The World Bank's Country Assistance Strategy 2004-08 (CAS) indicates that the Bank is prepared to enter into a credit agreement to finance an integrated Technical and Vocational Education and Training (TVET) sector reform program. The project aims to improve access to post-primary education and to 'increase graduation of Mozambicans with the skills, practices, and attitudes needed to fill technical positions, and create value-adding knowledge and innovation in production. This Economic and Sector Work (ESW) attempts to identify the key issues and strategic options to strengthen the analytical base in the sub-sector and support the preparation of this project. Specifically, the study aims to identify ways and means through which the World Bank could support the efforts of the Government to: (a) augment the supply and productivity of skilled labor in key sectors of the economy; (b) draw up an integrated TVET system; (c) improve the external efficiency and relevance of the vocational education and training system; (d) improve internal efficiency and quality of existing technical and vocational education; and (e) expand access to TVET and reduce existing inequalities in the system. The findings of this sector study support major premises that should guide any further discussion about an appropriate TVET reform path in Mozambique. Firstly, all reform efforts will have to be governed by the goal of transforming the current supply-driven into a demand-oriented TVET system. Secondly, the situation and financial analysis shows that a further expansion and strengthening of the TVET system as it is at the current moment will compromise its long term development and modernization prospects and will not be financially sustainable. Thirdly, it must be understood that TVET itself and alone will not solve the problem of unemployment and lack of productivity in the Mozambican economy. TVET can only support growth and economic development once other factors that influence the investment climate are right. Fourthly, Government will need to re-define its role, niches and special responsibility in the national TVET system in accordance with defined and agreed criteria and in partnership with other stakeholders in the training system. Such a new definition of roles and responsibilities has to be done before other major reform elements are identified. Finally, it must be understood that a comprehensive reform agenda will require the joint efforts of all stakeholders, including the cooperating partners, many of whom have already contributed technical and/or financial resources to the improvement of TVET. The report falls in two principal parts: (1) a diagnostic assessment of trends in the labor market, in education and the technical and vocational education and training sector; and (2) a discussion of various options that are available for the Government t o improve access, quality and labor market responsiveness of TVET in a sustainable manner.