Dissemination Workshop to Bota Stakeholders on VTF Survey Results

1. The Vocational Training Fund (VTF) Dissemination Workshop to Bota Stakeholders on VTF Survey Results Presented By: Mr Tshepo E Nkitseng 24 November 2011

2. Presentation Overview • Introduction • Administration of Fund • Payment and Calculation of Levy • Reimbursements

3. Introduction Introduction Informed by : • 1993 Commission on Education • Revised National Policy on Education (1994) • National Policy on V E & Training (1997) • Vocational Training Act (1998) • Pre-Implementation Seminars (2007/2008) • Vocational Training (reimbursement ) No8/08 • Vocational training (levy ) no 101 0f 2008 • Levy payments commenced October 2008

4. GOALS • To generate sufficient funds to support skills training by employers and therefore increase skills base at the workplace • Support the goal of cost-sharing in skills development in Botswana • To bring together supply and demand for training • Create opportunities in the training market

5. Payment Calculation • The amount of levy is based on the annual turnover of any Botswana company that is registered under the VAT Act or is liable for VAT at the following rates: • Annual turnover of P500,000 – P2 billion- levy = 0.2% of turnover • Annual turnover of more than P2 billion, contribution is 0.2% of turnover for the first 2 billion and 0.05% for any amount in excess of the P2 billion. • Oil Industry, contribution is a flat 0.05% on turnover relating to petroleum products

6. Reimbursement • Company must be up-to-date in paying Levy • Vocational Training that falls within the regulatory requirements (Accredited Institution or workplace) • Only training of citizens is claimable except for special cases where training of non-citizens is approved in advance by BOTA. • Prior approval by BOTA for training sourced outside Botswana

7. Reimbursement Formula/ Limit • There are two grant limits • 1) Limit based on amount of Levy (Formula) • Every P1.00 paid as levy up to a maximumof P1,000.00 shall generate a grant of P5.00 • Every P1.00 paid as levy in excess of P1,000.00 but below P5,000.00 shall generate a grant of P2.50 Every P1.00 paid as levy in excess of P5,000.00 shall generate a grant of P1.25 2) The total training costs incurred The approved reimbursement is the lesser of the two limits.

8. Reimbursement Formula/ Limit • Example: If turnover =P1,000,000 then Levy paid = P2,000 1) Grant limit based on levy is: P1000*5 +P1000*2.5 = P7,500.00 2a) If training costs are P10,000 Then the approved reimbursement will be P7,500.00 2b) But if training cost incurred is P4500 Then the approved reimbursement will be P4500

9. Application for Reimbursement • Use the VTF claim form( from BOTA or www.bota.org.bw) and attach the following: • Certified copy Omang for person(s) trained; • Original receipts or certified copies showing payment for tuition, accommodation, transport, meals and stationary; • Signed spreadsheet showing salary data; • Certified trainee transcripts or certificates showing competencies; • Certified copies of attendance register; • Pre - Approval letter, if training was outside Botswana

10. When can I Claim? Window Period Claims must have been lodged with the Authority on or before the 30th of June of each year

11. EXEMPTIONS • Entities with an Annual Turn-over of less than P500, 000.00; • Entities exempt from registering for VAT; • Companies registered with Diamond hub; • Companies registered with Innovation hub; (Exemption for the last two is for 5 years from date of registration )

12. Allocation to Special Groups At the beginning of each financial year, BOTA shall allocate funds as follows: • 2.5% for special groups • 1% for skills in emergent industries • 5% for small micro and medium enterprises

13. Claims as at 30th Sep 2011

14. Levy Update Information • Total number of Levy paying organisations ± 10000 • Cumulative collection as at end of October 2011: P517 Million • Cumulative claims paid as at end October 2011: P 84 Million • Coming from 731 Companies: ≈ 7%

15. Vocational Training Fund Survey Results Presented By Mr Mathews Phiri

16. Objectives of the study • To assess the major achievements of the Fund to date in relation to its stated objectives and intended results: • Assess what has been achieved, the likelihood of future achievements, and the significance/ strategic importance of the achievements. • Opinions on the Fund’s effectiveness based on impressions and interviews with target groups. • Describe any major failures to date

17. Objectives cont….. 2)The level and specific nature of the companies concerns in relation to the Fund. 3)Additional regulatory arrangements that can be done to promote the usage of the Fund and bring benefit 4)Any other relevant matter that can enhance the development of human capital through the Fund.

18. Target population • All companies that were registered with BURS and eligible to contribute, claim or use the Vocational Training Fund by the end of December 2010. • ±9000 companies

19. A self administered questionnaire was used to collect data for the study. • Simple random sampling was used and 600 questionnaires were sent out to levy payers. • 353 completed questionnaires were received back.

20. Analysis • Data entry, cleaning and analysis were done using Statistical Package for Social Sciences (SPSS) and Microsoft Excel

21. Results

22. Response by company type

23. Awareness of the VTF among companies

24. Effective means of disseminating information on VTF.

25. Training by Employer

26. Reasons for not training staff

27. Levels of training required by industry: Certificate Level

28. Diploma Level

29. Degree Level

30. Employers perception on what they like about the VTF

31. Major Challenges faced by employersReasons for dislikes about the VTF

32. Major challenges facing the VTF Division • Few claims • In complete submissions • Use of non-accredited training providers • Companies not seeking pre-approvals • No training needs analysis/plan done • Exorbitant Pricing of programmes by VTI’s when doing training for Levy payers; • Limited scope of training; • An influx of training providers in Botswana

33. Major challenges faced by Companies in their efforts to train

34. Suggested Improvement to the operations of the VTF

35. Suggestions to the funding scope

36. Suggestions to provide quality accredited training

37. Recommendations

38. BOTA should consider increasing the use of the email and the website to communicate with levy payers. • The Authority should provide adequate information and education about the VTF. • The procedures and documentation guiding the application for reimbursement should be reviewed, with the aim of making them more user-friendly and quicker to applicants. • The scope of the Fund should be reviewed to include other levels of training beyond certificate such as diploma, degree, masters, professional courses (CIMA, ACCA, AAT, MBA etc) and work improvement seminars.

39. The Fund should be used to support other training related activities such as: • Internships, attachments and on the job-training • Conducting training needs analysis for companies which pay the levy • Paying for training materials • To cover for product related training, such as those commonly carried out by manufacturers and distributors.

40. The Fund should pay for training costs upfront alongside the reimbursement approach. This will assist levy payers who are experiencing cash flow problems. • For growth in quality training, the VTF should also be used to upgrade trainers for them to attain full accreditation. Lack of qualified trainers is a serious problem in Botswana

41. Considerations should be made for the Fund to cover employees who have paid for their own training, by allowing them to submit claims through their employers- if their employers are levy payers. • BOTA should consider developing standardized forms which would be used when applying for training outside Botswana.

42. “UP SKILLING BATSWANA” THANK YOU