The Government of Rwanda is in transition from Vision 2020 to Vision 2050, aiming to secure high standards of living for all Rwandans. To achieve this ambitious goal, Rwanda must build a dynamic and capable workforce, meeting the rising demand for high-skilled jobs.

The National Skills Development and Employment Promotion Strategy (NSDEPS) aims at upskilling Rwanda’s workforce for long-term economic transformation by putting the private sector at the helm. In doing so, it follows the principles embedded in the National Strategy for Transformation, the Private Sector Development and Youth Employment strategy, and other relevant national documents. Primarily, this strategy builds upon the National Employment Programme (NEP). It seeks to amplify NEP’s successes, such as attending the upskilling needs of investing companies through the Skills Development Fund (SDF), while addressing its shortcomings, such as insufficient private sector engagement and weak accountability.

The number of entrants to the labour market is substantially larger than the increase in jobs during the last 15 years. Acknowledging the demographic trends, the ongoing seven-year Government programme, National Strategy for Transformation (NST1) of the Government of Rwanda (GoR) has an ambitious target of creating 214,000 off-farm jobs annually. For off-farm jobs, both the formal and informal sector will be important.

The Priority Skills for Growth programme (PSG) has been initiated through a partnership agreement between World Bank and government of Rwanda to reinforce governance of the skills development system and expand opportunities for the acquisition of quality, market-relevant skills in selected economic sectors through aProgramme for Results (PforR) financing model. Having an end line of September 2020, with consideration of achievement and remaining gaps related to the programme, the PSG was given an additional finance (AF) to extent it’s activities until September 2023. The programme results areas include (i) reinforcing governance of the skills development system, (ii) ensuring provision of quality training programmes with market relevance,(iii) expanding opportunities for continuous upgrading of job-relevant skills for sustained employability; and(iv) capacity building for implementation.

Among the components of PSG include Skills Development Fund II whose objective is to minimize skills gaps experienced by private business operators by rapidly increasing the supply of skills in high demand in the labour market and to ease the entry of new entrants to the labour market by providing them with labour market-relevant skills. The present phase of SDF supported through the PSG additional finance, builds on the experience of the previous SDF.

To ensure effective management of SDF additional finance, it was required to amend the existing operational manual that defines policies and operating principles and provides implementation guidance and brings on board various key stakeholders involved in the implementation of SDF additional finance and clarifies their respective roles and responsibilities. The manual has been amended in accordance with theGovernment of Rwanda and the World Bank’s policies and procedures. It benefitted from close guidance of the Rwanda TVET Board (RTB) Management Team and the World Bank Team as well as key stakeholders involved in the skills development.

The manual is a dynamic document which can respond to changes of the project implementation. It is structured to be used by the RTB, stakeholders and external auditors to implement the current phase of the SDF.

The SDF additional finance shall be implemented by RTB under the existing structure of SDF with guidelines which shall expand training opportunities for the acquisition of quality, market- relevant skills with more focus on selected economic sectors.

The target sectors were selected on basis of (i) sectors that employ large numbers of the population; (ii)sectors with potential for value addition and improved productivity; (iii) sectors where foreign direct investment is increasing and/or where significant public finances have been directed; and (iv) sectors that will support growth in other sectors.

While the focus is on the above-mentioned priority economic sectors, applications from other sectors are eligible for support provided there is a robust and well-documented justification in terms of employment opportunities for the graduates. The applicant will have to provide the documentation required by the RTB to assess the labour market relevance of the application. This must be in the form of a demand assessment.

The SDF is supposed to:

•  Stimulate competition and delivery of innovative programme offerings.
• Promote collaboration between enterprises and training centres and institutions.
• Increase skills acquisition among disadvantaged groups
• Improve the efficiency of training provision.

SDF is a challenge fund providing matching grants to institutions eligible for support according to the principles outlined in the manual.  Hence, the applications will be evaluated according to their relevance for further development of the Rwandan private sector and providing employment opportunities for youth entering the labour market.

Training areas that are not eligible for SDF include:

• Literacy training.
• General education.
• Higher education (degree programmes).
• Public administration.

The SDF is referred to in the Project Appraisal Document of the Priority Skills for Growth and the FinancialAgreement which was signed on 5th July 2020 between the World Bank and the Government of Rwanda.