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Value Chain Analysis of the Oil Palm Sector in Liberia: An Assessment of the Skills Needs and Training Providers
October 2016
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Value Chain Analysis of the Oil Palm Sector in Liberia: An Assessment of the Skills Needs and Training Providers
Inception Report
George Afeti
Tertiary Education and TVET Consultant
October 2016
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Table of Contents
1. Introduction 4
2. Background Information on Oil Palm Production 4
3. Justification for the Study 9
4. Value Chain Analysis 10
5. Methodology 10
6. Objectives of the Study 11
7. Expected Output 12
8. Inception Workshop 12
9. Next Steps 13
- Field Visits
- Dissemination Workshop
- Timelines and Deliverables
10. Conclusion 13
11. References 14
Appendix 15
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1. Introduction
As a consequence of the economic diversification and export strategy of the Government of
Liberia, a number of growth sectors with potential to generate hundreds of thousands of jobs
have been identified. These sectors include the rubber, cocoa, food processing, fisheries, light
manufacturing, and oil palm industries (see table 1). The oil palm sector in particular is projected
to generate about 156,000 direct and indirect jobs by 2030. The oil palm sector also has a huge
potential for value addition and product diversification, including the production of crude and
refined palm oil, cooking oil, soaps and fats, bio-fuels, and animal feed. Additionally, the industry
does not require huge capital investments, at least at the plantation and primary transformation
stages.
Table 1: Estimates of Current and Potential Viable Jobs & Livelihoods in High Priority Sectors
Sector Current Viable Jobs &
Livelihoods Sustained
Potential Viable
Jobs & Livelihoods
Sustained in 2030
Oil Palm and oil palm product manufacturing 37,700 156,000
Rubber and rubber product manufacturing 49,000 267,000
Cocoa and cocoa product manufacturing 30,000 100,000
Aquaculture and processing of fish 2,500 35,000
Marine fisheries and processing of fish 30,000 38,000
Other light manufacturing (e.g. plastics, steel,
aluminum, agricultural machinery, food products,
beverages etc.).
3,000 24,000
Total from these 6 sectors 152,000 620,000 Source: Africa Governance Initiative estimates based on analysis of national export strategy, trade data, industrial
data, agricultural data and reports.
The purpose of this study is to assess the workforce skills requirements for the oil palm value
chain in Liberia and the capacity of local training providers to deliver training to the required
standards. The study is funded by the Association for the Development of Education in Africa
(ADEA) through its Working Group on Education Management and Policy Support (WGEMPS),
with the Liberia Ministry of Education as its collaborating partner.
2. Background Information on Oil Palm Production The oil palm is an indigenous plant of West Africa. It originated in the rain forest regions of
countries such as Togo, Ghana, Liberia, Sierra Leone and Nigeria. The plant is also indigenous to
the equatorial regions of Cameroon, Angola, Zaire and Congo. It is from these regions that the
palm fruit was taken to the Far East where it has now become an important economic crop in
countries such as Malaysia and Indonesia, involving large scale production and processing for
export.
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The Palm Fruit
Two varieties of oil palm exist in West Africa: the thick-shelled indigenous variety called “Dura”
and the “Tenera” which is a hybrid of Dura and the shell-less variety called “Pisifera”. Most
commercial plantations now grow the Tenera variety which has a much thicker mesocarp and a
thinner shell and yields much higher volumes of palm oil than the indigenous Dura (Figure 1).
Figure 1. The Palm Fruit Farm Systems
Farm systems in Africa are generally classified as small holder, medium and large commercial
plantations. The key characteristics of the production systems are shown in Table 2.
exocarp
mesocarp
kernel
endocarp
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Table 2. Key characteristics of farm systems
Source: Adapted from World Bank 2008
Palm Oil Extraction Process Processing involves:
1. Harvesting the fruit bunches from the plantations 2. Sterilization (cooking) of the fruit bunches 3. Threshing (separation of the fruitlets from the bunch) 4. Digestion (softening of the fruitlets) and pressing out of the crude palm oil 5. Clarification (purifying and drying) of the crude oil 6. Fractionation into liquid (edible oil) and solid phases (fats and industrial solids)
Category
Small scale
Medium – Large scale
Production Level Small holder farms Commercial plantations
Production Tools Manual Manual and Tractors
Farm Inputs Small-scale inputs Large-scale /extensive
Markets
Close to farms
Far off: products or raw materials transported to processing plant
Technology
Limited or minimal use of equipment
Technologically adapted or modern equipment
Workforce Family workers Mostly salaried workers
Workforce Skills
Entrepreneurship skills; unskilled labour
Entrepreneurship and management Skills; Skilled workforce
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Source: Jin Xi Chemical Engineering Equipment Company Limited, China
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Source: Kingdo Industrial Company, China Figure 2. Palm oil extraction process flow diagrams
Most of the processes involved in large modern plants are mechanized and therefore will require appropriate machinery and adequately trained workforce. Skills needs in the oil palm value chain are diverse (Table 3)
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Table 3. Skills needs in the oil palm industry
Category Characteristics Skills Needs
Small-scale Farmers Generally low production volumes
Production skills development
Commercial Farmers Higher production volumes; Stage I transformation
Production and management skills
Local Transformers
Informal sector; Artisanal; manual transformation; by-products as fuel
Automation; product diversification; packaging techniques
Commercial Agents Middlemen; wholesalers; importers
Marketing and negotiating skills
Transporters All types of vehicles Logistics /Organization skills; Driving skills
Industrial Processing
Stage II transformation of palm oil; Refineries; manufacture of fats and soaps
Diverse technical, operational, and management skills
Source: Adapted from World Bank (2009)
3. Justification for the Study The demand for palm oil on the global market is huge. Palm oil has both food (e.g. edible oil, margarine) and non-food (e.g. biofuels, energy generation) uses. Palm oil can be found in one out of every ten food products (Sime Darby, 2009). Liberia can therefore benefit from huge export earnings from the crop. Key importers of palm oil are China, India, and the European Union. The potential for significant creation of jobs has also been highlighted. A study of the oil palm industry in Liberia with the objective of revitalizing the sector makes a lot of economic sense, both at the national and individual levels. A value chain analysis of the sector will reveal the key activities, strategies, and workforce requirements for revamping the sector.
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4. Value Chain Analysis The value chain analysis approach involves the determination of the workforce skills required to
develop and grow the sector in question. It also includes an assessment of the education and
training needs as determined by the relevant enterprises and other private sector actors involved
in the selected priority area as well as the capacity of national training providers to deliver
training to the required standards.
The selection of the priority economic sector or sectors to be developed is often a function of the
potential of the sector for growth, high productivity and employment creation. The Liberia
National TVET Policy document prioritizes a number of key economic sectors, including
agriculture and agribusiness, hospitality and tourism, light manufacturing, and ICT. The Ministries
of Commerce and Industry, Agriculture, Finance and the National Investment Commission and
National Bureau of Concessions have identified the agriculture, agro-processing and
manufacturing sectors as the key priority sectors that are capable of raising the regional
competitiveness of the Liberian economy as well as contribute to large scale employment of the
youth.
The oil palm sector has been selected for piloting in the first phase of the value chain analysis of
the priority sectors. As can be seen from Table 1, the oil palm sector which currently provides
37,700 viable jobs and livelihoods has the potential to generate as many as 156,000 jobs by 2030.
The oil palm sector also lends itself to greater value addition and product diversification as well
as lower capital investments.
5. Methodology
The value chain methodology would be to first conduct a mapping exercise to collect existing
data and fill in any knowledge gaps through targeted sample surveys and interviews with relevant
actors within the value chain. The existing sources of data to be exploited for a deeper analysis
of the skills supply and demand equation will include:
Administrative data available in the relevant ministries and agencies (Ministry of
Education, Ministry of Youth and Sports, Ministry of Commerce and Industry, Ministry of
Agriculture and other sector ministries). These data will be exploited to develop a fuller
picture of the supply of TVET by public and private providers.
Household and enterprise survey data. The analysis will focus on the labor market
outcome and employability of individuals with TVET qualifications.
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Existing studies conducted on the priority sectors, in particular the oil palm sector. These
studies will be exploited to extract relevant results pertaining to current and potential
shortages of specific technical, vocational and professional skills in the oil palm sector.
To fill in information gaps:
A survey of enterprises in the formal and informal sectors will be conducted to provide
information on the scope and nature of skills gaps and shortages and the quality of
training delivered.
A survey of public and private training providers and trainees to: (a) on the provider side,
fill in information gaps on cost, quality, quality assurance as well as obtain their views on
the business environment and feasibility of expansion, and (b) on the trainee side to
explore the demographic characteristics of trainees, the factors that influenced their
choice of TVET programs and how they finance their training.
Private TVET providers and local enterprises will be consulted in designing the workforce
development strategy for the oil palm sector. The report will be presented and discussed
at the national level by Government authorities, private sector businesses, and civil
society. A national stakeholder forum will be organized to get all stakeholders involved.
6. Objectives of the Study
The specific objectives of the study are to:
1. Identify the skill levels of the labor force and the link with growth and employment within the oil palm sector
2. Assess the training supply, focusing in particular on the oil palm sector, and covering roles of public and private providers, and geographic distribution.
3. Assess the capacity of the TVET subsector to support the innovation and growth of the oil palm sector.
4. Identify the demand for TVET skills at different levels within the oil palm value chain with emphasis on areas of actual and future skills gaps.
7. Expected Output
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The key output of this study will be a policy note to support the Government of Liberia in the
further development of policies, priorities and plans for TVET to support development of a skilled
workforce for the structural transformation of the oil palm sector, raise productivity, and provide
the foundation for development partners and other investments to develop the sector. The
results of the study would also be utilized by decision makers to design and implement a TVET
and higher education workforce development strategy for the oil palm sector. Lessons learnt
from this study on the oil palm industry would also be useful and applicable to any future value
chain analysis of other priority economic sectors.
8. Inception Workshop
An inception workshop was held on 28 September 2016, bringing together a cross section of key
players in the oil palm industry in a 1-day stakeholders’ forum to explain the rationale and
justification of the study and to pilot a set of questionnaires (see the Appendix to this report) that
would be administered in the next phase of the study. At the stakeholders’ forum, a roundtable
discussion was organized to receive participants’ views on the prospects for the oil palm sector.
The six discussion points below guided the roundtable assignment:
1. Why do you think the oil palm sector in Liberia is economically viable? Please give reasons.
2. Identify the strengths, weaknesses, opportunities and threats involved in the value
addition chain
3. Identify the key stakeholders in the industry
4. Identify and prioritize the workforce requirements and skills needs in the value addition
chain
5. Identify potential training providers (public and private) and existing or potential partners
6. Are there any additional questions that should be included in the draft survey instruments?
From the roundtable discussions, it was generally agreed that the oil palm sector has huge
potential to create sustainable jobs and that Liberia has the right climate and soil conditions for
oil palm production. However, it was pointed out that there were human resource challenges
that needed to be addressed in areas such as nursery development, farm management, machine
operations, production specialists, and research. Limited access to finance was also cited as a
drawback. It came to light that an Oil Palm Sector Strategy was under development as well as the
existence of a platform for oil palm sectoral coordination. The private sector was also willing to
invest in capacity development for the sector.
9. Next Steps
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The specific next steps are to: (a) deepen the analysis of skills gaps and shortages in supply
relative to demand in the oil palm sector, (b) develop a more complete picture of the supply,
cost, and external and internal efficiency of publicly and privately provided training, and (c) assess
the extent to which governance and financing policies pose opportunities and constraints to the
provision of training that is more responsive to actual and potential productive employment, and
their linkage to the country’s Employment Policy (2009), National Industrial Policy (2011),
National TVET Policy (2015), and the Oil Palm Sector Strategy (under preparation).
In this regard, field visits are scheduled for between 28 November and 3 December 2016, which
will be followed immediately afterwards by stakeholder dissemination workshop, and finally the
preparation of a policy note on the development of the workforce requirements for the oil palm
sector by the end of December 2016.
The fieldwork would include:
• Gathering of detailed information, data and statistics on the oil palm sector: who is doing
what and where?
• Assessment of potential impact on livelihoods
• Identifying the skills needs for increasing production and productivity
• Determining the workforce requirements for modernizing or strengthening both the
primary and secondary transformation sectors
• Assessing capacity of training providers to meet current and future workforce skills
requirements
• Compiling the key requirements for growth and innovation
• Preparation of policy note on revitalization of the oil palm sector in Liberia
10. Conclusion
The outlook for developing the oil palm sector appears good. However, it is necessary to keep in
focus the drivers of the industry, which are:
o Enabling policies, incentives, and political will
o Human resources development, including R & D
o Technology integration into the production systems
o Infrastructure development in the production catchment areas (roads, utilities, etc.)
o Private sector, NGO and CSO participation and collaboration
o Access to affordable credit.
These issues will be considered in the policy note that will be the key output of this study.
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11. References
Poku, K. 2002. Small-scale palm oil processing in Africa. FAO Agricultural Series Bulletin, 148. Sime Darby. 2009. Palm Oil Industry in Malaysia: Skills and Knowledge for Sustained Development in Africa World Bank. Novembre 2009. Etude sur la filière porteuse d’emploi « Palmier à Huile ». MINEFOP and ILO. Lebailly, Philippe and Jean Tentchou. World Bank. Juin 2008. Cameroun: Etude de compétitivité de la chaine de valeur du sectcteur agricole. Report No. AAA25-CM. Agriculture and Rural Development Department. Africa Region. Washington DC
Appendix
Development of the Oil Palm Industry in Liberia
Questionnaire for public officials of the Ministries of Education, Youth and Sports, Labor and
Employment, Agriculture, Commerce and Industry, Finance and Economic Development,
Chamber of Commerce, and TVET Institutions
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Target population: Officials of Ministries of Education, Youth and Sports, Agriculture,
Commerce and Industry, the Chamber of Commerce, and TVET Providers.
Name: …………………………………………………………………………………………………………………………
Organisation: ……………………………………………………………………………………………...................
Position: ……………………………………………………………………………………………………………………..
Contact (email, telephone): ………………………………………………………………………………………..
1. TVET INSTITUTIONS & A-TVET PROGRAMS (Ministry of education / Ministry of youth and sports;
and Training Providers)
How many post-primary formal TVET institutions are responsible for delivering A-TVET under your
ministry? What is the number of trainees under your ministry or in your training institution?
Disciplines offered Number of public institutions
Number of private institutions
Total number of trainees
Engineering (all fields)
ICT
A-TVET : Farm Machinery/Agriculture
A-TVET: Agro-processing/Agribusiness
Entrepreneurship
2. POLICY AND GOVERNANCE
2.1. Is there a TVET national policy in place? Yes No
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2.2 Is there a national TVET coordination body in place? Yes No
2.3 Is there a scheme to involve the community in TVET provision? Yes No
Please provide information on the scheme (objectives, date of creation, etc.). You may attach copies of
relevant documents.
3. ACCESS AND PARTICIPATION
3.1. Are there programs to attract more girls into the TVET system? Yes No
3.2. Are there programs to attract girls into A-TVET? Yes No
3.3. Are there any programs targeted towards PWDs in the country? Yes No
If yes, please provide information on the programs. You may attach relevant documents.
3.4. Are there any programs targeted specifically towards rural areas? Yes No
If yes, please provide relevant information. You may attach relevant documents
4. INSTRUCTORS, INSTRUCTOR TRAINING AND A-TVET INSTITUTIONS
4.1 Do TVET instructors receive pre-service training? Yes No Not all of them
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4.1.1 If not all of them, what is the percentage of trained teachers in your ministry or
institution?
4.1.2. What is the total number of trained A-TVET teachers in your ministry or in your
institution?
4.1.3. What is the total number of TVET teachers in your ministry or institution?
4.2 List the names of A-TVET institutions, their location (urban or rural), disciplines and enrolment
capacity in the following table. Add more spaces if needed. You may attach list of institutions.
Name of institution
Location (urban or rural)
Key disciplines taught and duration of training
Enrolment
Number of teachers /trainers
4.3. Are there any provisions for continuous professional development of instructors and TVET system
managers? Please elaborate.
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5. CURRICULUM AND TRAINING MATERIALS
5.1. Has competency-based training (CBT) been introduced in the training system? Yes No
5.1.1. If yes, what percentage of the A-TVET curriculum is CBT?
5.1.2 .What are the key challenges in the delivery of CBT? Please elaborate.
5.2. Is ICT integrated into the delivery of TVET? Yes No
5.3. What agency is responsible for curriculum design and review?
5.4. When was the last review conducted for A-TVET programs?
5.5. Are training manuals, other didactic materials (audio-visuals) in the area of A-TVET available?
Yes No Not enough
5.6. If not enough, what are the areas/disciplines for which didactic materials are not available? Please
indicate the areas.
5.6. Is the Private Sector involved in the design and review of training curricula? Yes No
5.7. Is the Ministry of Agriculture involved in the development of A-TVET curriculum? Yes No
6. EXAMINATIONS, ASSESSMENT AND CERTIFICATION
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6.1 Is there a dedicated Examination Body responsible for TVET examinations? Yes No
6.3. How is the Private Sector involved in TVET examinations? Please elaborate.
6.4. Are practical or agricultural field lessons examinable? Yes No
6.5. If yes, what percentage of the total examination score is assigned to the practical component?
7. LINKAGES AND PARTNERSHIPS
7.1. Are there mechanisms in place for building partnerships with the Private Sector in the area of A-TVET?
Yes No
If yes, please elaborate.
7.2. Does the Private Sector participate in the management/governance of TVET? Yes No
If yes, to what extent? Please elaborate.
7.3. Which donor agencies (multi- and bi-lateral)/NGOs are involved in A-TVET or in your institution?
Please indicate the names and nature of their involvement
7.4. What areas of A-TVET are they involved in? Please indicate the nature of the involvement
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8. FINANCING MECHANISMS (Ministries)
8.1. What are the existing funding levels / budget provisions for TVET under your ministry? Please fill in the table below
Source of funding (e.g. Government, private sector…)
Amount in 2015/2016 (USD) Use (e.g. training, equipment, capacity building, etc.)
8.2. What percentage of the national education budget is allocated to TVET under your ministry?
8.3. Has there been any increase in the TVET budget over the past 5 years? Yes No
If yes, please give the funding trend over the past 5 years
8.4 Do students / learners pay fees? Yes No
8.5. If yes, what are the average student fees for TVET and A-TVET programs, respectively?
8.6. What is the average training unit cost per student for TVET and A-TVET students? (In USD)
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8.7. Is there a Skills Development Fund in place? Yes No
If yes, please provide information on date of creation and sources of funding.
8.8. Is there a training levy scheme in the country? Yes No
If yes, please provide further information on the scheme.
8.9. Are there some other sources of funding for TVET programs? Yes No
If yes, please indicate the funding source and the nature of the contribution.
9. EMPLOYABILITY (Ministries of Education, Youth and Sports, Labour and Employment, Commerce and
Industry; Training Providers)
9.1. Is there any data on employment rates for TVET and A-TVET graduates? Yes No
If yes, please attach available data
9.2 Is there any national data on TVET completion rates? Yes No Don’t know
9.3 Do you conduct tracer studies on TVET graduates? Yes No
If yes, please attach available data
9.4. Is there a Labour Market Information System (LMIS) in place? Yes No
If no, please indicate the instruments for determining skills gaps and shortages in the economy
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9.5 Is there any collaboration between the different ministries in the collection and analysis of training
and employment data in the country? Yes No If yes, what is the
nature of the collaboration?
9.6 Are there any skills gaps and shortages in the oil palm value chain? Yes No
Don’t know
9.7. If yes, at what level are the skills shortages most evident? Production/plantation
Processing /transformation marketing /sales packaging
9.8 What do you consider as the key constraint to the development of the oil palm industry? Please rank
in order of importance as 1, 2, 3 or 4 (1 being the most important): Poor sales
Difficult access to credit lack of government incentives shortage of technical skills
10. FUTURE OF OIL PALM INDUSTRY IN LIBERIA
10.1. Do you think that the oil palm industry has the potential to contribute to?
Economic growth Yes No Don’t know
Employment creation Yes No Don’t know
Industrialisation Yes No Don’t know
Skills development Yes No Don’t know
Poverty eradication Yes No Don’t know
Stemming rural/urban migration Yes No Don’t know
10.2. In one paragraph give an assessment and potential of the oil palm industry in Liberia.
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11.3 Give 4 priority actions which you think are needed in order to make the TVET sector as a whole more
efficient.
Development of the Oil Palm Industry in Liberia
Questionnaire for the Private Sector, NGOs, Development Partners
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Name: …………………………………………………………………………………………………………………………
Organisation: ……………………………………………………………………………………………...................
Position: ……………………………………………………………………………………………………………………..
Contact (email, telephone): ………………………………………………………………………………………..
1. LINKAGES AND PARTNERSHIPS
1.1. Do you have or are you aware of any partnerships with Training Providers in the area of A-TVET or
the oil palm industry? Yes No
If yes, please elaborate.
1.2. Does your organisation participate in the management/governance of TVET? Yes No
If yes, to what extent? Please elaborate.
1.3. Are you involved in any way with in A-TVET? Yes No
If yes, please indicate the names and nature of their involvement
2. WORKFORCE REQUIREMENTS
2.1 Are you aware of the skills gaps and shortages in the oil palm value chain? Yes No
2.2 If yes, at what level are the skills shortages most evident? Production/plantation
Processing /transformation marketing /sales packaging
3. ENTREPRENEURS AND INDUSTRIALISTS IN THE OIL PALM INDUSTRY
3.1 What is your core business or area of intervention in the oil palm industry? Farming operations
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Processing / Transformation Packaging / marketing /sales
3.2 If you are an employer, how many people do you employ? Less than 5
Between 5 and 20 More than 20
3.3. What are the key skills lacking in your employees or in the industry?
(Tick as many as are appropriate)
Production / farming skills manufacturing / processing skills ICT skills
Report writing / communication skills marketing skills transport & logistics
Entrepreneurship skills
3.4. Are you willing to collaborate with A-TVET institutions in one or more of the following areas?
Yes No (If yes, please tick as many areas as appropriate)
Training delivery curriculum development training equipment donation
Internships for staff and students financial contributions
3.5. Do you enjoy any government incentives as a player in the oil palm industry? Yes No
If yes, state the nature of the incentive
Tax waivers easy access to credit other please specify
3.6. What do you consider as the key constraint to the development of the oil palm industry? Please rank
in order of importance as 1, 2, 3 or 4 (1 being the most important): Poor sales
Difficult access to credit lack of government incentives shortage of technical skills
4. FUTURE OF OIL PALM INDUSTRY IN LIBERIA
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4.1. Do you think that the oil palm industry has the potential to contribute to?
Economic growth Yes No Don’t know
Employment creation Yes No Don’t know
Industrialisation Yes No Don’t know
Skills development Yes No Don’t know
Poverty eradication Yes No Don’t know
Stemming rural/urban migration Yes No Don’t know
4.2. In one paragraph give an assessment and potential of the oil palm industry in Liberia.
4.3. Give 4 priority actions which you think are needed in order to make the TVET sector as a whole more
efficient.