034 document-travail-va

Agence Française de Développement
Working
Paper
November 2006 34
Vocational Training in the Informal Sector
Report on the Ethiopia Field Survey
Research financed by GTZ
(Gesellschaft für Technische Zusammenarbeit)
Richard Walther, ITG Consultant
(walther.richard@wanadoo.fr)
Translation: Adam Ffoulkes Roberts
DEPARTEMENT DE LA RECHERCHE
Agence Française de Développement
Direction de la Stratégie
Département de la Recherche
5 rue Roland Barthes
75012 Paris - France
www.afd.fr

Foreword
This report is an integral part of the survey and analysis work launched by the Research Department of the French
Development Agency (Agence Française de Développement, AFD) on training in the informal sector in five African countries
(South Africa, Benin, Cameroon, Morocco and Senegal). It was commissioned by the French Ministry of Foreign Affairs and
uses the same working assumptions as those applied to the other countries studied. It is also complementary to the report on
Ethiopia, which was produced on behalf of the German technical co-operation agency (GTZ) and also used the methodologi-cal
framework developed by the AFD.
The Angola field survey was carried out with extensive support from the French Embassy. However, the objectives could not
have been met without assistance from Emilio Ferreira and Fernando Madeira, experts with the firm HRD (Human Resources
Development) who helped the field survey mission to interpret the subtleties embedded in certain situations and accounts of
different experiences. Above all, they were able to convince certain people with little availability that they should provide the
survey team with information and analysis coming under their area of authority. The survey benefited from the expertise of
Anna Sofia Manzoni., who helped to identify the most legitimate Angolan representatives in the area studied and also provi-ded
her support in identifying documentary sources on the subject. The survey also benefited from the extremely useful help
of Abel Piqueras Candela, of the European Commission, who agreed to make a critical appraisal of the final report and nota-bly
checked that the sources quoted really do reflect the most recent changes in the country’s education and vocational trai-ning
policies.
Lastly, this report was also able to draw on extensive and very useful documentation, notably thanks to the representatives of
the European Commission Delegation, the UNDP, the DW, USAID and IDIA. They are very warmly thanked for their contribu-tions.
Working Paper N° 15 : Vocational Training in the Informal Sector - Concept Note.
Working Paper N° 16 : Vocational Training in the Informal Sector – Report on the Morocco Field Survey.
Working Paper N° 17 : Vocational Training in the Informal Sector – Report on the Cameroon Field Survey.
Working Paper N° 19 : Vocational Training in the Informal Sector – Report on the Benin Field Survey.
Working Paper N° 21 : Vocational Training in the Informal Sector – Report on the Senegal Field Survey.
Working Paper N° 30 : Vocational Training in the Informal Sector – Report on the South Africa Field Survey.
Working Paper N° 34 : Vocational Training in the Informal Sector – Report on the Ethiopia Field Survey.
Working Paper N° 35 : Vocational Training in the Informal Sector – Report on the Angola Field Survey.
The Ethiopian case study has been produced by the GTZ in partnership with the AFD as a part of efforts to align the action of
French and German development agencies.
Disclaimer
The analysis and conclusions of this document are those of the authors. They do not necessarily reflect the official position of
the AFD or its partner institutions.
© AFD Working paper No 34 Vocational Training in the Informal Sector - Report on the Ethiopia Field Survey 2

Table of contents
1. Introduction: Ethiopia, a country waking up to the reality of the informal sector 4
1.1. How the survey was carried out 4
1.2. The contribution of existing reports and studies 5
2. The country’s economic and social challenges 7
2.1. Growth is strong, but vulnerable to climatic and political conditions 7
2.2. Persistent poverty 8
2.3. Major educational needs 9
2.4. An essentially rural and informal labour force 11
2.4.1. A strong contrast between rural and urban activities 11
2.4.2. Difficulties in appraising the informal sector as a whole 12
3. Vocational training reform geared to the economic and social challenges 15
3.1. Current state of TVET 15
3.2. Towards a reform focusing on those concerned in the informal economy 16
3.2.1. The main thrust of the reform 17
3.2.2. The reform implementation process 18
3.2.3. The challenges of reform: moving from an institutional to a grassroots approach 22
4. Current training initiatives in the informal sector 23
4.1. The reality of traditional apprenticeship – a difficult issue 23
4.2. Public policies targeting the creation of micro activities 24
4.2.1. FEMSEDA entrepreneur training 24
4.2.2. The Dire Dawa REMSEDA’s integration and support role 25
4.2.3. The Addis Ababa weavers’ training project (ILO) 27
4.2.4. On-site training for MSEs in the building sector (GTZ) 29
4.3. The strategic role of women in the informal sector 30
4.3.1. The ILO survey and the profile of women entrepreneurs 30
4.3.2. Dire Dawa Women Entrepreneurs Association (DDWEA) 31
4.3.3. Dire Dawa Women’s Association (DDWA) 31
4.3.4. A training programme for empowering women 32
4.4. Varied experiences from the world of agriculture 32
4.4.1. The highly informal nature of employment in rural areas 33

Table of contents
4.4.2. Training farmers and agricultural development officials 33
4.4.3. Training the rural population in community skills training centres (CSTC) 33
4.4.4. The innovative activities of the Harar technical and agricultural training centre 35
4.4.5. NGO actions 37
5. Future developments and actions 39
5.1. TVET reform and the opportunities for the informal sector 39
5.1.1. Training institutions can ensure that training becomes an effective aspect of social
and economic development 39
5.1.2. The TVET system: skills assessment and certification for informal sector workers 41
5.2. The outreach of reform in the informal sector 42
5.2.1. The low impact of the training system on the informal sector 42
5.2.2. TVET reform and the lack of recognition of skills development processes in the informal economy 43
5.2.3. A paradigm shift with limited effects 43
5.3. The challenge of revitalising the informal sector 44
5.3.1. Looking closely at the real potential of traditional apprenticeship and self-learning methods 44
5.3.2. The need for a qualitative analysis of informal economy occupations 45
5.3.3. The need to go through with plans to recognise skills acquired in the informal sector 45
5.3.4. The need to strengthen sectoral, territorial and institutional dynamics 45
5.3.5. How to have informal sector workers take on responsibility for their own training and skills 46
In conclusion: the need to refocus the reform on grassroots initiatives 48
Appendix: recommendations and proposals for action 49
List of acronyms and abbreviations 51
References 52

1. Introduction: Ethiopia, a country waking up to the reality
of the informal sector
The Ethiopian government is undertaking a complete
reform of its education and vocational training system and
wants the informal sector to be included in any changes.
This is an ambitious strategy, which will entail a complete
overhaul of the education and training system, focusing on
outcomes and responding to the economy’s needs, thus
contributing to the country’s development. It will also mean
integrating the different kinds of training systems (formal,
non-formal, informal) into an overall approach focusing on
skills that have previously acquired, through whichever
means. This shift from a unified system to a flexible and
modular one, and from a qualification-based paradigm to
one based on acquired vocational skills, offers a real oppor-tunity
for those working in the informal sector to obtain
recognised qualifications. The reform notably includes
plans for Centres of Competence whose purpose will be to
acknowledge not only skills acquired through experience
and work, but also those obtained through the various exist-ing
types of training.
However, the inclusion of informal sector workers among
the beneficiaries of the reform is not as easy as it sounds.
The various officials met during the survey will have to
acknowledge the reality of the informal sector and econo-my.
This will not come easily. During our interviews, for
example, it was difficult, if not impossible, to obtain precise
figures concerning the informal sector’s role in the labour
market or its contribution to national wealth. It was even
more difficult to gain any idea of the real situation concern-ing
production and service activities in the informal sector,
or to identify the traditional methods used for acquiring
knowledge and know-how. Differing opinions were
expressed and there was much debate as to the existence
or otherwise of traditional forms of apprenticeship. It was as
if the informal sector was viewed in terms of the role
assigned to it by the reform, rather than by taking account
of the actual situation and trends.
In this respect, Ethiopia is at a crossroads. Domestic work-ers,
women involved in income-generating activities, street
vendors, small-holders vulnerable to the vagaries of the
weather and all the micro-enterprises involved in production
and service activities will not see any lasting improvement
in their situation unless the reform acknowledges the reali-ty
of this situation and take steps to improve it. Moreover,
the reform will not succeed in achieving its aim of training
all those involved in economic production unless it takes
account of the sector as it exists, and, more importantly,
unless it involves and exploits the potential of existing
stakeholders, partners and trends.
The operational success of the current reform will undoubt-edly
enable Ethiopia’s informal sector to shift from a para-digm
of mere survival to one of growth and development.
However, this will only happen if the reform, which is
designed to facilitate the recognition and accreditation of
the sector’s human and vocational capital, first of all helps
to develop and enhance what already exists instead of pur-suing
its own training agenda.

1. Introduction: Ethiopia, a country waking up to the reality of the informal sector
1.1. How the survey was carried out
The Ethiopia field survey differs from those carried out in
the other countries in that it is the result of a fruitful part-nership
between German and French development agen-cies,
namely the German Technical Co-operation Agency
(Gesellschaft für Technische Zusammenarbeit - GTZ),
which provides technical assistance to the Ethiopian
authorities in the design and delivery of the reform of tech-nical
and vocational education and training (TVET), and the
French development agency (Agence Française de
Développement – AFD), which has overall responsibility for
the study on vocational training in the informal sector.
The Ethiopia survey reflects the desire of the German and
French agencies to align their thinking and efforts in the
education and training field. It was funded under the Ethio-
German TVET project, which started in 1999, and was
organised further to a joint agreement between the
Ethiopian education authorities and German technical
assistance providers. The various German development aid
agencies constitute the largest donor and support provider
in the current process of vocational training reform.1 The
survey was carried out between 5 and 16 September 2006.
It started in Addis Ababa, where meetings were held with
the various officials responsible at federal and regional lev-els
in the various ministries involved in vocational training.
Meetings took place with the major international organisa-tions
involved in this field, as well as with national employ-ers’
and trade union federations. It was also possible to
meet some of the actors working closely with those eco-nomically
and professionally active in the informal sector.
After the interviews in the capital, the survey was complet-ed
by a field trip to the Dire Dawa region, where it was pos-sible
to interview project leaders working with micro-enter-prises
and production and service units, as well as some of
the workers who actually benefited from the training and
skills development activities. These meetings were particu-larly
useful in that they shed light on the real situation in the
informal economy and the way in which those working in it
are trying to raise themselves above subsistence level.
1.2. The contribution of existing reports and studies
Unlike Morocco and Cameroon, Ethiopia has not undertak-en
any specific national surveys on the informal economy.
Neither has Addis Ababa been the subject of a specific sur-vey
such as those carried out for the major capital cities of
West Africa.2 However, the 2005 Labour Force Survey car-ried
out by the Central Statistical Agency (CSA) of Ethiopia3
provides some data which can be used to make an objec-tive
appraisal of the significance and role of those working
in the informal sector.
However, current data and forecast trends concerning the
economic, social and educational situation are widely avail-able.
The Plan for Accelerated and Sustained Development
to End Poverty (PASDEP),4 published in October 2005, fol-lows
on from the Sustainable Development and Poverty
Reduction Program (SDPRP).5 It describes in detail the
progress made since 2000 and sets out the major policies
and means required to enable Ethiopia to achieve econom-ic
growth and reduce poverty. It also includes useful data for
this study, notably regarding what is happening in the edu-cation
and training area and how efforts to boost micro and
small enterprises (MSEs) can improve national economic
growth and reduce unemployment, and on the strategic
sectors and market niches which have job growth potential.
This plan thus combines economic strategy, a skills devel-
1 German technical assistance in the reform of TVET is being supported by most institutions
or organisations specialised in international development aid: the Centre for International
Migration (Center für Internationale Migration - CIM), the German Development Service
(Deutscher Entwicklungsdienst - DED), Capacity Building International (Internationale
Weiterbildung und Entwicklung gGmbh - InWEnt) and Senior Expert Service (SES). The
GTZ, which is the technical cooperation agency, is responsible for coordinating all of the
partners involved. The German Development Bank KfW also provides financial support for
some parts of the reform programme.
2 STATECO, (2005), Méthodes statistiques et économiques pour le développement et la
transition, No. 99.
3 Central Statistical Agency, (2006), The 2005 Labour Force Survey.
4 Ministry of Finance and Economic Development (MoFED), (2005), Ethiopia: Building on
Progress: A Plan for Accelerated and Sustained Development to End Poverty (PASDEP)
(2005/6-2009/10).
5 The Sustainable Development and Poverty Reduction Program (SDPRP) covered the
years 2000/01-2003/04.

1. Introduction: Ethiopia, a country waking up to the reality of the informal sector
phases of its development. The reform’s implementation
framework, notably regarding the inclusion of non-formal
training in the future TVET system, is dealt with in a sepa-rate
document which has been produced by the Education
Ministry with German technical assistance.8
All of these documents, which are constantly being updat-ed,
clearly show that the inclusion of vocational training in
the country’s development strategy, and notably efforts to
recognise the informal sector’s role and skills needs, is at
the heart of the political agenda.
The only things missing from this comprehensive bibliogra-phy
are a very detailed analysis of the informal sector/econ-omy,
and an objective picture of its contribution to the coun-try’s
growth and poverty-reduction policy.
6 Ministry of Education, (2005), Education Sector Development Program (ESDP-III),
2005/2006-2010, Program Action Plan (PAP).
7 Ministry of Education (September 2006), National Technical and Vocational Education and
Training (TVET) Strategy.
8 Engineering Capacity Building Program (ECPB, July 2006), Non-Formal TVET
Implementation Framework, Building Ethiopia.
opment strategy, and the inclusion of informal sector work-ers
in the vision of the country’s future.
The third phase of the Education Sector Development
Program (ESDP-III),6 which follows on from a programme
initially launched by the Ethiopian Government in 1997,
gives an overview of the education system and explains in
detail how training and education policies are contributing
to the overall strategy for boosting growth and reducing
poverty.
Information on the current TVET reform may be found in a
number of reports, the most important of which is the
National Technical and Vocational Education and Training
(TVET) Strategy.7 The latest version of this report was
being completed during our survey. The document sets out
and explains the reform’s key guidelines and the various

2. The country’s economic and social challenges
Ethiopia’s informal sector is part of an economy that
remains heavily dependent on the primary sector, although
a noticeable shift towards services and production activities
is under way. It has also been fully included in the policy to
combat poverty and reduce illiteracy and under-education
rates among the population.
2.1. Growth is strong, but vulnerable to climatic and political conditions
Since the Federal State was established in 1994, Ethiopia
has enjoyed a relatively sustained rate of growth, signifi-cantly
above that of Sub-Saharan Africa as a whole.
However, this rate suddenly fell from 8.8% to 2.7% in 2002,
and there was negative growth in 2003 (-3.7%). This was
due to the drought that afflicted the country in 2002/2003.
Economic growth then peaked at an unprecedented 13.1%
in 2004, mainly due to the quick recovery of agricultural pro-duction.
According to the OECD, the Ethiopian economy
should continue to show good results following the 2004
peak. Economic growth for 2004/2005 was 6.8% and a rate
of 5.8% has been forecast for 2005/2006.
Table 1. GDP growth: Ethiopia and Sub-Saharan Africa
1990 1995 2000 2001 2002 2003 2004
CGDP (current prices, in billions of dollars), Ethiopia 8.61 5.78 6.53 6.51 6.06 6.65 8
GDP (current prices, in billions of dollars) Sub-Saharan Africa 298.38 317.52 326.24 324.87 337.21 439.29 ..
Annual GDP growth, Ethiopia (%) 2.6 6.1 6.0 8.8 2.7 -3.7 13.1
Annual GDP growth, Sub-Saharan Africa (%) L 3.8 3.2 3.3 3.4 3.9 4.8
GDP per capita (in constant 2000 dollars), Ethiopia 94.7 90.2 101.5 108.0 108.6 102.4 ..
Gross National Income (GNI) per capita, Ethiopia 170 110 110 110 100 90 110
Source: World Bank (2005), World Development Indicators.
The Ethiopian economy is heavily driven by the agricultural
sector, which represented 42.1% of GDP in 2004,9 employs
80% of the population (89% in 2001 according to World
Bank figures) and provides around 90% of export revenue.
The estimated increase in agricultural production is 6.6% in
2004/2005, and 7.4% in 2005/2006 and 2006/2007.
Agriculture receives support from public aid programmes
such as the national food security programme, and benefits
from the extension of public services to rural areas and the
protection of farmers’ rights. However, given the constraints
affecting agricultural markets (partially due to the lack of
roads), low levels of productivity (due to the limited use of
pesticides and fertilisers, irregular rainfall, poor soil fertility,
and environmental degradation)10 as well as chronic short-ages
of foodstuffs, the OECD estimates that approximately
5 million Ethiopians continue to depend on food aid.
Services represented 46.5% of GDP in 2004. This sector
grew by approximately 7% between 2004 and 2005, chiefly
9 OECD (2006), African Economic Outlook 2005/2006 – Country Studies: Ethiopia.
10 World Food Programme (2006), Draft County Programme - Ethiopia 10430.0 (2007-2011).

as a result of the growth in the health and education sec-tors,
as well as in transport and communications.
Industry, which represented 11.4% of GDP in 2004, showed
real growth of approximately 7% over the 2004/2005 peri-od.
This was mainly generated by a high level of household
and business demand for construction services, and the
development of the mining and quarrying industries.
Growth in service activities and a genuinely modern indus-try
appears to be constrained by the fact that Ethiopia has
a predominantly public sector economy and is finding it dif-ficult
to introduce effective privatisation policies.
The country has considerable unexploited resources
(hydroelectricity, minerals, tourism, etc.) There are a num-ber
of growth niches just waiting to be exploited. 2004 saw
the rapid emergence of a horticultural sector, which contin-ued
to show strong signs of growth in 2005.11
Ethiopia’s balance of trade has a structural deficit. Exports
are essentially generated by coffee (Ethiopia is the world’s
sixth largest producer), where the downward trend in prices
is likely to continue in view of the global surplus.
Conversely, the increase in import prices, in particular of oil
and steel, has worsened the country’s trade deficit, which
reached 20.4% of GDP in 2003/2004. Ethiopia relies on
multilateral and bilateral international funding to cover its
budget deficit and also to finance part of its investment pro-gramme.
The present economic situation is however threatened by
recent political developments. The violence that broke out
as a result of the contested election results in May 2005,
and the ensuing brutal repression of the opposition, jeopar-dised
political stability and led to the freezing of part of the
international aid budget ($375 million in December 2005,
which is equivalent to 10% of the country’s revenue).12 The
growing risk of conflict with Eritrea should also be stressed;
there has been a constant increase in tension between the
two countries in recent years, despite the peace agreement
signed in December 2000.
Table 2. GDP in 2004, by sector
As a % of Ethiopia’s GDP
Agriculture 42.1
Manufacturing industries 4.6
Other industries 6.8
Trade, hotels and restaurants 8.6
Transport, storage and communications 7.0
Public services 14.7
Other services 16.2
Source: AfDB/OECD 2006.
2.2. Persistent poverty
Table 3. Growth of GDP per capita
2001 2002 2003 2004 2005 2006
(estimated) (anticipated)
GDP per capita, in dollars 120 109 115 137 153 170
GDP per capita in Purchasing Power Parity (PPP) 723 727 691 769 823 858
Source: International Monetary Fund (IMF).
Apart from the 2002/2003 period when Ethiopia faced a
general economic slowdown, GDP per capita has been
gradually and consistently increasing over recent years.
However, in spite of this encouraging economic perform-ance,
Ethiopia remains one of the poorest countries in the
world. It was ranked 170th out of 177 countries in the
UNDP’s Human Development Index (HDI) in 2005.13
Despite the constant increase in Ethiopia’s HDI, a large
section of the population continues to live in poverty. In
2000, 77.8% of Ethiopians lived on less than $2 a day, and
23% were living under the absolute poverty level ($1 a day).
11 Mission économique d’Addis-Abeba (2006), Fiche pays Ethiopie, MINEFI-DGTPE.
12 OECD, op. cit.
13 UNDP, (2005), Human Development Report.

Studies carried out under the PASDEP show that average
growth of 4% over the coming years would not be enough
to reduce the level of absolute poverty. At this rate of
growth, more than 20 million Ethiopians will still be living in
poverty in 2015. An annual growth of at least 8% would be
needed to achieve the Millennium Goals to cut current
poverty levels by half.
Ethiopia is thus one of Africa’s chief recipients of World
Bank and EU development aid. In 2004, Ethiopia received
aid worth a total of $1.2 billion, which is approximately
equivalent to 16% of its GDP14.
Under the PASDEP’s current phase (2006-2011), it should
be possible to improve the current situation thanks to
increased productivity growth in agriculture, improved man-agement
of natural resources, food security and diversifica-tion
of the means of subsistence.15
Ethiopia also benefits from the Heavily Indebted Poor
Countries (HIPC) Initiative. It completed the process on 20
April 2004, thus opening the way for cancellation of multi-lateral
debt. This has permitted rescheduling which has
resulted in a reduction of nearly 80% of Ethiopia’s foreign
debt.16
2.3. Major educational needs
According to data from the National Population Office (2005),
Ethiopia has a population of 73 million. The country has had
an annual demographic growth rate of nearly 2.5% over the
last decade, which has now settled at 1.9% (World Bank,
2006). This means that Ethiopia has a young population
(45.4% of the population—in other words about 31.2 million
people—was aged under 14 in 2003), and that considerable
investment is thus needed in the education system.
In view of this situation, the Ethiopian government adopted
an education and training policy, from 1994 onwards. With
UNESCO’s help, it drew up a ten-year Education Sector
Development Programme (ESDP). The country is currently
in the third phase of this programme (ESDP III), which runs
from 2005 to 2011. The main aim of the programme is to
achieve the Millennium Goals through improved access to
Table 4. Literacy rates, Ethiopia compared with Sub-Saharan Africa
Ethiopia Sub-Saharan Africa
Literacy rate (% of people aged 15 and over) (2000-2004) 49.9 62.5
Female literacy rate (% of women aged 15 and over) (2000-2004) 40.3 54.8
Male literacy rate (% of men aged 15 and over) (2000-2004) 60 70.9
Youth literacy rate (% of 15- to 24-year olds) (2001) 67.5 70.5
Literacy rate of young women (% of 15- to 24-year old young women) (2001) 60.2 65.7
Literacy rate of young men (% of 15- to 24-year old young men) (2001) 74.8 75.7
Source: UNESCO, Institute of Statistics.
education and better quality teaching.
There are considerable challenges to be met in terms of lit-eracy.
According to UNDP data, Ethiopia’s illiteracy rates
were among the highest in the world until the mid-1970s.
UNESCO data for 2000-200417 shows that adult literacy
rates remain 12.6 points lower than the average for Sub-
Saharan Africa, and that there is a gap of nearly 20 points
between male and female literacy rates. They also show
however that literacy among young people aged between
15 and 24 is clearly on the increase, and that the disparities
between Ethiopia and the other countries of Sub-Saharan
Africa, and between young men and young women in
Ethiopia, are gradually being reduced thanks to the efforts
14 Mission économique d’Addis-Abeba, Fiche pays Ethiopie, MINEFI-DGTPE.
15 World Food Programme (2006), op.cit.
16 Mission économique, op. cit.
17 UNESCO’s data are more encouraging than those in the PASDEP (Plan for Accelerated
and Sustained Development to End Poverty), which indicates that in 2004, 62% of
Ethiopians were illiterate.

the country is making in order to develop its education sec-tor.
However, there are still significant disparities between
rural and urban areas, and these also need to be reduced.
UNESCO’s analysis of the net enrolment ratio18 shows that,
despite progress made in the area of literacy, education lev-els
in Ethiopia remain below those for Sub-Saharan Africa.
This net enrolment ratio is low for primary education com-pared
to other countries, remaining at under 50% of children
of school age. The repetition rate in primary education is rel-
Table 5. Progression and achievements in the education system (2004)
Ethiopia
Average number of years’ education ISCED20 1-6 years 6 (UIS estimate)
Repetition rate, primary education (%) 11
Survival rate into the grade for 10- to 11-year-olds (%) (2000-2004)21 62
Rate of transition from primary to secondary education (%) 85
atively low (11%) and the survival rate is 62% of children.19
However, in secondary education the net enrolment ratio is
around 25% of the age range concerned. This puts Ethiopia
Table 6. Primary and secondary school net enrolment ratios (2004)
at the same level as the average for Sub-Saharan Africa.
One of the reasons for this situation is the relatively high
transition rate from primary to secondary education; this
Ethiopia Sub-Saharan Africa
Net enrolment ratio, primary school (%) 46 65
Net enrolment ratio of girls, primary school (%) 44 63
Net enrolment ratio of boys, primary school (%) 49 67
Net enrolment ratio, secondary school (UIS estimate,22%) 25 24
Net enrolment ratio of girls, secondary school (UIS estimate, %) 19 21
Net enrolment ratio of boys, secondary school (UIS estimate, %) 31 26
was 85% in 2004.
The data provided by the PASDEP reinforce those provid-ed
by UNESCO.23 They show a gross enrolment ratio24 of
79.2% in 2004/05 (70.9% for girls and 87.3% for boys).
They also highlight extremely wide inter-regional dispari-ties,
with a rate of 125% for Addis Ababa compared with a
rate of 75 to 80% for the regions of Amhara and Dire Dawa,
and only 15 to 17% for the regions of Afar and Somalia.
Lastly, they show that between 1997 (the year the first
ESDP was launched) and the current phase of ESDP III,
the number of primary schools in Ethiopia rose from 10,394
to 16,078. This increase has however been coupled with a
rise in the teacher/pupil ratio. This stood at 57 in 1997 and
has risen to 69 in 2005 (compared to an average of 44 in
Sub-Saharan Africa), despite the aims of the successive
programmes to bring it down to 50.
Although Ethiopia spends an average of 4.6% of its GDP on
18 The net enrolment ratio is the percentage of enrolled children of the official age for the edu-cation
level indicated to the total population of that age. Net enrolment ratios exceeding
100% reflect discrepancies between these two data sets (UNDP, (2003), Human
Development Report).
19 According to 2006 World Bank data, the survival rate is only 51%, which would consider-ably
weaken the efficiency of the Ethiopian education system.
20 International Standard Classification of Education.
21 UNICEF.
22 UNESCO Institute for Statistics.
23 Ministry of Finance and Economic Development (MoFED) (2005), Ethiopia: Building on
Progress: A Plan for Accelerated and Sustained Development to End Poverty (PASDEP)
(2005/6-2009/10).
24 The gross enrolment ratio is the percentage of total number of children enrolled in primary
education, irrespective of age, and the population of the age group of those officially eligi-ble
for primary education in any given year. This indicator is widely used to assess the
overall level of participation in primary education and the capacity of the education system
to satisfy primary education needs (UNESCO).

education, a figure that puts the country in the higher brack-et
in terms of education spending across the region, con-siderable
efforts are still needed. However, the number of
teachers is appallingly low in relation to the number of chil-dren
of school age. According to the Ministry of Education,
the lack of teachers is the main factor hindering the
increase in primary education enrolment. This is why there
are plans, under ESDP III, to recruit 294,760 teachers with
a view to educating a maximum number of children and
reducing the teacher/pupil ratio to acceptable levels.
2.4. An essentially rural and informal labour force
The Labour Force Survey (LFS), carried out in 2005 by the
CSA,25 indicates a participation rate of the economically
active population (including all those over 10 years old) of
76.7% over the twelve months preceding the survey.
However, this figure varies widely according to gender and
areas of activity. For example, the participation rate is only
50.2% in urban areas, whereas it reaches 82% in rural
areas. The rate for men is 84.7% compared to 69% for
women. Similar differences can be seen as far as unem-ployment
is concerned.26 The rate of unemployment is
20.6% in cities, but only 2.6% in rural areas. There is bare-ly
any male unemployment in rural areas (0.9%), although
it is high in urban areas (13.7%). Female unemployment is
very high in urban areas (27.2%), but low in rural areas
(4.6%).
2.4.1. A strong contrast between rural and
urban activities
Analysis of the economically active population by cate-gories
of employment highlights differences between sec-tors,
in particular agriculture/fishing and services, as well as
between the kinds of jobs held by those working in these
sectors. These include skilled workers, workers doing ele-mentary
jobs (mainly in manufacturing), craftworkers and
Table 7. Breakdown of the economically active population by categories of workers
Categories of workers Overall participation rate Participation rate in urban areas Participation rate in rural areas
Those working in services or trade 6.7 24.8 4.5
Qualified workers in agriculture and fishing 40.5 8.2 44.5
Elementary jobs27 42.8 24.6 45.1
Crafts and related activities 7.0 22.6 5.1
Technicians and similar
workers 1.0 5.5 0.4
Others 2.0 14.3 0.4
Source: National Labour Force Survey, 2005.
technicians.
The breakdown by categories of activity/types of jobs con-firms
the fact that Ethiopia’s economy is heavily dependent
on the rural and agricultural sector (which employs more
than 25 million people out of a total economically active
population of 35 million). It also indicates that non-agricul-tural
service and production activities are mainly concen-trated
in urban areas. From this we can infer that the grow-ing
urbanisation of Ethiopia, which currently has one of the
highest rural population rates in the whole of Africa (85% of
total population and 90% of the population living under the
poverty level currently live in rural areas)28 will have a sig-nificant
impact on the type of work done by the economi-cally
active population. Service, crafts and technical activi-ties
are also likely to grow.
25 Central Statistical Agency of Ethiopia (2006), The 2005 National Labour Force Survey.
26 According to the person in charge of the LFS, the concept of unemployment used in
Ethiopia is that of flexible unemployment. This defines the unemployed as those who are
available for work whereas the strict definition used by the ILO is unemployed people avail-able
for work and looking for work.
27 The survey defines elementary activities as those carried out by day labourers in agricul-ture,
mining or building.
28 ECPB (2006), National Technical and Vocational Education and Training (TVET)
Strategy.

According to the survey, the distinction between skilled and
elementary activities does not appear to correspond to the
usual skills levels. It rather suggests that skilled workers in
agriculture and fishing have a fixed professional activity,
whereas workers classed in the elementary jobs category
are day labourers who change jobs depending on the work
available mainly in manufacturing. According to the survey
on the informal urban sector published in 2003,29 the term
“elementary job” refers to routine tasks that are usually of a
manual nature and require physical effort. Examples given
in the survey include street, market or door-to-door sales,
various kinds of washing and cleaning activities, cleaning
and maintenance in houses, hotels and offices, portering,
etc.
2.4.2. Difficulties in appraising the informal sec-tor
as a whole
The statistical data available (LFS 2005 and Informal Sector
Survey 2003) provide a detailed overview of Ethiopia’s
labour market, given that the two surveys furnish significant
data on the breakdown of the workforce and the respective
shares of types of activity according to a large number of cri-teria.
Amajor problem still remains, however, concerning the
identification of those working in the informal sector. The
concept used by the CSA only applies to urban areas, and it
is only possible to gain an overall view of the non-structured
economy by analogy, in other words by applying the
Agency’s indicators for urban areas to the rural sector.
A labour market dominated by domestic jobs and self-employment
The Labour Force Survey gives a detailed analysis of
employment status in Ethiopia, indicating in particular that
the majority of the economically active population is either
unpaid family workers (50.3%) or self-employees/own
account workers (40.9%). Although the available data does
not enable any precise classification of these workers, there
is no doubt that most of the activities covered here are infor-mal,
in that they are above all based on occasional employ-ment
(according to the term “day labourer” used to define
elementary activities), family, personal or social links
(unpaid family workers) rather than jobs covered by a prop-er
employment agreement including guarantees.30 The
table on the breakdown of the economically active popula-tion
according to employment status shows that at most
8.8% have salaried employee status and thus the possibili-ty
of a formal employment contract.
On the basis of these data, it is impossible to say that all
jobs outside public administration and private enterprises
are in the informal economy, although there are strong
grounds for presuming this to be the case. The results of
the 2003 Informal Sector Survey31 make it easier to give an
Table 8. Breakdown of the economically active population according to type of employment
Employee status As a % of overall As a % of urban As a % of rural
participation/activity rate participation/activity rate participation/activity rate
Government employees 2.6 16.5 0.9
Self-employees/own account workers 40.9 40.3 41.0
Unpaid family workers 50.3 15.0 54.6
Private organisation 2.9 15.1 1.4
Others 3.3 13.1 3.5
Source: National Labour Force Survey, 2005.
accurate interpretation of the 2005 survey on the real situ-ation
in the overall labour market.
Those working in the informal sector do so by necessity,
are left to themselves, and are mainly self-taught
In its introduction to the Informal Sector Survey, the
Statistical Agency defines the informal sector as existing in
a specific context (urban areas only). It also uses multiple
criteria that are much wider than simply a business with no
29 Central Statistical Agency (2003), Report on Urban Informal Sector, Sample Survey.
30 See the definition of informal employment in R. Walther, (2006), La formation en secteur
informel, Note de problématique, AFD Working Paper No.15.
31 Central Statistical Agency (2003), Op.cit.

specific accounting system: the definition used in the sur-veys
identified in the other countries visited. The basic def-inition
used is that the informal sector refers to activities
which are carried out in the home or in a single-person
enterprise by the owner alone or by the owner and a very
small number of employees. The wider definition includes
the following criteria:
the informal enterprise is not usually officially registered
and has a low level of organisation, productivity, and
profitability;
it has limited access to the market, to credit agencies, to
formal training and to public services;
it has very small or no fixed premises, and is usually
located in the family’s home;
it is not recognised, supported or regulated by the pub-lic
authorities and does not comply with social protec-tion
regulations, employment legislation or health and
safety provisions.
Results of the 2003 survey on the informal sector are the
following:
informal enterprises employ 50.6% of the urban eco-nomically
active population;
out of the 799,352 people interviewed as part of the sur-vey,
43.29% work in manufacturing and 37.78% in the
trade or hotel and catering sectors;
99.09% of enterprises have a single owner. Ownership
is based on a structured partnership in only 0.56% of
cases. Although the survey states that co-operatives
and associations are on the increase, these presently
represent only a very small percentage of informal
enterprises;
the capital of informal enterprises is made up of 90%
personal or family capital. 0.12% have obtained a bank
loan, 0.74% have received funding from micro-credit
organisations, and 1.04% receive support/funding from
public authorities and/or NGOs;
63% of the value-added of the sector is generated by
trade and hotel and catering, and 25% by manufactur-ing.
Next by order of importance are personal services,
urban agriculture, and transport;
people choose to work in the informal sector mainly
because they have no other alternative (41.73%) and/or
because little investment is required (36.73%). For only
4.54% is it a deliberate choice;
workers in this sector acquire their skills through being
self-taught (67.86%), via their family (26.88%) or
through apprenticeship or on-the-job training (3.54%).
Only a very small percentage (0.09%) has received any
formal training.
An analysis of informal sector workers’ education levels and
the different methods of skills acquisition shows that only
46.95% are literate (compared with the national average of
49.9% for the same period), that 42.74% have completed
primary education (compared with 46% at national level)
and that only 13.01% of male workers have been through
secondary education, compared with 31% at national level.
Table 9. Analysis of the level of education of informal sector workers by gender (in %)
Total workforce and share by gender Illiterate Intermittent Years Years Years Over 12 Total
school 1-6 7-8 9-12 illiterate
Men 32.50 5.03 16.45 13.48 13.01 0.71 67.50
Women 67.41 1.57 35.28 7.46 6.98 0.13 32.59
Total 53.05 2.99 24.19 9.46 9.46 0. 37 46.95
Source: Survey of the urban informal sector, 2003.
These figures show that the informal sector employs the
least educated men, and especially women, and that work-ers
with a higher level of education are more likely to be
able to find alternative employment to the informal sector.
They also show that only a very tiny number of workers
have taken part in TVET. It can be said therefore that, in
2003, TVET had almost no effect on the skills existing in the
informal sector.

A dominant and fast-growing informal sector
If the “informal unit” term used for urban areas is applied to
rural areas, it can be said that all of the jobs recorded in
2005 under the headings of self-employment, own-account
workers and unpaid family workers do, by analogy, come
under the informal sector. The percentage of informal work-ers
out of the total economically active population is thus
91.2%. This places Ethiopia alongside Cameroon, Benin
and Senegal as countries with a huge informal-type econo-my
employing at least 90% of the economically active pop-ulation.
This analysis is confirmed by the non-formal TVET
implementation framework programme drawn up by
German development aid agencies in co-operation with all
the Ethiopian authorities and training providers concerned.
It clearly indicates that the vast majority of employment
opportunities lie in the informal sector.32 The programme
also underlines that the creation and consolidation of
employment in Ethiopia cannot come from major public or
private companies, or from public administration, but nec-essarily
relies on the development of MSEs, especially in
the informal sector, and the promotion of viable forms of
self-employment. The statistical study on the informal sec-tor
also indicates that the informal economy is growing
rather than declining. According to the study, the economic
recession, structural adjustment policies, increasing urban-isation
and high population growth have led to the unantic-ipated
and unprecedented growth of the informal sector in
a number of developing countries. This is all the more so as
modern enterprises and especially public companies have
had to make workers redundant or make large cuts in
salaries. This partly explains the importance of the informal
sector in Ethiopia.
32 ECBP (Engineering Capacity Building Program) (2006), Non-formal TVET implementa-tion
framework, Building Ethiopia.

3. Vocational training reform geared to the economic and social
challenges
The TVET system is currently the focus of an in-depth strate-gic
rethinking and a reform intended to provide the Ethiopian
economy with the skills it needs in order to grow. This rethink-ing
and reform process is part and parcel of an overarching
policy entitled “Building Ethiopia”, which is being implement-ed
by the Ethiopian Government under the supervision of the
Ministry of Capacity Building and in partnership with the
Ministry of Education, the Ministry of Trade and Industry and
the private sector. The Engineering Capacity Building
Program (ECBP)33 is responsible for the policy’s overall
implementation. It is funded by the German Ministry of
Economic Co-operation and Development (BMZ), and oper-ates
with assistance from various German aid agencies
under the co-ordination of the largest such agency, the GTZ.
The purpose of the overall programme is to reform voca-tional
training and engineering courses. It is also designed
to introduce a national framework for qualifications and
standards, to develop the private sector and to encourage
it to contribute to the various types of action being taken.
The reform of the TVET system is a key component in the
programme. This reform, which is just getting under way, is
being implemented as part of the ECBP by the Ministry of
Education with technical assistance from German aid agen-cies,
in conjunction with local and regional authorities and
with the co-operation of all the economic and social part-ners
concerned.
3.1. Current state of TVET
According to the Ethiopian Ministry, technical and vocation-al
education and training comprises three main types of
training:
formal training schemes run by accredited public or pri-vate
vocational training centres and leading to recog-nised
technician-level certification;
“non-formal” training courses,34 which do not meet
recognised standards relating to content and the neces-sary
length of training in order to obtain certification.
They are delivered by public or private institutions such
as NGOs, community training centres, religious agen-cies
and private profit-making bodies. Non-formal train-ing
focuses primarily on helping people obtain employ-ment.
It is aimed at school leavers, school dropouts,
young and adult workers and groups excluded from the
labour market;
informal training, which refers to the acquisition of
knowledge and skills in a non-structured environment. It
consists primarily of on-the-job training that is not cur-rently
recognised or validated and traditional appren-ticeships
in MSEs, particularly in the craft sector.
33 As the term ECBP is commonly used in Ethiopia, it seems logical for this report to refer to
the Ethiopian capacity building programme in this way.
34 The definition of non-formal training given in the reference documents is taken from
CEDEFOP’s 2003 Glossary on Transparency and Validation of Non-Formal and Informal
Training. It defines non-formal training as “learning which is embedded in planned activi-ties
that are not explicitly designated as learning (in terms of objectives, time or support),
but which contain an important learning element. Non-formal learning is intentional from
the learner’s perspective.” The strategic and operational papers mentioned define the con-cept
of informal training along the same lines as CEDEFOP (learning resulting from every-day
activities related to work, family or leisure, which in most cases is unintentional from
the learner’s perspective), while incorporating it into the overarching concept of non-formal
training.

3. Vocational training reform geared to the economic and social challenges
Training is also available in the agricultural sector, but the
Ministry of Education is not responsible for it.
The following table outlines the structure of the formal
TVET system organised by the Ministry of Education.
In order to increase the availability of training for young
excluded people and school dropouts, over ten years ago,
the Government decided to expand the formal TVET sys-tem.
Thus the number of non-agricultural education and
training institutions rose from 17 to 199 between 1996/1997
and 2004/2005, and the number of pupils from 3,000 to
106,300,35 31% of whom are trained in private establish-ments.
In addition, approximately 42,000 young people
were enrolled in agricultural courses in 2004/2005.
However, notwithstanding the efforts made to extend TVET
in recent years, it caters for just 3% of the relevant age
group.
Table 10. The Education and TVET system in Ethiopia
Age
Grade
19 Higher Education
Diploma Level
Certificate Level II
Certificate Level I
Junior Level
TVET
Upper Secondary
School
General Secondary
Education
Primary Education
18
17
16
15
14
13
12
11
12
11
10
9
8
7
6
4
Source: Ethio-German TVET Programme (2003), The Ethiopian TVET Qualification System, Addis Ababa.
Basic Level
Vocational
Despite these investments, and although it is difficult to esti-mate
the number of Ethiopians with access to TVET,
demand still far exceeds supply and most of the population
does not have access to such training—particularly school
dropouts, the unemployed, company employees, the self-employed
and workers employed in MSEs. In addition, the
system has a number of obvious weaknesses. In recent
years, for instance, many employers have lamented the
poor quality of teaching, trainees’ lack of practical skills and
the unsuitability of training programmes. Moreover, it has
not been possible until now for people having acquired
vocational skills outside the formal TVET system (through
traditional apprenticeships, non-formal training, exercising
an occupation and so on) to obtain recognised certification,
resulting inter alia in a lack of labour market transparency.
35 According to ESDP (Education Sector Development Programme) III. The first ESDP pro-gramme
(ESDP I) was launched in 1997 as an integral part of the Civil Service Reform
Programme (CSRP). In fact, the purpose of the ESDP is to help the Ethiopian Government
harness the full range of national and international resources in order to enhance the qual-ity
and efficiency of the education system as a whole, and to report on the efforts made in
this area.

3.2. Towards a reform focusing on those concerned in the informal economy
The strategic thrust of the reform was defined as part of the
implementation of the PASDEP and in the context of the var-ious
national and sector-specific economic development
plans. The public authorities responsible for overseeing it
with technical assistance from German aid agencies have
the task of training a skilled, motivated and competent work
force. The aim is to develop the private sector and introduce
education and training schemes geared to demand and tai-lored
to the economic and social needs of the labour market,
particularly with a view to creating self-employment opportu-nities.
The current reform thus directly focuses on upgrading
the skills of those employed in the informal economy.
3.2.1. The main thrust of the reform
The main thrust of the reform may be described as follows:
broadly, it seeks to change the vocational training para-digm
by moving from a supply-driven approach to one
driven by demand and, more importantly, by the accred-itation
of existing skills, irrespective of how they have
been acquired;
by turning the system around, it will improve access to
training among people who are usually excluded (young
people and adults who have dropped out of school,
have a low level of education or are illiterate, entrepre-neurs
and workers in the formal and informal economy
who need to upgrade their skills and obtain recognised
qualifications, farmers and agricultural workers, unem-ployed
people seeking skills in order to enter the labour
market, and so on);
it is designed to gear training to MSEs, to encourage
training centres to concentrate on the informal econo-my’s
skills needs, to introduce incentives aimed at
encouraging business start-ups at local level and in par-ticular
linking the acquisition of skills to access to micro-credit
so as to create self-employment opportunities,
and, lastly, to enable the various training institutions to
develop training courses tailored to the needs of their
target groups.
At a more structural level, the current reform is intended to
ensure that non-formal training becomes an integral part
of the training system. This means that the new system
must explicitly define the objectives and content of such
training and specify operational procedures, and that all
the relevant partners must be involved in the planning,
management and assessment phases when it comes to
developing non-formal training provision. It also means
that the existing distinction between formal training lead-ing
to specific qualifications and non-formal training lead-ing
to unvalidated, unrecognised competencies and skills
must be abandoned. To this end, the reform proposes that
the entire training system be based on occupational stan-dards
as well as a single format for accrediting all different
types of courses. It also proposes that training be
assessed and certified on the basis of outcomes, that is,
the competencies actually acquired as a result of formal or
informal training and validated using a uniform certifica-tion
method and system.
Figure 1 shows how the reform makes the transition from
supply-driven training to demand-led training, notably tak-ing
account of labour market needs. These needs are
reflected in, and organised into occupational standards
serving as a basis for the design of training curricula and
various modes of formal, non-formal, workplace, on-the-job
training and self-learning. If the system is to be successful,
a quality-management approach should be adopted during
the labour market analysis to ensure this is used effective-ly
to draw up occupational standards, and to incorporate
various forms of training into a service geared to the skills
development needs of individuals and businesses. `
According to the strategic and operational reference docu-ments,
delivery of the reform clearly calls for an overhaul of
all existing training schemes so as to tailor them to the com-petencies
and skills needed by the market, particularly in
the micro- and small enterprise sector. These schemes also
require institutional changes in line with the objectives to be
achieved. In particular, all private and public, economic and
social, and national and local partners must be involved
both in developing new training content and modes of train-ing
and in managing the overall training, assessment and
certification system.

Figure 1. Outcome-based organisation of TVET system
Labour Markett
Occupational
Standards
Support to curriculum
development: curriculum
guides, model curricula, etc
Occupational
Quality
Management
Helping Hand
TVET
Delivery
Formal TVET
delivered by public
and non-public
providers, enterpris-es,
as cooperative
training, etc.
Long and short term
non-formal TVET
programmes
delivered by public
and non-public
providers, in
enterprises, etc.
Source: Ministry of Education diagram, Draft Revised Strategy, 2006.
3.2.2. The reform implementation process
Various strategic papers published since 2002 have gradu-ally
refined the reform process to be implemented, and out-lined
the main thrust of an operational scenario now being
developed. Various initial tangible outcomes were identified
during the field survey.
The decision to adopt a uniform approach to the reform
Various ministries are currently involved in Ethiopia’s TVET
sector on account of the institutions they are in charge of:
the Ministry of Education, the Ministry of Agriculture, the
Ministry of Health, the Ministry of Trade and Industry and
the Ministry of Labour. The paper setting out the “National
Technical and Vocational Education and Training
Strategy”,36 the latest version of which has recently been
completed (in September 2006), has the distinctive feature
of covering all forms of technical and vocational training,
apart from higher education, irrespective of which particular
ministry they come under. The application of this across-the-
board strategy to all forms of training is innovative in
that it unites all the partners around a common vision of
regulated by
TVET authorities
(with
participation of
stakeholders)
Testing/
Certification
Informal TVET, i.e.
on the job-training,
self-learning,
traditional
apprenticeship and
all other modes of
TVET
what needs to be done in order for Ethiopia to ensure a
more competent and skilled work force, thereby improving
its chances of development and economic growth. Previous
field surveys carried out as part of the study on “Vocational
Training in the Informal Sector”, particularly the one on
Benin, showed that without such a common vision none of
the reforms instituted had any chance of being completed
within a reasonable timeframe. The field survey demon-strated
that such a common vision exists in Ethiopia as
regards the broad thrust of reform, but not necessarily in
relation to the specific means of delivery.
The issue of consultative or deliberative management of
the reform process
The strategy paper calls for a wide range of stakeholders at
all levels to be involved in implementing the different com-ponents
and phases of the reform process.
36 ECBP (2006), op.cit.

The public authorities have opted for the greatest possible
representation of stakeholders. The partners normally
involved in consultation forums in other countries (min-istries,
employers, trade unions and sector bodies) are
included, but so are representatives of teachers, parents,
local authorities, the beneficiaries and leading national
communication agencies. As a result, some of the organi-sations
met with during the survey, particularly employers’
organisations and trade unions, feel that their voices cannot
be heard properly. The key consultation forums identified in
the strategic paper are the national and regional commit-tees
responsible for helping the authorities introduce the
reform according to the main guidelines set. A number of
those met mentioned the current debate over the proper
nature of these committees: will they continue to serve as
mere forums for expression and information sharing, or will
they, as many seem to hope, be given genuine decision-making
authority? It appears that employers, who have
trouble finding the time and motivation to take part in these
committees, will play an active role in them only if their func-tion
is deliberative rather than purely consultative.
The crucial need for a uniform approach to reorganising
demand, supply and certification
The fact that the reform focuses on outcomes (i.e. the com-petencies
acquired and certified) has led to a complete
overhaul of the training system by means of a process
divided into interlinked phases in terms of both methodolo-gy
and timeframe. This process may be described as fol-lows:
analysis of the labour market and business demands
culminates in the setting of occupational benchmarks
standardised at national level;
these benchmarks, which identify the competencies to
be developed, serve as standards for the development
of training curricula and quality management of the var-ious
training mechanisms (formal, non-formal and infor-mal)
introduced;
both training outcomes and competencies acquired on
the job are assessed and certified in relation to the stan-dardised
occupational benchmarks;
assessment and certification give access to recognised
national qualifications, which are identical regardless of
how they are gained (through training or the validation
of competencies acquired on the job).37
The reform project sets out procedures for implementing
each of these phases. For instance, the task of analysing
demand is described as being the joint responsibility of
training centres and employers. The federal authorities are
responsible for setting occupational benchmarks, although
employers and trade unions must also be consulted and
actively involved, and contributions must be sought from
experts who are knowledgeable about the world of work.
Curriculum development is assigned to experts within train-ing
centres, whose sole obligation is to produce modular
courses leading to the outcomes identified by the corre-sponding
benchmarks.38 Assessment and certification, car-ried
out on an independent basis at the Centres of
Competence still to be set up, undoubtedly form the cen-trepiece
of the entire reform. By assessing competencies
rather than the knowledge acquired during training courses,
the system as a whole can focus on the new target groups:
as well as graduates of formal and non-formal training
schemes, these include apprentices, workers trained on the
job and, by extension, those employed in the informal sec-tor,
many of whom have no educational qualifications other
than proven occupational know-how.
The field survey was able to verify that the reform imple-mentation
scenario was not merely hypothetical, but had
actually begun to take shape, particularly in the construc-tion
sector, which is regarded as a priority. Some bench-marks
for occupations in areas such as structural work, fin-ishing
work and interior fittings have been finalised.39 While
the curricula for these benchmarks are not yet finished, they
are at least in the process of being completed. The experts
37 The “Engineering Capacity Building Program, National Training Qualification Framework”
paper gives a very clear picture of the overall qualification framework on which the current
reform is based. As well as outlining the process of moving from labour-market analysis to
certification by means of occupational benchmarks and assessment of the competencies
acquired, it explains the different qualification levels: basic level, junior level, intermediate
levels I and II (leading to certificates) and intermediate level (leading to a diploma). It
shows that the qualification framework does not go beyond the recognition of technician-level
diplomas, to use the terminology employed by the European Union.
38 Although training centres are responsible for curriculum development, they receive initial
assistance from the Ministry of Education. It sends them “model curricula” developed at the
central level, which they can adopt and/or adapt according to their own situation and
needs.
39 According to the PASDEP, more than 50 occupational benchmarks had been set by the
end of 2005.

responsible for testing and certifying them have received
methodological training. All that remains is to set up the
Centres of Competence at Entoto College in Addis Ababa.
The centre’s development plan has been finalised, and
methodologically speaking everything is in place. The cen-tre
is not yet operational however, and some of the people
we talked to expressed their impatience in this respect. In
total, five or six Centres of Competence are to be set up
throughout the country.
The difficulty of developing dual-type training and/or
apprenticeships
The TVET system currently includes a form of training
known as “apprenticeship”. It involves young people in
grades 10+1, 10+2 and 10+3, that is, young people taking
formal technical and vocational courses. It operates as fol-lows:
young people spend 70% of the school year, or 9
months, being trained at the centre;
for the remaining 30% of the year, they are placed in
firms. The firms are usually identified and selected by
the training centre or college within its immediate eco-nomic
environment. They are generally small or medi-um-
sized enterprises forming part of the local economic
fabric.
In educational terms, work placements count for 22% of the
overall assessment for the year. A number of those we
spoke to told us that such placements are simply a form of
work experience. According to the head of the Education
Office in Addis Ababa, there are institutions that train busi-ness
executives to become genuine apprenticeship mas-ters
and thus to supervise young people on internships.
Some of those institutions (including the college we visited
in Dire Dawa) have stopped offering this type of training.
The field survey found that this type of apprenticeship
raised a number of problems in practice. Firstly, this is an
inappropriate description in that it refers to the experience
of working in a firm rather than a form of training alternating
between theory and practice: in this sense, the word “intern-ship”
would be far more appropriate than “apprenticeship”.
Secondly, no reference is made to any kind of contractual
relationship between employer and trainee, and the young
person continues to be regarded as a school pupil through-out
his or her time in the firm. Moreover, colleges have real
difficulty placing young people in firms and/or finding intern-ships
matching the technological and vocational content
covered by the school syllabus.
The reform of the TVET system includes the design and
implementation of co-operative training courses.40 In prac-tice,
the initial aim is to introduce a pilot dual training
scheme in partnership with major Ethiopian public and pri-vate
enterprises. The enterprises participating in the project
will select the young trainees according to the skills they
need. However, the plan is also for these enterprises to
take partial responsibility for training young people who
may be hired by enterprises not involved in the pilot phase
or who start their own businesses. The TVET centres par-ticipating
in the scheme will have to bring both their teach-ing
quality and technological investment into line with the
needs of enterprises.
The project currently being launched provides for the subse-quent
extension of the pilot scheme to MSEs and, in particu-lar,
production and service units in the informal sector and co-operatives
and training centres in rural areas. The document
says that this second phase is particularly important because
of the predominance of MSEs in the Ethiopian economy, the
current reform’s key requirement to open the TVET system to
a wide range of target groups, and the Government’s goal of
significantly increasing the number of people trained in the
vocational education and training system.
It is unlikely that successful co-operative training in large,
modern enterprises can be extended to the informal sector
as it stands. At present, the reform plan does not provide for
a significant investment in training for adult workers in
MSEs, let alone in training for the heads of such enterpris-es
to become “apprenticeship masters”, albeit only for
those young people under their responsibility within the tra-ditional
apprenticeship system. A comparison with the other
countries surveyed shows that such investment is the only
way to motivate professionals to take on young trainees
40 ECBP (August 2006), Co-operative Training and Enterprise Training.

and involve them in an effective learning process. Training
young people without giving adults already in work (many of
whom are under-educated) the means to upgrade their own
skills and thus to develop their careers engenders—as
craftworkers in Benin put it—a sense of fear among adults
vis-à-vis the growing influence of young people with greater
skills, which can but be detrimental to the smooth develop-ment
of on-the-job training.
Figure 2. The phases of the reforms process
Source: Richard Walther.
3.2.3. The challenges of reform: moving from an
institutional to a grassroots approach
All the strategic and operational papers setting out and
organising the different phases and key points in the reform
process promise that the system will be opened up to those
currently excluded from it, and that efforts will be made to
involve its future beneficiaries. While target groups in the
informal sector are seen for their true worth, with an accu-rate
assessment of their situation, they are regarded as
potential individual beneficiaries rather than possible asso-ciations
set up to deal with economic, occupational or
industrial processes.
The various field surveys show that the institutional mind-set
of vocational training practitioners when it comes to
approaching people working in the informal sector is unlike-ly
to motivate the latter unless representative associations
are involved, be these territorial, vocational or sectoral or
simply NGOs. The field survey in Ethiopia was unable to
identify any highly structured organisations of informal
workers. However, steps are already being taken to form
groupings of stakeholders (which are mandatory in some
cases, particularly as a prerequisite for obtaining micro-credit),
networks of businesswomen, local, regional and
national agencies for MSEs, sectoral associations linked to
chambers of commerce and so on. A 2003 Ministry of Trade
and Industry directive41 lists several dozen sectoral associ-ations,
many of which are active in the informal sector. The
directive has the distinctive feature, however, of attempting
to organise and regulate—at the local, regional and nation-al
level and in conjunction with chambers of commerce—
organisations that exist first and foremost to represent
workers at the grassroots level.
In the light of a comparative analysis of training policies and
practices in the informal sector in the various countries sur-veyed,
it appears that the current TVET reform will be more
effective and relevant if it is not confined to an excessively
institutional approach, but brings on board all the collectives
and associations represented in the non-structured econo-my.
This means that the reform’s proponents must pay
greater attention to the processes already at work in the
informal sector and use them to underpin their efforts to
enable the sector’s many workers to upgrade their skills.
41 A Directive Issued to implement Proclamation No. 341/2002 of Chamber of Commerce
and Sectoral Associations Council.

4. Current training initiatives in the informal sector
Although it was easy to obtain all available information on
training provided in formal establishments and on the broad
outlines of current TVET reform, it was difficult to find out
about training in the informal economy. There are several
reasons for this: the information was scattered; few people
work in this area; there is little communication among the
various public and private agencies involved, and, although
the matter is considered important, it is not a priority.
The field survey did, however, identify a number of
schemes and operators in the field. It was not always pos-sible
to obtain full information or meet the people best
placed to report on what has been done, but the information
gathered provides the broad outlines of current training ini-tiatives
in the sector.
4.1. The reality of traditional apprenticeship – a difficult issue
The Non-Formal TVET Implementation paper published
recently as part of the Capacity Building Programme men-tions
traditional apprenticeship in the MSE sector.
According to this document, this sector includes employers
or very often master craftsmen owning small enterprises in
the crafts, services, repairs, transport or trade sectors. The
latter make partial or full use of family members as unqual-ified
workers or apprentices.42
Despite this formal statement about the existence of tradi-tional
apprenticeship, the field survey revealed little to con-firm
the reality of its existence. Some people said that, in
the light of the situation in Sub-Saharan countries, there
was actually no traditional system established in crafts or
services. Others said that there was only the school
apprenticeship scheme offered in training establishments,
involving work placements in businesses rather than the
implementation of a well-balanced combination of class-room-
based training and work experience. Others said that
the term “apprenticeship” referred to the plans for designing
and developing co-operative or dual-type training in associ-ation
with the largest and/or best performing enterprises in
the country. Lastly, the meeting with an official from the
Ministry of Employment and Social Affairs made it possible
to make a rapid appraisal of the training scheme for which
it is responsible. The major features are as follows:
in Ethiopia, as in West African countries, skills are large-ly
acquired within the family or neighbourhood. On this
subject, it is worth noting that only 3% of young people
go through the TVET system and that only 25% of pupils
who complete primary education go on to secondary
school. A 1999 survey recorded 12,100 apprentices
while a 2005 survey recorded 85,622, of whom 26%
were in the crafts production sector (such as woodwork,
weaving, sewing and so on), the remainder being in the
services sector;43
traditional apprenticeship is not an organised process:
there is no curriculum, no training premises, no qualified
trainers and no structured progression;
the main fields concerned are motor mechanics, main-tenance
and crafts.
42 ECPB (July 2006), Non-Formal TVET Implementation Framework.
43 This data was obtained from the Ministry of Employment and Social Affairs. The 2005 sur-vey
on employment and the active population indicates that apprentices represent 0.3% of
the 31,435,108 people in work, namely a total of 94,305 apprentices. It also indicates that
50.3% of employees are unpaid family members. Although such employees are not
apprentices, it is clear that they learned their trade as they went along, since only a tiny
number undertook vocational training. Since the Ministry has no clear picture of the reali-ty
of what happens, it wishes to carry out a major study to establish the facts.

Legislation stipulates that an apprentice should have a con-tract
with a master craftsman or an establishment and work
under specified hygiene and safety conditions and in
defined trades. It further stipulates that the curriculum
should be determined in association with the Ministry of
Education and that the apprenticeship should be of defined
length, but does not fix any time limit. However, due to lack
of means, the Ministry of Employment and Social Affairs
fails to apply the legislation as it should. While inspectors
visit workshops to check whether master craftsmen are
complying with ILO apprenticeship safety rules, they pro-vide
more in the way of advice and assistance than enforc-ing
the regulations.
4.2. Public policies targeting the creation of micro activities
The public authorities and more particularly the Ministry of
Commerce and Industry have national and regional
schemes targeted specifically at MSEs.44 The national
scheme, entitled FEMSEDA (Federal Micro and Small
Enterprises Development Agency), was set up in the time of
the Emperor of Ethiopia to train poor children who had no
other access to education and training. The regional
schemes, entitled REMSEDA (Regional Micro and Small
Enterprises Development Agencies), are currently being set
up by FEMSEDA, and also by regional offices of the
Ministry for Capacity Building. According to information
gathered during the survey, REMSEDAs were to be set up
in the Tigray and Harar regions. Work in the field included
lengthy contact with the Dire Dawa regional agency, the first
at national level to take any really serious action.
The Plan for Accelerated and Sustained Development to
End Poverty (PASDEP 2005/2006-2009/2010), which
reports on action carried out in the MSE sector throughout
the country, gives an overall picture of action undertaken by
the various agencies responsible for MSE development. It
firstly indicates that such enterprises play a very important
economic role, to the extent that they use people who are
largely underemployed in the agricultural sector and enable
families to diversify their sources of income. Secondly, the
document lists sectors with high job-creation potential:
domestic livestock rearing, poultry rearing, silk harvesting,
bee-keeping, clothes-making, metal-working, construction
and fast-growing intra-urban services such as waste collec-tion,
car park caretaking, small retail and various repair
services. Lastly, it provides detailed figures on the
scheme’s results, indicating that 96,000 MSEs were given
a boost at national level and 280,000 jobs were created.
The activities undertaken by FEMSEDA and the Dire Dawa
REMSEDA form part of this overall approach, while at Addis
Ababa level, the ILO initiative aimed at training profession-al
weavers in order to improve their ability to access the
international market is based largely on co-operation with
FEMSEDA.
4.2.1. FEMSEDA entrepreneur training
FEMSEDA is a public body attached to the Ministry of
Commerce and Industry. It is organised into three depart-ments:
quality, planning and training/skills development. Its
role is to assist MSEs in meeting their training needs. It also
operates in the clothes-making, woodworking, textiles, pot-tery,
tapestry, weaving sectors, etc.
The agency runs an annual training programme from
October to March and from March to August. It works in
technical areas and also in management and finance. It
runs technical four or five month training sessions in sectors
such as clothes-making, metal and wood-working, three-month
training sessions in clothes-making and, at the
request of investors wanting to reach international markets,
one-month training sessions in weaving. 85% of skills
acquisition takes place on the job and 15% is acquired in
classroom sessions. FEMSEDA actually has its own prem-ises
in Addis Ababa, which enables it to provide training in
suitably equipped workshops offering appropriate tech-niques
for each specialist activity.
44 A “micro-enterprise” is an enterprise with an annual turnover of less than 20,000 birrs
(1,800 euros), and a small enterprise is a unit with a turnover of less than 500,000 birrs
(45,000 euros).

Training is aimed at the informal, essentially crafts, sector.
People can undertake the various training sessions without
having any specific level of skills, with the exception of
some, such as tapestry, wood-working and so on, which
require level 10, which is in fact TVET Grade 1.
Often, trainers in TVET centres or establishments do not
have the practical capabilities required for organising train-ing
schemes targeted at people in the informal sector. This
means that, during the holidays, some of them attend train-ing
sessions held in FEMSEDA premises.
The agency runs training to help MSEs improve the way
they launch or manage their business. It uses a training
package for literate people, which has been designed and
produced by ILO. For illiterate people, it uses a World Bank
aid that is practical and very visual in design. It offers train-ing
in creating and managing work. In each technical
course, it also includes an introduction to management and
entrepreneurship. All training sessions form part of an
annual training plan. The 2006 plan relating to MSE man-agement
provides a clear picture of the means implement-ed
by FEMSEDA to launch and stimulate the informal sec-tor.
Training plan objectives
to help individuals wishing to set up their own MSE to
acquire the basic notions of economics;
to enable them to acquire the skills they need in order to
launch a profitable and successful business;
to promote effective and high quality production and
service units in their field of activity.
Courses offered
Courses organised at federal level come under the general
title: “Develop a skills-based economic activity through
business creation.” They aim to encourage participants to
be self-critical, adopt an entrepreneurial approach and
develop the ability to set up their own business. They are
divided into three main types of training:
Starting Your Own Business. Training is intended to
encourage informal economy workers to adopt an entre-preneurial
attitude so that they know how to set up a
business, obtain the necessary start-up capital, draw up
a financial plan, prepare a marketing plan, hire staff,
produce and sell and, lastly, develop the business suc-cessfully;
Improving Your Business. The aim of the course is to
help those who already have an established business to
improve and modernise their management practices by
developing their skills in the areas of market access,
purchasing, stock control, financial and accounts man-agement
and business planning;
Acquiring Basic Economic Skills. Following the example
of what is offered in South Africa, the idea is to develop
entrepreneurial attitudes and provide training in the fun-damental
concepts of entrepreneurship, in order to
enable participants to distinguish clearly between fami-ly
and professional activities, to encourage them to
keep a cash book and to acquire basic business plan-ning
skills.
All courses are based on active learning methods specifi-cally
tailored to the needs of the people to be trained. They
include discussion groups, role-playing, case studies, site
visits, films and the analysis of good practice.
These courses are aimed more particularly at people who
want to launch or improve their business and, to this end,
wish to develop their technical and managerial skills. Each
course lasts five days and may be delivered as a one-week
training package or as ten half-days of training.
Fees are payable for all courses, except for those with min-isterial
exemptions and those targeting strategic sectors
such as clothes-making. The cost is 137 birrs per person,
or 12 euros,45 when delivered on agency premises, and 86
birrs, or 7.8 euros, when delivered off premises. When
courses are run outside Addis Ababa, the cost is 127 birrs,
or 11.5 euros.
In 2005, the agency trained 800 people from the informal
sector, including 500 in clothes-making, 150 in design and
120 in the metal-working, wood-working and silk sectors. All
of the people trained were selected for their ability to cas-
45 Exchange rate at 4 October, 2006.

cade what they learned to other members of their local
association or co-operative.
4.2.2. The Dire Dawa REMSEDA’s integration
and support role
The Dire Dawa REMSEDA has been in existence for two
years. The agency is really the institutional partner in an
economic development project that already existed in the
region. It currently comprises a planning and programming
department and a research and development department,
which are in turn subdivided into a piloting and support
service and an MSE development training and promotion
service. Other services are to be added, including a spe-cialised
service to support those developing income-gener-ating
activities, and an information and advice service to
assist trained people in accessing the job market. At pres-ent,
REMSEDA employs ten staff, soon to be supplement-ed
by a number of experts specialising in the fields in which
the agency is involved. The Dire Dawa REMSEDA is in fact
the first operational regional agency. Consequently, people
are always asking to visit it, and it often serves as an exam-ple
to other agencies that are in the course of being set up.
Strategic intervention areas
The agency focuses its work on sectors forming part of the
region’s economic strategy and which make a significant
contribution to GDP, such as property development, public
works (including road-building), food, textiles, arboriculture,
etc. The agency works on the principle that there is a mar-ket
for all of these activities. Construction is one of the
areas in which the agency has invested most, particularly
as the Government itself has issued calls for tenders in the
above-mentioned areas of roads and property, and also in
local agency creation and the building of schools, training
centres and rural development centres.
Local councillors, administrators and the various officials
concerned, including those involved in education and voca-tional
training, meet on a monthly basis. These regional
steering groups enable the agency to intervene according
to local development priorities and to play an effective role
in integrating the working population of the informal sector
into the job market.
The model for empowering people to find work
REMSEDA runs a scheme that enables unemployed and
unoccupied people to come together into groupings in order
to work on public interest projects, before gradually devel-oping
such projects into profitable activities. The scheme
can be described as follows:
thanks to its fortunate public circumstances (financial
resources and the availability of land to establish busi-ness
parks), REMSEDA acts as an economic develop-ment
and job agency. It supports the creation of associ-ations
and co-operatives of young people and adults
(with a maximum of 15 members) as part of works com-missioned
by public authorities or forming part of the
regional development plan. It helps these associations
and co-operatives to set up production and services
units on the public land made available. It sets up infor-mation
and financial support offices as close to its busi-ness
parks as possible, so as to give the groupings eas-ier
access to public and private market opportunities.
REMSEDA has thus enabled its members to bid for the
construction of universities and enterprises, hospital
catering services or the delivery of traditional food to
local authorities. To date, REMSEDA has facilitated the
creation of 220 co-operatives or associations, including
63 in construction, 43 in food processing, 40 in metal-working,
25 in waste disposal, 11 in clothes-making, 6 in
wood-working, 5 in urban agriculture and so on;
REMSEDA helps to consolidate the work of associa-tions
and co-operatives at a professional and financial
level. It makes technical, financial and management
training run by the Dire Dawa TVET College available to
members of groupings. It helps them to obtain loans
from micro-credit organisations by giving them assis-tance
in drawing up their development plan. To date,
over 2,500 groupings have benefited from loans of up to
20,000 birrs (about 1,800 euros).46 It provides machin-ery
suited to their professional needs and compliant
with technical standards, and advises them throughout
the business development process;
46 Recently the Government decided to guarantee loans from micro credit organisations (to
the tune of 212 million birrs, which is about 19 million euros). This will make it possible to
provide MSEs with loans of 50,000 to 100,000 birrs (about 9,000 euros).

lastly, REMSEDA promotes structured co-operation
between MSEs. It helps enterprises to organise trade
fairs that enable them to compete with private industry
products, to sell goods and to position their products to
meet export market demand. The agency invited
Djiboutian entrepreneurs to fairs that it organised so
that they could help Dire Dawa MSEs to evaluate the
quality of their products in the face of international com-petition.
REMSEDA also helped to bring together exist-ing
groupings in order to create sector associations. It
set up a production and service unit forum with a view
to transferring the responsibility for the creation of such
associations to members of the forum. The idea is that
forum members analyse opportunities for creating larg-er
groupings, express their joint training needs and, if
possible, respond jointly to invitations to tender.
Training activities organised
There have been many of these and they have improved
technical skills in all sectors: construction (1,012 people),
metal- and wood-working (682 people), sewing and textiles
(444 people), urban agriculture (430 people), food process-ing
(411 people), and so on. Training also addressed man-agement
and entrepreneurial skills (4,387 people). Over a
period of two years, a total of 12,935 of the working popu-lation
in the informal sector have received training. It is dif-ficult
to evaluate the impact of such training, especially
since it forms part of overall measures to achieve progres-sive
integration into jobs and stable employment. But the
fact that during the same period, 13,056 people found per-manent
or temporary employment demonstrates that such
training is at the very least an effective support in the over-all
process of entry into the world of work.
An example of job creation: cutting cobblestones for
paving roads
The field survey visited several sites, including one where
cobblestones were being prepared for building or repairing
Dire Dawa’s roads and pavements. This site has the fol-lowing
features:
it encompasses all manufacturing stages of the final
product (a 10cm-sided cobblestone), including the quar-riers
(from outside the Dire Dawa region), the lorry driv-ers
bringing the stone to town, the various stone-cutters
who rough-hew the stone, break it into semi-finished
and then finished blocks and those who lay the cobble-stones
to make the roads and pavements. (This is a
long and complicated process requiring project-type
organisation that manages each stage from the original
product to the final stages of hewing and laying. It can
be successfully completed only through effective man-agement
of the various stages involved in production,
from the very start to the finished product);
it operates as a commercial organisation to the extent
that the producers involved in each stage are set up as
profit-making companies, buy a product at a certain
stage of production, work on it in accordance with pre-determined
standards and then sell it after having cal-culated
the added value and the profit to be distributed
to each stone-cutter and layer. The work site assumes
de facto that there are a series of commercial compa-nies
demanding both management and financial skills
from members;
from the discussions held, it emerged that the scheme
has a significant effect on those involved. It enables
them to acquire skills (quarrying, stonecutting and lay-ing);
it makes them comply with standards and dead-lines,
and lastly, it encourages them to manage their
part of the work in accordance with precise and clear
financial and accounting rules. So it includes both
apprenticeship in a trade and apprenticeship in the
basic concepts of business management.
The young people interviewed showed an in-depth knowl-edge
of the entire process of production and marketing and
confirmed that it was a valuable learning experience.
Several were motivated to organise themselves further, and
were able to develop their work into other areas and func-tions.
There is no doubt that the Dire Dawa REMSEDA scheme,
spanning the creation of associations and co-operatives
promoting integration into the world of work through to their
consolidation into micro- and small production and service
enterprises, serves as model for development aid. It com-bines
public intervention with job creation, promotes social
and vocational integration and the acquisition of financial

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