By: Mory Sumaworo
Youth entrepreneurship is crucial to the sustainable economic growth of the African Continent. It creates job opportunities for millions of Africans, it helps the government to allocate funds for other development areas that might have been affected due to the joblessness of the young people. It is interesting to know that Africa is the second most youthful populated continent after Asia; youths between 15-24 years of age constitute 19% of its demographic composition, while there is a projection that this figure may double by 2030 as youths’ percentage may rise and reach 42%.
However, this indicates a promising, upright projection and bright future for the continent in the sense that young people are the main engine of sustainable development (Demographic Dividend). Nevertheless, massive unemployment and underemployment rates are the biggest challenges and obstacles that still stand ahead of Africa’s growth (Demographic Distress). Hence, to handle this social economic problem and predicament, entrepreneurship that has been massively engaged by many talented young Africans ought to be exhorted by the governments and other development stakeholders.
It is, therefore, recommended to governments and stakeholders smartly invest in training young people about entrepreneurship, mainly in agriculture, IT, and ICT in addition to providing all necessary support and reducing systematic barriers that come their way in many African economies such as bureaucratic barrier, high-cost of doing business, lack of access to finances and the existence of deplorable infrastructures both tangible and intangible, etc.
This paper discusses young entrepreneurs’ role in driving the development agenda and realization of the United Nations-initiated Sustainable Development Goals (SDGs) in Africa. The Research is qualitative in nature to explore some of the challenges and prospects of youth entrepreneurship on the African Continent. The study concludes that entrepreneurship in general and youth entrepreneurship, in particular, are the main and must be the main engine of Africa’s economies, turning its demographic distress into dividends, and solving other associated socio-political and security challenges
Africa is the second most youthful populated continent after Asia; youths between 15-24 years of age constitute 19% of its demographic composition, while there is a projection that this figure may double by 2030 as youths’ percentage may rise and reach 42%. However, this indicates a promising, upright projection and bright future for the continent in the sense that young people are the main engine of sustainable development. Nevertheless, massive unemployment and underemployment rates are the biggest challenges and obstacles that still stand ahead of Africa’s growth.
Therefore, to handle this social economic problem and predicament, entrepreneurship has to be massively engaged by many talented young Africans and ought to be exhorted by the governments and other development stakeholders. Besides, young African entrepreneurs experience many difficulties translating their brilliant ideas into reality due toa lack of access to funds and financial support. Millions of excellent business plans die every year because of starting-up requirements; capital, unnecessary bureaucracy, etc. In addition, deplorable conditions of basic-needed infrastructures for business operations play as well a pivotal role in setting setbacks for many young business aspirants. For instance, the accessibility to electricity is low with its high in many African countries. Some reports have shown that the average rate of access to electricity in Sub-Saharan Africa is 28.5%, while the cost is too high. Moreover, a bad road network between rural areas and urban markets is also a batch of an obstacle for businesses to well function and operate.
Despite all of these, the future of youth entrepreneurship on the Continent is bright, especially agribusiness which is being projected to produce future millionaires and billionaires as noted by Dr Adesina, the President of the African Development Bank, and forecasted to contribute to Africa’s economy $ 1. trillion by the World Bank by 2030. Also, Information Technology and Real Estate Industry are other potentials where African young entrepreneurs will and may take advantage of when start-up challenges are addressed by the governments and business environment.
Importance of Youth entrepreneurship: Entrepreneurship on the African continent should play a major role in job creation, economic transformation, and building reliable and smart infrastructures. Further, Africa’s largest potential lies in the hands of its youths who have been estimated as the second in percentage after Asia from 2015- 20601 .
In 2015, 226 million youths aged 15-24 years lived in Africa accounting for 19% of the global youth population. According to some statistics, this youthful population is projected to have increased by 42% in 2030, the deadline set for achieving Sustainable Development Goals (SDGs).2 These figures are dividends if they are well invested in and afforded the opportunities to engage in effective and productive entrepreneurship. Indicated that below are some significant outputs for youth entrepreneurship in Africa.
Self-Job creating: Entrepreneurship offers the opportunity for young people to create jobs for themselves by translating their respective talents and skills into reality. In the African context, there has always been a burden on the public sector in terms of employment opportunities, a situation which has left millions of young people without incomes to sustain themselves and their families. However, if youth-initiated businesses are encouraged by governments and other development partners, there would be a dramatic reduction in the alarming unemployment rate in many African countries. In addition, youth entrepreneurship also helps lessen the employment load on the public sector as it creates jobs for many employable skillful young people.
All in all, encouraging entrepreneurship is particularly important to face some of the challenges related to the high youth unemployment rate3 . The importance of entrepreneurship in creating jobs has been emphasized as stated below. Some reports revealed that successful development required a series of structural conditions that created a business and growth-enabling environment Growth and poverty reduction in developing economies result directly from new jobs, 9 out of 10 of which are created by the private sector. 4
Promoting Skills and Unveiling Potentials: Encouraging and promoting entrepreneurship is a gateway to unleashing hidden potentials that could contribute to any country’s development drives and economic transformation. If the young people are taken care of, it can ease their engagement in businesses on their own, there would be an explosion of hidden skills and talents for sustainable development. Future millionaires and great CEOs could be created through promoting and supporting youth entrepreneurship, especially in Africa where golden potentials for businesses are very huge and perhaps still verging.
Development acceleration: There is no doubt about the significant role of the private sector in delivering and building infrastructures such as roads, airports, railways, hospitals, schools, universities, and recreation centres. These development projects could be assisted by the private sector which includes entrepreneurship. Because, in the absence of an effective and strong private sector, recurrent expenditures (REs) consume a large portion of the annual budget of the nation. Thus, capital expenditures (infrastructures) would be negatively affected. And this is the scenario in many African nations where businesses struggle to survive due to the lack of reliable and adequate infrastructures and facilities.
For instance, Liberia which is on the way to recovery from the aftermath of almost two decades of civil conflicts (1989- 2003) that resulted in damage to its infrastructures (schools, hospitals, hydro, roads, etc.), still has very weak participation of the private sector in its economy, as a result, the central government spends more than 85% of its annual budget on recurrent expenditures and only less than 15% on capital expenditures.
If entrepreneurship is encouraged, well invested in, and supported, there could be a decline in government spending on RE. Consequently, public investment will be raised and business–friendly infrastructures will be built and made available. In other words, considering the government the largest employer will be dramatically reduced as a strong private sector will be home to thousands of employees, hence the pressure of recurrent expenditures on the nation’s annual budget will be minimized and economically diverted to other development projects.
Economic Growth: It is believed that smart entrepreneurship and economic growth are synonymous and intertwined as the former leads to the latter. When youths are actively engaged in entrepreneurship, unemployment rates will reduce as stated above and they will have income which is calculated in the nation’s Gross Domestic Product (GDP); one of the yardsticks by which economic healthiness and growth of the nation are measured.
Security and Reduction in Crime Rate: Youth employment is one of the major reasons and soft components in keeping societies safe and reducing crime rates. A lot of social maladies occur because of massive unemployment rates as jobless; young people have their wants and needs, and if there is no rightful avenue to meet those economic wants and needs, they will resort to wrongful mains. Nonetheless, if youth entrepreneurship is being taken care of, supported, funded, and encouraged by the governments and the development partners, the situation will help in creating incomes for millions of young people on the continent to flourish her economic growth. Hence, this will help to control many of them – young people- from being involved in extra-judicial activities to raise and secure incomes for themselves.