Rwanda has earmarked $4 million to benefit businesses and institutions that support basic skills training as it seeks to grow its human capital to drive economic growth.

The funds will be deployed to support the private sector and non-governmental organisations that can offer short term training to a minimum of 25 people per cycle for the next 2-3 years beginning this year.

Last week Rwanda’s Workforce Development Authority (WDA) which is charged with skills development said it is in the process of receiving proposals from firms that will participate in the process.

The best proposals will be eligible for funding of between Rwf6 million ($10,050.2) –Rwf60 million ($100,100.1) depending on the capacity of the firm to train.

“We will improve the capacity of these businesses and institutions to train more people on ‘hands on skills’ including providing infrastructure. The training will be focused on basic skills to meet the immediate needs of the market such as hair dressing, plumbing,” Gasana Jerome, the Director General of WDA said last week.

However, funding will focus on improving skills for specific priority sectors in fields related to Information and Communications Technology (ICT), renewable energy and technical skills in mechanics, plumbing and electrical engineering.

The initiative is part of Rwanda’s wider efforts to promote vocational and technical training countrywide as it moves to bridge its existing skills gap.

The government intends to expand the capacity of the existing Technical Vocational Training Institutions (TVET) from the current 600 students to 10,000, to bridge a growing shortage of technical skills in its labour market.

Currently, enrolment in both technical secondary schools and vocational training centres stands at 14,000.

The country aims to increase the absorption rate of TVET graduates from around 25 per cent in 2006 to 75 per cent by end of 2012.

Mr Gasana said government is targeting to have at least three TVET schools at each district while at the same time improving the quality of training offered by these institutions.

“We are putting emphasis on practical training that allows students to acquire skills immediately.”

Analysts say despite the improvement in the business environment, the skills gap is a disincentive for private investment as it increases the cost of doing business in Rwanda with most businesses having to incur additional costs of outsourcing labour.

“There seems to be mismatch between the skills that private sector employers require and the skills that universities and other tertiary institutions provide to new labour entrants more so in the very competitive private sector.

"What education systems are providing are mainly technical solutions which may not exactly tally with real life problems at the work place. Employers in the private sector demand results,” Dr Dickson Malunda, a senior research fellow with local think tank, Institute of Policy Analysis & Research, said.

He said increased investment in technical and vocational schools will address youth unemployment and skills shortage.

“When we talk about the youth unemployment problem, we focus on university graduates who are unemployed, we forget that the majority of unemployed youth are primary and secondary school drop outs,” he said.