Language: English

Original: English

AFRICAN DEVELOPMENT BANK

Grant Proposal for Financing under the MENA TRANSITION FUND: Support for the Work Readiness Program in Tunisia

COUNTRY: The Republic of Tunisia

Date: November 2015

Appraisal Team Mr. Oussama BEN ABDELKARIM, Senior Education Economist, OSHD.2Ms. Selma ENNAIFAR, Chief Financial Management Specialist, ORPF.2Ms. Blandine WU-CHEBILI, Principal Procurement Officer, ORPF.1Mr. Mohamed Ali EL-KOUT, Principal Financial Accountant, FFCO.2

Sector Manager Mr. Justin MURARA, OIC Division Manager, OSHD.1Sector Director Ms. Sunita PITAMBER, OIC Director, OSHDRegional Director  Mr. Jacob KOLSTER, Director, ORNA

Ms. Mulle CHIKOKO, Principal Social Protection Officer, RWFOMr. Mouhamed GUEYE, Principal Education Economist, OSHD.2

Peer ReviewersMs. Rosemond OFFEI-AWUKU, Senior Poverty Economist, OSHD.1Ms. Laurence LANNES, Principal Health Economist, OSHD.3

Mr. Driss BELAMINE, Senior Development Economist, OSHD.1

Table of Contents1. Introduction2

1.1 Background Information 2

1.2 Project Objectives 4

1.3 Proposal Preparation 5

1.4 Justifications and Rationale for the Use of Resources 5

2. Project Description 6

2.1 Component 1: Capacity building for key stakeholders participating in employment programs and increasing the employability job seekers 6

2.2 Component 2: Supporting the development of the National Employment Policy 9

2.3 Component 3: Program management and support tools 10

3. Program Cost Estimates 10

4. Procurement 12

5. Implementation 14

5.1 Implementation Schedule 14

5.2 Implementation Arrangement 15

6. Financial Management arrangements 15

7. Conclusions and Recommendations for Bank’s Consideration 16

Annex 1: Government’s Request 17

Annex 2: Cancellation decision of HSBM Project’s by MENA-TF 18

Annex 3: Procurement Plans 19

2

Currency Equivalents

1 UA = 1,39687 USD

1 USD = 1,99811 TNDNovember 2015

Acronyms and Abbreviations

AfDB African Development BankANETI National Agency of Employment and Independent WorkCSP Country Strategy PaperEA Executing AgencyERP Enterprise Resource PlanningGDP Gross Domestic ProductGoT Government of TunisiaGPN General Procurement NoticeHSBM Holistic Social Business MovementISA Implementing Support Agency (under MENA Transition Fund)ME Ministry Of EducationM&E Monitoring and EvaluationMENA Middle East and North AfricaMHESR Ministry of Higher Education and Scientific Research MSME Micro, Small and Medium EnterpriseMVTE Ministry of Vocational Training and EmploymentONEQ National Observatory of Employment and QualificationsOSHD Human Development Department (AfDB)PIU Project Implementing UnitQCBS Quality and Cost Based SelectionSME Small and Medium EnterprisesTND Tunisian dinarTORs Terms of ReferenceUSD United States of America DollarWRP Work Readiness Program

3

Grant Information

Client’s Information:

RECIPIENT: Government of Tunisia

IMPLEMENTING AGENCY: The Ministry of Vocational Training and Employment

Financing Plan:

Source Amount Instrument

AfDB USD 2,560,000 MENA TFGovernment USD 128,000 Government BudgetTotal Cost USD 2,688,000

ADB’s Key Financing Information:

MENA Grant Currency USD

Timeframe – Main Milestones

Concept Note Approval 20 November 2015Project approval 15 January 2016Effectiveness 1 March 2016Last closing 28 February 2018Completion 31 August 2018

4

A. Results-based Logical FrameworkCountry and project name: Grant Proposal for Financing under the MENA TRANSITION FUND: Support for the Work Readiness Program in TunisiaPurpose of the project: Provide a visible change in the short and medium term in the labour market in Tunisia by increasing the capacity of employment

public services to implement and evaluate complex programs and by reducing the gap between the economy’s needs and the job seekers skills and competencies.

RESULTS CHAINPERFORMANCE INDICATORS

MEANS OF VERIFICATION

RISKS / MITIGATION MEASURESIndicator Baseline

(2015)Target (2017)

IMPA

CT Impact Reducing the unemployment of Tunisian job

seekers and building the capacity of public employment services and social partners in the regions

15.2%

Female : 22%Youth : 31%

14.5%

Female : 20%Youth : 28%

National Institute of Statistics and ONEQ

OU

TC

OM

ES

Outcome 1Improved coverage of job seekers by ANETI

Rate of registered job seekers at ANETI (Number of registered job seekers with ANETI / Total number of job seekers)

34% 40%

ANETI and ONEQ Reports

The increasing budget deficit dampens the government’s transfer to the less developed regions and private investment decreases in less developed regions / the Bank, and other Development Partners have confirmed their support to finance the budget deficit, under which reducing regional disparity is a key component.

The procurement risk for the grant implementation is high. / The

Outcome 2 Improved Government capacity in addressing the skills gap in labour market  

Rate of job offers unsatisfied two months after their posting (Number of unsatisfied job offers after two months / Total number of job offers)

56% 45% 

OU

TPU

TS

Component 1: Capacity building for key stakeholders participating in employment programs and increasing the employability job seekers

Sub-component1.1 Capacity building for the Government and key stakeholders in designing and managing employment programs and initiativesOutput 1.1.1

Output 1.1.2

Output 1.1.3

Output 1.1.4

No. of ONEQ staff members trained

No. of MVTE and ANETI staff members trained

No. of employment advisors trained

No. of civil society associations trained

0

0

0

0

15

30

250

100

Project Reports

Project Reports

Project Reports

Project Reports

v

corrective measures which have been agreed are the following: (i) The hiring of a qualified procurement specialist familiar to Bank’s rules and procedures; (ii) a massive and a continuous support from the Bank’s team throughout the implementation phase for capacity enhancement on Bank procedures; (iii) the use of the Bank’s SBDs; and (iv) a Bank’s prior review adapted to the situation.

The low implement-tation capacity of the MVTE. / (i) The PIU is led by an experienced manager familiar with the implementation of complex programs (ii) Senior staff of MVTE and ANETI will be trained in

Sub-component 1.2 Introducing the community management approachOutput 1.2.1

Output 1.2.2

Output 1.2.3

Procedures manual on reconversion advisory issued and adopted

No. of job seekers trained

Number of job seekers placed in jobs by ANETI in priority sector

N/A

0

0

Analysis issued and adopted

860

220

Project reports

Project reports

Project reports

Component 2: Supporting the development of the National Employment Policy

Sub-component2.1 Diagnosing the skills gaps and general trends in labour market

Output 2.1.1 Diagnosis of the skills Gap developed N/A Diagnosis adopted Study report

Sub-component2.2 Development of National Employment Policy

Output 2.2.1

Output 2.2.2

Output 2.2.3

National Employment policy developed

Action Plan developed

Workshops to share the results of the Strategy is organized

N/A

N/A

0

Diagnosis adopted

Action Plan adopted

6(With 5 in the

regions)

Strategy document

Strategy document

Project Reports

Component 3: Program management and support tools

vi

project management and implementation.

Output 3.1

Output 3.2

Output 3.3

Output 3.4

Online platform for feedback of job seekers, trainees and private companies

Quarterly M&E report

Annual auditing report

Program completion report (PCR)

N/A

N/A

Annually

N/A

Online platform functional

Quarterly produced

Annually produced

By completion of the program

Online platform

Project Reports

Project Reports

Project Reports

KE

Y A

CT

IVIT

IES

COMPONENTSComponent 1. Capacity building for key stakeholders participating in employment programs and increasing the employability job seekers

Component 2. Supporting the Development of the employment policy

Component 3. Program management and support tools

INPUTSComponent 1: Training, workshops, consultancy and technical expertise, (USD 1885,000)

Component 2: Consultancy (USD 425,000)

Component 3: Consultancy, and equipment (USD 90,000)

Miscellaneous: USD 60,000

AfDB staff time and missions: USD 100,000

vii

1. Introduction

As an eligible recipient, the Government of Tunisia (GoT) has requested the support of the African Development Bank (AfDB), as an Implementation Support Agency (ISA), to assist in the preparation and implementation of a technical assistance (TA) project to cover the pilot phase of “the Work Readiness Program (WRP)”. The WRP is a program initiated by the Ministry of Vocational Training and Employment (MVTE) to tackle the pressing issue of unemployment in Tunisia, especially among disadvantaged groups. Specifically, the WRP will aim to enhance the employability of Tunisian job seekers by improving their skills and significantly building the capacity of public institutions that provide assistance to them. This proposal, for a total amount of USD 2,560,000 to be sought from the MENA Transition Fund, has been prepared for that purpose.

1.1 Background Information

1.1.1 Tunisia has made remarkable progress especially in terms of governance and political reforms. Tunisia has organized four successful and transparent parliamentary and presidential elections, adopted a new constitution based on respect for human and civil rights, and witnessed the emergence of an active civil society. More recently, the Tunisian quartet, which played a significant role during the political transition, was awarded the Nobel Peace Prize as a recognition for the country positive achievements. Notably, this progress on the political front was achieved in a difficult socio-economic context, which has worsened after the 2011 Revolution at the backdrop of the challenging security situation that marked the region.

1.1.2 Four years after the 2011 Revolution, the GoT still faces major socio-economic challenges that hamper its ability to respond to social demands of the people, particularly those related to job creation. The GDP growth rate was 2.3% in 2014 but is estimated at about 0.5% for 2015. The economic slowdown has widened macroeconomic imbalances1. Political uncertainty weighs also negatively on the competitiveness of Tunisia and is considered as the third most important problem by business operators. Inflationary pressures remain also high. Equally important are inefficiencies in the business environment, which deter private investment. In this context, it is increasingly difficult for the private sector, especially micro, small and medium enterprises (MSMEs) to generate jobs and prosper. In the second quarter of 2015, the unemployment rate for the whole population reached 15.2% against 17.6% in Q2 2012 while that of university graduates decreased from 30% in Q1 2015 down to 28.6 % in Q2 2015. High unemployment does not only reflect limited job creation but also a mismatch between the needs of private companies and the skills of job seekers.

1.1.3 High unemployment threatens social cohesion in Tunisia, since a large cohort2 of increasingly educated young people struggle to find jobs and participate productively in the economy. The pressure related to employment and inclusive growth remains high despite 1 The macroeconomic situation is characterized by a stabilization of the budget deficit at 4.8% of GDP in 2015 against 4.9% in 2014 and 6.8% in 2013. The deterioration in the current account balance continued to increase reaching 8.9% of GDP in 2014 from 4.7% of in 2010.2 According to a 2013 study, among 2,895,682 aged 15-29 years, 420,102 are unemployed. Among these there are 244,581 men (58.2%) and 175,521 women (41.8%). Unemployment among young people increases with age, and nearly 20% of people aged 25-29 are unemployed non-students against nearly 17% for young people aged 20-24 and 6% for young aged 15-19 years. A pronounced disparity of youth unemployment is by region. The District of Tunis ranks first with a share of 21.7% of all unemployed, followed by the Central East (21.6%), Central West (15.3%) and the North is (14%).

2

efforts deployed by the Tunisian government in collaboration with international development partners to address this problem. One young unemployed out of nine had previously refused a job, with the low salary offered being the main reason for the refusal.

1.1.4 At the same time, based on ANETI database, thousands of job offers remain every year unsatisfied as several companies struggle to find the right skills and competencies on the labour market to fill their job vacancies. In fact, the number of vacant positions was estimated at 29,741 posts according to the ONEQ survey in 2014, including 11,543 in “industry” sector. The gap between the supply and demand is persistent and represents a challenge to Tunisia’s economic development. Constraints to economic growth from a skill gap perspective have to be removed and urgently addressed by the GoT. Currently, the GoT does not have a comprehensive national employment policy, which has become an absolute necessity and a very important development pillar in a volatile and rapidly changing world of work.

1.1.5 Government’s support for raising the employability of job seekers and narrowing the skill gaps in the labour market: The GoT, through its the MVTE, has been designing and implementing several employment programs that include a training and employability component in order to improve job seekers’ skills and address market needs in terms of skills and competencies. In 2012, MVTE reviewed the existing programs portfolio and decided to introduce four new employment programs including one (Chèque d’amélioration de l’employabilité) focusing on the skill set of the supply side. In addition, in 2015, the Ministry of Higher Education and Scientific Research (MHESR), the Ministry of Education (ME) and the Ministry of Vocational Training and Employment (MVTE) have formed a Human Resources Committee (one the most important measure of the General Budget Support Program conducted by the Bank) to coordinate the HR strategy in Tunisia and to ensure better alignment with the economy’s needs. Furthermore, through the MVTE, the GoT will shortly launch the design of the National Employment Strategy to support job creation and enhance human capital. Furthermore, The ANETI is undergoing an organizational restructuring. It aims to optimize the allocation of resources by (i) standardizing the process within employment offices (i.e. Simplified procedures, Front office specialized in welcoming job seekers and registering them , back office accepting only by appointments, etc…);and (ii) freeing up extra time for counselling and advisory by outsourcing the administrative tasks to other units than employment advisors. The restructuring takes into consideration the main objectives of the Work Readiness Program as it re-focus the mission of employment advisors on personalized mentoring and counselling. The expected result is an overall improvement of execution capabilities.

1.1.6 Donors’ support for HR and employment programs in Tunisia. Donors have been involved in supporting the GoT under its initiatives through either direct financing or budget support. In the field of human capital development, the World Bank Group increased its support for Tunisia to improve governance and accountability, opportunities for women and youth, private sector job creation and investments in interior regions. In September 2015, the French Development Agency (AfD) granted a € 24.7 million to GoT in order to fund the promotion of the socio- professional integration of young people with the objective of meeting the needs of companies for qualified personnel, especially in promising industrial sectors. Furthermore, Luxembourg, current president of the council of the European Union, has led very recently efforts to start a € 200 million fund dedicated to improve the HR management and training in

3

North Africa and to increase the mobility of vocational training students between the north and the south shores of the Mediterranean Sea.

1.1.7 Bank’s support for HR and employment programs in Tunisia. The AfDB supports HR sectors via a variety of programs such as: (i) the budget support program “Support to regional development and employment creation” that aims to raise $ 200 million and should be approved before the end of 2015. The program’s second component focuses on “skills development and quality of labour improvement"; (ii) a Technical assistance in the development and implementation of entrepreneurship training device and active learning for the benefit of universities and vocational training centres in Tunisia; and (iii) the Souk At-Tanmia Partnership, which was launched in 2012 by the AfDB in coordination with 19 partners and aims to support MSMEs development by providing grants (TND 10,000 – 30,000 per project) as down-payment capital that can be leveraged to access market financing. The first edition of Souk At-Tanmia has financed 61 projects, 62% in disadvantaged areas, 53% held by youth, 32% by women and 54% by the previously unemployed. To date, beneficiaries are satisfied with the support they have received.

1.1.8 The GoT has been undertaking a comprehensive set of reforms to transform the Tunisian economy, address the difficult social context, accelerate the inclusive growth and create jobs for the youth. The reforms relate to six main axes: (i) Ensure the stability of the macroeconomic environment; (ii) Modernize the business environment and encourage competition in the local market; (iii) Encourage domestic and foreign investors to invest in Tunisia; (iv) Create a strong financial sector to better serve the development of the private sector; (v) Provide a workforce that is better trained and qualified; and (vi) Strengthen labour market institutions and optimize policies through better segmentation and targeting.1.1.9 As part of the axes (v) and (iv) reforms, the Tunisian government is considering the strengthening of the National Agency for Employment and Independent Work (ANETI) and the MVTE, the development of complementary training curricula for job seekers and the definition and implementation of a comprehensive national employment policy. The whole program aims to provide a visible change in the medium and short term in the labour market in Tunisia by increasing the capacity of employment public services to implement and evaluate complex programs and by reducing the gap between the economy’s needs and the job seekers skills and competencies. It is critical to identify major growth constraints from a skills gap perspective and understand how to bridge these gaps through a comprehensive framework to train job seekers and orient them to respond to the needs of the economy. This proposal is therefore prepared to contribute to the GoT’s objective of jobs creation and employability development, and to improve the impact on growth inclusiveness.

1.2 Project Objectives

1.2.1 The WRP aims to provide a visible change in the short and medium term in the labour market in Tunisia by increasing the capacity of employment public services to implement and evaluate complex programs and by reducing the gap between the economy’s needs and the job seekers skills and competencies. More specifically, WRP aims to: (i) Develop an effective national employment policy; (ii) Increase the implementation capacity of the MVTE and other support agencies and Civil Society organization; (iii) Improve the employability of socially most vulnerable job seekers; and (iv) Develop a sustainable and scalable model on effective job readiness programs.

4

1.2.2 The Work Readiness Program (WRP) has the following intermediate objectives: (i) Build the capacity of public employment services and social partners in interior regions by providing them with tools and expertise that are necessary to implement impactful and successful employability programs; (ii) Develop a national employment policy that involves all relevant actors; (iii) Identify key sectors with high potential for employment creation and economic development, but which face growth constraints due to scarcity of required skills (both quantitative and qualitative); (iv) Orient job seekers to these key economic sectors by identifying the available profiles that could integrate these sectors and by offering them additional training and reconversion advisory; and (v) Improve professional and interpersonal skills of Tunisian job seekers. The program combines a personalized evaluation, targeted training in technical and soft skills, coaching, and internships.

1.2.3 The direct beneficiaries of this nationwide program will be Tunisian administration, youth, women and other vulnerable people who are failing to find jobs. It is aimed at developing their own skills and competencies, and supporting private companies who plan to create more jobs and hire young Tunisians, and local communities. The indirect beneficiaries will include families of direct beneficiaries and the entire Tunisian population through the supply-chain effect and spillovers from the direct beneficiaries through consumption and other activities. Moreover, the population including youth, women, the vulnerable and rural poor, especially those in disadvantaged regions, will be targeted as a priority.

1.2.4 The WRP will be structured in 2 phases, of which the first phase will solicit support from the MENA Transition Fund: (i) A pilot phase of the WRP in Tunisia will take place from January 2016 to December 2017. The GoT is seeking support from the MENA Transition Fund for this pilot phase. The pilot-phase will contribute to: (1) building capacity of key stakeholdersto participate in the implementation of the employment programs and especially the Work Readiness Program, (2) Contracting private training providers to train and increase the employability of a “control pool” of the socially most vulnerable job seekers; and (3) Developing an effective national employment policy; (ii) A ramp-up phase will then take place starting from January 2018, financed by the Government resources. The ramp-up phase will adjust the training methodology based on the results of the pilot phase and then scale it up to much a larger group of job seekers.

1.3 Proposal Preparation

1.3.1 This proposal was prepared through a collaborative effort by the Ministry of Vocational Training and Employment (MVTE) and the Human Development Department (OSHD) from AfDB. This is in line with the MENA Transition Fund’s requirements, whereby the AfDB will act as the Implementing Support Agency (ISA) for this proposal providing the MVTE, as the executing agency through the Minister’s cabinet dedicated project team, with the necessary oversight, guidance and assistance required. In addition, the AfDB rules and procedures will be used throughout the implementation of this Program, as per the ISA criteria.

1.4 Justifications and Rationale for the Use of Resources

1.4.1 The Program fits in the MENA Transition Fund’s objectives and scope, especially in terms of fostering sustainable economic growth by enhancing job creation and inclusive development. The main resources will be used to implement this Program at the macro, meso and micro levels. At the macro level, it will contribute to narrowing the skill gaps in priority sectors by quantifying the gaps and adopting a plan to satisfy the demand. At the meso level,

5

activities will be institution-based, focusing on the needs of the key stakeholders, and will include capacity building, information sharing and dissemination, and the creation of linkages. At the micro level, it will be help in increasing the employability of the socially vulnerable youth and women in cooperation with service providers, technical expertise in the private sector and civil society associations.

1.4.2 The Program is well aligned with the GoT’s Strategic Note presented in September 2015 as background to the forthcoming 5-year Strategic Development Plan 2016-2020. The note presents six axes to meet the objectives of accelerating growth and job creation and achieving balanced regional and inclusive development. The Work Readiness Program fits within the second pillar “From a low-cost economy to an economic hub” and in the third pillar of “Human development and social inclusion”. The Program also aligns well with the fourth pillar for “Realizing the ambitions of the regions” regarding the targeting of disadvantaged regions. Thus, the WRP fully aligns with current GoT agenda.

1.4.3 The Program is in line with the AfDB’s Ten Year Strategy (2013-2022), Human Capital Strategy (2014-2018) and Interim CSP (2014-2015) for Tunisia. The program is aligned with the Governance pillar of the Interim Country Strategy Paper (CSP 2014-2015) for Tunisia focusing on supporting reforms and on capacity building (in the areas of job creation, MSME and entrepreneurship development). The program also fully adheres to the Ten-Year Strategy (2013-2022) of the Bank and the Human Capital Strategy (2014-2018) through its contribution to the development of qualifications. Finally, the Program is also aligned with the 3rd High five announced by President of AfDB, namely “Jobs for Africa’s youths and women”.2. Project Description

The Program consists of the following three components:

2.1 Component 1: Capacity building for key stakeholders participating in employment programs and increasing the employability job seekers

This first component achieves the first objective of the WRP: Build the capacity of public employment services and further key stakeholders in the regions by providing them with tools and expertise that are necessary to successfully implement employment programs. In addition, this component should achieve the second objective of the Work Readiness Program: Increasing the employability of socially vulnerable job seekers with very low employability.

Sub-component 1.1: Capacity building for the Government and key stakeholders in designing and managing employment programs and initiatives

2.1.1 The first sub-component aims at strengthening labour market institutions in Tunisia through support for the Government in providing an enabling strategic framework and in coordinating and overseeing labour market active programs.

2.1.2 Public Employment Services currently manage a database of all unemployed Tunisians registered with them along their key skills and attributes such as the level of education and the job interviews they did in the past. The database includes highly valuable information and statistics, which should be used to analyze the labor market, develop and test profiling models and build an information tool to provide vocational guidance for pupils, students and applicants. Moreover, employment advisors need to build their capacity to differentiate job seekers according to the degree of their vulnerability in the labor market. The model of expertise lies

6

precisely in the ability of an advisor to elaborate, during a conversation with the job seeker, a comprehensive understanding of the job seeker’s position in the labor market and of his prospects for return to employment in order to determine the type of support he/she needs. Employment offices need to adopt and implement a methodology for systematically profiling, categorizing job seekers and identifying their needs in terms of counselling, training and coaching. They also need to adopt a client-oriented approach by focusing on satisfying both job seekers and companies and monitoring the satisfaction rate. At the same time, the Ministry for Vocational Training and Employment must improve its capacity to evaluate the impact and assess the efficiency of its programs to identify weaknesses that need to be addressed through revisions in these programs.

2.1.3 The MVTE is still constrained in critical capacities such as structuring initiatives, developing programs, and managing and evaluating them. The Work Readiness Program will help build capacity for the Ministry in program management and evaluation. More specifically, the achievements during the pilot and rollout phase of the Work Readiness Program will be used to shape this capacity building. For example, the procedures manual issued on the implementation of the program can be adopted by the GoT as a base to develop implementation guidelines for other programs. Furthermore, the national employment agency ANETI will acquire critical capabilities to adopt segmented approach in supporting job seekers.

2.1.4 In order to establish strategic partnership with the private sector, developing partnerships and agreements between public employment services and businesses is a requirement for improved intermediation and better alignment of the economic environment needs with the employment programs. Furthermore, there is a significant and urgent need to develop the cooperation and coordination with the private employment agencies and the civil society in order to address the diverse needs of jobseekers and enterprises and the massive development of employment programs. The capacity of ANETI to offer individual counselling and mentoring to Tunisian job seekers is very limited and estimated to be at 10,000 to 15,000 job seekers simultaneously. This capacity is one of the most important barriers to implement large-scale employment programs and needs to be increased to 80,000 to 100,000 job seekers. Civil society, external counsellors and private employment agencies can help alleviate the pressure.

2.1.5 Henceforth, capacity building for the GoT in program management and evaluation will be carried out in the following aspects:

A. Strengthening the Ministry of Vocational Training and Employment in designing and rolling-out strategic programs:

a. Enhance the performance of the division of the labour market active programs in designing and evaluating labour and HR programs and policies;

b. Enable the government to identify, mobilize and cooperate with private sector, especially through technical cooperation in the fields of the identification of business needs and skills gaps;

c. Identifying tools and means able to improve the statistical approaches of the Ministry of Vocational Training; and

d. Hiring a monitoring and evaluation consultant for the PIU.

B. Strengthening support services (coaching and consulting) in the local employment offices:

7

a. Organize workshop for career counselling and training to enhance the skills of employment advisors; especially in the disadvantaged regions;

b. Identify the tools and means in the employment offices that require reinforcement with the involvement of other actors (associations, private sector);

c. Provide training for database management and statistical tools in matter of unemployment and skills gaps; and

d. Assistance for building regional skills map.

2.1.6 Key activities under this sub-component include: Organize training sessions for the National Observatory of Employment and

Qualifications (ONEQ) to enhance their evaluation and assessment capabilities; Organize training sessions for senior MVTE and ANETI staff focusing on their

project management skills; Organize a training workshop for employment advisors to improve their counselling

and community management capabilities; Form a dedicated Task Force and organize visits to employment offices – especially

in impoverished regions – to assist them, financed by MVTE budget; Analyse the regulatory framework for private employment agencies in Tunisia and

formulate recommendations to reform it; and Train relevant associations and external counsellors to build-up their coaching and

counselling capabilities.

Sub-component 1.2: Introducing community management approach to employment offices

2.1.7 Individual counselling relies on the personal relationship between the employment advisor and the job seeker. This relationship depends on mutual trust. The advisor should spend more time with his “community” of job seekers and organize regular sessions to raise labour market awareness. Employment advisors need to be familiar with “community management” approach and apply it in a first step to a small cohort of job seekers with low employability mainly based in impoverished and disadvantaged regions. This pool includes young male and female Tunisians, who come from a poor family background and who (i) left school very early before obtaining any degree or professional certificate; or (ii) gave up the idea of working after a long unsuccessful job search and felt marginalized by society. Selected candidates from this pool will be offered basic and complementary training to enhance their employability potential, upgrade their skills and motivate them to enter the labour market. The selection will be based on a certain number of criteria that should reflect the social vulnerability and the need to raise employability of selected candidates. The Development index (Index established by MDICI) of the region of the job seeker, the social background of his family, the length of his unemployment period and the assessment of his employability and skills will be all taken into account.

2.1.8 The curriculum primarily addresses the strong belief that the public sector is the sole guarantor of stability and job security in return for minimal effort from employees. This conviction prevails among vulnerable job seekers in Tunisia. Possible curriculum for the basic training may include following modules: (i) languages and communication; (ii) logic of the labour market (Building a search strategy in the labour market); and (iii) competitiveness and Fitness (to develop job seeker’s ability to navigate through the local professional network and to define a personal development plan with the objective of finding and securing a decent job).

8

2.1.9 Key activities under this sub-component include: Contract providers to train 860 job seekers (40 job seekers from each of the 14 most

impoverished regions and 30 from each remaining region) in the different modules of the basic curriculum and then in the complementary curriculum;

Conduct routine supervision of the pipeline and on-going training; and Collect feedbacks from job seekers who have received the training, via the online

platform.

2.2 Component 2: Supporting the development of the National Employment Policy

This component aims at building capacities on the design, implementation, monitoring and evaluation of effective national employment policies and plans.

Sub-component 2.1: Diagnosing the skills gaps and general trends in labour market

2.2.1 Cross-sector skills gap will be diagnosed quantified and mapped to job description and required profiles using four main sources:

National sectorial policies. The most concrete and imminent one is the "Smart Tunisia" program, which has been recently launched and aims to attract foreign companies and convince them to outsource some of their support functions to Tunisia;

Bilateral agreements between Tunisian and other countries and requests of labour force sent by the authorities of foreign countries to GoT;

Job offers being posted at ANETI using the conventional procedure and remaining unsatisfied after a certain amount of time (only valid if a critical mass is reached);

Requests from professional associations, chambers of commerce and employers’ organizations to anticipate skill needs not available on the market.

2.2.2 This sub-component will be the main lever in the job market to accompany the national employment strategy and sectorial policies by qualifying and orienting human resources to economic priority sectors.

Hire a consulting firm to:

Organize local workshops across the country that involve employers and job seekers to identify local unsatisfied job offers;

Analyze current labour demand vs. supply in priority sectors such as Offshoring (BPO Voice and Data, ITO and R&D), Electrical, Electricity and Mechanical Engineering (e.g. wielding, assembly, maintenance, quality…), Construction and real estates (e.g. plumbers, carpenters, electricians, project managers);

Quantify the gap and characterize the quality requirements in terms of content delivered (specific technical, language, soft skills), training institutions, type of program, etc; and

Prioritize the gaps to be addressed based a certain number of criteria: size and potential of the employment opportunity, availability of job seekers whose profiles correspond to the reconversion requirements, sector growth constraints from skill gaps.

The diagnosis will be very important to develop the national employment policy.

9

Sub-component 2.2: Development of National Employment Policy

2.2.3 The employment policy-making process will be based on tripartite social dialogue and involve all actors with an interest in the measures to be taken:

The technical areas that may constitute its main pillars;

The elements of a policy implementation strategy; and

The relevant monitoring and evaluation systems and impact assessment techniques.

2.2.4 The main actors are the Ministry of Vocational Training and Employment, the Ministry of Finance, the Ministry of Development, Investment and International Cooperation and the Ministry of Social affairs. A team consisting of representatives of the four ministries and the social counterparts will be in charge of the design and coordination of the national employment policy. The team will need technical expertise to accomplish its mission.

2.2.5 The key activity is to hire a Firm with proven record of accomplishment in developing employment policies.

Component 3: Program management and support tolls

2.3.1 Under this component, activities related to program management will be addressed. It aims to: (i) Put in place a Project Implementation Unit (PIU) ,which will be in charge of the Program implementation and consist of members from Ministry’s cabinet, Division of Employment Promotion and ANETI; (ii) Build an online platform dedicated for satisfaction surveys and feedback of customers (employers, trainees and job seekers); (iii) Purchase IT materials (75 laptops) for PIU and employment offices; Conduct an audit to the program; (iv) Assess the efficiency of the program and evaluate its impact; and (v) Produce required reporting.

2.3.2 The activities under this component include mainly: (i) hiring consultants, (ii) assisting with the roll-out of the program, and (iii) preparing quarterly monitoring and evaluation (M&E) report, annual audits, and a program completion report (PCR) upon completion of the Program.

2.3.3 Procurement activities relevant to establishing the PIU will be done with assistance from the ISA in terms of: (i) development of TORs; (ii) identification of potential candidates; and (iii) guidance on setting the technical evaluation criteria. The Government, through the PIU, will ensure the coordination between the Work Readiness Program and other public and private programs in the areas. The coordination is expected to improve value for money and enhance operational efficiency.

3. Program Cost Estimates

3.1 The program costs are primarily for capacity building and technical assistance services for government and other key stakeholders, providing complementary training and advisory to job seekers, and project management. The total cost of the Program is budgeted at USD 2,688,000 with USD 2,560,000 to be provided through resources of the MENA Transition Fund.

3.2 In line with the MENA Transition Fund Agreement, the AfDB acting as the ISA is eligible to charge the project expenses related to the implementation of the component designated to the ISA, and the provision of guidance and support to the GoT’s executing agency, such as staff time, travel requirements and staff expertise. In this regard, the Program has allocated an amount of USD 100,000 for expenses incurred by the ISA over its duration.

10

Table 1: Budget Summary

Amount (USD)

Local Component

Foreign Component

Project Direct Costs (by MENA Trust Fund) 2,460,000 0% 100%Project Indirect Costs (by MENA Trust Fund) 100,000 0% 100%Sum of Costs (by MENA Trust Fund) 2,560,000 0% 100%GoT Counterparty 128,000 5% 0%Sum of Costs 2,688,000 5% 95%

Table 2: Budget Planning by ComponentsCosts by Item (USD) MENA Trust

FundCountry

Component 1: Capacity building for key stakeholders participating in employment programs and increasing the employability job seekers

1885,000

1.1 Capacity building for government and key stakeholders in the designing and managing employment programs and initiatives

430,000

Training for the National Observatory of Employment and Qualifications (ONEQ) to enhance their evaluation and assessment capabilities

30,000

Training for MVTE and ANETI senior staff focusing on improving their project management skills

50,000

Training for employment 250 advisors (Two from each employment office in Tunisia) to improve their counselling and coaching capabilities, reconversion advisory to selected job seekers and introduce the community management concept

150,000

Monitoring and evaluation specialist (including development of Program completion report)

85,000

A dedicated Task Force to visit employment offices – especially in impoverished regions – to assist them (Transport / accommodation and other incidental costs for field visits)

In kind (equivalent

to 4,400)Analysis of the regulatory framework for private employment agencies in Tunisia

15,000

Training workshops for relevant associations to build-up their coaching and counselling capabilities

100,000

1.2 Introducing community management approach to employment offices 1,455,000Contract training providers to train 860 job seekers (40 job seekers from each of the 14 most impoverished regions and 30 from each remaining region) in the different modules

1,455,000

Component 2: Supporting the development of the Employment Strategy and dissemination of results

425,000

2.1 Diagnosing the skills gaps and general trends in labour market 175,000

Organize local workshops to identify unsatisfied local job offers 25,000Hire a consulting firm to Analyze current labour demand vs. supply in priority sectors such as Offshoring, quantify the gaps and prioritize

150,000

2.2 Development of the national employment policy 250,000Hire a Firm, with proven record of accomplishment in developing employment policies, and to organize dissemination workshops.

250,000

Component 3: Program management and support tools 90,000Online platform for feedback and satisfaction survey for customers (employers, trainees and job seekers

15,000

Laptops and equipment for employment offices 70,000

Computer and equipment for PIU 5,000

11

External auditing In kind (equivalent to 18,000)

Staffing the PIU In kind(equivalent to 105,600)

Sum of direct costs 2,400,000Miscellaneous costs (2.5%) 60,000Total direct costs 2,460,000ISA indirect costs (staff time, travel for AfDB staff) 100,000Budget to be requested from the MENA Trust Fund 2,560,000

4. Procurement

4.1 Procurement activities to be financed by the MENA TF Grant will be procured in compliance with African Development Bank’s procurement Rules and Procedures for the Use of Consultants, and Rules and Procedures for procurement of Goods and Works (May 2008 edition and revised July 2012) using the appropriate Bank’s Standard Bidding Documents (SBDs). The bulk of procurement activities under the project will consist of consulting services and goods as detailed in the table below:

Table 3. Procurement table of contracts financed by the MENA TF Grant

  Amount in USD

Procurement Nature

Procurement

method

Duration of future contract

Component 1 : Capacity building for key stakeholders participating in employment programs and increasing the employability job seekers

Trainer for the National Observatory of Employment and Qualifications (ONEQ) to enhance their evaluation and assessment capabilities (including ticket+accommodation+per diem)

30 000 Individual consultant 3 CV 4 months

Trainer in project management and monitoring for ANETI and MVTE (including ticket+accommodation+per diem) 50 000 Individual

consultant 3 CV 5 months

Specialist for WRP project monitoring and evaluation (including ticket+accommodation+per diem) 85 000 Individual

consultant 3 CV 22 months

Training workshops for employment advisors in the area of counselling and coaching capabilities 150 000 Consulting

firm QCBS 6 months

Training workshops for relevant associations (to build-up their coaching and counselling capabilities) and private sector actors 100 000 Consulting

firm QCBS 6 months

Study on the regulatory framework for private employment agencies in Tunisia (including ticket+accommodation+per diem)

15 000 Individual consultant 3 CV 2 months

Training workshops for 860 job seekers- French language 600 000 Consulting firm QCBS 12 months

Training workshops for 860 job seekers- Microsoft IT 450 000 Consulting firm QCBS 12 months

12

Training workshops for 860 job seekers - Soft skills (Communication/leadership/Entrepreneurial Thinking) 405 000 Consulting

firm QCBS 12 months

Component 2 : Supporting the development of the National Employment Policy

Study on priority sectors (Analyze current labour demand vs. supply and quantify the gaps and prioritize) 175 000 Consulting

firm QCBS 3 months

Development of the national employment policy 250 000 Consulting firm QCBS 6 months

Component 3: Program management and support tools

Online platform for feedback and satisfaction survey for customers (employers, trainees and job seekers) 15 000

Non-consulting services

Shopping 6 months

Computers for employment offices and PIU 75 000 Goods NCB 1 month

4.2 Procurement of Consulting Services

4.2.1 Individual consultant services planned to be financed under the grant will be procured following comparison of qualifications of at least 3 qualified consultant based on their respective CV as described by Section V of the appropriate Bank Rules.4.2.2 Consulting firms services for the training activities, workshops and studies will be procured through Quality and Cost Based Selection (QCBS) as described by paragraph 2.1 of the Bank rules.4.2.3 Short lists of consultants for services offered by firms estimated to cost less than UA 200,000 for firms per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of Bank’s rules and Procedures for the Use of Consultants, dated May 2008 and revised July 2012.

4.3 Procurement of Goods

4.3.1 Goods and non-consulting services foreseen to be procured under the grant are composed of IT equipment and the development of online platform for total estimated amount equal to 90,000 US$. Goods will be procured using National Competitive Bidding (NCB) procedures, and non-consulting services through shopping.

4.4 Assessment of the Executing Agency

4.4.1 The MVTE will be the Executing Agency (EA) representing the GoT. The Project Implementation Unit (PIU) set up within the MVTE, will be responsible for all procurement activities of the project including filing and archiving of documentary evidence in collaboration with the Department of Document management of the MVTE.

4.4.2 An assessment of the capacity of the PIU to implement procurement actions for the project has been carried out by the Bank. The assessment reviewed the organizational structure for implementing the project and the interaction between the project’s staff responsible for procurement activities and the Executing Agency’s relevant central unit for administration and finance.

4.4.3 Even though the EA had worked with projects financed by different development institutions such as JICA, EU, AFD, they do not have any experience with Bank’s or similar Multilateral Bank procurement rules and procedures. The PIU is not yet staffed with experienced procurement specialist. It was agreed that the PIU will communicate to the Bank approval the terms of reference that will be used to select internally (within the MVTE) the procurement

13

specialist. The PIU committed to designate the procurement officer, in addition to the financial management officer, before the signature of the grant.

4.4.4 Considering the above. The overall procurement risk for the grant implementation is set as high. The corrective measures which have been agreed are the following: (i) the hiring of a qualified procurement specialist familiar to Bank’s rules and procedures; (ii) a massive and a continuous support from the Bank’s team throughout the implementation phase for capacity enhancement on Bank procedures; (iii) the use of the Bank’s SBDs; and (iv) a Bank’s prior review adapted to the situation.

4.5 Prior review

4.5.1 The procurement process for: (i) the 2 first individual consultants; (ii) all consulting firm assignments; (iii) Goods and non-consulting services will be submitted to Bank’s prior review. The remaining process will be post review by the Bank during supervision or whenever planed by parties.

4.6 General Procurement Notice

4.6.1 The text of a General Procurement Notice (GPN) will be agreed with the PIU and it will be issued for publication3 in UNDB online and in the Bank’s Internet Website, upon approval by the Bank.

4.7 Procurement Plan (PP)

4.7.1 A procurement plan has been prepared during the preparation of this grant. This plan, which is presented in the annex 3, will be fine-tuned upon approval of the grant to allow smooth implementation. This Procurement Plan will be updated by the Borrower’s Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. Any revisions proposed to the Procurement Plan shall be submitted to the Bank prior no objection. The Borrower shall implement the Procurement Plan in the manner in which it has been agreed with the Bank.

5. Implementation

5.1 Implementation Schedule

5.1.1 The Program will be implemented over a period of 2 years. Physical implementation is expected to start immediately upon approval of the proposal, expected by January 2016, and continue until December 2017. Annual work plans and procurement plans will be provided by the implementing agency upon the launching of the Program.

5.1.2 The key milestones of the Program are defined as follows:Table 4: Key Milestones and Timeliness

Milestones Timeliness since the launching of the

ProgramEstablishment of the PIU 1st monthBuying computers for employment offices and PIU 1st month

3 The General Procurement Notice is prepared by the Borrower and submitted to the Bank, which will arrange for its publication in the United Nations Development Business (UNDB online) and in Bank’s Internet Website.

14

Hiring the consultant to train ONEQ Staff 2nd monthHiring the consultant to train PIU, MVTE and ANETI senior staff 2nd monthHiring the monitoring and evaluation expert for the PIU 2nd monthHiring consulting firm to train employment advisors 2nd monthHiring the consultant to perform the study on regulatory framework for private employment agencies in Tunisia

3rd month

Hiring the consulting firm to help the MVTE to develop the National Employment Policy

3rd month

Hiring training provider for 860 job seekers – French language 3rd monthHiring training provider for 860 job seekers – Microsoft IT 3rd monthHiring training provider for 860 job seekers – Soft skills 3rd monthHiring consulting firm to train relevant associations 4th monthHiring a firm to design and implement online feedback platform 4th monthEstablishment of online feedback platform 10th monthCompletion of final report 24th monthProgram completion 24th month

5.2 Implementation Arrangement

5.2.1 The MVTE will be the Executing Agency representing the GoT. A Project Implementation Unit (PIU) will be set up within the MVTE, which will perform majorly from the government side in coordination and oversight of the implementation of the WRP Program. The PIU will be technically assisted through contracting consultants for implementing the planned activities. Technical assistance will be solicited from a monitoring and evaluation (M&E) specialist.

5.2.2 The AfDB, as the ISA, will support the GoT to establish the PIU in assisting in the procurement of the consultants, including developing Terms and References, identifying quality candidates, and issuing criteria for technical and financial evaluation. The GoT, by staffing the PIU, will nominate a Project Coordinator, who is familiar with other relevant government-led initiatives/programs and responsible for coordination among them, an Accountant and a Procurement Officer.

5.2.3 AfDB will carry out prior review of the procurement requests, supervision of disbursements and utilization of funds, supervision on program implementation progress by fielding missions and guiding the M&E.

6. Financial Management Arrangements

6.1 Disbursements

6.1.1 The disbursement of the MENA TF Grant will be done according to the Bank’s rules on disbursement as set out in the Bank’s Disbursement Handbook. Due to the limited number of contracts financed under the grant resources (IT and other equipment as well as consulting services contracts) and as the MVTE has no previous experience with the Bank procedures, the Direct Payment Method will be used. Therefore, the Bank will transfer money to the final supplier of goods or services based on payment instructions received from the MVTE. The MVTE will complete and sign the relevant withdrawal application forms and submit them to the

15

Bank by clearly indicating the amount/currency, the name and the bank details of the payee and attaching all the relevant supporting documents outlined in the Bank Disbursement Hand Book.

6.2 Financial Management

6.2.1 The Project Implementation Unit will be responsible for the day-to-day financial management of the project. For this purpose, a qualified and experienced Accountant from the Ministry Financial Management Department should be officially designated and partly assigned to the PIU. His qualifications, previous experience with donor-financed project as well as his detailed terms of reference should be submitted to the Bank non-objection before the grant agreement signature. He will ensure that project expenditures are fully justified and timely recorded and supporting documents (signed contracts, invoices, receipts, bank no-objection …) well kept and archived. A simplified work program and budget should be annually prepared based on the project costs and expected annual outputs. Satisfactory internal controls and procedures should be maintained to ensure that the proceeds of the grant are used for the intended purposes. Given the absence of previous experience with Bank procedures and the absence of an FM updated manual at the level of the MVTE, a simplified procedures manual will be prepared for this project and submitted to the Bank before first disbursement. The accountant will maintain separate accounts for the project in accordance with acceptable accounting standards and procedures. Detailed accounts should facilitate the identification of expenditure by project component, category of expenditure and source of fund. Simplified Annual financial statements should be prepared for the entire project in the form of a simple statement of sources and uses of funds. Interim financial reports should be submitted every six-months as part of the semi-annual progress reports and according to a template agreed with the Bank. A launching mission should be organized following grant signature to present the Bank procedures in terms of disbursements and financial management.

6.3 Audit

6.3.1 The CGF (Contrôle Général des Finances) will perform an audit of the project at mid-term and at project closure. These two audits should be performed in line with the Bank terms of reference for audit of grants and trust funds. The audit reports of the program including the report on internal control (Management Letter) shall be submitted to the Bank no later than six months after the concerned audited periods.

7. Conclusions and Recommendations for Bank’s Consideration

7.1 In conclusion, the Bank is requested to approve being an ISA for this Program, for which resources will be forthcoming from the MENA Transition Fund.

7.2 It is recommended that a grant not exceeding 2,560,000 USD from MENA TF resources be approved to the Government of Tunisia for financing the Work Readiness Program.

16

Annex 1: Government’s Request

17

Annex 2: Cancellation Decision of HSBM Project’s by MENA-TF

18

Annex 3: Procurement Plans

A – Consultants Services

19

B – Goods

20