses
 Company-specific Training Programs
 TEVETA working
Associations

with
Industrial
Groupings
or
On an annual basis, TEVETA spends large sums in excess of
K80 million under these programs and this is, at least,
10% of its total income.
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TEVETA Programs
TEVETA is given the mandate of managing the apprenticeship
scheme

TEVETA selects students into technical colleges

TEVETA buys appropriate tools for the training providers.

TEVETA pays training subsidies to training providers

TEVETA attaches students and instructors to industry

TEVETA carries out programs of upgrading teachers in TECHVOC
up to a minimum of diploma level.
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TEVETA Programs
TEVETA manages several programs for the informal
sector under the following initiatives:
 Skills Development Initiative
 On-the-job Training with Partners involved with
development programs
 Small Enterprise Development
 Training of youths through Facilitation Units
 Training of Orphaned and Vulnerable Youths through
special Projects.
Some of these programs are implemented using TEVETA Resources
while others have donor support.
The demands for different skills training programs are much larger
than TEVETA can implement due to resource constraints within
TEVETA.
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TEVETA Programs
Quality Assurance programs include:
 Standards and Curriculum Development
 Registration and Accreditation of Training Providers
(and the related grading thereof)
 Assessment and Certification
Levy Collection
 The process involves verifying payroll information in
what is called “inspection”.
TEVETA has to collect the TEVET levy from employers
and this is what funds TEVETA programs
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TEVETA Programs
Planning Monitoring and Evaluation
 Labour Market information
 Planning
 Monitoring
 Evaluation
Information Education and communication
 Information dissemination
 Marketing
 Public relations
Service centres
 TEVETA has decentralised Service Centres that act like
Satellite Centres of the TEVETA Secretariat.
 These Service Centres are implementing agents of TEVETA
Programs approved by the TEVETA Board in the three
catchment areas of Malawi.
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Governance and Management

TEVETA operates under the direction of a Board that is
appointed by the Minister after receiving nominations from
various constituencies defined in the TEVET Act.

The TEVETA Board is composed of several persons
appointed from the 14 constituencies of relevant
stakeholders.

The Board entrusts the running/implementation of TEVETA
programs to management.

As a guide from the Board, the governance costs for
management and the Board take a maximum total of 30%
of the TEVETA Budget.
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Challenges

Government’s position has compromised the output of
programs run by TEVETA. The TEVET Act provides for legal
action if employers don’t pay.
•
Conflicting roles of collecting levy and using the private
sector for training
•
discounted wage negatively affecting attachment
•
TEVETA governance structure is too lean for the mandate.
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Challenges
•
Insufficient funds to support stakeholders in training
matters.
- Technology gap
- Limited access
- Youth empowerment
- Failure to promptly respond to training needs
•
The subsidy amount for training materials in colleges
in some trades is so minimal that college may not buy
meaningful training materials
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Conclusion
•
TEVETA is contemplating the use of the Malawi
Revenue Authority as is the case in other
countries like Tanzania.

There is need for TEVETA to expand the
governance structure to effectively carry out its
functions.
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THANK YOU SO MUCH FOR YOUR LISTENING
MAY GOD BLESS YOU
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