Across Africa, “youth” are scaring the heck out of us. There are just so many of them, coming along so fast, with all sorts of demands – tweeting, texting and Instagramming with abandon. African teens and 20-somethings are pouring out of high schools, vocational training and universities, itching to join the global economy, and finding jobs scarcer than rains in the high-noon Kalahari.
The problem is urgent for Ethiopia, Africa’s second most populous nation. Ethiopian leaders are trying to keep economic growth surging to reduce poverty, improve food security and foster social peace. (The International Monetary Fund has approved a $2.9 billion loan to support economic reforms in a government rapidly embracing change.)
A strategic imperative is to expand opportunities beyond hardscrabble farming and create jobs with higher incomes along the way, especially for rural youth ages 15 to 29.
The hunt for a scalable solution is racing against the clock: Ethiopia is one of nine countries – five of them African – that will contribute the majority of global population growth by 2050, according to United Nations forecasters. Ethiopia’s population will soar to 205 million in 2050 from around 110 million today. (And 18 million in 1950.) Yet a path toward hope has appeared.
The formula
An American-funded initiative has found a formula to transform young people from burdens into bosses. Youth Potential, tested by Save the Children in 30 woredas or districts scattered across Ethiopia, layers work skills and management training and coaching with practical internships, job shadowing and a personal development plan. After only 12 months, a startling shift of mindset and action occurs.
Among the 458 participants studied in depth, self-employment shot up to 60.5 percent from 40 percent at the start of the program. The effect was strongest for those with some college education (73 percent from 29 percent) and for those with no schooling (75 percent from 34 percent). In short, the approach seems to work across the education spectrum.
There was a marked shift toward self-owned enterprises and away from family businesses. For 71 percent of those studied, incomes rose. And that translated into a gain of more than 80 percent in savings – to $251 from $137. In a country with an average income below $800 (in 2017), that’s no pittance.
Assuming Youth Potential reaches the target of 34,537 rural young people, the United States Agency for International Development will have spent $500 per participant, a total of $17.3 million, to get these results. For a proof of concept program, that’s solid value for money. Economies of scale probably would lower the per-capita cost.
The value is bigger than the program’s investment because the grassroots civil society partners involved, including the Relief Society of Tigray and HUNDEE in Oromia, along with the Ethiopian Government, have bolstered their capabilities to grow entrepreneurs for the long term.
Toward 2030
The coming year will bring a bigger push in Ethiopia for youth employment. The MasterCard Foundation has pledged $300 million over five years to help Ethiopia create 10 million jobs for young people by 2030, mostly through entrepreneurship. Working with Ethiopia’s Jobs Creation Commission, the foundation’s effort will focus on agriculture, manufacturing, tourism and digital technology.
“Through my travel across Ethiopia, I’m inspired by the creativity and dynamism of young entrepreneurs and how their innovations are bringing about meaningful change in their communities,” Mastercard Foundation President and CEO Reeta Roy said in launching the Young Africa Works investment in October.
Any scaling up will need to overcome one major obstacle identified by the USAID study: access to start-up and working capital, the lack of which tends to discourage these budding entrepreneurs from venturing beyond agriculture. The IMF program aims to improve access to capital. Knowledge and skills will ignite Ethiopia’s youth bosses, but they’ll need more fuel to kick their ventures into high gear.
For the full evaluation report, search for document PA-00T-JMR at dec.usaid.gov
