Youth Unemployment In Africa: A Ticking Time Bomb, Or A Window Of Opportunity For Entrepreneurship?
Africa is bustling with the energy of young people managing businesses everywhere. At least that is the impression you get. When spending time in any town or city, you can see young traders try to flaunt their goods along the road, selling everything from bottles of water to phone credits. New and second-hand items or various foods are sold on makeshift tables or spread out on the floor alongside the streets. Young people even offer inventive services to fit different needs such as running their own hairdressing salons, while others offer to be tour guides to lost tourists. In the rural areas, this extends to children filling potholes on the road, shouting for payment in the form of ‘sweet’s!’ as vehicles pass by.
These different forms of businesses might seem mundane or unimportant to some who might compare it to the high-tech entrepreneurship that exists today. But this is exactly what they are: forms of entrepreneurial practices in Africa, providing livelihoods for young people on a daily basis. With so many young people not having access to formal employment, they are becoming increasingly pressed into changing their views of being ‘job seekers’ to becoming ‘job creators’ in order to survive, becoming entrepreneurs by default rather than by design.
Youth unemployment in Africa has become a top political priority according to the ILO. The continent has the fastest rates of demographic growth in the world, with its population predicted to rise from 1.2 billion in 2017 to 2.5 billion in 2050. It is also estimated that by 2050, Africa will have 38 of the 40 youngest countries globally, with median populations being under 25 years. Effectively, the demand for jobs will grow, with 12 million people expected to join the labour force every year, intensifying the need to provide jobs.
The challenge of ensuring sufficient human development and employment for the youth bulge is both Africa’s largest opportunity, as well as its biggest threat to growth prospects and stability. It has been labeled as Africa’s ticking time bomb. If there is no investment in providing skills and education to young people so that they are able to find employment options, it could lead to a threat in political and social stability, primarily in growing urban areas.
Developing young people’s ideas into entrepreneurial realities on a larger scale has been a challenge in Africa due to a lack of access to finance, the necessary business skills or knowledge, suitable mentors, as well as enabling policies by governments. In addition, parental and societal attitudes of youth entrepreneurship may have negative impacts, due to the risks which come with it instead of more traditional job routes. Therefore, the amount of time and money invested in offering human development services to young people could help determine whether it will be possible for Africa to use the demographic dividend to its advantage, or risk a demographic time bomb.
In order for youth employment interventions across Africa to be successful, then all aspects need to be considered. This includes funding, training or education, business services and support, and linking employees and employers. Additionally, the needs and desires of young people need to be fully considered. A coordinated effort to tackle youth unemployment is also required, among governments, private sectors and development financiers. In addition, youth in rural areas should not be neglected, as they are often faced with further limited opportunities and resources when it comes to entrepreneurial activities.
The main driver for emigration, particularly for young people, is the disproportion between labour supply and demand. However, the young population in Africa has the advantages of global connections due to this emigration, which can be seen as a huge opportunity for entrepreneurship. One of the first potentials for resources which the continent can use is its domestic and foreign human resources which exist both at home and abroad to foster structural transformation.
Remittances sent home by emigrants can be used to further fund productive investments in new entrepreneurial activities. Recorded remittances into Africa are its largest source of foreign capital, that is after foreign direct investments. Studies have indicated that investments, such as starting a business or land purchases, were the highest uses of remittances which African diaspora sent home. As well as the diaspora offering opportunities for origin countries to develop with investments, they can also improve access to foreign capital markets in investment funds and diaspora bonds, and establish contacts to encourage trade and investment or development grants. They can importantly transfer newly developed technology, knowledge and skills when they return to the origin country.
A recent summit in Stockholm called together African diaspora, of varied ages, along with international organisations and even potential investors, to highlight the necessity of promoting employment possibilities for the African youth, through innovation and entrepreneurship. Many of the hardworking youths who attended the WAYS summit have come to Sweden to learn the skills and knowledge which they hope to bring back with them to Africa. Discussions focused on the importance of the diaspora trying to link their current country with their countries of origin to further open up opportunities for collaboration. Although the focus on entrepreneurship and increased funding may sound like a viable solution to unemployment among youths in Africa, the speakers at the WAYS summit established that the necessary support has been missing for young people in Africa.
One of the speakers, Tolulope Olalekan who is originally from Nigeria and successfully started her own business, explained that although young people may have the energy, passion and ideas to become entrepreneurs, they need to be equipped with the tools to start. There is currently no ‘enabling environment’ in Africa, as there is a lack of training and education available to young people. She explained: “The support system isn’t there, so a lot of young people are frustrated with these ideas that they carry around”.
Another successful female entrepreneur from Zambia, Prudence Persson, highlighted that there is more investment flowing into African start-ups than ever before, both as a result of foreign investment and the African diaspora. What is required for entrepreneurship to succeed is mentors, business coaches, and creative spaces in Africa, such as innovation stations, science parks, and incubators. In this way, she explained, “young people can go and sit and have their hands held through the journey. That’s how we’re going to start reducing these numbers. If there’s a gap in the ecosystem then everything else falls flat”. A healthy ecosystem could exist if entrepreneurship could be seen as the norm, and is given the right tools to thrive, so that young people can thrive along with it. She suggested that we need start moving away from the problems, and start focusing on the opportunities instead as, “While we sit here and talk about how hard it is, there are Africans in Africa making it happen”.
There is no doubt that young people in Africa are positive about their ability to become entrepreneurs. A recent study compared their positivity to their peers in other regions, and it showed that 60 percent of 18 to 34-year-olds in Africa believed that they had the knowledge and skills to create a business, compared to 17 percent of young people in the European Union and 30 percent in North America. Although that does not necessarily mean that they have translated desire into action, this level of optimism should not be underestimated, and provides a good place to start.
The agenda of youth employment in Africa is an urgent one. The continent should reap the benefits of its demographic dividend, as well as the opportunities that emigration can bring, to improve the lives and livelihoods of Africans. In order to promote inclusive economic growth, the potential of Africa’s young entrepreneurs and innovators should be recognised to create high-quality jobs. Young people need to be encouraged to be creative problem solvers by looking around their communities, identifying a problem and coming up with proper solutions to these issues, as the best solutions are homegrown, in a local context. With the right resources and support, young people in Africa can be trained and equipped to pursue their innovative ideas and provide viable career opportunities for themselves as entrepreneurs.