RIFA - Réseau Interrégional pour l’Adaptation de la Formation
Technique et Professionnelle aux Besoins de l’Artisanat
Interregional study
Vocational Education and Training
(VET) in the Informal Sector
Côte d’Ivoire, Benin, Brazil, Morocco, Honduras, Guatemala,
by
Fabienne A. Baumann and Jens Kayser
Bfz gGmbH
International Division
2012
This project is funded by
The European Union
A project implemented by
sequa gGmbH
Content
Introduction ........................................................................................................................................ 1
1. In brief: the socio-economic background of the participating RIFA countries ...................... 2
2.The informal sector................................................................................................................ 3
2.2 The informal sector in Western Africa - General insights ................................................... 5
2.2.1 Benin ..................................................................................................................................... 6
2.2.2 Côte d’Ivoire ........................................................................................................................ 7
2.2.3 Morocco................................................................................................................................ 7
2.3 The informal sector in Latin America - General insights ..................................................... 8
2.4 The informal sector in the RIFA target and partner countries- Results of the survey ....... 10
2.5 Formalizing the informal sector – the case of Brazil ......................................................... 13
3. Vocational Education and Training in the informal sector .................................................. 14
3.1 Skills: How they are delivered and why they matter ......................................................... 14
3.2 Results of the Survey ....................................................................................................... 16
3.3 Opinions and recommendations……………………………………………………………….18
3.4 Possibilities for knowledge transfer: Approaches to VET in the informal sector exemplified
............................................................................................................................................... 19
3.4.1 Benin ................................................................................................................................... 19
3.4.2 Côte d’Ivoire ...................................................................................................................... 20
3.4.3 Morocco.............................................................................................................................. 20
4. Concluding remarks ........................................................................................................... 21
References ...................................................................................................................................... 23
1
Introduction
RIFA is the French acronym for Inter-regional Network for the Adaptation of Technical and Vocational
Education to the Needs of the Craft Sector (Reseau Inter-Regional pour l'adaptation de la formation
professionnelle et technique aux besoin de l'Artisanat). The EU-funded project aims to create a network for the improvement of vocational training in the craft sector in the target countries, which will
primarily help to adapt the content and structure of vocational training needs of enterprises. In the
process, local conditions will be taken into account. The target countries are three francophone countries in West Africa: Morocco, Benin and Côte d'Ivoire.
These countries show very different structures of vocational education and training (VET). While there
are already first steps towards a ‘dual system’1 in Morocco and Benin, training centers are the predominant providers of VET in Côte d'Ivoire. In all three countries, the vast majority of workers in the crafts
and trades work in the informal sector. In addition to the three target countries, there are associated
project partners from Latin America. These partner institutions comprise facilities of professional training or business associations from Brazil (CACB), Honduras (IPC), Guatemala (INTECAP) and El Salvador (CCIES).
Following the idea of South-South cooperation, the associate partners are to share their experience
and knowledge concerning training provision and education with the partners from the African countries. During the course of the RIFA-project, these activities are taking place in four conferences and
workshops in Abidjan, Côte d’Ivoire (March 2010), Curitiba, Brazil (December 2010), Fez, Morocco
(September 2011), Frankfurt/Main, Germany (2012) and Benin (2013).
The workshops will not only facilitate the transfer of knowledge, but also create synergies for both
sides as representatives of all participating countries have the opportunity to capture the situation of
vocational education and training on the basis of six themes. These topics were jointly identified during
the first workshop in Abidjan (Côte d'Ivoire).
Within the framework of the project, these six priority themes will be transformed into analytical studies: one national study for each participating African country and one interregional and comparative
analytical study according to each topic. The studies are based on three sources of information. First,
questionnaires with identical questions are sent to the partners in each participating country to obtain
country specific information. Due to the identical questions for each country, the answers can easily be
compared to each other. The on-site workshops in which the participants from all participating countries analyze the strengths and weaknesses of their system of vocational education in relation to the
respective theme represent the second source. Third, additional information is drawn from existing
research and other sources. However, the results from the questionnaires and workshops, where experts from the participating countries directly share their experience, remain paramount.
This document includes the study on "Vocational Education and Training in the informal sector". First,
a very brief outline of the socio-economic background of the respective regions of the RIFA countries
is given. An introduction to the concept of ‘informal sector’ is then followed by a characterization of the
informal sector in Africa and Latin America in general as well as in the RIFA target countries Benin,
Côte d’Ivoire and Morocco. The RIFA survey on VET and the informal sector revealed a distinct situation in Brazil which will be outlined concluding the third chapter. Among the RIFA project countries,
Brazil often serves as a role model, and this is again true for the Brazilian approach of improving the
situation of its informal workers by initiating a comprehensive program for eliminating the informal sector as a whole. The third chapter deals with training in the informal sector, includes the results of the
RIFA surveys and a brief presentation of some distinct approaches in the RIFA target countries. Also
in the third chapter, one can find the ideas and recommendations collected from the study.
1 ‘Dual system’ refers to the delivery of VET in two learning locations: a business or company and a vocational
school. 2
1. In brief: the socio-economic background of the participating RIFA countries
The following chapter provides a brief outline of the socio-economic development in the African region
and in Latin America with indicators commonly associated with the informal sector. Find below an
overview of the most recent rankings concerning the Human Development Index HDI2 and the share
the informal sector has of the Gross Domestic Product (GDP) in the respective countries.
HDI
% of informal sector in GDP
Benin 0.4 (Rank 167)
Benin 45.2%
Brazil 0.7 (Rank 84)
Côte d’Ivoire 39.9%
Côte d’Ivoire 0.4 (170)
Brazil 39.8%
Guatemala 0.5 (Rank 131)
Guatemala 51.5%
El Salvador 0.6 (Rank 105)
El Salvador - no data available
Honduras 0.6 (Rank 121)
Honduras 49.6%
Morocco 0.6 (130)
Morocco 36.4%
(UNDP, 2011)
(World Bank, 2002)
According to the latest economic outlook for Africa, the region has started to recover from the global
economic downturn caused by the recession. Africa’s average growth rate was at 4.9 per cent in 2010
and was predicted to be at 3.7 per cent in 2011 and 5.8 per cent in 2012.3 Even though the economic
recovery is likely to reduce temporary unemployment, structural unemployment is expected to remain
high in many African countries.
However, progress in the reduction of poverty has been slow compared to other developing regions.
This is also due to the fact that in many countries growth originated in sectors with rather weak link to
the rest of the economy. Thus those sectors where the poorer population works and lives have often
been left out and growth benefits only a small share of the overall population and has little impact on
the creation of jobs and on the reduction of poverty. One of the results is persisting high social inequality in African countries, a factor that is a common feature in all developing countries.
Further, African scores concerning the HDI are among the lowest when compared to other regions,
although almost all countries managed to improve their scores during the last decade (2000-2010).
Rising per capita income, progress in widening access to knowledge and health care have significantly
contributed to improvements but the latter is also attributed to the rather low initial standards. An exception is Côte d’Ivoire, as it experienced considerable political turmoil in 2011 following the presidential elections and the violent struggle of the two candidates. The unrest and uncertainty resulted in a
heavy slowdown of economic activities with a virtual stand-still of international travel, international
cooperation and financial markets in the country.
Although there are differences within the region, Latin America’s economic performance has been
solid since 2003. While South America outperforms Central America, Mexico and the Caribbean, the
constantly strong external demand from other emerging economies like China and the sound internal
2
Human Development Index (HDI): Created by the United Nations Development Programme (UNDP) in 1990, the HDI is a measure which summarizes achievements in three different dimension or indices of human devel‐
opment: health, knowledge and standard of living. These three indicators are then statistically re‐scaled to take values between 0 and 1, one being the highest possible score. The HDI is calculated as a simple average of all three indices. 3
African Economic Outlook, 2012.The status of human development in Africa as measured by the Human De‐
velopment Index, at: http://www.africaneconomicoutlook.org/en/outlook/human‐development/the‐status‐of‐human‐ develop‐
ment‐in‐africa‐as‐measured‐by‐the‐human‐development‐index/ . 3
demand have contributed to a growth rate of about 5 per cent annually since 2003.4 Naturally the latest global economic crisis also affected Latin American economies, however several countries continue to perform considerably well compared to the rest of the world. Among others, China’s demand for
commodities, improved macroeconomic management and solid fiscal policies are reasons for optimistic economic predictions for Latin America. Brazil, considering the size of its domestic market, its natural resources and its socially balanced and good governance of the past years, plays an accentuated
role.
Despite promising economic developments, social inequalities remain a problem as “one in three Latin
Americans (180 million people) still lives below the poverty line and 10 Latin American economies rank
among the 15 most unequal economies in the world.”5 Another problem is the low productivity in Latin
America which is partly caused by the economies’ limits in diversification (and due to a lack of investment in research, development and innovation. It is noteworthy in this context that although spending
on the education systems of the region has increased constantly over the past decades, the quality of
educational provision remains low and access to education is unequal.6 This is especially true for access to vocational education and training programs.
2. The informal sector
2.1 Major characteristics – the difficulty of definition
In connection to its ‘World Employment Programme’ the International Labour Organization (ILO) had
introduced the term ‘informal sector’ in the early 1970s in the course of the Kenya ‘employment mission’. Since then the concept has been subject to various interpretations, and it should be noted that
there is no single definition of ‘informal sector’.
Accordingly, several theories have evolved over time on both origins and characteristics of the informal sector and of ‘informality’ per se7, largely depending on the research discipline from where the
topic has been approached, e.g. economics, sociology, statistics, law and so forth. Often, characterization of the informal sector is based on the activities performed, the work relations, modes of employment.
Generally, it can be said that ‘informal sector’ refers to the economic activity outside governmental
regulations. In almost all developing countries the informal sector comprises a large segment of the
labor market characterized by low levels of capital, low skills, difficulty to access organized markets
and technology; low and unstable incomes and poor and unpredictable working conditions. Also, the
informal sector has to be clearly differentiated from illegal economic activities such as drug trade, organized crime or black markets. All these activities provide people with income and sometimes pose a
considerable contribution to wealth generation in the target countries of RIFA, however, they are not
seen as part of the informal sector as identified in the scientific discussion.
With regard to what is seen as ‘informal sector’, there are considerable differences between countries,
regions and within many trades, and boundaries between informal and formal sector businesses and
activities are not always clearly defined. Further, the informal sector is not limited to urban areas as it
also exists in rural settings.
Despite the differences, several recurring features have been identified for the informal sector:8



4
Lack of legal protection for workers concerning labor and social services
Limited access to formal/regulated markets and subsidies
High interest rates for loans leading to high capital costs
Latin American Economic Outlook 2012, published by OECD and UN at: http://www.oecd.org/dataoecd/38/35/48965859.pdf 5
Ibid., p.9 6
Ibid., p.15 7
As summarized e.g. in Cortés, 1997, in Henley, Arabsheibani and Carneiro, 2008, and Chaudhuri and Mukhopahyay, 2010 8
ILO, cited in Overwien, 2007, p.9 4






Personal and business property is usually not separated
Organization based on family, ethnic and/or religious relationships
Contracts not put down on paper
High numbers of female workers
Child labor
Earnings are often directly consumed, therefore rarely re-invested
The informal sector, subsistence production and the formal or regulated parts of a country’s economy
are usually interrelated. The informal sector is not as informal as one would think since codes of conduct between workers, entrepreneurs, customers and suppliers are common and it is often difficult to
distinguish between informal and formal activities. Accordingly, a relatively new phenomenon due to
increasing global economic integration and competition is that businesses frequently resort to “mixedmode labor arrangements” where regulated labor exists alongside informal types of labor, often
through subcontracting. This also contradicts the notion that activities in the informal sector are necessarily extralegal or illegal. Further it results in the possibility of workers being engaged in formal and
informal activities at the same time.
There is evidence that the informal sector is not a temporary phenomenon where workers wait to enter
the formal economy and which would eventually be absorbed by the formal economy once it grows
enough to offer significant opportunity. The relation between economic growth and the informal sector
has proven to be ambivalent: In developing and transition countries, economic progress can lead to an
increase of informal activities, while the same can be true for times of economic crises.
Who works in the informal sector?
People working in the informal segment of an economy are usually socially disadvantaged and belong
to social groups that are excluded from participating in the political process. Business relations in the
informal sector are very personalized and usually based on family structures. Women frequently account for two thirds or more of workers in the informal sector.9 Access to education and further delivery
of training is in many countries restricted for women, among other reasons due to the fact that they are
often expected to perform traditional roles. Consequently, women are driven to the informal sector
while being excluded from more sophisticated jobs. In family run businesses children often have to
step in, too often at an early age, which prevents them from obtaining more than only the basic levels
of general education. Even if they have the opportunity to acquire relevant knowledge, skills and competences, young people have a hard time finding adequate employment and access to a better job
and therefore simply stay in informal sector jobs.
Different attempts have been made to create a profile of informal sector workers. ILO for instance
established the three categories below:



‘Owner-employers’ refers to the owners of micro-enterprises. They usually employ a small
number of paid workers and sometimes take in apprentices.
‘Own-account workers’ are those who own and run a one-person business working alone or
receiving help from family members, unpaid workers or apprentices.
‘Dependent workers’ are workers who are either paid or unpaid, including family workers, apprentices, home-workers, wage workers or contracted workers and domestic workers.
German researcher Bernd Overwien, who has conducted much research on the relation of professional education and the informal sector, lists the following forms of employment in the informal sector:
Owners of small enterprises who w ork on their own account; sole traders, hawkers, ambulant craftsmen; employees, wage workers, helpers, apprentices; family workers; home workers; casual workers
as well as beggars and street children.10
Workers in the informal sector regularly suffer from precarious living and/or working conditions. Their
lives are characterized by poverty which is often expressed by a daily struggle for basic commodities
9
Overwien, 2007, p. 9 Ibid, p. 15 10
5
due to uncertain income, the lack of access to medical care and limited or no access to education and
training. A number of features typically define working and living in the informal sector:11








High input of time for a low income
Dependence of fluctuations of the market
Lack of access to loans and barely any opportunity to save money
Limited access to education and information
Uncertain legal status and certainty
Social welfare usually only provided by family
Disconnected from events outside immediate environment
High degree of (social) solidarity within family and associated social groups
However, working in the informal sector can also be voluntary. Making this choice often is a more
promising option for those who dispose of a low level human capital, including skills, knowledge and
competence and where productivity of the formal sector is limited. In exceptional cases, work in the
informal sector, however, can provide a relatively high profit, even if the work does not require skills
and technology. For example, a strategic position with high customer frequency on street corners can
provide street vendors with a very high income. In such cases informal work represents the rational
choice of entrepreneurs and of those who want to find a way around governmental regulations.
2.2 The informal sector in Western Africa - General insights
It is widely acknowledged that “the industrial fabric of the West African countries is essentially made of
a large number of micro, small and medium-sized industries operating in the informal sector.”12 As in
the majority of the continent and other developing regions, the informal sector in the western part of
Africa is commonly seen as an important part of the economies of the respective countries. This is
above all due to its size: The informal sector is estimated to absorb 61 per cent of the industrial urban
labor force in Africa, making it a very significant factor in the national economy, as it provides income
and labor as well as certain social stability.13 This is why governments and business associations have
to include informal businesses much more in their agendas and programs.
There are no accurate statistics keeping track of the innumerable small businesses, workshops, and
shops etc. which constitute the informal sector in the region. However, they are generally attributed the
function of incubators for the development of enterprises and the creation of jobs. It is estimated that
the informal sector in Africa accounts for 93 per cent of the jobs created in the 1990s.14
The informal sector in Africa, like in other parts of the developing world, has been considered to be a
somewhat accidental, a temporary result of the transition to a modern economy. The heavy burden of
colonization, the deficient economic performance during postcolonial statehood and inconsistent as
well as ever changing policies concerning ‘structural adjustment’15 led to the marginalization and impoverishment of a considerable number of people, who resorted to alternative ways to procure incomes and secure livelihoods. This is further intensified by the “colonial legacy of exclusion”.16 Often
regulatory frameworks in African countries also pose barriers to relevant support by the state for those
working in the informal sector.
Contrary to common belief, the informalization of the economy in Africa is in fact growing. There are a
number of different reasons for this. During the 1990s African economies faced a general downturn
11
Ibid., p 10 European Community ‐ West Africa Regional Strategy Paper and Regional Indicative Programme 2008 – 2013 at: www.delnga.ec.europa.eu/projects/EC‐West%20Africa%20Regional%20Strategy%20Paper.pdf, p. 16 13
Maldonado,1999, cited in Kanté, 2002, p.1 14
Ibid. 15
Structural adjustments are usually programs initiated in the 1990 by Western‐dominated international insti‐
tutions such as the IMF or the World Bank. They usually included privatization, removal of trade barriers, low‐
ering company taxes, reduction of welfare programs etc. The outcomes of these so‐called “reforms” are dis‐
cussed very controversial and their impacts on developing countries have been widely criticized. 16
See Xaba, Horn and Motala, 2002, p.24 12
6
which led to increasing poverty. The burden of high levels of exterior debt - which had tripled between
1980 and 199617 - resulted in some 25 per cent of the GDP being consumed by the amortization of
debt. This in turn limits the resources available to significantly alleviate poverty and to long term investments to support economic growth. The slow growth of GDP has been one of the major factors
contributing to the increase of unemployment rates and hence to the growth of the informal sector.
Between 1973 and 1993 the informal sector “absorbed” large parts of the surplus labor, while at the
same time the formal sector found its capacities diminishing. This is a main reason for the growth of
the informal sector to its current size.
Another reason for the growth of the informal sector in African countries is urbanization. Urbanization
is above all a product of migration, either from rural areas or from other countries to larger cities and
their outskirts in order to find jobs and better living conditions. Urbanization is also a product of the
structural crises in the agricultural sectors in Africa. Although the informal sector is growing, the number of available jobs is not. This is so because ‘growth of the informal sector’ in Africa usually means
that instead of employment opportunities the number of economic units, mostly individual entrepreneurs, increases. Hence, informal sector workers in African countries commonly work independently, if
they do, they seldom employ more than a couple workers and often economic activities are related to
family businesses.
The largest group within the informal economy in African countries is the crafts sector which consists
of the following branches: Food, construction, wood and furniture, metal and metal construction, clothing and textiles, hygiene and toiletries as well as services such as barber shops or car repair.
Further, many people engage in activities interchanging between the formal and informal sector. Street
vendors for instance make a living off selling diverse goods, food or manufactured, by order of larger
manufacturers, entrepreneurs etc. These street vendors often compete with formal sector businesses.
By subcontracting and outsourcing of tasks to informal sector workers larger businesses enhance the
informalization of production and labor. Because salaries often do not suffice to make a decent living,
employees from the public sector, e.g. health or education also resort to the informal sector where
they perform activities similar to their profession in order to gain an additional income.
2.2.1 Benin
Because Benin does not monitor its informal sector statistically, it is difficult to outline accurately the
current state of the sector in urban and rural areas. However, based on data compiled by the Agence
Française de Développement (AFD) in 2006 it is possible to give an insight to the characteristics of the
Beninese informal sector. Basically, the sector is part of an economy which grows constantly but is
dependent on the global cotton market and on Nigerian trade and customs policies, as well as it is a
result of persistent poverty.18
The economic structure in Benin rests on a limited number of pillars: The primary sector comprises
mainly cotton as a cash crop (38 per cent of the GDP). Benin’s port of Cotonou is an important hub for
export, re-export and transit trade. Little manufacturing and outdated production facilities represent the
secondary sector. According to the AEO (2011), the informal sector in Benin absorbs almost 95 per
cent of the labor force and therefore plays the biggest role in income generation. This data is not unusual and reflects the great importance of the informal sector in job creation and social stability.
Benin’s informal sector represents a tendency of informalization of the labor market. Several indicators
support this argument: Between 1992 and 2002 the number of people in the status ‘self-employed’
rose from 60.5 per cent to 70.2 per cent.19 The employment in the informal sector has stayed constantly over 90 per cent whereas employment in formal sector companies decreased and was at 0.2 per
cent of the working population in 2007. Public sector employment, employment in public enterprises
and in not-for-profit organizations has been at 2.9 per cent, 1 per cent and 0.7 per cent respectively in
2007 (AEO, 2011). Accordingly, the main characteristics of Benin’s labor force are that it is primarily
informal and agricultural. This is, among others, a result of the 1990s policies on structural adjustment.
17
See Toussaint, 1999, cited in Kanté, 2002, p.5 AFD, La formation professionnelle en secteur informel, Rapport sur l’enquête terrain au Benin, 2006, p.7, at: http://www.afd.fr/webdav/site/afd/shared/PUBLICATIONS/RECHERCHE/Scientifiques/Documents‐de‐
travail/019‐document‐travail.pdf 19
Ibid., p.11 18
7
They resulted in privatization and cuts in the civil service. Layoffs forced many to resort to the informal
sector while the modern or formal sector failed to create employment.
Low educational levels of workers in the trade or agricultural sector contribute to low productivity in
these areas. During the last decades, the Beninese educational system had suffered from a lack of
financial support, the decay of infrastructure and shortages in qualified teaching personnel. Although
to date, primary school enrolment is around 100 per cent, the quality of educational provision suffered
due to increased quantity: Pupil to teacher ratios as well as dropout rates remain high. The improvement of primary schooling would open up new possibilities for vocational education and training and
thereby boost productivity and economy towards the reduction of poverty on the long run.
2.2.2 Côte d’Ivoire
Given the recent political crisis, Côte d’Ivoire is distinct in terms of its economic situation. Since the
conflict started in 2002 the Ivorian economy had recovered although it remained fragile. The agricultural sector is the country’s main employer absorbing over 60 per cent of the workforce (AEO, 2008).
The consequences of the latest political conflict have hit small and mediums sized enterprises hardest,
further endangering formal as well as informal employment.
However, as was common all over Africa, Côte d’Ivoire’s labor market had faced difficulties since the
1980s. Due to the downsizing of the formal sector formal employment has decreased in almost all
economic sectors, above all construction and public services. Many have found employment in the
informal sector which showed annual growth rates from 7 to 5.7 per cent between 1975 and 1990.20
Most recent research on the informal sector in Côte d’Ivoire is based on a 1998 survey of workers in
the construction and garment sectors in the city of Abidjan.21 This survey reveals some aspects of
informal labor in the country. It found that only men worked in the construction sector and that females
who worked in the textile industry were either unpaid workers or apprentices paying a fee. Paid laborers had contracts with a maximum validity of three months. The remuneration in both sectors had
been structured according to the required skills of the performed task. Mostly, the workers did not receive any additional benefits such as assistance during illness or in the case of accidents at the workplace. Those in fee-paying apprenticeships did not receive any payments for their work but instead hat
to pay their employers for the provision of technical training. The duration of apprenticeships was
found to last three years on average. Generally the survey revealed that access to work in the informal
construction or textile sector was based on social ties, initiated through family ties, the neighborhood in
which people live etc.
The survey also outlines that a major obstacles to formal registration of service and manufacturing
businesses in Côte d’Ivoire was the time needed to complete the registration process. Informal businesses named improved access to financial support as the most important benefit of formal registration.
2.2.3 Morocco
In Morocco, the current economic growth does not seem to be enough to meet the demographic
growth and growth of the labor force respectively. The country’s main challenge is to create sufficient
employment opportunities for the significant number of people newly entering the labor market each
year.22 The rising number of women entering the labor market causes the growth of the labor force to
be even higher than the demographic growth.23
Even though 380.000 jobs were created from 2003 to 2004, almost one third of them were unpaid. It is
estimated that since 2002, each year some 15 per cent of those entering the labor market do not find
jobs, have to accept unpaid work or perform informal activities. Unusually, unemployment is higher for
20
Gaufryau and Maldonado, 1997, cited in Guichaoua, 2006, p.6). Guichaoua, 2006, p.7 22
According to a AFD report, between 1999 and 2004 the labor force in Morocco grew from 10.3 million to over 11 million. 23
AFD, 2006 : La formation professionnelle en secteur informel, Rapport sur l’enquête terrain au MAROC, p. 8, at : http://www.afd.fr/webdav/site/afd/shared/PUBLICATIONS/RECHERCHE/Scientifiques/Documents‐de‐
travail/016‐document‐travail.pdf 21
8
better qualified people than for those with little or no qualifications as the labor market favors “[…]
under-qualification to over-qualification, notably owing to the need to keep labor costs as low as possible in order to increase competitiveness.”24
Another pressing problem is poverty which is especially widespread among those living in rural settings. Still, 15 per cent of the overall population in Morocco had been estimated to live below the national poverty line in 2007.25
Morocco’s labor market structure is characterized by an increasing number of people in selfemployment and a decrease of the proportion of formal employees in both, urban and rural areas. 42
per cent of the Moroccan population lives in rural settings where more than half of the overall working
population worked in family assistance or apprenticeships in 2004, according to the AFD report. This
trend supports the country’s shift towards the informal sector.
Nevertheless, the existence of an informal sector is not new in Morocco: Several studies have been
conducted to capture the phenomenon since 1984, showing that the country has realized the importance of this economic segment rather early. The first survey on the construction and civil engineering sector showed that in this particular segment 52 per cent of its workforce was employed informally.
A very small number of businesses complied with tax and social security obligations. It is likely that
this proportion has stayed about the same until to date due to the ineffective registration measures of
businesses in the industry.
In industry, trade and service sector which have been subject to the surveys in 1988 and 1997, it was
revealed that more than 25 per cent of employment is informal and that these informal activities are
mainly performed by self-employed people, employers or associates (54 per cent) while employees
only account for 30 per cent. This highlights the commonly autonomous nature of informal activities.
Further, a later survey on the same sector samples shows that informal units and employment in the
informal segment of the three sectors had risen annually until 1997.26
The latest and most comprehensive survey comprises the informal non-agricultural sector. This particular sector alone was found to contribute 17 per cent to the creation of income in Morocco. Herein
trade and repair entities constitute the largest of such contributions to wealth creation.
2.3 The informal sector in Latin America - General insights
The symptoms of the informal sector in Latin America, such as urban poverty, low-paying jobs, selfemployment and poor living conditions have only been recognized as social problems since the
1960s.27
Research states two major reasons on why the informal sector persists in the region:
 Compliance with or lack of rules and regulations: informal economic activities are thus either
the result of heavy regulation or of their inefficient enforcement. In the first case, workers or
entrepreneurs do not manage to overcome administrative barriers to join the formal economy.
In the second case, negligence in the enforcement of rules and regulations encourages informal activity.28
 Macroeconomic performance: Limited economic growth results in a lack of adequate jobs in
the formal sector. Expanding urban markets sparked migration from rural into urban areas resulting in a surplus within the urban labor force. Industrialization and global economic integration also result in the restructuring of the labor market, displacing low-skilled workers into the
informal sector.29
24
Ibid., p. 10 See CIA World Factbook, 2012 26
AFD 2006, p. 13 27
Bifani, 1987, pp.74‐75, cited in Cortés, 1997, p.71 28
Freije, n.d., p.1 29
Lora and Oliviera, 1998, cited in Freije, n.d., pp. 22‐23 25
9
Although data for the informal sector in the region lacks a generally accepted definition and consistency, the ILO provides a working definition of informal workers which in Latin America includes selfemployed workers, unpaid family workers, domestic service and employers and employees from small
firms (5 - 10 workers).
Based on this, data by the Economic Commission for Latin America and the Caribbean (CEPAL) reveals some general characteristics of the informal sector in Latin America:
 The largest group of informal sector workers is that of self-employed persons, followed by
wage workers in small firms and domestic workers.
 Women have the larger share within domestic service (and in some countries as selfemployed workers) and a smaller share as wage workers.
 Women work more often in the informal sector than males. This can be explained by cultural
factors and the fact, that informal sector jobs often provide the necessary flexibility for working
mothers. Additionally, the female labor supply increased over the past decades due to increasing school enrolment and a rising educational level of women. In times of economic difficulties many households also rely on an additional income.
 Wages in the informal sector have declined in all countries except Chile.
 Wages in the informal sector are lower than in the formal sector.
 In the informal sector women are paid less than men. Even if women dispose of a higher level
of education, they earn less than their male counterparts because they usually have less
working experience.
 Household composition, migration and race are found to be factors of influence on the likelihood of working in the informal sector.
 In Latin America informal activities are concentrated in the service sector and concern nontradable goods.
Regulations, rules and the informal sector
As has been mentioned, rules and regulations or the absence thereof can have impacts on size and
dimension of the informal sector in Latin America. Researchers found that ineffective enforcement or
lack of key labor market regulations enable the pursuit of informal activities. On the other hand, strong
regulations usually impose additional costs on economic activities which many people cannot afford.
Often these are administrative fees and/or paperwork or operational costs. Expected costs and bureaucratic obstacles are seen by many participants of the RIFA project as key factors to prevent informal businesses from engaging in a formalization process. Here, governments are expected to provide
more information, guidance and a more simplified process of formal business registration. This is the
path that the Empreendedor Individual program in Brazil follows.
Further, the informal sector in Latin America shows two main ways of interaction with the formal sector. There is evidence that the informal sector is used by formal sector participants e.g. firms or businesses, as an opportunity to avoid certain taxes or expenditures by exploiting its cheap labor. Also, the
informal sector closes the gaps which emerge because market possibilities are left out by the formal
sector. This is mostly done by distributing goods or services to areas the formal sector cannot or will
not reach.
Poverty and social protection
Although poverty and working in the informal sector are not automatically linked - some entrepreneurs
in the informal sector do considerably well - poverty can either be a result of or a cause for informal
activities. This is due to lower wages compared to formal employment and many people who work in
the informal sector do so because they do not have the means, financially or in regard to education, to
enter the formal labor market. Informal sector workers commonly also experience a lack of social protection since in informal economic activities, contributions to social security or taxes are usually avoided. Therefore, it is crucial for governments to include the informal sector in its social policy, as this
sector remains a tool to exclude a large portion of the working population from any form of social protection.
10
2.4 The informal sector in the RIFA target and partner countries- Results of the survey
The matrix below gives information about how the respective countries replied to the first part of the questionnaire concerning general information about the informal sector.
Benin
Côte d‘Ivoire
Morocco
Guatemala
Honduras
Share/Size of informal
sector; differences
between rural and
urban settings
The informal sector is
a remainder of the
traditional crafts and
trade sector, employing about 80 per cent
of the work force.
After the agricultural
sector, the informal
sector is the second
biggest sector of employment, accounting
for 39 per cent of the
GDP and 32 per cent
of the work force.
The non-agricultural
informal sector comprises 37.3 per cent of
the economy accounting for 14.3 per cent of
the GDP. 70 per cent
of all informal businesses operate in
urban areas. The agricultural sector is almost entirely informal.
The informal sector
comprises 29.9 per
cent of the economy.
Discrepancies between rural and urban
areas are a result of
differences in the access to education and
health care, in employment opportunities
and the cost of living.
Characteristics of
the informal sector and
the nature of employment therein
The crafts sector is
generally attributed to
the informal sector
because many businesses do not comply
with fiscal regulations.
Employment is above
all also provided by
agricultural activities,
the breeding of livestock, fishery and
trade.
The sector consists of
small unregistered
production units, operating in the nonagricultural segments
of the economy. The
level of organization of
workers is low, limited
degree of separation
of business and personal assets. Business
relations are characterized by close family
and personal/social
ties.
The informal sector
makes up for 57 per
cent of the trade, 20
per cent of the services, 17 per cent of
the industry and 5.4
per cent of the road
construction sector. 49
per cent of the activities are not performed
on fixed premises.
The informal sector
accounts for 30 to 35
per cent of the GDP.
In rural settings up to
90 per cent of the work
force performs informal activities, while in
the share of the sector
is 70 per cent in urban
areas. Remunerations
for workers in rural
areas are considerably
lower than in the urban
context.
The labor force in the
informal sector comprises: Domestic
workers, unskilled
workers, selfemployment, wage
workers, employees
who are paid by private firms or work in
small businesses [less
than 6 employees].
Work is performed
predominantly in small
and family businesses,
by street vendors,
through services and
food retail.
11
Why do so many people work in the informal sector?
Due to unemployment
and underemployment people
resort to
the informal sector.
The economy is weakened by structural
issues with neighboring Nigeria: Nigerian
products flood the
Beninese market,
damaging the crafts
sector and forcing the
economy to focus on
imports rather than
exporting own products.
The informal sector
provides income for
those who left rural
areas to work in the
bigger cities. Further,
informal labor a way to
escape widespread
unemployment. Many
with low educational
levels do not find work
in the formal sector but
do in the informal sector instead.
Living conditions for
informal sector workers
Women and young
people predominantly
account for the informal labor force.
Income in the informal
sector is at subsistence level, hence quite
low. Many former soldiers, war invalids and
increasingly alumni
from higher education
institutions not finding
work elsewhere resort
to the informal sector,
There are different
reasons according to
the profession, age,
work experience, size
of the business etc.
Ignorance concerning
bureaucracy, taxes
and business regulations is a barrier to
formal registration of
informal activities.
Additionally, limited
access to loans, high
contributions to the
social welfare system
and low income make
formal registration
unaffordable for many.
Work is often characterized by low income
and unsanitary conditions. Improved access
to microcredit is needed in order to shape
up equipment and
capital for the businesses. Further education and the declaration of special protective crafts zones would
enhance productivity
and working conditions.
Production sector does
not generate enough
formal jobs. High costs
and administrative
barriers for the formalization of informal
businesses. Weak
enforcement of labor
regulations is incentive
for informalization.
The reasons are manifold, mainly there is no
alternative to informal
labor.
Uncertainty of income
and work place, lack of
social security, low
educational levels.
Through increased
funding for education
and VET and by covering the informal sector
with social welfare, the
state could improve
conditions.
Life in the informal
sector is at subsistence level, daily allowance is satisfying only
basic needs: The
chances to enter the
formal labor market
are only minimal.
12
Entering the formal
sector: Incentives and
possibilities Practically, changing
from the informal to
the formal sector is
unlikely because financial and administrative resources are
very limited. Although
many businesses
would prefer to formalize, they do not receive enough cooperation by the government.
Those operating in the
informal sector in most
cases do not have a
sufficient educational
level to be eligible for
formal employment.
Is the informal sector
accepted? Is it being
integrated or fought
against? The informal sector
has been recognized
as a social partner, as
well as its important
role for the crafts sector. The informal sector is also integrated
into the institutional
approach to VET provision.
The informal sector
receives attention by
several ministries. It is
recognized as an important part of the
economy due to its
potential to create
employment and incomes and thus to
alleviate poverty. The
sector is also sought to
improve the image of
local products.
There are not incentives for formalization
by the government due
to a lack of communication and misunderstandings: Craftsmen
are not sufficiently
informed about governmental strategies
and measures. Or else
respective reforms are
not based on the
needs of the informal
entrepreneurs.
While the informal
segments of agriculture and fishery are
recognized, the crafts
sector is not According
to the local craftsmen,
the informal sector is
not sufficiently recognized for its contribution to the tourism
industry and for the
creation of employment opportunities.
Craftsmen generally
feel excluded and not
supported.
Barriers to formalization are: Complex administration and fees
as well as the burden
of taxes. The integration into the social
welfare system and
the possibility to expand business to state
institutions and formal
enterprises has been
stated as incentives.
Main barriers to formalization are the lack
of opportunities for
financial support and
limited access to technology.
In Guatemala, the
informal sector is not
seen as a pillar of
economic development, rather it is perceived as a threat to
the formal economy,
where jobs are created
and taxes are paid.
The general assumption is that within the
informal sector, VET
does not exist. In
some parts of the
country the sector is
recognized [e.g. in
Guatemala-City]
through programs
aiming at the improvement of working
conditions for street
vendors.
The Honduran government employs a
state secretary for the
informal sector. Research on VET in the
informal sector is yet
to be done. The government follows an
approach of integration
of the informal sector
and tries to benefit
from its existence.
2.5 Formalizing the informal sector – the case of Brazil
Not much has been mentioned about how countries cope with the existence of the informal sector.
This chapter is to give a brief outline of a policy program which represents such a coping strategy.30
While interviewing the RIFA partners, it became evident that Brazil is implementing a program which
intends to eliminate the informal sector in its current form. This transformation is aimed at formalizing
the business entities of which the Brazilian informal economy consists.
However the status of informality in Brazil is defined, all of the informal workers have in common that
they have informal and thus illegal working contracts. The result is that for employees and wageworkers benefits, holidays etc. are subject to negotiation and non-registered workers are not eligible
for unemployment benefits, maternity leave and other social security measures. Considering the facts
above, the central question on why to formalize informal labor is already partly answered: By including
formerly informal businesses and their workers into the formal sector, they are also included in existing
social security as well as educational and tax schemes. Still, for the Brazilian government formalization seems attractive also from the economic point of view.
Constraints to economic growth and the role of the informal sector
While, after a global economic downturn, most Latin American countries recovered since the 1990s,
Brazil’s economic growth remains at modest rates.31 It is argued that a major constraint to substantial
economic growth is the considerable size of the “gray market” which accounts for about 40 per cent of
Brazil’s GNI (Gross National Income, as measured by the World Bank). In eleven different sectors,
more than half of the labor force is informal. The large share of informal activities in Brazil’s economy
results in major distortions as companies, small businesses and individuals who e.g. avoid taxes and
ignore safety and quality standards gain advantages over their counterparts who respect legal requirements. Among others, Brazil’s surplus of unskilled labor is a strong incentive for informality. It is
interesting to note that the surplus in unskilled labor is seen as a major reason for the informal sector’s
growth, as this highlights the importance of professional education and training in improving the informal sector’s inclusion in social or tax systems.
Policy makers and academics argue that by diminishing informality productivity and investment could
be increased, labor and capital costs reduced and market distortions avoided. Whether this is what the
Brazilian government had in mind when it launched the Empreendedor Individual (EI) program32 in
July 2009 will have to be subject to future research. The Individual Entrepreneur program is part of the
‘Leis Complementar No. 128’ which the Brazilian Ministry of Development, Industry and Foreign Trade
(MDIC) and the Ministry of Finance (MF) passed in December 2008. Through the EI program, special
conditions have been created to formalize the smallest businesses operating in the ‘informal sector’ in
Brazil. By the end of 2010 the government initiative had already reached 850.000 people throughout
the country.
This is how the EI program works: Everyone who is interested in formalization and is eligible has to
register with a special tax system, the Simples Nacional. Eligibility is given if the person is considered
an individual entrepreneur, thus working alone or with maximum one employee. The Simples Nacional
system is based on a simplified and reduced tax scheme. Registered individual entrepreneurs do not
have to pay other federal taxes but a reduced tax (51 – 55 R$ monthly) on social welfare and municipal services tax. Several other social benefits are granted to the entrepreneurs. It is obvious that integration into the Brazilian social safety network is of great benefit for the affected families.
The Brazilian Service to Support Micro and Small Enterprises (SEBRAE) is the main organization in
addition to the Ministry of Development, Industry and Foreign Trade (MDIC) implementing the program. Since the introduction of the EI program SEBRAE holds an annual Semana do Empreendedor
Individual (Individual Entrepreneur Week) throughout the country where interested people cannot only
register for formalization but also take part in a number of training courses.
30
Due to the EI program and the perceived de facto non‐existence of the informal sector, Brazil chose not to answer the RIFA questionnaire on VET in the informal sector. However, the Brazilian project partner provided comprehensive information on the EI program. 31
See Bezerra and Cavalcanti, 2007, pp.3‐4 32
http://www.portaldoempreendedor.gov.br/modulos/inicio/index.htm Interregional Study: Vocational Education and Training in the Informal Sector 3. Vocational Education and Training in the informal sector
3.1 Skills: How they are delivered and why they matter
In the past, economic development of developing countries has been hindered by multiple factors
such as wars and civil unrest, political instability, climate and the consequences of climate change,
limited access to technology and weak investment, low levels of education, weak health care systems,
migration, ‘brain drain’ and the exclusion from world markets due to the current state of globalization.
Due to these considerable impediments, above all many African countries, often under the pressure of
international financial organizations such as the IMF and the World Bank, have brought structural adjustment policies under way. These policies more or less comprise the same strategies: Privatization
and the liberalization of markets, capital and labor markets in order to enhance competitiveness. The
assumption is that these adjustment measures lead to a change in the demand of skills as new markets develop, new technologies are used and production and work are reorganized.
However, adjustment measures and the exposure to the consequences of global integration have
rather resulted in shrinking formal labor markets, growing informalization and a decrease of resources
for training delivery where spending cuts are part of the ‘adjustment package’.
Concerning training in relation to the informal sector, it is argued that there are two major approaches:
(i) Training for the informal sector, here training is delivered by formal institutions which are e.g. run by
the respective government, non-governmental organizations, private providers or through technical
international cooperation;
(ii) Training in the informal sector, in this case training provision is part of the setting of the sector.
Formal or organized VET provision in developing countries basically comes down to the following
routes offered: Institutionalized publicly run training systems or run by NGOs, training on the job by
enterprises or private provision. Only very few people working in the informal sector have undergone
formal training, because usually formal training institutions are only located in urban areas and entry
requirements concerning the level of education are often not fulfilled. Further, formal training is regarded as not responsive enough to the needs of the informal sector.
Apart from formal training provision there is the delivery of training in the informal sector where traditional training schemes are at the heart of skills acquisition. “Traditional apprenticeship training is often
the most important means of training in the informal sector, particularly in West Africa. Traditional apprenticeship training is self-financing, self-regulating and cost-effective, but it perpetuates traditional
technologies and lacks standards and quality assurance.”33
The strength of non-formal training, that is not government run or public, is that it is delivered by a
multitude of providers who can offer training to specific target groups, efficiently in regard to accessibility and costs and that it is flexible and therefore more likely to adapt to the needs of the informal sector
businesses. Informal sector training is often characterized by outdated technologies, unorganized
delivery, low productivity, inacceptable working conditions and most importantly depending on the
skills of the respective master. A theoretical part of the training is usually weak and the range of skills
acquired tends to be narrow. The opportunities for women in traditional apprenticeship training are
limited due to the division of labor based on traditional gender concepts.
33
Johanson (2004), p. 22 14
Interregional Study: Vocational Education and Training in the Informal Sector An example of traditional apprenticeship in the garment industry in Abidjan, Côte d’Ivoire34
Apprenticeship usually lasts about three years and apprentices pay a considerable fee to their
masters and work long hours in the workshops: On average nine hours, six days a week.
“The apprenticeship doesn’t follow any pre-existing explicit plan. It mainly consists of repeating
practical operations shown by the employer. Despite the formality induced by the payment of
fees, the imperatives of production always supersede training obligations. Among tailors, assembling pieces of fabric (e.g. sleeves to a shirt) or adding finishing touches to clothes (e.g. sewing
buttons) are taught in early stages of the apprenticeship but it can take months to be initiated to
cutting (the most important part of the production process) or to be allowed to perform the commercial tasks implied in a direct contact with clients. These operations are jealously monopolized
by the employer or the most experienced tailors in the workshop. Upgrades in the process of
learning seem to happen at a slow random pace. An important opportunity is offered when the
apprentice’s immediate predecessor in the workshop quits the job or she/he is promoted. The
follower then inherits the tasks previously performed by his/her elder. The most recent newcomer
only performs tasks despised by others (sweeping, cleaning the machines, ironing etc.). The apprenticeship system, far from obeying a strict teaching calendar, is thus organized as a labor
queue.
Symptomatically “liberation” is the term used by young workers to qualify the completion of their
apprenticeship, an event the timing of which entirely decided by the boss. Objective technical
tests rarely support this decision, which then allows its instrumental manipulation by the employer.
Finally, the “certificate” delivered is generally not recognized as a valid diploma by formal authorities and consequently, has a value restricted to the area where the employer has gained a certain
degree of reputation.”
For the employers, this form of apprenticeship is merely seen as a provision of cheap labor, therefore
it seems necessary for governments and business membership associations to use their influence to
bring changes. While traditional forms of apprenticeship have their advantages, their focus must turn
away from exploitation of young and cheap workers.
Even though training in the informal sector might have its flaws, the informal sector has an inevitable
and fundamental share in the development of skills due to its central role in the economy: For developing and emerging countries it is in fact a place for employment and hence the provision and protection
of livelihoods and income.
A multitude of arguments can be found on why training in connection to the informal sector matters.
The development of skills and knowledge is a key instrument to improve productivity, working conditions, and to promote decent work in the informal sector: “Better, less work-intensive and safer technologies can raise productivity and income, reduce work drudgery and occupational risks to health and
safety, and improve products. New skills and knowledge can open doors to more economically and
socially rewarding jobs […]. In addition, better-educated entrepreneurs are generally also more responsive to policy measures, which is important for the sector's development. Higher education levels
mean more stable income generating enterprises in the informal sector as a whole.”35
What sort of training is needed and how should it be delivered?
Training needs in the informal sector are perceived very differently. A recurring fact is that workers in
the sector often are either uncertain about what skills they might need or are reluctant to participation
in training schemes. When entering the informal sector only very few skills are needed in the first
place and these are usually obtained through on the job training.
As diverse as the nature of the informal economy are the contexts of training and training needs. Obviously there cannot be a standard concept for education and training in connection to informal labor.
Moreover, apart from mere skills social, organizational and personal competencies have to be developed by informal sector workers. Therefore training provision should incorporate measures for developing these competencies.
34
35
Guichaoua, 2006, p.9 See Liimatainen, n.d., p.4 15
Interregional Study: Vocational Education and Training in the Informal Sector A serious problem is the low general educational level which is common for many workers in the informal sector. A lack of basic skills is a main barrier for the participation in training and other educational measures, also later on during the working life. Girls and children of farming families in rural
areas are those most often prevented from progressing in primary and further education, this is particular true for the African context.
Another suggestions from this research are:
 Training and the inclusion of the informal sector into the system of professional training
seems to be vital.
 Among informal workers and business owners awareness about the benefits of training
and professional education must be raised, so they will participate in efforts to uplift their
living and production conditions by training means.
 As the long term goal formalization of informal sector entities must have top priority. As the
Brazilian case shows, this can be an effective tool to extend government’s regulating power to
this substantial part of the economy and include a large number of workers into social protection and professional education systems.
However different the nature of the informal sector and its people is, some general principles for the
design of education and training schemes can be identified:36
 Social-cultural values and norms have to be considered.
 Training approaches should be based on the structures already existing in terms of communities, villages, neighborhoods, ethnical, religious groups etc.
 Training provision should be building on traditional and informal learning structures and should
be integrated into the overall system and linked to the formal education and training system.
Therefore barriers to formal provision should be removed.
 Training should be easily accessible, not too time consuming and centered on the respective
learners.
 Before developing training schemes, local needs have to be assessed.
 Special reference should be made to the provision of education and training for women.
3.2 Results of the Survey
This chapter reveals the information about vocational education and training in the informal sector
which given by the RIFA partners by answering the questionnaire on the topic.37
As far as professional training initiatives by governments are concerned in the informal sector, the
government of Honduras is represented in all areas of the sector. Governmental involvement is based
on a strategy to support workers in the informal sector. Training delivery is realized through centralized
courses. In Guatemala, there are first initiatives in the form of hotlines to obtain information on education and training; however no measures have been actively implemented yet, to practically support the
provision of professional education and training for the informal sector.
Morocco operates several programs concerning training in the crafts sector in order to upgrade skills
levels. These programs target mostly younger people in several trades and combines a theoretical
component in training centers with practical training in workshops. The courses are quite successful in
providing employment opportunities to the participants, even though training is not formal. Through the
‘Fond de Developpement de la Formation professionelle’ (FDFP), vocational training is supported in
Côte d’Ivoire’s informal sector. To date some 2400 apprenticeship contracts have been concluded in
this country. Throughout the country, sixteen people are in charge of recruiting enterprises in support
of the training scheme. After three years, apprentices receive an informal certificate. There are no fees
charged for the participation in the scheme.
With regard to training skills levels for the informal sector, in Honduras many workers did not undergo
training and no training programs within the sector are available. In Guatemala, some sporadic
measures are offered by the state or non-governmental organizations. However, financing these
36
37
Overwien (2007): For convenience reasons, country names stand as synonyms for the respective RIFA project partners. 16
Interregional Study: Vocational Education and Training in the Informal Sector measures is often difficult. This is why INTECAP, the RIFA partner organization in Guatemala, provides financial support for disadvantaged groups to attend training.
Workers in Morocco’s informal sector commonly receive practical training at the workplace, in workshops or through internships.
How do traditional structures of training manifest themselves in the informal sector?
While in Honduras training structures exist, but are not officially recognized and several projects are
conducted by local or international donors, in Guatemala some businesses train workers on the job.
During this time, these workers are not eligible to remunerations. Traditional training in Morocco is
based on three consecutive steps with a progressive income: The first step foresees the status of an
apprentice who receives a small allowance. The second step would qualify the apprentice to be an
interim employee, receiving a limited pay. Step three leads to the status of a qualified worker earning a
‘real’ wage and who is eligible to run his own business. This can be another model for a vocational
training scheme that is at least partly oriented on the needs of informal workers.
In Côte d’Ivoire traditional apprenticeships without a contract are the most common form of training in
the informal sector. The same is true for Benin, where training is dependent on the respective professions.
In connection to vocational education and training in the informal sector, non-governmental stakeholders are involved in all surveyed countries, even if their number is very limited as in Guatemala. In
Honduras, catholic non-governmental organizations often engage in training. Morocco also names
NGOs, while other institutions like the chambers, OFPPT38 or the ‘Organisation Entraide Nationale’39
are more or less linked to the state. Local stakeholders such as crafts masters, associations and municipal government unit have been named by Benin. In Côte d’Ivoire the German International Cooperation (GIZ), supported by loans from the World Bank, has implemented a 13-year project building
training structures for auto mechanics and management assistance with other trades to follow.
Another question is whether qualifications obtained in the informal sector are formally recognized. In
Honduras, informally achieved qualifications are not accepted, or at least not measured against formal
qualifications. The INTECAP in Guatemala offers the certification of informal qualifications no matter
where and how the qualification was acquired. No diplomas are issued in the informal sector in Morocco, but completed training or apprenticeships are often recognized by the sector’s craftsmen. Even
though partner organizations of the crafts associations such as micro credit institutions or banks do
accept informally obtained qualifications, the craftsmen would like to see a separate entity in charge of
regulating the recognition of informal qualifications. Apprentices completing training in a dual mode
have the possibility to receive a formal diploma.
The Beninese approach considers the recognition of qualifications from the informal sector through
institutionalized qualifications and examinations based on the idea of recognition of prior learning
(RPL)40. This approach is very interesting as a model for other African countries as is takes the specific situation in the informal entities into account and incorporates the preexisting skills and types of
learning.
Is the informal sector represented in the social dialogue?
The involvement of informal sector representatives in Honduras is limited to policies concerning vocational education and training in the informal sector. Associations, above all the religious ones argue for
more representation. In Guatemala, representatives of the informal sector are sporadically involved,
but cannot exercise enough pressure to seriously contribute to governmental decision making or that
of formal enterprises.
38
Office de la Formation Professionnelle et de la Promotion du Travail, http://www.ofppt.ma/ http://www.entraide.ma/article/menuview/77 40
RPL commonly also refers not only to prior learning but also to informal or non‐formal learning: Informal learning can be seen as learning that occurs outside formal institutionalization or sponsorship. It takes place in an environment of activities or interests of individuals or groups, in interactions with friends, family and at work. It refers to learning activities that are not course‐based or in structured learning which is delivered in informal, flexible ways such as in the community. Informal learning involves learning that occurs in an envi‐
ronment where there is no formal or planned learning framework, no specific outcomes or teaching. . 39
17
Interregional Study: Vocational Education and Training in the Informal Sector The social dialogue in Morocco takes place without informal sector representation, while formal trade
unions and formal businesses are involved, to the resentment of the informal crafts sector. Further,
several professions do not have any form of organized qualification system, therefore informal businesses demand for the decent representation of their interests, for instance through the chambers of
crafts. The situation in Benin is judged positively as informal sector representatives are involved in the
social dialogue.
3.3. Opinions and recommendations
How could vocational education and training improve the situation in the informal sector?
In regard to the findings of this study, it is clear that the integration of professional education and training in the informal sector is very important. According to the Honduran project partners, VET offers
instruments to improve productivity of informal activities, thereby helping to generate income. Further,
through education and training knowledge can be generated which could lead to the development of
new methods for production and marketing. In Guatemala, the state should develop VET provision
especially answering the needs of the informal sector and its people, while such provision should be
free of charge. More support for the qualification of young people by the administrative bodies is demanded by the Moroccan partners. Important would be for instance to expand the dual system. In
Benin, where the informal sector is large, the qualification level of informal sector workers is seen as
vital to make the crafts sector more dynamic.
As to how VET provision could be adapted to the setting in the informal sector, Honduras argues for a
system of early diagnosis of the needs of the sector. Problems should be precisely defined and addressed and problem solving should be coordinated by the government. Guatemala suggests to determine the situation of VET in the informal sector through surveys which then give an insight as to
how VET could be adapted to the sector’s needs. INTECAP (Guatemala) already has altered some
programs in order to make them more responsive to the informal sector, e.g. cosmetics, nutrition, auto
mechanics and agriculture.
Morocco argues that all sectors, including the informal, should be represented under the respective
chambers, because currently many training programs do not answer the demands of the market. As of
now, membership of the chambers answers geographic proportions instead of sector representation.
Benin, on the other hand, strives for a strategy for national vocational education and training provision,
which would supposedly lead to the informal sector being included into training programs and to the
alteration of such programs according to the needs of the firms and businesses.
Are there trainers within the informal sector?
While there are none in Honduras, INTECAP in Guatemala employs trainers who work with disadvantaged or vulnerable groups and who have access to further education. In Morocco, formal trainers (by
OFPPT) play an important role when it comes to the informal sector as they are stated to be the only
ones to consider the needs of the craftsmen, no matter if they work formal or informal.
Not only Guatemala argues that informally acquired competences should be integrated into the vocational curricula. Honduras mentioned that the integration is necessary and that the integration of new
qualifications is demanded by enterprises as well. In Morocco, management abilities in the informal
sector are questioned but technical competences, acquired in informal training, are widely recognized.
To improve management capacities within the informal sector, certain training courses under the guidance of the chambers are seen as helpful, especially in marketing or accounting.
How could informal sector workers be reached by [formalized] VET provision?
Ambulant training courses based on the evaluation of market demand have been advocated by Honduras. According to Guatemala, special education and training programs should be developed for
informal sector workers, while among the latter, the advantages of further training should be promoted.
Possible settings for the organization of training could be distance learning and training following a
dual mode. In Morocco, the most effective system is regarded to be the dual system with an emphasis
on internships and/or practical training which is conducted by the crafts chambers. The reason for the
dual system’s efficiency is the possibility to align training and demands at the workplace.
The informal sector in Benin has been a part of the national strategy on VET since 1995 in order to
integrate young people into the labor market. The focus lies on the formalization of informal businesses, in line with the Brazilian approach.
18
Interregional Study: Vocational Education and Training in the Informal Sector Should VET in the informal sector generally be supported and if yes, how?
According to Honduras, vocational education and training can facilitate the establishment of micro
businesses in the informal sector and lead to the improvement of livelihoods through the creation of
jobs and increasing employability. In Guatemala supporting VET provision in the informal sector can
be part of a comprehensive labor market policy and would enhance entrepreneurship in the country. In
Morocco, informal businesses in the crafts sector should receive widespread support, such as by better access to formal economy and finance. Here, the formalization of informal labor should be facilitated. Through the attendance of conferences and trade fairs, the approach could be promoted throughout the country.
Benin already supports VET in the informal sector through its integration in the national education and
training strategy. The setup of a ministry for vocational education and training and the establishment of
a ‘Direction technique de la Formation et de la Qualification professionnelle’ (DFQP) are favorable.
3.4 Possibilities for knowledge transfer: Approaches to VET in the informal sector exemplified
3.4.1 Benin – the institutional approach
Benin is a somewhat unique example of approaching training for the informal sector. This is above all
due to the involvement of three major institutions: employers and trade unions as well as the country’s
public authorities. All three parties are responsible for the promotion, funding, developing and evaluation of skills provision through training initiatives for the informal sector. This “institutional approach”41
reflects the coordinated involvement of stakeholders from political, economic, professional and social
backgrounds. The fact that the informal sector accounts for over 40 per cent of the GDP makes training for the sector a priority, from the social as well as the economic perspective.
How is informal sector training based on the institutional approach organized?
With the help of several international donor and technical cooperation agencies42 Benin started a fundamental reform process towards an integrated vocational education and training system in 2001,
which also includes the informal sector. At the heart of this system is apprenticeship training, covering
above all the different occupations in the crafts sector. Apprenticeship mainly targets school drop outs
or young people facing barriers to enter formal training provision. In the informal sector apprenticeship
commonly offers the only opportunity for many to achieve relatively secure employment and the integration into the economically active population while keeping up with market trends and technological
developments.
As part of the reforms starting in 2001, two certificates have been introduced aiming at the innovation
and formal organization of the traditional apprenticeship schemes. The national vocational skills certificate (Certificat de qualification professionelle CQP) was introduced in 2005. The CQP serves the
attestation of skill level of workers. Its target group are young people at age 14 and above who already
have acquired a level of vocational qualification equivalent to the last year of primary school in Benin.
The CQP is awarded after the completion of 600 hours of training or three years, which are split between class room learning at a training center once a week and 4 to 5 days spent with the respective
trainer in practical training. Through the CQP the VET system is gradually shaped into a dual mode.
The announced target is 3000 apprentices each year obtaining the CQP.
In addition to the CQP an occupational skills certificate (Certificat de qualification au métier) CQM is
introduced. The CQM is valid for continuing training provision, whereas the CQP targets initial training.
The CQM is designed to be a measure to introduce minimum quality standards for key skills and is an
instrument to validate the skills previously acquired through traditional apprenticeship.
This approach is a promising attempt to reorganize training by including the informal sector due to
several reasons: It builds on the already existing structures of apprenticeship in the informal sector for
the gradual introduction of theoretical training and (formal) certification, therefore the consideration of
the sector’s needs is put into practice. Further, coupling a legislative and regulatory framework with
41
Naturally, there are other training schemes outside this approach, however due to its potential of becoming a good practice model, only the institutional approach will be presented at this point. 42
For further information refer to AFD, 2006, p.21 19
Interregional Study: Vocational Education and Training in the Informal Sector consultation and partnership for its implementation seems a very reasonable choice, likely leading to
all stakeholders’ willingness to support the reform process.
3.4.2 Côte d’Ivoire
The core of the Ivorian vocational education and training system is the Fonds de développement de la
formation professionelle (FDFP). The fund was established in 1991 as part of the country’s human
resource development program. It is the main instrument to coordinate and implement policies concerning apprenticeship and continuing training. Further, it monitors, evaluates and of course finances
training plans and projects.
The fund also covers training for the informal sector. It manages the apprenticeship tax and taxes for
further vocational training which is levied through compulsory contributions. In cooperation with partners it also delivers in-service training. One of the strengths of training delivery through the fund is
that, unlike in most traditional arrangements, apprentices do not have to pay fees. Therefore, training
through the fund is particularly interesting for young people in the informal sector.
The Ivorian Ministry of Agriculture introduced the approach of the creation of local training committees.43 The committees are in charge of the development of training schemes for young people and
workers in the agricultural sector, a sector in which informality is particularly high. The courses are
adapted to the needs of the local economy in order to help graduates to find work. The inclusion of
local chiefdoms in the process of decision making reveals the importance that is placed on integrating
the local context into the development of training schemes. This approach is sustainable as it focuses
the acquisition of skills on the techniques of local subsistence farming which enable producers to better secure their livelihoods without forcing them to leave their homes.
3.4.3 Morocco
According to research done by the AFD, Morocco is confronted with a special conflict: The training
system aims at qualifying young people for the entry of the labor market while the labor market mainly
recruits unqualified people. AFD’s surveys reveal that 4 to 5 per cent of informal sector workers had
undergone formal training while over 80 per cent were merely trained on the job. The relevance of
traditional training methods is further emphasized by the findings of the AFD researchers that traditional apprenticeship is still highly practiced in all manual occupations.44
This and the fact that school drop-out rates are high in the country (some 60.000 students annually)
make vocational education and training initiatives for Morocco’s informal sector a “second chance” or
prescriptive measure. Additionally, entry requirements and financial hurdles for accessing the formal
VET system are commonly too high for drop-outs and for those who have never attended school in the
first place, leaving these groups without any other way but to engage in informal activities.
Hence, the main challenge is to design training initiatives based on the very heterogeneous needs of
the individuals working in the informal sector and on the needs of the informal sector businesses.
However, public authorities are said to distance themselves from developing training especially for the
informal sector.45 But through the setup of a non-formal education directorate in 1998, several governmental initiatives have been launched to address the problems of poverty and illiteracy and introduce job-start programs: About 40 classes throughout the country target young people aged 12 to 15
with the provision of basic skills with which they either can enter occupational training or find a job, or
they can update their knowledge in order to progress into the VET system. All programs are conducted in cooperation with ministries and local and regional stakeholders as well as NGOs and the private
sector representatives.
Besides the directorate for non-formal education the Entraide national solidarity agency operates several programs mainly aiming at social development, social inclusion and poverty alleviation.46 One of
the approaches to reach these goals is education and training. Entraide runs 86 ‘Centres de Formation par Apprentissage’ (CFA) which offer apprenticeships with a share of 80 per cent of the time
43
Walther, 2011, p.8 Agence Francais de Développement 2006, p.18 45
Ibid., p 20 46
See http://www.entraide.ma/article/menuview/28 44
20
Interregional Study: Vocational Education and Training in the Informal Sector spent in practical training in companies. In 2009/2010, more than 6.000 people had benefited from the
apprenticeship schemes, according to the organization.
In addition to the public sector’s efforts there are several initiatives by other stakeholders that target
training and education for informal workers, such as



Microcredit organizations: Al Amana
One of the biggest Moroccan micro credit providers, Al Amana also offers training services, for
example ‘training for income-generating activities’. For a small symbolic fee, participants can
take part in modules concerning marketing, sales techniques, human resource management
or stock management. The courses follow special didactical approaches in order to answer
the participant’s often lower educational levels. Although many informal entrepreneurs are
hesitant or even reluctant to participate in training because they do not see its immediate impact, many have already taken part in the training modules. They realized that once they
would obtain a micro credit, there were other challenges on the operational side to deal with,
in which the training helps them to cope.47
Neighborhood activities: The mobile unit approach
Since this concept was developed by the OFPPT and Belgian development aid, this particular
training scheme has been put into practice in remote rural areas and in urban settings. The
approach targets uneducated youth, unemployed graduates, formal and informal workers
alike. At mobile homes equipped with a workshop for a given occupation, trainees acquire
skills based on real work situations without having to leave their respective immediate environments. Due to this convenience, participants are motivated to return on a regular basis for
the courses which last from two weeks to four months.
Maisons familiales rurales (MFR)- Rural family centers
This French institution has been greeted with much enthusiasm since its establishment in
1937. Since the 1970s, MFR also has an international division (Association Internationale des
Mouvements Familiaux de Formation Rurale AIMFR). The rural family centers came to Morocco in 1995. The aim is to support social and occupational development through training on
and off the job. The Moroccan target groups are 15 to 24 year old school drop outs who are
provided with them three year training courses. Using special pedagogic methodology and
mixing general with vocational education, courses are usually adapted to the local circumstances. The educational programs run through the MFRs are a product of the close cooperation of firms and the respective families. Since 2002 all Moroccan MFRs are grouped together
by the National Association of rural family centers (Union nationale des maisons familiales rurales).
4. Concluding remarks
The examples outlined above have been chosen with regard to possible areas of interest for the RIFA
project participants. In all cases the formal vocational education and training system is not fully responding to the needs of the informal sector, hence different ways have been identified to optimize
skills development in the informal sector.
Benin has put the involvement of and cooperation between the social partners at the heart of its reform of the VET system, an approach that includes the informal sector. The acquisition of qualifications in form of CQP (Certificat de qualification professionelle) and CQM (Certificat de qualification au
métier) are in the center of the strategy. It is obvious that all measures aim at the recognition of the
skills already obtained at the informal workplace. Therefore, they are an instrument for the recognition
of prior learning (RPL) as well as an instrument to formalize training delivered in the informal sector.
Through these efforts of formalization the development and improvement of occupational standards is
put forward and its coverage of economic sectors is expanded widely.
Formalization is also the aim of the Empreendedor Individual program in Brazil. Whether this policy
will lead to the disappearance of the informal sector in Brazil is not yet clear and if the answer is yes,
what consequences will its disappearance have? Although its effects on training in connection to the
47
AFD, 2006, p.22 / 23 21
Interregional Study: Vocational Education and Training in the Informal Sector informal sector are not yet obvious, the program could prove to be an interesting option for other countries.
Contrary to the Beninese and Ivorian governmental approaches, the outlined projects in Morocco are
implemented by other stakeholders and open up interesting alternatives to government action. Although to date they commonly only reach a limited number of people: particularly the Maisons familiales rurales (MFR) could be a promising way to deliver training in rural areas. The majority of the population in almost all RIFA countries lives in rural settings, which makes them even harder to reach as
informal sector workers in urban environments. The MFR project is already present in all RIFA target
countries except Côte d’Ivoire and could therefore be subject to a joint initiative to expand and optimize the provision of professional education in the informal sector.
Especially in urban settings, the Moroccan mobile units represent another initiative favorable to the
informal sector situation, because it not only ‘comes to the people’ integrating the immediate environment of the workers but delivers short-term training courses.
The questionnaires show that the situation in the informal sector in the RIFA project countries is different regarding (i) living conditions, (ii) people, (iii) training initiatives, (iv) existing training delivery and
(v) general status of the sector, while generally it contains surprising similarities. Nonetheless are these differences the fuel for debate, exchange of information and the transfer of knowledge as well as
the identification of possible good practice example which could be transferred to the context of other
countries. Indeed, a number of good practices that are exercised in the participating countries can be
named:
1. Mobile training units in Morocco that make it possible to reach rural areas where the majority
of people work in informal businesses.
2. Institutionalized approach in Benin that includes employers (and their associations), trade unions and government authorities to join forces in combating the negative sides of the informal
sector.
3. Local training committees in Côte d’Ivoire that contribute to the training of informal workers in
rural areas.
4. The comprehensive formalization program of the Brazilian government that aims at completely
eliminating the informal sector and therefore offers a way to include the informal workers in the
formal VET system.
However, it has to be considered that all VET initiatives in and for the informal sector should always be
considered in regard to their specific environments. All training measures have to be positioned in the
respective social and economic realities and with regard to what they are supposed to achieve. It is
vital to determine clear objectives of training intervention in order to be able to assess its suitability or
success.
Moreover, training is only relevant if it is seen as one way to improve the given situation of the informal
sector: Vocational education and training, while being only one means to this end, plays a crucial role
and must be one part of a much wider program to initiate the process of improving the situation of the
great number of people employed by the informal sector.
22
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