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Technical skills shortage poses threat to manufacturing sector

In estimated 300,000 Kenyans earn their living in the manufacturing sec- tor. However, over the  past

five years, job uncertainties have overshadowed the sector. A signifi- cant number of manufacturers have downsized or closed shop because of tepid growth. Data from the Kenya National Bureau of Statistics (KNBS) indicates that manufactur- ing accounted for 9.2 per cent of the country’s GDP in 2016, down from

9.4 per cent in 2015, 10 per cent in 2014, 10.7 per cent in 2013 and 11 per cent in 2012.

The manufacturing sector’s steady decline is largely attributable to the high cost of doing business, inadequate infrastructure, limited land availability, cheap imports, and increased scarcity of technical and vocational skills.

The government, through the Ministry of Industrialization and Enterprise Development, has rolled out  several  policy   interventions to address these issues, including launching the Kenya Industrial Transformation Programme. This plan outlines the steps that the gov- ernment intends to take to increase manufacturing jobs to 700,000 and add around U.S$ 2-3 billion to the GDP over the next decade.

Similarly, recent state-led invest- ments in infrastructure, as well as the streamlining of service deliv- ery    through    Huduma   Centers


and government web portals, has helped improve the overall busi- ness environment. Tellingly, global Consultancy EY, in a recent report on Africa’s investment landscape, notes that Kenya is now the sec- ond most attractive investment des- tination in Africa after Morocco, surpassing stalwarts such as South Africa and Nigeria. This indicates that most of the reforms undertaken

to revitalize the manufacturing sec- tor and make Kenya more attractive to investors are bearing fruit.

However, the single issue affecting manufacturers that is proving increasingly difficult to address  is

the scarcity of technical skills. This is because, at its root, it is more of an attitude problem than a policy problem.

Many smart and ambitious young Kenyans needed to bridge the technical skills gap in manufacturing are snubbing technical and vocation- al training in favour of university degrees.

Technical colleges are seen only as a second choice to attending university.

Moreover, faced with declining enrollments and flagging revenues, a vast number of technical vocation institutes have converted into uni- versities in order to attract students and stay afloat. There are now over 60 universities in Kenya.


University degree

According   to   Education Cabinet Secretary,    Dr.    Fred   Matiang’i,

Kenyans, especially the youth, ought to change their mindset about tech- nical skills. “TVET ought to be a destination of choice for those who wish to acquire the skills required to move this country to the next level of economic development. As a matter of fact, evidence suggests that TVET education is as of equal value and in some cases even more valuable than a traditional university degree,” said Dr. Matiang’i during the launch of a TVET conference earlier in the year.

Kenyan manufacturers, through the          sector     lobby,     the          Kenya Association                                of            Manufacturers (KAM), have repeatedly voiced their concerns about the youth’s prefer- ence for degrees over technical skills. “Although the quantity of gradu- ates is rising rapidly, manufacturers are increasingly complaining about shortages of skills in the labour market,” reads a joint report released this year by KAM and U.K.-based Overseas Development Institute. The report outlines 10 policy recommen- dations that will help shore up the manufacturing sector. These include making the sector more export-ori- ented and enforcing a fiscal regime that supports manufacturers, among others.

The increased preference of uni- versity degrees over technical train- ing is not just to blame for the wid- ening technical skills gap affecting manufacturers. It is also to blame for something worse—the country’s high youth unemployment rate.

According to a recent World Bank report, unemployment among Kenya’s youth is the highest in the region at 17.3 per cent compared to  six  per  cent  for  both  Uganda and Tanzania. The preference of uni- versity degrees over technical skills among youth is partly to blame.

Kenya churns out an estimated 50,000 university graduates annual- ly, but only a fraction are absorbed into formal employment. The grad- uates who are not absorbed into meaningful employment end up add- ing to the masses of unemployed, explaining the high levels of youth unemployment in the country. This can be addressed if there is a shift in attitudes about technical skills.

Young Kenyans need to under- stand that a university degree is not the only path to a bright future. Technical skills can also empower youth. They can arm young people with the skills needed to transform Kenya into an industrialized mid- dle-income  economy.

However, changing the attitudes of an entire generation is not some- thing that can be done in one fell swoop. Manufacturers therefore need to take contingency measures to address the skills shortage, even as the Education Ministry and relevant stakeholders labour to endear the youth to technical skills.

KAM, in its joint report with ODI, recommends that: “manufac- turers develop an  incentives


programme for skill develop- ment led by the private sector rath- er than supply-driven, public-sec- tor-training.” KAM further notes that there is a need to foster continual dialogue between industry and aca- demia. This will ensure greater align- ment between academic curricula and market demands.



Competitive pay

Even as the government and manu- facturers strive to make blue collar jobs more popular, it is critical for them to appreciate the fact that part of the reason why blue collar jobs are avoided is because majority of them pay peanuts. Competitive pay for skills such as plumbing, weld- ing and machine operation could help reverse negative attitudes about these jobs.

Paying technical workers com- petitively is not a waste of a firm’s resources, as some would imagine, but could actually give a firm a unique competitive advantage. Germany is a shining example of how taking good care of blue collar workers gives firms an edge in the market place.

The $3.73 trillion (Ksh 373 trillion) European economic power- house is known to pay blue collar workers competitively. It is no sur- prise that it is a global leader when it comes to industrial machinery and the automotive sector, both of which require dedicated and highly skilled blue collar workers.

“In Germany, the blue collar worker represents the first and most important element in a long chain of quality control measures. In Kenya, on the other hand, German compa- nies experience that technical educa- tion for blue collar is viewed as less prestigious,” notes Maren Diale, the Country Director of the Delegation of German Industry and Commerce in Kenya.

Germany is working closely with the Kenyan government to improve the state of the TVET sector. It committed Sh3 billion to technical schools in November last year to equip training units with state-of- the-art facilities that offer crafts- men with modern skills to match the needs of the market. German ambassador to Kenya, Jutta Frasch, at the time noted that Kenya should entrench vocational training just like countries such like Germany, China and Switzerland.

In addition to donor support for TVET Institutions from bilat- eral partners such as Germany, the government has also taken its own independent steps to bridge the technical skills gap. In 2014 it estab- lished the Curriculum Development, Assessment and Certification Council with the aim of improving quality and relevance of training programmes in TVET institutions. This was in response to the lack of standard curriculum and assessment bodies in the TVET sector.

The government has accompa- nied these measures with increased promotion of TVET as a viable route to success for the youth, with CS Dr. Matiang’i personally spearheading conferences aimed at sensitizing the youth about the benefits of TVET.

In the long run, measures aimed at bridging the technical skills gap in Kenya will help reverse the for- tunes of the manufacturing sector. Furthermore, a skilled labour force could help Kenya mobilize more global investments in manufacturing at a time when global manufacturers are shifting away from Europe and China due to a shrinking work- ing-age population and rising labour costs.