ATTACHMENT_6_-_WORKFORCE_DEVELOPMENT_ASSESSMENT_2014.pdf

Workforce Assessment in Djibouti: Final Report

June 24, 2014 This publication was produced by International Development Group LLC, for review by the United States Agency for International Development.

Workforce Assessment in Djibouti: Final Report

Contract Number AID-OAA-I-12-00042 Task Order No. AID-603-TO-14-00001

Submitted By:

International Development Group LLC (IDG)

DISCLAIMER

The contents of this report are the sole responsibility of IDG and do not necessarily reflect the views of USAID or the United States Government.

Cover Photo Photo credited to Christian Fagueret

ACRONYMS

AFD French Development Agency ALFAD Support for the French Language in Djibouti ANEFIP Agence Nationale de l’Emploi et de la Formation et Insertion Professionnelle APC Approach Trough Competencies APE (Students’) Parents Association BAC PRO Baccalauréat Professionnel CARICOM Caribbean Community CFPEN National Education Training Center CGE School Management Council CIA Central Intelligence Agency CNSS Caisse Nationale de la Sécurité Sociale CONTESS Conseil National du Travail, de l’Emploi, et de la Sécurité Sociale DeSeCo Definition and Selection of Competencies Project DISED Department of Statistics and Demographic Studies EDAM Enquête Djiboutienne auprès des Ménages EdC Education Coaches EFA Education for All EMIS Education Management Information System ENAP Ecole Nationale de l’Administration Publique ESL English as a Second Language FSL French as a Second Language FSP Priority Support Funding GoDj Government of the Republic of Djibouti GPE Global Partnership in Education IDG International Development Group LLC ILO International Labour Organisation IMF International Monetary Fund JICA Japan International Cooperation Agency LC Labor Code LIC Lycée Industriel et Commercial MAECI Ministry of Foreign Affairs and International Cooperation MENFOP Ministry of Education and Professional Training MOF Ministry of Finance MOL Ministry of Labor MOWA Ministry of Women’s Affairs OCDE/OECD Organization for Economic and Cooperation Development OTI Objectifs Terminaux d’Insertion, Terminal Integration Objectives PAE Education Action Plan PISA Program for International Student Assessment PTR Pupil Teacher Ratio TCNs Third country nationals TIMSS Trends in International Mathematics & Science Study TVET Technical vocational education and training UDT Union Djiboutien des Travailleurs UGTD Union Générale des Travailleurs Djiboutiens

UNDP United Nations Development Programme UNFD Union Nationale des Femmes Djiboutiennes

TABLE OF CONTENTS

Executive Summary

Introduction Purpose and Scope of the Study Methodology

Context and Background Overview

Recent Economic Trends Current Structure of the Economy, Labor Markets, and Poverty

Basic Education System Introduction

Education Reform in Progress Persisting Problems Competency Approach Notable Education Management Information System (EMIS) Data What is a Modern, Twenty-First Century Education?

Impact of Linguistic approach in education

Basic Education Survey Findings

Qualitative data Analysis

Recommendations on Basic Education

Technical and Vocational Education and Training (TVET) System Introduction

Profile of TVET Service Providers Government Reform Employment-related Services Providers Survey

Findings on TVET Recommendations on TVET

Gender Access to Education and Success in Education Services Introduction

Primary Level Middle Level Secondary Level Technical and Vocational Education and Training (TVET) Employment-related Services

Findings on Gender Recommendations on Gender

Labor Market Supply and Demand, and the Unmet Demand for Skills Overview

Labor Market Supply Labor Market Demand, and the Unmet Demand for Skills and Occupations

Occupations/Professions in Greatest Demand, According to the Team Survey Other Relevant Results from the Employer Survey Prospects for Economic Growth and Job Creation Supplementing Labor Demand Estimates Using National Data Attitudes, Behaviors, Skills, and Knowledge in Greatest Demand, According to the Team Survey Youth Focus Groups

Recommendations for Technical Areas for TVET Programming General Recommendations for Job Creation

GoDj’s Skilled Labor Expansion Plans Vision 2035 Ministry of Labor – National Employment Policy Recommendations on Skilled Labor Expansion Plans

Labor Regime Introduction

Labor Law: Labor Code, Decrees, Collective Conventions, and Enterprise Agreements Formation of Contract Termination of Work Contract Other Forms of Engagement Occupational Health and Safety Social Insurance Trade Union Representation

Findings on the Labor Regime Assessment of the Labor Code Status of Collective Conventions and Enterprise Agreements

Recommendations on the Labor Regime

A Djibouti Jobs Center as a Mechanism for Providing Assistance

Annex 1: Scope of Work for Workforce Assessment in Djibouti Project

Annex 2: Map of Djibouti

Annex 3: Final Agenda of Workforce Assessment Team

Annex 4: School Management Questionnaire

Annex 5: Senior Management MENFOP Questionnaire

Annex 6: Focus Group Participants

Annex 7: Technical and Vocational Education, and Vocational Training Centers Questionnaire

Annex 8: Employment Service Provider Questionnaire

Annex 9: Youth Focus Group Questionnaire

Annex 10: Djiboutian Economic Public and Private Organizations

Annex 11: Employer Questionnaire

Annex 12: 2008 Decree Establishing the National Council

Annex 13: 2012 Decree Establishing the National Council

Annex 14: Minimum Wage Agreements

Annex 15: Regulations Necessary for Labor Code Implementation

Annex 16: CNSS Data

Annex 17: Synopsis and Summary of Recommendations

Introduction Purpose and Scope of the Study Methodology

Basic Education System Findings on Basic Education Recommendations on Basic Education

Technical and Vocational Education and Training (TVET) System Findings on TVET TVET Recommendations

Gender Access to Education and Success in Education Services Findings on Gender Recommendations on Gender

Labor Market Supply and Demand, and the Unmet Demand for Skills Findings on Labor Market Supply and Demand, and the Unmet Demand for Skills

Labor Market Supply Labor Market Demand, and the Unmet Demand for Skills and Occupations Occupations/Professions in Greatest Demand, According to the Team Survey Supplementing Labor Demand Estimates Using National Data Attitudes, Behaviors, Skills, and Knowledge in Greatest Demand, According to the Team Survey

Recommendations for Technical Areas for TVET Programming General Recommendations for Job Creation

GoDj’s Skilled Labor Expansion Plans Analysis of GoDj Skilled Labor Force Expansion Plans Recommendations on GoDj Skilled Labor Force Expansion Plans

Labor Regime Findings on the Labor Regime Recommendations on the Labor Regime

A Training Center as a Mechanism for Providing Assistance

LIST OF TABLES

Table 1: Djibouti’s ‘Doing Business 2014’ ranking out of 189 countries Table 2: GDP 2007-2012 (millions Djiboutian Francs) Table 3: Employment by Sector (% and Estimated Totals) Table 4: Work Status of Djiboutians, 2012 Estimates Table 5: Selected PAE indicators Table 6: Evolution of primary enrollments over the period 2003-2013 Table 7: Selected indicators for Primary schools Table 8: Actual 2012-13 5th Grade OTI results Table 9: Twenty-first century education 1st to 12th grade learning skills and work habits Table 10: TVET Centers Table 11: Graduation Rates by Technical Area Table 12: Employers Interviewed Table 13: Key Interview Questions Table 14: Potential Growth Sectors According to Surveyed Employers* Table 15: Occupations Demanded by Surveyed Employers Table 16: Principal Constraints Reported by Employers Table 17: Estimate of Annual Demand by Occupation Based on Vision 2035 and EDAM Household Survey Table 18: Skills, Attitudes, and Behavior Demanded by Surveyed Employers Table 19: Levels of Labor Regulation Table 20: Books of the Labor Code Table 21: Articles in the LC requiring Correction or Interpretation Table 22: Collective Conventions and Enterprise Agreements

LIST OF FIGURES

Figure 1: Work Status of Djiboutians as % of Total Population Figure 2: Labor Force Participation (>=16 years) Figure 3: Unemployment Figure 4: Flexicurity

EXECUTIVE SUMMARY

In their recent meeting, Presidents Obama and Guelleh jointly recognized that effective workforce education and training are the “foundation for expanded employment and private sector investment”.

The Government of the Republic of Djibouti (GoDj), in its Vision 2035 multi-sectorial strategy document, points out that strengthening primary and secondary education is a cornerstone for building a vibrant economy. USAID also recognizes the significant role that workforce readiness skills, such as critical thinking, problem solving, and communication skills, play in supporting the economic development of a country in the current rapidly changing, technology-driven world. In this context, USAID has collaborated with the GoDj in conducting an assessment of Djibouti’s evolving labor market, the skill sets it demands from workers, and the extent to which the basic and vocational education systems and labor regime are providing workers prepared for this new economy. The assessment was conducted in country during April-May, 2014, with some follow-up time to finalize the report. This document is the final report for that assessment.

The Assessment Team considered the Djiboutian workforce in its economic context, as an economy experiencing rapid growth in recent years particularly in certain sectors related to international trade, though struggling to generate workers prepared to fill new positions in the labor force. The Assessment Team reviewed the basic education system, to identify weaknesses as they relate to employment. This included site visits and interviews at schools in Djibouti, as well as meetings with GoDj officials and experts in the area of education. The vocational educational system was likewise reviewed in great detail, with site visits and interviews both with providers of training and consumers of it (the potential employees trained and the employers who need a workforce). Focus groups were conducted with youth in vocational training and with unemployed youth. The gender data for both basic education and vocational training were reviewed. The Team studied the GoDj plan for job creation, embodied in Vision 2035 in general terms, in more detail in Ministry of Education and Professional Training’s (MENFOP’s) Action Plan, and in the Ministry of Labor’s (MOL) National Employment Policy. Through interviews with many employers and through reviewing available data on the economy and labor market, the Team analyzed trends and likely scenarios for job creation in the private sector, identifying occupations and skill areas where there seems to be growing labor market demand. And the Team reviewed the labor regime and its implications for a well regulated labor market and consulted with employers, local counsel and labor unions to identify the ambiguities that can give rise to unnecessary conflicts and impair the functioning of the workplace. As a result, the Team has arrived at recommendations for basic education, vocational training, gender inclusion and labor regulation. In response to discussions on the possibility of creating some kind of jobs training center, the Team suggests how the proposed recommendations could be implemented through such an institution.

Labor Market Supply and Demand, and the Unmet Demand for Skills. The Assessment Team met with 24 employers, covering a cross section of sectors and employing 7000 workers or 8% of those employed, to obtain a better understanding of where growth is likely to occur, what occupations and skills will be in greatest demand, where shortages exist either currently or in the future, and the extent to which TVET institutions are or are not providing graduates with the right skills. In addition to company interviews, the Team met with another 20-30 persons from public and private organizations knowledgeable about the Djiboutian economy. The Team also interviewed leading TVET institutions to collect information on what kinds of training is being provided. The Team also used use of various national sources of data and information, including Vision 2035 and the most recently published Enquête Djiboutienne auprès des

Ménages (EDAM) household survey. The Team used several different, complementary approaches for estimating demand for skills and occupations, summarized below.

Occupations and Skill Areas in Demand in Djibouti, Estimated Using Various Methods (In rank priority, greatest first)

1. Potential growth sectors (per employers surveyed, see Table 21)

2. Current occupations (per employers surveyed, current hires or recruits, see Table 22)

3. National labor demand (estimates using Vision 2035 & EDAM household survey, see Table 24)

Port (shipping, clearing, forwarding)

Transport (truck and rail)

Tourism

Agriculture and agribusiness

Fisheries

Construction

ICT

Accounting and finance

Electricians

Marketing, sales, customer service

Mechanics

Drivers

Administrative support

Cleaners, janitors

Carpenters

Cooks

IT specialists

HVAC (incl. refrigeration)

Plumbers

Masons

Fishermen

Sales

Transportation and material moving

Construction

Production

Business and financial operations

Installation, maintenance, and repair

Farming and fishing

Food preparation

Computer

Management

Employers also were requested to list the attitudes, behaviors, skills, and knowledge that they expect from current and prospective employees. As much importance was placed on attitudes, behaviors, and general skills, like communication, as on skills that are specific to the occupations mentioned above. In particular, many indicated the following: punctuality, ability to learn, ability to work with others, flexibility, English, French, general IT skills, physical fitness, and oral and written communication skills.

The above presentation of occupations, technical skills, and soft skills in demand in the economy gives a roadmap for the types of technical vocational education and training that Djiboutian TVET institutions need to offer.

Technical vocational education and training (TVET). The current TVET system at all of levels is insufficiently focused on employment and too much supply driven. TVET service providers use curricula that have been developed based upon training needs assessments of private sector enterprises conducted by specialized curriculum development experts, technical experts and inspectors from the MENFOP. However, curricula remain weak due to insufficient communication with the private sector.

There is a limited use of academic material in TVET. Resources for infrastructure, equipment and materials are inadequate and many programs use outdated equipment. Minimal attention is given in TVET programs to vocational guidance (to help students choose fields that are of interest and fit their strengths), to entrepreneurship training, work habits, work readiness skills, basic literacy and numeracy (for students lacking these competencies), or job placement. Most TVET institutions do little to track the job placement rates of students so have little feedback on how successful their programs are.

TVET programs need to refocus their programs on industry-specific skills development programs for skilled worker positions that are being offered by private-sector enterprises. To do this, TVET programs need to greatly increase linkages to the private sector, not only at a high level, but also at a practical level so that those designing curricula and those teaching have a clear and specific understanding of what skills private-sector firms need. TVET institutions need to increase their focus on: vocational guidance, entrepreneurship training, work habits, work readiness skills, basic literacy and numeracy, on-the-job training (internships), job placement, and tracking of job placement success of graduates.

Greater resources are needed for infrastructure, equipment and materials.

Basic Education. For students to succeed in a modern, twenty-first century economy, the basic education system not only needs to teach the competencies of literacy and numeracy and bodies of core knowledge, but also an interactive and autonomous way of thinking and acting, in life in general and in a job environment. Djibouti’s basic education system struggles to achieve these outcomes and is plagued by numerous problems. There is no clear, progressive, iterative approach to mastering key literacy and numeracy skills in primary schools. Teacher supervision is very rigid, reflecting an education hierarchy that developed with greater focus on implementing centralized standards and rules. The system faces a particular language challenge: Students are for the most part exposed for the first time in their lives to the medium of instruction (French) when they enter 1st grade. Having to acquire essential literacy skills in a second/foreign language presents distinct and severe challenges that must be routinely addressed in the public education system. There are insufficient cultural references to Djiboutian society and typical jobs found in the local economy in texts to link these sources to the real world students live in.

And there is a dire scarcity of education space in the Djibouti public education system—not enough classroom, and student-teacher ratios that are too high for effective learning.

To remedy basic education problems, Djibouti needs to strengthen teaching of essential literacy and numeracy skills, ensure greater presence and representation of key occupations found in current Djiboutian society, and better teach twenty-first century learning skills and work habits in primary/intermediate and secondary curriculum. The assessment Team recommends to introduce basic reading skills in national languages at least during 1st grade as a means of both softening children’s linguistic/cultural transition and aligning their self-concept with the school as an institution. English as a second language should more broadly be introduced in middle school. And it is critical to build new schools to increase classroom space and reduce student-teacher ratios.

The labor regime. The Assessment Team was told by employers that labor relations are not the worst of their constraints, but that there are some significant ambiguities causing conflict and business uncertainty. The labor code was significantly revised in 2006 to reduce the burden on employers, as required by the IMF as part of structural reforms designed to increase foreign investment. The objective was to remove some of the rigidity, allow more flexible recruitment and termination. The 2006 revisions resulted in inconsistencies that still require correction. There is also ambiguity as to the applicable labor law in the Free Zone and the status of foreign employees. This needs to be clarified. The formation of contracts, termination, and various requirements of stamping and registration for labor contracts, the burden of outdated medical and labor inspections and the costs of dispute resolution, also affect efficiency and competitiveness. If applied literally, those provisions could significantly slow production.

These issues all need to be addressed, as well as: improving dispute resolution processes; better protecting against gender discrimination; finalizing and agreeing sectorial collective conventions; setting a reasonable minimum wage; and getting the tripartite process to function better.

Gender. While elementary education integrates males and females, with roughly equal participation, females drop out by middle school and are only 43% of students. Female participation continues to decline as one proceeds through the education system. Vocational training in Djibouti is essentially a system with gender disparities. Males receive industrial training while females receive either commercial sector administrative training or training in low level female dominated professions such as laundry and baking. While there are not formal, systemic barriers to the entry of females into technical industrial training, the practice is that they do not participate. Since the barriers are not so much formal and systemic, a response to this problem needs to be nuanced. Proactive policies and practices are needed to recruit students on a gender neutral basis with efforts to reach female students.

Government skilled labor force expansion plans. There are several key documents in which the GoDj’s labor expansion plans are embedded: Vision 2035, the MOL National Employment Policy, and MENFOP’s Action Plan. These documents vary in the extent to which they provide sufficient detail for action plans, tasks, assignment of responsibility to individuals or agencies, and identification of budget resources. The Team makes recommendations in these areas and on incorporating the recommendations of this report into Government plans. The National Employment Policy Plan is laudable in that it pays as much attention to the needs of the currently unemployed population as it does to the TVET system, and appropriately places a significant emphasis on expanding job opportunities in addition to skills development. While the plan is generally consistent with the findings and recommendations of this report, it appears to rely too heavily on new government interventions, rather than tapping into innovative solutions that involve the private sector.

A Jobs Center as mechanism for supporting workforce development. As part of a comprehensive strategy to develop Djibouti’s workforce with short-term and long-term measures, as a tangible implementation mechanism of the recommendations made in this report and of the action plans of GoDj, the Assessment Team proposes creation of a Djibouti Jobs Center. This proposal seeks to respond to comments made by senior GoDj officials during the assessment, who expressed interest in the creation of some kind of a center, offering a proposal that hopefully would meet the expectations and preferences of GoDj officials and also would provide a mechanism for implementing the recommendations in this report. The center could offer TVET services directly to individual beneficiaries, including direct training in areas clearly in demand by employers, and in providing soft skills training and employment services, as well as strengthening the programs of existing basic education institutions, vocational training and educational institutions, and government agencies.

General recommendations for job creation. The Team’s interviews and analyses also yielded general recommendations for what could be done to increase job creation, in addition to strengthening TVET.

Additional recommendations fall into four areas: (1) internships (‘stages’); (2) job matching; (3) compensation schemes; and (4) business environment. Business environment improvements have been addressed by other donors as well, particularly the IMF and World Bank, and include electricity and telecommunications reform; customs clearance improvement; streamlined business licensing; tax reforms; better water management; and strengthened access to credit.

Toward a workforce that is ready to work. In sum, the recommendations in this report are intended to help Djibouti put into place the basis education, vocational education, labor force regime, plans, and policies needed for producing workers who have the skills that new jobs demand, and who can help drive Djibouti’s growth and prosperity.

INTRODUCTION

Purpose and Scope of the Study

The United States Agency for International Development (USAID)/Djibouti initiated a Workforce Assessment in Djibouti in April 2014. 0F

1 The primary Government of Djibouti (GoDj) counterparts for the assessment are the Ministry of Foreign Affairs and International Cooperation (MAECI), the Ministry of Education and Professional Training (MENFOP) and the Ministry of Labor (MOL). MENFOP and MOL view this assessment as a step in the improvement of workforce readiness skills 1F

2 in youth, which is critical to economic development. The purpose of the assessment is to better understand the job market in Djibouti for skilled workers and to identify strategic USAID interventions to improve Djibouti’s workforce development initiatives and enhance employment opportunities for skilled workers in non-formal and formal sector employment. The assessment focused on the identification of (a) workforce-related literacy, numeracy, and readiness skills as well as technical and behavioral skills; and (b) economic sectors and occupations with the greatest potential for skilled level employment growth, with the goal of contributing to USAID Mission’s education and workforce efforts in Djibouti. The assessment contains the following seven elements:

1. Evaluation of the Basic Education System: Evaluation of primary and secondary schools to determine the drivers of poor academic achievement.

2. Assessment of Technical Vocational Education and Training (TVET): Capacity assessment with a focus on the effectiveness of literacy, numeracy and workforce readiness skills training in public and private TVET institutions to determine their ability to provide the requisite training to meet employer needs.

3. Evaluation of Gender Access to and Success in Education Services: Evaluation to determine gender access and success in participating in education services to identify any inequalities and disparities.

4. Labor Market Supply and Demand, and the Unmet Demand for Skills: Survey of the private sector and identification of sectors with the potential to increase employment opportunities for male and female job seekers, and identification of skill sets required for unskilled, semi-skilled and skilled employment.

5. Evaluation of the GoDj’s Skilled Labor Expansion Plans: Review of the GoDj’s skilled labor force expansion plans including Vision 2035, the MOL’s National Employment Policy and MENFOP’s Action Plan for 2011-2016 and development of recommendations to achieve goals.

6. Analysis of the Labor Regime: Identification of any legal and regulatory impediments to hiring, terminating, and retraining workers, and recommendations to address these issues.

7. A Djibouti Jobs Center as a Mechanism for Providing Assistance: The Assessment Team proposes the creation of a Djibouti Jobs Center as a tangible implementation mechanism to develop Djibouti’s workforce.

1 The assessment was undertaken for USAID by International Development Group LLC (IDG), under Contract AID-

OAA-I-12-00042, Task Order AID-603-TO-14-00001. Team Members were: Jeffrey Tines, Team Leader and Vocational Education Expert; Christopher Fagueret, Basic Education Expert; Richard Rousseau, Labor Economist;

Lena Zezulin, Labor Lawyer; David Snelbecker, Engagement Manager; and Abdallah Hamadou and Madina Oudoum, Project Assistants.

Basic life skills are also called workforce readiness skills in this context and are limited to skills such as problem solving, critical thinking, communication, interpersonal, decision-making, etc.

Each section presents an analysis followed by recommendations for donors and the GoDj for strengthening the education system to better support labor market demands.

Methodology

The Assessment Team took the following steps:

1. Reviewed authoritative reports on government and donor programming strategies; status of youth; and other relevant documents;

2. Met with: (i) USAID officials and staff from other international development organizations; (ii) government representatives from key ministries, departments, agencies, and programs; (iii) representatives from the private sector across key economic sectors; and (iv) representatives from primary and secondary schools; (v) TVET centers and employment-related service providers; and (vi) representatives from public and private employment service providers.

3. Conducted (i) structured focus groups with unemployed youth and youth in vocational education and training centers; and (ii) structured interviews with the key stakeholders: private-sector companies, vocational training service providers, and employment service providers. (The detailed Scope of Work is attached in Annex 1. A list of meetings conducted is attached in Annex 3.)

4. Conducted a review of the Labor Code and representative labor regulations, collective conventions and enterprise agreements.

Prior to meeting with private sector companies across the different economic sectors, a meeting was held with the Chamber of Commerce to obtain relevant information on the local business community.

The Chamber of Commerce provided information on local economic activities as well as private-sector and government investment trends. The Assessment Team also met with the government ministries such as the Ministry of Education and Professional Training and the MOL to obtain access to primary and secondary schools, technical and vocational education and training centers, employment-service centers and employment inspectorates. These same government ministries assisted in the identification of youth who participated in the in-school and out-of-school unemployed youth focus groups. Focus group discussions, as well as individual and group interviews with key stakeholders, were conducted during a four week period from April 14 to May 8, 2014.

Representatives of stakeholder groups were identified in the following manner. First, non-formal and formal service providers that provide primary and secondary education classes, TVET, or employment-related services were identified with the assistance of the different government ministries. Second, local private-sector enterprises were identified randomly from a list of enterprises provided the Chamber of Commerce for those sectors that have the greatest potential for semi-skilled and skilled workers. Both central trade unions were interviewed as well.

CONTEXT AND BACKGROUND

Overview

Djibouti is a lower middle income country with a gross domestic product (GDP) of $1.283 billion in 20112F

3. Djibouti is in the low human development category according to the UNDP with a ranking of just 164 out of 186 countries. It is plagued by persistently high unemployment and poverty. According to the latest household survey conducted in 2012, the unemployment rate was 48.4%, while extreme poverty stood at 41.9% of the population and relative poverty at 79.4% 3F

4. The country ranks 169 out of 184 countries in the 2014 Doing Business Report published by the World Bank Djibouti (it is not covered by the World Competitiveness Report). The Doing Business Report compares the country with its immediate neighbors, Ethiopia and Eritrea, and other selected neighboring countries that are, like Djibouti, members of the Arab League4F

5.

Table 1: Djibouti’s ‘Doing Business 2014’ ranking out of 189 countries 5F

Country Ranking

UAE 23

Saudi Arabia 26

Oman 47

Regional Average (Middle East & North Africa) 107

Ethiopia 125

Egypt 128

Djibouti 160

Eritrea 184

While its overall ranking increased by 12 places on the Doing Business index from 2013 to 2014, Djibouti still ranked 127 or lower on 8 of the ten criteria measured 6F

7.

It should be noted at the outset that current reliable data on the economy and labor market is difficult to obtain. For example, the last published IMF Article IV consultation dates back to 2008. The IMF withdrew from Djibouti 2007-2011. The GoDj has not yet authorized publication of the results of the latest 2013 consultation. The primary Djiboutian organization responsible for the publication of economic statistics is the Department of Statistics and Demographic Studies (DISED), recently transferred from the Ministry of Economy and Finance to a new Secretary of State for Statistics. The Assessment Team met with DISED at the beginning of the visit to Djibouti. DISED collects, analyzes, compiles, and publishes data collected by various line ministries and government agencies, including the Central Bank, which is the source for sectorial data on GDP. DISED is also responsible for periodic

World Statistics Pocketbook, UNData, 2013.

Profile de la Pauvreté en République de Djibouti, 2012, DISED, September 2012.

Djibouti joined the Arab League in 1977; one of its two official languages is Arabic (the other being French).

‘Doing Business 2014’, World Bank, 2014.

Starting a business (127), construction permits (157), getting electricity (144), registering property (133), getting credit (180), protecting investors (182), paying taxes (66), trading across borders (66), enforcing contracts (163), resolving insolvency (147).

census taking, the most recent of which was in 2009, and household surveys, referred to in French as EDAM (Enquête Djiboutienne auprès des Ménages). The last survey was conducted in 2012, and selected information from that survey is included in a September 2012 publication that profiles poverty in Djibouti7F

8.

Recent Economic Trends

The Djiboutian economy grew nominally at an average annual growth rate of close to 10.2% during the five year period 2007-2012, according to detailed data published in the Central Bank’s 2013 Annual Report and summarized in the table below. Real GDP growth during this period was about 4% after inflation, which the Central Bank reported as averaging 6-7% over this period. The World Bank’s ‘Country Partnership Strategy’ released in March 2014 reports real economic growth over the somewhat shorter period of 2009 to 2012 at 4.5%. Given that the population is still growing rapidly at approximately 2.8% per year, real per capita GDP growth was barely above 2% per annum over this period. The IMF estimates that real growth needs to be at least 8% per year to bring down unemployment rates that remain stubbornly high.

Table 2: GDP 2007-2012 (millions Djiboutian Francs) 8F

# Sectors 2007 2008 2009 2010 2011 2012

% of

GDP

2012 at Factor Cost

% of Growth 2007-

1.0

Primary:

Agriculture, livestock, fisheries, forests 5,475 6,089 6,537 6,764 7,238 7,587 3.5% 2.5%

2.0 Secondary: 24,078 30,979 33,102 36,974 41,771 46,180 21.1% 26.3%

2.1 Industry 3,643 3,924 4,217 4,761 5,298 5,604 2.6% 2.3%

2.2 Construction 12,744 18,769 20,326 22,998 26,481 30,177 13.8% 20.7%

2.3 Electricity and Water 7,691 8,286 8,559 9,215 9,992 10,399 4.8% 3.2%

3.0 Tertiary: 104,880 120,273 128,814 137,389 150,666 164,811 75.4% 71.2%

3.1 Commerce and Tourism 25,983 29,376 31,512 33,584 36,898 41,238 18.9% 18.1%

3.2 Transport and Communication 36,027 43,785 47,772 50,846 56,407 61,276 28.0% 30.0%

3.3 Banks and Insurance 17,905 21,638 23,273 25,816 28,304 30,878 14.1% 15.4%

3.4 Non-market Services9F

22,478 22,789 23,457 24,157 25,763 27,794 12.7% 6.3%

Profile de la Pauvreté, DISED, 9/2012.

Central Bank 2013 Annual Report, Central Bank of Djibouti, 2014.

Primarily government administration plus private, non-profit organizations.

3.5 Other Market Services 2,487 2,685 2,800 2,986 3,294 3,625 1.7% 1.4%

GDP at Factor Cost 134,433 157,341 168,453 181,127 199,675 218,578 100.0% 100.0%

Transport and communication (30%), which includes the existing port activity, construction which includes several new ports (20.7%), and commerce and tourism (18.1%) were the best performing sectors in terms of growth, contributing almost 70% of all growth in the economy over the period from 2007 to 2012.

Current Structure of the Economy, Labor Markets, and Poverty

The Djiboutian economy is dominated by the tertiary, or service, sector that accounts for 75% of total income. Construction dominated the secondary, or industrial, sector. There is little other manufacturing or transformation. One of the few major companies involved in transformation is the Coca-Cola bottling plant, which produces its own bottles, soft drinks, and water. Much of the primary, or agricultural, sector is small scale farming (fruits and vegetables) and livestock raising for personal consumption.10F

One notable exception is a relatively sophisticated fishing company described in the employer interviews section of the report.

According to the Chamber of Commerce there were a total of 3,435 enterprises in Djibouti as of September 201211F

12. The sectorial breakdown was: agriculture (23); industry (28); construction (469); and services (2,915). There are 210 companies operating in the Free Zone, all of which except two are engage in service activities, including trading, storage, transport, and logistics. The two non-service companies were listed as engaged in fishing and canning, and industrial maintenance/repair of containers. The service sector is dominant, with the government accounting for 41% of total employment in both the formal and informal sectors. The following estimates of employment by sector are based on percentage estimates of employment by sector included in the DISED 2012 household survey, EDAM3-IS.

Table 3: Employment by Sector (% and Estimated Totals) 12F

Sector % Total

Primary: 2.3% 3,516

Agriculture, Livestock, Forestry 1.6% 2,446

Fisheries 0.7% 1,070

Secondary: Industry 10.6% 16,205

Extractive Industries 0.3% 459

11 According to ‘Vision 2035’, local production of fruits and vegetables covers around 10% of local consumption.

Membership in the Chamber of Commerce is mandatory for all enterprises outside the Free Zone. Some of the companies operating within the Free Zone are also members, although one foreign company operating in the zone indicated that it is not a member.

EDAM3-IS/2012, DISED, 2012. Employment by sector is estimated from percentages in the DISED household survey multiplied by total estimate employment of 152,879 from UNDP provided supplemental documents at April 16, 2014 employment workshop. The Team asked DISED to verify the total of 152,879 in writing on May 4, 2014.

Food, Beverages, Tobacco 2.7% 4,128

Manufacturing 0.7% 1,070

Water, Electricity, Gas 1.5% 2,293

Construction (‘Bâtiments et travaux publics’) 5.4% 8,255

Tertiary: Services 87.1% 133,158

Commerce 13.1% 20,027

Restaurants and Hotels 1.9% 2,905

Transport & communications 5.8% 8,867

Finance (‘Banques, assurances et autres établissements financiers’) 2.1% 3,210

Other Market Sectors 2.5% 3,822

Domestic Services 6.7% 10,243

Public Administration 41.0% 62,680

Private Administration 12.0% 18,345

International organizations, Embassies, and Consulates 1.4% 2,140

Other 0.6% 917

Total 100% 152,879

Source : EDAM3-IS/2012

It is difficult to analyze the Djiboutian labor market using traditional measures such as the unemployment and labor force participation rates due to the lack of frequent employer and household surveys and published data.

Calculations of the unemployment rate provided to the Assessment Team ranged from a low of 27% (EDAM3-IS/2012 household survey using the internationally accepted and rigorous ILO definition of employed persons and job seekers), to 48% (EDAM3-IS/2012 using a broader definition of job seekers), to a high of 60.7% quoted in a 2012 study by JICA13F

14. Using the estimated number of employed and unemployed persons in 2012 provided by UNDP and attributed to DISED, the Assessment Team constructed the following estimated breakdown of the population according to work status. Anecdotal evidence provided at the beginning of the assessment indicated that one Djiboutian worker supports ten family members; according to our calculations, this number is closer to one worker for every six persons, as shown below.

Table 4: Work Status of Djiboutians, 2012 Estimates 14F

1 Employed 152,879 17%

2 Unemployed 141,973 16%

Etude sur le marché de l’emploi Des secteurs informels et formels, JICA, Juin 2012.

Zerbo, Adama and Kamil, Ali Mohamed, Processus de Formulation de la Politique Nationale de l’Emploi:

Diagnostic de l’Emploi en République de Djibouti, March 2014 UNDP. our estimated population of 888,827 (also used by UNDP) should be accurate based on the following analysis. According to the ‘Annuaire Statistique’ published by DISED in 2012, the population in 2009 was 818,159: ‘La République de Djibouti a réalisé son 2ème Recensement Général de la Population et de l’Habitat (RGPH) en 2009, après celui de 1983 dont les résultats n’avaient pas été publiés. Selon les résultats du 2ème RGPH, la population résidente totale est de 818 159 habitants’. Using the official population growth rate of 2.8% per year, population reaches 888,827 in 2012.

Workforce (1+2) 294,852 33%

3 Not seeking employment 15F

16 229,556 26%

Working age (1+2+3) 524,408 59%

4 Population <16 364,419 41%

Total Population 2012 (1+2+3+4) 888,827 100%

Figure 1: Work Status of Djiboutians as % of Total Population

Making use of the same data from the UNDP, the following additional charts provide, respectively, a breakdown of the working age population by participation status (yielding the labor force participation rate), and a breakdown of the labor force by employment status (yielding the unemployment rate).

Figure 2: Labor Force Participation (>=16 years)

Represents the difference between the working age population and the workforce. N.B The terms workforce and labor force are used interchangeably throughout this report. Both terms refer to the number of persons employed plus the number of persons actively looking for employment.

Employed 17%

Unemployed 16%

Not seeking employment

26%

Population <15 41%

Labor Force 56%

Working age, not seeking employment

44%

Figure 3: Unemployment

Interviews conducted by the Assessment Team with a cross-section of employers highlighted a number of challenges, in addition to the availability of skilled labor, that are having a negative impact on economic growth and job creation. The high costs of doing business in Djibouti, especially for energy, communications, and labor, were frequently cited as constraints to growth. Future job growth in Djibouti will continue to be concentrated in the services sectors, driven by the dynamic and expanding ports and ancillary activities. The ports should have a significant multiplier effect on local goods and services industries that can also be important sources of job growth. Interventions are needed to prepare the Djiboutian workforce with the literacy, numeracy and work readiness skills to take advantage of these opportunities. The assessment next addresses the preparation of the workforce, through both basic education and vocational training, and identifies weaknesses in those areas.

Employed 52%

Unemployed 48%

BASIC EDUCATION SYSTEM

Introduction

Education Reform in Progress

This section is the result of site visits to five primary schools and four intermediate schools, six professional interviews with senior education management, plus a desk review of relevant studies, assessments and other data related to the Djiboutian educational system. The objective was to determine the drivers of poor academic achievement that affect workforce preparation. As governments around the world are seeking ways to improve student achievement to respond to growing public recognition of the importance of education for individual and societal progress and success, Djibouti continues its own initiatives to reach ambitious education improvement goals initially formulated in 1999. Although results obtained thus far by the country’s MENFOP have been generally rated as mixed by a range of recent international assessments, the government remains determined in its goal of achieving a range of objectives by the target date of 2016. To that end, MENFOP has recently drafted a revised action plan 16F

17 for its entire primary and secondary education system, inclusive of all professional training streams. The new action plan’s stated outcomes focus decisively on the following:

Improve the education system’s qualitative and quantitative performances in terms of access, equity, retention and learning;

Achieve a better match between education and training and people and regions’ diverse needs;

Ensure access to professional and technical training and quality of training meet both youths’ expectations and workplace requirements;

Finalize curricular reform already undertaken as part of the larger learning program content improvement; and

Arrive at more efficient and effective management of the education and training systems.

The action plan lists many areas of intervention and a comprehensive range of activities, names target programs and assigns responsibilities within MENFOP. However, the plan is silent on the key question of funding that would assure five-year implementation; in effect, the plan remains a policy document that informs and guides future ministry action through the last stages of education reform implementation but stops short of mobilizing government and/or donor resources that will ensure its realization.

It is in that light that the GoDj’s concurrent request for funding to the Global Partnership for Education (GPE) should be noted. Because the country has been lagging behind in its quest to reach the Millennium Goals in Education (Education For All [EFA], 2015), its recourse to additional funding through GPE is based on the premise that increased direct investment at the classroom level will result in improved systemic student assessment capacity, thereby building teachers’ and system’s capacity to engage in real time follow up of student performance. In other words, GPE’s additional funding should facilitate the final implementation stages of education reform in Djibouti through bottom-up school-based intervention rather than top-down mandated action as had too often been the rule to date. Such approach is in line with current education reform implementation world-wide and is proven to result in higher, more substantive success.

Plan d’Action de l’Education et de la Formation Professionnelle 2011-2016 – PAE.

MENFOP’s PAE 2014-1026 was further assessed for GPE’s endorsement on July 22, 2013. In the ensuing report, a number of risks have been clearly identified and are relevant to the present review:

As underlined above, costs remain high especially those associated with school construction, a cost item that is preponderant in view of a dire lack of learning spaces in Djibouti schools;

Objectives set may be overly optimistic especially as they relate to improvement of numeracy and literacy skills;

Government should reconsider its continued support for private primary/intermediate education in view of its high cost;

Government education funding has been shrinking as a percentage of the overall budget, which could have negative implications in the future;

Although responsibilities have been assigned, accountability remains weak for the most part and will continue to slow down quality improvement throughout reform implementation; the most notable domains being literacy and numeracy but also more fundamental areas such as universal access that has effectively been dropped for Horizon 202017F

18 as shown in table below.

Table 5: Selected PAE indicators 18F

INDICATORS TARGET 2013 2016

Learning Results

% autonomous readers after 2 years of schooling 100 10 75

% students able to read by end of primary years 100 25 75

Student Access

Primary 100 77 82

Girls 100 NA NA

Boys 100 NA NA

Student Movement

Primary completion rate 100 66 74

% repeaters in primary years < 10 8.8 7.2

Special Educational Services

% students in private schools <10 12.1 12.5

Persisting Problems

Although Djibouti’s national education reform has made important steps forward over the last fifteen years, the system continues to experience persisting problems. Although Djibouti is on track to eliminate gender disparity in primary education by 2015, one out of every four children is not enrolled in school (see Table 5 above). This is largely the result of low enrollment rates among the poorest inhabitants of rural areas. Of the children who are enrolled, the repetition rate for the final year of primary education remains as high as 23%. Girls generally represent a minority of first-year enrollments in basic education (45%). The reform’s focus continues to be improving quality, making learning relevant and reducing

18 Some countries that did not meet their development targets through implementation of Education For All (EFA) 2015 have deferred them to what has been referred to as Horizon 2020, effectively giving themselves an additional 5 years to meet the EFA targets (albeit with a 5-year delay). Djibouti is not on-track to meet its EFA 2015 targets and has not officially deferred them to 2020. As a result, it is unlikely that Djibouti will meet the objective of universal access to primary school by 2020.

PAE Assessment 2013 – page 26.

disparities. It will also seek to improve girl-boy parity in the transition from intermediate to secondary school and advocate for the systematic involvement of communities in educational projects.

As the reform has unfolded first through the primary school years (1-5), then the intermediate school (6- 9), the child-friendly school initiative has promoted learning quality and student-centered teaching methods while improving the learning environment. Specific projects have included teacher training initiatives, production and provision of textbooks and better teaching methods. They include the development and support of safe, healthy, more caring and engaging learning environments through the teaching of basic life skills, good hygiene practices, and access to drinking water and separate latrines for boys and girls.

Competency Approach

The essential novelty brought by the 1999 education reform resides in the adoption of a new approach to learning organized according to competencies in the different disciplines. Students are deemed “competent” when they have internalized a sum of concepts (knowledge, know-how, attitudes, procedures, etc.) and especially when they are able to mobilize them to resolve a concrete problem-situation. In such perspective, this approach pursues three key objectives 19F

20. First, teachers focus their pedagogical effort on what students must master by the end of the academic year rather than what they have to teach. Their role has now become one of how to best organize learning so that students will reach the expected level of mastery. Second, teachers must give meaning to all learning proposed:

learning must occur in situ so that young learners will relate their different understandings into a coherent and sequential march towards…