Cost of shortage of skills

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Somalia’s journey towards reconstruction after two decades of civil war has been sluggish, partly due to skills shortage as supply of professionals trails market needs.

Analysts say the skills gap across professional fields has denied Mogadishu full economic dividends as order makes a return and activity picks up.

The implementation of the proposed US$803 million energy plan over the next 10 years is feared to suffer massive delays due to lack of technical skills needed to conduct due diligence and construct new power plants, substations and transmission lines.

“The most important, cross-cutting major set of issues is the extreme shortage or absence of qualified personnel, and the uncertainty regarding future supply of trainable persons, given a 24-year interruption of education processes,” states a report of the African Development Bank (AfDB).

The cost of training is far much smaller compared to what the economy stands to benefit from a competent pool of workers in future.

The few available professionals, mostly expatriates from abroad, demand princely remuneration, citing insecurity and tough working conditions. This has pushed up labour cost and that of projects.

The government now plans to spend US$58 million on the creation of a large pool of workers in the energy sector. Analysts have hailed as a step in the right direction.

“The cost of training is far much smaller compared to what the economy stands to benefit from a competent pool of workers in future. This will cut reliance on expensive expatriates and lock in cash in the local economy,” says Patrick Obath, a regional (East Africa) energy consultant.

Engineer Obath says that the complexity of the energy field requires a set of specialised skills ranging from law, which comes in handy in the drafting of power purchase agreements to engineering, energy economists and technicians.

The supply of these professionals lags demand in Somalia, boxing the country into a tight labour market corner. Mr Obath says the hefty cash paid to energy expatriates could be channelled towards productive sectors of the economy like health and schools with the acquisition of the requisite skills by the local population.

Somalia plunged into civil skirmishes in 1991 with militias tearing down infrastructure and crippling learning. However, order is making a return with the coming into power of the Federal Government of Somalia (FGS) in 2012. This has made it possible for the State to draw up new development strategies to power growth and improve welfare.

But this cannot be achieved without the diverse input of the adult proportion of the estimated 12.3 million Somalia population. The need for skills upgrade is critical.

FGS energy plan paves the way for systems upgrade and halving of power tariffs to US$0.50 per unit (kilowatt hour) by 2025. Skills shortages, however, remain a drag that has slowed project implementation.

“…Hardly anybody understands even basic energy sector management concepts (power, energy, peak demand…) and there are very few persons working in energy sector management,” the AfDB report says.

Government institutions, including the Ministry of Energy, suffer from a shortage of qualified staff, weakening their capacity to develop proper policies for growth.

Analysts say the FGS and its development partners should line up incentives like higher pay to attract young Somali professionals from the Diaspora to bridge the skills gap.

“While qualified personnel from the Somali Diaspora is less costly than expatriate technical assistance, its cost greatly exceeds local wages,” the AfDB says. “Its employment is also subject to security considerations, though in lesser measure than for expatriates.”

Foreign experts need handsome pay that includes hardship allowance and assurance of their security before they travel to impart technical skills to the local population.

Expats’ expenses like travel, accommodation and meals are often factored in, pushing up project costs.

A number of Somali homes relocated overseas in pursuit of better jobs and education, while others left because of insecurity.

Somalia needs to initiate sustainable training programmes to deepen its talent pool for engineers, technicians, planners, accountants, financial analysts and energy economists, according to the report.

This is set to consume huge sums of money and time.

Somalia, like most African nations, lacks a national skills database, hampering efforts by industry players, education and labour policy makers to establish and subsequently plug sectorial skills gap.

Analysts say that a skills data bank will help ease the process of scouting for talent while guiding policy makers in addressing labour market imbalances.

“For example, a recent study in Hargeisa shows that there is only one person knowledgeable about energy issues in the sector Ministry,” the report says, highlighting the depth of the problem.

“In this context, the quickest action could be for donor countries to set-up scholarship programmes for Somali young persons in their universities and technical training institutions.”

The government also needs to boost interest in learners in the energy sector for uptake of the courses through policy formulation and incentives.

“The most urgent tasks after the preparation of this investment programme would be the actual preparation of the technical assistance project and the design of Somali Electrification Institute (the proposed energy sector regulator),” the AfDB states. “The first component should be training and knowledge sharing about basic energy sector concepts and policies.”

Analysts say the government should race to roll out the training programme in order to cut out project delays, reduce costs and minimise poor workmanship.