KIS Consultancy الرحيم نالرحم الله بسم يي

Jan 2016 Issue #006

www.kisconsultants.net

Bridging the Unemployment Gap

through Higher Education Partnerships

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The Origins

Sudan’s economy was hit hard since the southern part of the country declared independence in

July 2011, taking with it about 75% of the country’s oil output.

Once the largest country in Africa, even in its diminished state Sudan holds the potential to be an economic powerhouse. Sudan sits at the crossroads of sub-Saharan Africa and the Middle East, with fertile lands and abundant livestock, and some remaining natural resources (oil and gold), which make it the third largest economy in North Africa (after Egypt and Morocco) and the largest economy in the greater eastern Africa region

Sudan’s Economic Structural Change

Sudan is currently undergoing economic structural change to counter the impacts of the loss of land and wealth by diversifying into agriculture, manufacturing and services sector.

The sectoral structure of Sudan’s economy shows the growing importance of agriculture, less importance of extractives, and relative stability of other sectors (manufacturing, services) by 2030.

The ability to provide public services relates to the ability of governments to invest into the human capital of the younger generation and to build infrastructure that can be used for forward-looking economic activities in the long term.

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Sectoral changes by 2030 include:

The main sectoral changes by 2030 include

Increased prominence for the agricultural sector; its shares in exports, value-added, and employment all increase (most dramatically for exports) while its share in total imports falls and imports meet a smaller share of domestic demand for agricultural products;

Reduced importance for extractives, especially in exports but also in value added and employment, combined with increased reliance on imports to meet domestic demands;

Increased shares in total exports and imports of manufactured goods

Figure 1 - Sudan’s Economic Structural change after secession of the South.

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Sudan’s Youth Unemployment Rates Figure 2 – Sudan’s Youth Unemployment compared to neighbouring countries.

Source: World Bank

Sudan suffers from particularly high youth unemployment: new labor market entrants, those around 20 years of age, face an unemployment rate of around 24 %. Comparison with the peer group countries shows that Sudan’s youth unemployment rate is the second highest after Egypt.

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Poverty Rates

Poverty in Sudan ranges from 26 % in Khartoum state to 62.7% in Darfur.

The incidence of poverty in urban areas, particularly Khartoum, is significantly lower than that of the rural areas. Rural areas are more than two and half times as poor as the capital and almost twice as poor as the rest of the urban areas. Rural areas account for over 60% of the Sudanese population and account for almost 80% of Sudan’s poor. For the rural population, any poverty reduction strategy needs to build on agricultural growth, while at the same time considering creation of off-farm employment opportunities.

Figure 3 – Poverty and Education in Sudan

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Poverty Reduction through Education

The actual impact of economic growth on poverty reduction and income inequality depends on the sectoral composition of growth. Supporting growth in certain labour intensive sectors of the economy such as agriculture, construction and manufacturing can have greater effect on reducing poverty compared to other less labour intensive sector like mining, utilities and services. Economic growth in the agricultural sector is particularly powerful to alleviate poverty and works in two ways:

First, through a reduction of unemployment and greater engagement of the labor force;

and second, by raising the incomes in agriculture that may reduce the income inequality.

Employment by Sector

Figure 4 – Employment by Sector in Sudan, Source: World Bank report 2015

Employment patterns differ between rural and urban areas.

Agriculture accounts for 50 % of rural employment and 5.5 % of urban employment.

Services account for most urban jobs (74.6%) but are also important in rural areas (39.1 %).

Employment in manufacturing and industry are more common in urban areas (3.1% and 16.8 %, respectively)

Employment in manufacturing 1% and industry 9.8% in Rural areas.

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Manufacturing and mining account for extremely small shares of employment in both young and old groups but could have strong growth potential with the correct transfer of knowledge and skills.

Sudan’s Education and Employment Sector

Figure 5 - Education Breakdown of Employment by Economic Sector, % of Total. % of Total

Figure 6 – Education Breakdown by Employment of Economic Sector in Sudan. % of Total

There is a substantial skill differential and gap across sectors. The ratio of workers with secondary or post-secondary education to workers with no or primary education is highest in manufacturing (0.94), followed by services (0.96) and non-manufacturing industry (0.73), with agriculture scoring far lower (0.12). This has clear implications for economic transformation. Raising employment in the manufacturing and non-manufacturing industry sectors is likely to require substantial increases in higher education levels.

Individuals aged 20–29 have substantially higher levels of education: one in ten has some post-secondary education and a further one in three has some secondary education.

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At present younger workers are no more likely to work in industry, manufacturing, or services than their older compatriots, indicating that there is little current capitalization on this opportunity. Successful economic development has typically been accompanied by structural transformation, in which manufacturing and industry’s share of output and employment rises at the expense of agriculture (McMillan and Rodrik, 2011). Manufacturing and industry typically display higher productivity, higher wages, and faster rates of technology adoption. Sudan’s challenge is to find ways to grow these sectors, and particularly to shift younger and more educated workers into higher productivity jobs.

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Transfer of Knowledge

In order to improve the overall value added of employed personnel and reduce the unemployment rate and the process of poverty reduction the “ingredients of growth” need to be established. The “ingredients of growth” generally refer to domestic policies that can be leveraged through an open international environment and developing skills and integration.

The result of the spread of new technology and know-how in the domestic economies substantially reduces the cost of acquiring new technology and know-how. This in turn will help Sudan develop their own competitive technologies and products, which supports the goal of product diversification and structural change in the economy.

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From Education to Employment

Weaknesses in primary, secondary, and tertiary education limit the ability of students to acquire professional skills. Factors related to education, domestic regulation, trade, and labor mobility explain skills shortages and skills mismatches in professional services in Sudan. From a regional perspective, enrollment in higher education is higher in Sudan than in other Sub- Saharan African countries and is similar to that in Middle Eastern and North African countries, but the education sector shows weak learning outcomes at all levels (World Bank 2015). Given the relatively high enrollment rate in higher education, it is important that students acquire the skills that match those needed by the labor market. Sudan could leverage earlier progress made in the education sector. For example, its success at increasing enrollment at the primary and secondary levels generates growing demand for vocational and higher education. The absence of links between educational systems, employers, and users of services prevents young graduates from acquiring market relevant skills. Figure 7 - Framework for exploring the education to employment system.

Source: McKinsey and Company

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Several stakeholders from the private sector have emphasized the coordination problems between employers, professional associations, and education institutions in the content of educational programs for engineers and accountants. Policy actions to encourage collaboration between universities, professional associations, and the private sector (for example through internships) could help students acquire skills and practical training. Such collaborative actions are required to better understand and strengthen the links between the curricula and the skills required to support the expansion and diversification of the economy. The requirements for medium- and high-level skills in more sophisticated business services need to feature in Sudan’s Education sector plan to mobilize both internal and external financing.

Partnerships for development Partnerships for development aim to develop the capacity of higher education institutions within developing countries to accelerate poverty reduction in local and national context and to promote sustainable development. Many partnerships focus on how the African institutions can develop and integrate strategies that will increase access for students, introduce new degree courses, improve teaching and learning quality and enhance research outputs. They are often funded by providers of overseas development assistance such as the Department for International Development, United Kingdom. The types of activities of a partnership can be categorised into either research or teaching. Please see Figure 8.

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Figure 8 - Types of previous UK-Africa Partnership funded by the UK Department for

International Development

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Higher Education Partnerships An effective educational partnership is a dynamic collaborative process between educational institutions that brings mutual though not necessarily symmetrical benefits to the parties engaged in the partnership. Partners share ownership of the projects. Their relationship is based on respect, trust, transparency and reciprocity. They understand each other’s cultural and working environment. Decisions are taken jointly after real negotiations take place between the partners. Each partner is open and clear about what they are bringing to the partnership and what their expectations are from it. Successful partnerships tend to change and evolve over time. For a partnership to be deemed effective, the type and number of outcomes a partnership produces is often commonly recognised as the key indicator. Such outcomes include

improved curricula

increased research publications

additional research projects For partnerships to become well established and sustainable, they need to demonstrate how they (a) fit in with a university’s overall strategy and (b) have the support of a wide range of staff. Partnerships need to be based on mutuality to ensure:

• incentives and benefits are explicitly defined and relevant to both partners based on a thorough understanding of the different institutional, economic and cultural contexts

• a willingness to share decision-making equally between the partners • efforts to build trust, as a basis for self-reflective approaches to assessing and evaluating

the achievements and challenges of the partnership and what the residual benefits have been in both institutions.

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Linking Students to Employment A survey by Mckinsey and Company of more than 8,000 education providers, youth, and employers across nine OECD countries discovered that improving graduate opportunities was a priority for education providers. Figure 11 – Improving graduate employment priority rank. Source: Mckinsey Survey

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Knowledge Transfer Partnerships – Business/University/Associate Knowledge Transfer Partnerships are designed to include business into the partnership formulae in order to expose students to field experience and enable businesses to benefit from student research output. Knowledge Transfer Partnerships are mutually beneficial for three partners - the business, knowledge base partner (univerisites), and the associate(s). The aim of the Knowledge Transfer Partnership is to: “strengthen the competitiveness, wealth creation and economic performance of the Sudan by the enhancement of knowledge and skills and the stimulation of innovation through collaborative projects between business and the local universities”

The associate (a master’s or PhD student) at the University is supported to work in the business on a project identified as being of strategic importance - a real life project to address a business challenge. Each Knowledge Transfer Partnership employs one or more associates which helps the business to gain the knowledge and capability it needs to innovate and grow. Associates are employed by the University, but are fully embedded within the business. Knowledge Transfer Partnership associates are supervised by an academic supervisor who is expected to spend one half day per week on the business premises to assist the associate with the project. The associate also has a business supervisor which ensures they have access to the resources they need within the business.

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Why Get Involved? Knowledge Transfer Partnerships are designed to be mutually beneficial for all three partners - the business, the university, and the associate(s). The model recognises the importance of both codified and tacit knowledge, and is based on the understanding that successful knowledge transfer depends fundamentally on people. These drivers are at stimulating knowledge transfer and innovation in companies. The relationship formed between the business and the university, facilitated by the associate, allows the transfer of knowledge, technology and skills to the company.

A Knowledge Transfer Partnership will:

facilitate the transfer of knowledge and the spread of technical and business skills, through innovation projects undertaken by high calibre, recently qualified people under the joint supervision of personnel from business and the knowledge base;

provide company-based training for the KTP associate in order to enhance their business and specialist skills within the context of the project;

stimulate and enhance business relevant education and research undertaken by the knowledge base; and

increase the extent of interactions by businesses with the knowledge base and their awareness of the contribution the knowledge base can make to business development and growth.

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Programme Outcomes 1. Business - deliver significant increased profitability for businesses through improved quality and operations, increased sales and access to new markets - in particular embed new skills and improved capability.

2. Knowledge Base - from an academic partner’s perspective, benefits centre on the application of knowledge and expertise to important business problems, contributing to the Research Excellence Framework (REF) and developing business-relevant teaching and research materials.

3. Associate(University Master/PhD student) - the main benefits are considered to be fast track career development opportunities, a competitive salary, employment within chosen academic discipline, training and development, opportunity to register for higher degree during project, and many are offered employment by host companies. Figure 10 – Collaboration relationship between business and universities –

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Conclusion Sudan is still suffering from the economic and fiscal effects that were a result of the secession of South Sudan in 2011. With the secession, the country lost about 75 % of its revenues and most of its predominant economic activity: crude oil exports. Sudan’s structural economic policy has since attempted to diversify its economy into other sectors such as agriculture, light industry, services and manufacturing in order to mitigate the gross effects of the loss of wealth. Large capital and material resources have been invested into agricultural sector, which now employs close to half of Sudans working population. Similar advances are projected into the manufacturing, services and construction sectors as a means of generating wealth and employment. However material and capital resources need to be coupled with effective human investment into local capacity building. Through the aiding of higher education institutions, skills and knowledge can be harnessed to produce a pool of capable talent for the rapidly diversifying economy. According to World Bank report Sudan’s unemployment rate amongst graduates with higher education degrees is approximately 25.5% - one of the highest in the Africa. Partnerships that promote the sharing of knowledge through higher education partnerships and collaboration with businesses are fundamental to raising education quality standards and relevance of taught courses for potential employers. Partnership programs have proven records of improving student retention at higher education institutions and enhance employment prospects to graduates considerably- key ingredients to reducing unemployment, reducing poverty and securing economic stability for generations to come.