Africa Doing More, Not Enough, to Finance Youth
November 11, 2019
It is too little to make much of a difference, admitted Akinwumi A. Adesina (PhD), president of the AfDB, addressing the media today in Johannesburg, South Africa, during the second edition of the Africa Investment Forum. The challenge is enormous. Close to 10 million young women and men join the labor market every year in Africa. Currently, there are 14 million unemployed in Ethiopia. Yet only less than one-third of these youth in Africa end up finding jobs, leading tens of thousands of them to seek dangerous routes to Europe.
Countries on their own try to cope with the issue of youth unemployment. Few such as Ethiopia created a commission for jobs, which hopes to generate 1.4 million jobs in a year. MasterCard Foundation has also earmarked 300 million dollars for helping to create job opportunities for 10 million Ethiopian youth. The African Development Bank (AfDB), the premier financial institution in the continent, where Ethiopia is a founding member, has a flagship programme for the youth. Allocating half a billion dollars, its leaders hope to generate tens of thousands of jobs in the agriculture, industry and information technology sectors.
It is too little to make much of a difference, admitted Akinwumi A. Adesina (PhD), president of the AfDB, addressing the media today in Johannesburg, South Africa, during the second edition of the Africa Investment Forum. Neven Mimica, the outgoing commissioner for International Cooperation & Development under the European Commission, agreed.
“The straight and honest answer is: it is not enough,” said Mimica. An attempt to create 25 million jobs in the coming five years is the tip of the iceberg when there are 640 million Africans under the age of 29. “My heart breaks as a president of the Bank,” said Adesina. “We aren’t doing enough at all.”It is rare to see the issue of youth unemployment take centre stage at high powered forums such as this, which opened today, where international capital searches for viable ventures in the continent.
AfDB’s President wants to see a paradigm shift in thinking from seeing the youth in Africa as risks to assets, as the response needs to move away from “youth empowerment.” It is the people who talk about youth empowerment that end up empowering themselves, according to Adesina. “Financial institutions in Africa don’t understand the youth and their aspirations,” said Adesina, who spoke alongside Neven. “All they see in the youth is risk.” Adesina wants to see the language of “youth empowerment” evolve to “youth financing,” where systemic, scalable and effective investments are made in order to create an eco-system for start-up businesses to get connected.
The European Commission has announced the creation of a 60-billion-euro fund, the largest amount to date, to provide guaranteed lending to small and upstart businesses in Africa. Mimica hopes the use of this funding will create close to 10 million jobs in five years.
“But we have to do more and faster,” said Mimica.