By Tengetile Hlophe & Mangaliso Mohammed
Government has taken bold steps towards resuscitating the economy, as evidenced by the recently launched Strategic Road Map 2019 –2022 in a bid to facilitate private sector led economic recovery and industrialisation.
Resuscitating economic growth in Eswatini is not just a job that solely rests on government alone, everyone has a role to play in making things happen for the economy, especially the private sector.
In recent developments, one of the world’s largest free-trade areas – the African Continental Free Trade Area (AfCFTA) – comes as a huge opportunity to materialise private sector led growth. The AfCFTA, as enforced on 30 May 2019, presents opportunities for Eswatini to drive industrial development, increase the country’s competitiveness and help Eswatini become the export led economy it wants to become.
Experiences of industrialisation and newly industrialising countries (NICs) demonstrate that transformative policies in labour, technological change and high investments in human and physical capital play a fundamental role in spurring economic development. Scholars acknowledge that development of the industrial sector is incumbent on the human resource available in a country.
Fortunately, the Strategic Road Map prioritises development of the country’s human capital (education and ICT) as one of the five key sectors for growth. So what role can the private sector play to fast-track human capital development for industrialisation in Eswatini?
Fast-tracking human capital development
The debate on the skills and employability of Eswatini’s graduates remains one of the core elements of a wider education, youth unemployment, and job creation problem. In the interest of preparing tomorrow’s workforce for the fourth industrial revolution, which is beginning to transform business and jobs faster than workers can adapt, there are legitimate concerns on the employability of Eswatini’s graduates now and into the future.
The relevance of the skills produced by the education system and entrepreneurial disposition of Eswatini’s graduates remains in question. While fingers keep pointing towards inadequacy of the education and training system and its policies, a few silent voices continue to wonder what companies are doing to close the skills gap and drive industrial development.
These are some of the critical questions that the country should not shy away from, especially if private sector-led growth is to be achieved. What is the road to be followed to close the skills gap in Eswatini?
Technical and Vocational Education and Training (TVET) skills have been identified as a foundational skill to drive manufacturing and industrial development, especially for developing countries. However, vocational institutions adapt to technological development at a glacial pace such that by the time the students graduate, the technology has changed and some skills are no longer relevant.
Despite the high unemployment rate in Eswatini, the private sector is struggling to fill vacant positions owing to the unavailability of adequately trained staff. An ESEPARC study finds that about a quarter (25.8%) of 166 surveyed companies in the TVET sector (electrical, automotive, and ICT industries) indicate that they face difficulties finding a qualified and competent TVET workforce.
In fact, less than 20% of the companies expressed complete satisfaction with the skills demonstrated by Eswatini’s TVET graduates. Companies report that on average, 86% of TVET graduates require additional training or re-training upon employment.
The impact of a skills gap is detrimental at the regional, national, firm, and individual level. Skills gaps limit national competitiveness and industry productivity, while increasing production costs, lowering quality, and reducing overall social and economic development potential.
According to economic researcher, Adrian Nikolov and colleagues, for the individual a skills gap limits their opportunities for employment and to improve their standard of living.
The Role of the Private Sector
The private sector/companies should realise that as long as people are exiting through the back door as fast as they are coming in through the front, recruitment has no added value. Tacit knowledge contributes to the uniqueness of employee skills and increases their levels of innovation and competitiveness.
Therefore, each company should seriously consider establishing retention and skills upgrading policies. If all companies are engaged in positive skilling and upskilling of the labour force, companies can rest assured that the employees exiting are just as good as the new ones coming through.
Nikolov suggests that industries should also consider skills development along the value chain. This will improve product quality and productivity of suppliers, enhance small and medium enterprises (SMEs) capacities in production and service delivery, and enable clients (such as distributors) to sell and repair company products more reliably.
Other scholars suggest that the establishment of centres of excellence in some industries can also help the development of skills and knowledge transfer. Senior Education Specialist, Shanti Jagannathan from the Asian Development Bank, reports that Germany’s TVET system is industry driven; companies share 75% of the costs of training while 25% comes from the government, with TVET students spending 1.5 days in school and 3.5 days in actual workplaces.
The skills crisis also has the aspect of underutilisation of skills and over skilling of individuals resulting from imbalances in the labour market demand and supply of the workforce and a low entrepreneurial culture. Even though 70% of companies in the automotive, electrical, and ICT sectors of Eswatini provide internships, less than half of these will also hire interns. This demonstrates a need for skills at a level higher than general practise.
Furthermore, where companies/industries offer concrete commitments that match the scale of skills demand, complementary investment should be made by multiple other stakeholders to ensure that skills development initiatives are sustainable. For example, where computers are donated to schools, they must be accompanied by upskilling of the teachers, upgraded software, and a stable supply of electricity among other factors such as affordable internet usage fees.
The private sector must also realise that improving the employability of Eswatini’s graduates is not just an education system problem alone. For example, skills mismatches are also related to other labour market and economic phenomena such as underemployment, structural unemployment, unemployment and inactivity traps, job polarisation, and income inequality.
At the same time, skills gaps can be exacerbated by the migration of qualified workers to other parts of the continent and abroad. The higher the disparities (in all their dimensions), the larger the drag on actual and potential economic growth.
Studies demonstrate that employees are critical resources for competitive advantage, their value is what enables companies to enact strategies that increase efficiency and effectiveness, exploit new market opportunities, neutralise potential threats, increase customer benefits and lower costs.
Therefore, compromising on the quality of skills reduces quality and the performance of firms. Since the public education system in Eswatini is often unable to provide a sufficient number of qualified people and to equip graduates with skills required by employers, companies need to step-in to bridge the skills gap.
In conclusion, it is important to note that the economy is not static and neither are the skills needed to support economic activities. Countries like Eswatini need to adopt active labour market policies and human resource management systems that report and track present and future company skills.
Emaswati should consider lifelong learning as an intervention tool for socio-economic empowerment in a globalising and highly competitive world. Companies should play a more pro-active role in the development of skills for industrialisation to ready Eswatini for export driven trade and enhance industry competitiveness in the region.
Regardless of whether a country’s economy is thriving or experiencing a downward spiral, employers can benefit from a skilled workforce that is able to respond to changing economic and global circumstances. Not investing or divesting from human capital development is simply not an option for an economy like Eswatini that wants to grow.
