5.1 Introduction
5.2 Tanzania
5.3 Zimbabwe
The main objectives of the surveys of manufacturing enterprises in Tanzania and Zimbabwe was to evaluate the changes in training policies and practices that had taken place during the 1990s. In Tanzania, it was decided to select enterprises from right across the manufacturing sector while in Zimbabwe, which has a much larger and more sophisticated industrial sector, a relatively more homogeneous group of enterprises from one sub-sector, metal and metal goods was selected.
5.2.1 Survey design and methodology
A sample of 30 enterprises was selected from the most recent Directory of Industries which was compiled from information collected by the Tanzanian Bureau of Statistics in 1989. Two selection criteria were used namely - enterprise size in 1990 (proxied by the number employed in each enterprise) and location (the sample was equally divided between enterprises in Dar Es Salaam and Arusha and Moshi in Northern Tanzania). The original intention was to randomly select from each location, roughly equal numbers of large enterprises (with more than 500 workers) and small-medium enterprises (with less than 500 employees). In the event, 17 large and 13 small-medium enterprises were surveyed in the two survey locations (see Table 5.1).
Table 5.1: Ownership and employment size profiles of survey enterprises, 1990 and 1997
|
Ownership category |
1990 |
1997 |
||||
|
Number |
<500 |
>500 |
Number |
<500 |
>500 |
|
|
Parastatals |
16 |
6 |
10 |
6 |
4 |
2 |
|
Locally owned |
9 |
5 |
4 |
10 |
9 |
1 |
|
Foreign owned |
2 |
1 |
1 |
3 |
1 |
2 |
|
Joint ventures |
3 |
1 |
2 |
11 |
8 |
3 |
|
Total |
30 |
13 |
17 |
30 |
22 |
8 |
It can also be observed in Table 5.1 that both the ownership and size profiles among the 30 survey enterprises have changed dramatically during the 1990s. The government embarked on an ambitious privatisation programme in 1992 and, by 1997, over 250 state-owned enterprises had been divested. Among the survey enterprises, 10 out of the 16 parastatals were wholly or partially privatised during this period. With respect to employment, it is clear that there has been quite a dramatic reduction in the workforces of all but a handful of the survey enterprises as they have struggled to restructure in the face of increasingly intense import competition (see Table 5.2).
Table 5.2: Overview of survey enterprises in Tanzania
The median change in employment between 1990 and 1997 was -26 per cent. It is in this context, therefore, of major changes in ownership and management of manufacturing enterprises in Tanzania coupled with rapid downsizing of workforces that changes in training policies and practices must be analysed.
The sectoral breakdown among the survey enterprises is: 7 leather and textiles (23.3 per cent), 6 food and beverage (20.0 per cent), 9 engineering (30.0 per cent), 5 wood and paper (16.7 per cent) and 3 chemicals (10.0 per cent).
Interviews: Interviews based on a questionnaire were held with the manager in each survey enterprise who had overall responsibility for training. Each respondent was asked to provide qualitative and quantitative information on the changes that had occurred in enterprise training activities since 1990 as well as their views on and responses to changes in government training policies during this period.
All the enterprises selected for the survey agreed to cooperate and, while some managers were unable to furnish all of the data that was required (in particular on financial outlays and staff time committed to training activities), the interviews did generate sufficient information to be able to assess changes in training activities during the 1990s.
5.2.2 Overall Change in Training Provision
Table 5.2 shows that among the 30 survey enterprises, 17 (57 per cent) increased their training provision (with 27 per cent rating this increase as 'significant'), while 13 (43 per cent) indicated that there had been 'no change' (13 per cent), 'decline' (13 per cent) and 'significant decline' (17 per cent)
Positive Training Response: The reasons given by the 17 enterprises who increased their overall training efforts are presented in Table 5.3. Most of these enterprises stated that the main reasons for their positive training response related directly to the intensification of the process of economic liberalisation during the 1990s which has forced them to try to improve their competitiveness (both with respect to product quality and price) in both domestic and export markets. Nearly 90 per cent introduced new production technologies and 70 per cent introduced new management techniques (such as quality awareness, total quality management, team building, use of information technologies) which have required the rapid acquisition new knowledge and skills. 12 of the 17 enterprises have a strong commitment to exporting, of whom three are actively seeking ISO 9000 status.
It can be observed in Table 5.3 that least important factors have been changes in availability of both public and private training and the introduction of the (VETA) training levy.
Privatisation has clearly accelerated this process of modernisation Multinational companies that have acquired controlling shares in large state owned enterprises have been able to utilise their own formal training facilities and other subsidiaries in Africa and elsewhere in the world for both off- and on-the-job training. Improvements in labour productivity among this group during the 1990s have been very impressive (see Tables 5.2 and 5.4). This is particularly the case for those enterprises that 'increased significantly' their overall level of training.
Table 5.3: Impact of various factors affecting training among the positive response group (percentages)
|
Reasons |
No impact |
Minor impact |
Moderate impact |
Major impact |
|
New management |
23 |
18 |
6 |
53 |
|
New production technologies |
6 |
6 |
29 |
59 |
|
Import competition |
6 |
24 |
18 |
53 |
|
Commitment to exporting |
6 |
18 |
24 |
53 |
|
Availability of public training |
12 |
29 |
47 |
12 |
|
Availability of private training |
12 |
59 |
35 |
6 |
|
Demand for training by employees |
12 |
18 |
47 |
24 |
|
Involvement of employer organisation |
47 |
12 |
41 |
0 |
|
General economic environment |
0 |
0 |
35 |
65 |
|
Introduction of VETA levy |
6 |
59 |
35 |
0 |
While the introduction of new technologies and management practices has clearly had a countervailing negative impact on training (mainly because the majority of enterprises in this group - 12 out of 17 - have significantly reduced the size of their workforces), on balance, the overall training response among this group of enterprises has been positive.
Table 5.4: Median changes in employment and productivity by training change group (percentages)
|
Change in overall training group |
Employment |
Productivity |
|
Increased significantly |
-44 |
255 |
|
Increased |
-33 |
60 |
|
No change |
-52 |
5 |
|
Declined |
-75 |
0 |
|
Declined significantly |
-19 |
-ve |
Zero or Negative Training Response: Enterprises which have not had a positive training response have generally been those with (i) serious capacity under-utilisation. This is particularly the case where the privatisation process has become very protracted which has had a highly adverse impact on both employment and production. Eight out of the nine enterprises where training declined were affected by privatisation; and (ii) continued reliance on simple or mature technologies that only require minimal skills to operate, maintain and repair.
Among the 30 per cent of enterprises where the overall level of training has declined, it is clear that very significant reductions in the workforce have been a key factor which, in turn, is a direct consequence of the failure of these enterprises to cope in the new policy environment. The median decline in employment among this group between 1990 and 1996 was -33 per cent with only one enterprise reporting a small increase in employment.
5.2.3 Resource Commitments
Most enterprise respondents could not provide precise estimates of the amount of staff time and financial resources devoted to training. In large part, this is due to the predominance of informal on the job training, especially in medium to smaller enterprises.
Trainers and In-House Training: Only 12 (40 per cent) out of the 30 survey enterprises employed full time trainers in 1996. Compared with the numbers of trainers employed in 1990, there had been no changes at seven enterprises, two had increased, but three had fewer trainers. However, among the 17 enterprises that did increase their overall training efforts, there was at least a 25 per cent increase in the amount of staff time devoted to training. In contrast, among those enterprises that had a negative training response, staff time allocated to training activities fell by 25-40 per cent between 1990 and 1996.
Financial Commitments: In real terms, enterprise funding for training had fallen very significantly during the 1990s. Among the eleven enterprises which provided adequate information, the median value for the change in financial outlays on training between 1990 and 1996 was -50 per cent. Only eight enterprises funded staff on external training courses in 1996. Thus, more training on-the-job by existing staff has accounted for most of the increased training effort rather than larger human and financial resource commitments for formal training courses, both in-house and at external training institutions.
By international standards, enterprise funding of training in Tanzania remains very low, both in absolute and relative terms. Among the minority of enterprises that do have explicit training budgets, total expenditure for external and in-house training for the median enterprise was T.Sh. 7 million in 1996 (US$14,900) and averaged T.Sh. 13,000 per employee (US$22.4). In countries such as Japan where training is accorded high priority by enterprises, training expenditures are typically 3-5 per cent of total turnover.
The extent to which survey enterprises have changed their reliance on public and private training institutions also indicates that, for the group as a whole, financial commitments for training have been falling during the 1990s. Only 30 per cent and 20 per cent of enterprises indicated that they had increased their reliance on public and private institutions respectively and that nearly half had reduced their reliance on public sector training centres and 40 per cent on private training centres. This is at a time when the VETA training levy was introduced (which is intended to promote formal training by enterprises at public training centres) and government began to encourage private sector training provision. The absence of any kind of rebate scheme for approved training courses has meant that enterprises have been unable to defray the costs of external training.
5.2.4 Overseas Training and Foreign Trainers
Less than half of the survey enterprises send their staff overseas for training. The numbers of overseas trainees were relatively small with the median enterprise only sending two employees in 1996. While 40 per cent of enterprises stated that their reliance on overseas training increased between 1990 and 1996, 33 per cent reported a decline. The withdrawal of government scholarships, development of local training capacity, and increased financial stringency were the most commonly cited reasons for reduced reliance on overseas training.
Long term expatriates with clearly defined training roles were employed at nine of the survey enterprises in 1996. Only four enterprises use foreigners on a shorter term basis (i.e. less than 3 month visits). Asked if they would like to employ more foreign staff if immigration controls were scrapped, only three enterprises stated that they would do so. Very high employment costs is the key constraint preventing enterprises relying more on foreign managerial and technical expertise. Most respondents rated foreign personnel as 'effective' or 'very effective' in their training roles.
5.2.5 The Role of Government
Positive and Negative Policies and Actions: As part of its socio-economic reforms, the Government has embarked on a wide range of policies and actions that have affected the delivery of training by both public and private sector providers. The survey of manufacturing enterprises asked respondents to give their views on which of these policies and actions since 1990 have been supportive of their training efforts and which have had a negative impact on training.
As can be observed in Table 5.6, the government policy to allow private sector training institutions to operate is regarded as having the most positive impact on enterprise training in the manufacturing sector, closely followed by the establishment of VETA and the Council for Technical Education and Training. These responses are somewhat surprising given that that only small minorities of survey enterprises stated that they had increased their reliance on either public or private training institutions since 1990. However, it may take time for enterprises to respond to these policy initiatives.
Table 5.5: Positive and negative impacts of government policies and actions on training efforts among survey enterprises
|
Positive |
per cent respondents |
Negative |
per cent respondents |
|
· Allowing private sector training institutions to operate |
96.6 |
· Introduction of cost-sharing measures |
53.3 |
|
· Creation of VETA and NCTET |
83.3 |
· Withdrawal of scholarships |
43.3 |
|
· Privatisation programme and economic liberalisation |
66.6. |
· Removal of government subsidies to public companies |
20.0 |
Introduction of cost-sharing measures, the removal of scholarships and government subsidies to parastatals were the three policies/actions that were identified as having the most negative impact on enterprise training. In interviews with survey enterprises, it is clear however that there is considerable concern about the VETA levy. Most enterprises simply seen the levy as another unwelcome tax which has had no major on their training programmes and which acts as a disincentive to hire extra workers.
Desired Changes in Government Policies and Actions: Survey enterprises were asked to indicate which changes in government policies and/or actions are necessary to improve the quality and quantity of training. Table 5.6 summarises their responses with respect to 12 possible areas. Three areas stand out as being of particular importance, namely better staffing and facilities at technical colleges and more steps to promote in-house training. All survey enterprises indicated that in order to promote more in-house training the government should allow training expenses to be double deducted for tax purposes. Changes to the VETA levy, reform of the apprenticeship system, more support for overseas training, and more encouragement for private sector trainers were also identified as being important by large majorities of respondents. With respect to the training levy, the major changes that were proposed were (i) fixing a maximum amount that should be paid by any one enterprise; (ii) relating the levy benefits to the training services that are actually provided by VETA institutions; and (iii) the use of levy resources to develop in conjunction with VETA training courses that directly meet the priority training needs of enterprises.
Between them, the 30 survey enterprises employed 19,316 workers in 1997. However, only 10 of these enterprises sponsored 78 apprentices (0.4 per cent of total employment). It is clear, therefore, that the mainly artisan training provided by VETA has little relevance to employers in the manufacturing sector.
Table 5.6: Desired changes in government policies and other interventions (percentages)
|
Area of policy/action |
Unimportant |
Quite important |
Very important |
|
Change in ministerial responsibility |
73.3 |
20.0 |
6.7 |
|
Creation of an autonomous training agency |
16.7 |
50.0 |
33.3 |
|
Changes to VETA levy |
20.0 |
53.3 |
26.7 |
|
Better staffing at technical colleges |
0.0 |
16.7 |
83.3 |
|
Better facilities at technical colleges |
0.0 |
10.0 |
90.0 |
|
Reform of apprenticeship system |
23.3 |
30.0 |
46.7 |
|
More encouragement of private sector trainers |
6.7 |
56.7 |
36.6 |
|
Steps to promote more in-house training |
0.0 |
16.7 |
83.3 |
|
Expatriates |
53.3 |
43.3 |
3.4 |
|
Overseas training |
10.0 |
60.0 |
30.0 |
|
Double tax rebates on training expenses |
0.0 |
30.0 |
70.0 |
5.3.1 Survey design
A sample survey of metal and metal goods enterprises in Zimbabwe was undertaken in early-mid 1997. Thirty firms out of a total of 285 in the sub-sector were selected for investigation. Enterprises were classified as large (400+ employees), medium (100-399 employees) and small (less than 100 employees). The original intention was to randomly select 10 enterprises from each group. In the event, 27 firms agreed to be interviewed (6 large, 12 medium, and 9 small).
Table 5.7 shows that employment contracted among nearly one-third of the survey enterprises between 1990 and 1996 and remained unchanged among another 12 per cent of firms. Only four enterprises (14.8 per cent) were fully or partially foreign owned.
Table 5.7 Some characteristics of the sample firms
|
Firm |
Main products |
Date established |
Ownership |
Employment |
||
|
1990 |
1996 |
% change |
||||
|
1 |
steel & iron products |
1948 |
parastatal |
7000 |
3100 |
-56 |
|
2 |
steel pipes & tubes |
- |
local pvt |
- |
373 |
- |
|
3 |
scrap metal, tow-bars |
1964 |
local pvt |
80 |
55 |
-31 |
|
4 |
civil engineering |
1964 |
local pvt |
- |
550 |
- |
|
5 |
padlocks, foundry |
1962 |
foreign |
60 |
200 |
233 |
|
6 |
plumbing items |
1972 |
local pvt |
150 |
180 |
20 |
|
7 |
irrigation equipment |
1974 |
local pvt |
7 |
23 |
229 |
|
8 |
steel tubes, furniture |
1948 |
local pvt |
140 |
100 |
-29 |
|
9 |
bolts, nuts, fasteners |
1957 |
local pvt |
375 |
210 |
-44 |
|
10 |
window/door frames |
1911 |
local pvt |
1700 |
1700 |
0 |
|
11 |
heavy structural steel |
1930 |
local pvt |
240 |
280 |
14 |
|
12 |
ladders, shelter huts |
1994 |
local pvt |
3 |
15 |
400 |
|
13 |
bush pumps, tools |
1965 |
local pvt |
102 |
102 |
0 |
|
14 |
general engineering |
1945 |
local pvt |
80 |
80 |
0 |
|
15 |
house boats, roof vents |
1958 |
local pvt |
200 |
100 |
-50 |
|
16 |
nails, welding rods |
1986 |
local pvt |
12 |
24 |
100 |
|
17 |
engineering work |
1966 |
local pvt |
50 |
84 |
68 |
|
18 |
architectural joinery |
1951 |
local pvt |
1300 |
850 |
-35 |
|
19 |
structural steel works |
1987 |
local pvt |
30 |
26 |
-13 |
|
20 |
air braking system |
1972 |
local pvt |
65 |
83 |
28 |
|
21 |
fabrication & erection |
1982 |
local pvt |
30 |
60 |
100 |
|
22 |
decorative light fitting |
1960 |
local pvt |
176 |
180 |
2 |
|
23 |
vehicle bodies |
1985 |
joint venture |
120 |
440 |
267 |
|
24 |
motor vehicles |
1961 |
joint venture |
580 |
772 |
33 |
|
25 |
exhausts, tubing jacks |
1967 |
foreign |
80 |
154 |
93 |
|
26 |
hydraulic hoists, axles |
1957 |
local pvt |
160 |
160 |
0 |
|
27 |
bicycles, wheelbarrows |
1956 |
local pvt |
230 |
150 |
-34 |
5.3.2 Overall Training Response
With respect to training, the sample as a whole can be divided in two broad groups, namely those that have responded positively to the new economic policy regime (17 firms) and those which have not (13 firms).
Positive Training Response: Almost two-thirds (63 per cent) of the sampled firms have implemented important changes in their training policies and practices since the start of ESAP. Most have been strongly motivated by a growing realisation that training plays a key role in improving product quality and service to clients which was seriously deficient during the 1980s. Interestingly 6 out of the 17 firms in this response group were seeking ISO 9000 accreditation at the time of the survey which has far reaching implications for the scope and intensity of their training activities.
While there have not been any widespread changes in the organisation, planning and management of the training function among these companies, identifiable training expenditures have increased very significantly. The median increase between 1990 and 1996 was 650 per cent in nominal terms (approximately 275 per cent in real terms). This translates into an average real rate of growth of 18.5 per cent per annum. There was little if any noticeable difference in the behaviour of these firms with respect to either size or type of ownership.
Table 5.8 summarises the importance of a variety of factors in stimulating increased levels of training since 1990. New management and new management practices have been particularly crucial with 82 per cent and 58 per cent of respondents stating that they had had a 'major impact' on their training efforts. New technology and changes in the general macroeconomic environment have also been relatively important. Surprisingly, higher commitment to exporting does not feature as a key factor. Nor were changes in the availability of public and private training provision rated as being important.
In general, expatriate managers and those local managers that had had some experience working outside Zimbabwe had a more positive approach to training than managers who have risen 'through the ranks' and have little or no exposure to overseas management practices. The dramatic impact that improved training can have is well illustrated by the experience of one particular company. A new managing director was appointed inn 1993 and, within the next two years, he recruited a completely new management team. A new training strategy has been adopted with the overall objective of ensuring that every employee becomes multi-skilled. Within a six month period, the company had trained every employee in quality awareness and the six Ms (defined as 'men, machines, management, markets, materials and money'). As a result of this new strategy, labour productivity has increased by a third, and exports grew from below 5 per cent of output in 1990 to around 10 per cent in 1996. Although the company has not sent employees overseas for training, senior management feel that this is necessary in order to keep abreast of developments elsewhere.
Table 5.8: Factors encouraging increased training among the metal goods enterprises (percentages)
|
Factor |
No impact |
Minor impact |
Moderate impact |
Major impact | |
|
Enterprise-specific | |||||
|
|
New management |
18 |
0 |
24 |
58 |
|
|
New management practices |
12 |
0 |
6 |
82 |
|
|
New technology |
41 |
18 |
0 |
41 |
|
|
Employee demand for training |
71 |
18 |
6 |
6 |
|
|
Import competition |
29 |
18 |
6 |
47 |
|
|
Commitment to exporting |
59 |
18 |
12 |
12 |
|
Others | |||||
|
|
General economic environment |
18 |
6 |
18 |
58 |
|
|
Changes to ZIMDEF |
76 |
12 |
12 |
0 |
|
|
Availability of public training provision |
76 |
18 |
6 |
0 |
|
|
Availability of private training provision |
59 |
6 |
18 |
18 |
|
|
Involvement of employer provision and other organisations |
71 |
12 |
12 |
6 |
Negligible or Limited Training Responses: The remaining 10 (37 per cent) of firms surveyed have not appreciably increased the intensity of their training activities since 1991. The main reasons cited by respondents for this limited training response were: predominance of low skill jobs (40 per cent), experienced workers employed by the company for many years (30 per cent), machinery not changed (20 per cent), and poor performance of those who had been trained (10 per cent). Generally speaking, these companies stated that the economic reform programme has had fairly minimal impacts on their operations.
5.3.3 Training by Staff Category
Among the group of positive response companies, there appears to have been an intensification of training throughout their workforces. Generally speaking, managers and supervisors are mainly trained outside of the firm while skilled and semi-unskilled workers continue to be trained almost exclusively on the job. Most firms believe they are too small to be able to train managerial and supervisory staff in-house.
Reliance on external training providers has been particularly important among those firms that have attempted to introduce new management concepts such as 'quality at source' and team work. While most firms continue to believe that training workers exclusively on the job is most cost-effective, a small group of companies have started to send their shop floor workers on external training courses.
5.3.4 Local and Overseas Training
12 (40.7 per cent) out of the 27 firms surveyed use both public and private training institutions while 6 (22 per cent) and 1 (3.7 per cent) depend solely on private sector and public sector providers respectively. The remainder (29.6 per cent) rely solely on their own training efforts.
Fewer than the half of the firms surveyed (48.1 per cent) have indentured apprentices since 1990. Only 1 among the 10 firms that have not appreciably increased their training activities since 1990 have employed apprentices. Among the firms that do not have apprentices, one of the main reasons cited for this are the rigid, bureaucratic regulations and procedures for apprenticeship training coupled with pervasive concerns about the poor, deteriorating quality of formal off-the-job training at government training centres. Syllabi are also criticised as being very out-dated and instructors out of touch with the latest technological developments.
Only 3 firms (11.1 per cent) have sent any of their staff overseas for training and only 4 (14.8 per cent) firms have used foreign trainers to undertake short term training courses. Consequently, most firms remain very isolated from the most recent technological and related training developments overseas.
5.3.5 Views on Government Policies and Practices
Most respondents recognise that government VET policies and practices have a strong bearing on their own training activities. However, almost two-thirds of firms felt that government does very little to encourage firm-level training. All but one (albeit large) firm stated that the government should play a central role in encouraging firms to train more.
All but four of the 27 firms surveyed indicated that ZIMDEF has little impact on their training activities. Most simply regarded the training levy as a tax that has to be paid but there was widespread concern about the lack of transparency and accountability in the use of ZIMDEF funds.
Nearly two-thirds of the surveyed companies (63 per cent) indicated that certain government policies can be identified that definitely discourage them from undertaking more training. Principal among these are perceived difficulties in getting rid of employees who are considered to be incapable of absorbing new ideas and acquiring new skills. This is despite changes to the prevailing labour relations legislation which are intended to create flexible labour markets. Firms would like to replace their current workforce with more educated recruits who are widely perceived as being much easier to train.
Over 50 per cent of survey respondents stated that steps to provide in-house training, better staffing at colleges and change in ministerial responsibility were 'very important' in order to improve enterprise training (see Table 5.9). Most respondents felt that MOHE does not appreciate the critical importance of job related in-service training for increasing labour productivity. It is surprisingly, therefore, that only half thought that changes to ZIMDEF were 'very important'. Similarly, apprenticeship reform is not a priority for most enterprises nor is increased overseas training and greater reliance on expatriate training personnel.
Table 5.9: Relative importance of possible government interventions to improve training among metal goods enterprises
|
Possible changes |
Unimportant |
Quite important |
Very important |
|
Steps to promote in-house training |
15 |
19 |
65 |
|
Better staffing at colleges |
30 |
17 |
52 |
|
Change in ministerial responsibility |
39 |
9 |
52 |
|
Changes to ZIMDEF |
43 |
9 |
48 |
|
Creation of autonomous training agency |
47 |
13 |
39 |
|
More encouragement of PSTIs |
38 |
25 |
38 |
|
Increased use of foreign personnel |
40 |
28 |
32 |
|
More overseas training |
60 |
12 |
28 |
|
Apprenticeship reform |
48 |
22 |
30 |
|
Better facilities at colleges |
61 |
4 |
26 |
