Dr. Akinwumi Adesina, president of the African Development Bank (AfDB), says African youths are faced with lack of funds to turn their ideas into viable businesses.
He, however, tasked governments and private sectors on the continent to grow, finance and support large scale youth-led businesses.
According to the News Agency of Nigeria (NAN), Adesina said this on Monday, while speaking at a virtual high-level roundtable on Scaling up Financing for Youth Entrepreneurship and Innovation in Africa.
He said that the capacities and entrepreneurial drive of the youths in Africa needed to be unleashed to create jobs, noting that the youth must be supported to go beyond job seeking.
“We must grow, finance and support large scale successes of youth-led businesses in Africa.
“Existing financial institutions have failed to meet the needs of this rapidly growing population of the continent.
“This is due to lack of appropriate financing instruments; archaic credit risk assessments; focus on collaterals which the youth do not have; and lack of long-term financing horizon.
“That can deploy different types of financing instruments, from debt, equity, quasi-equity and guarantees over the life cycle of the businesses of the youth.”
Adesina said the continent has several programmes directed at improving the skills of the youth by countries, supported by bilateral and multilateral finance institutions.
He noted that though such programmes might have helped to impart some skills to support entrepreneurship, the youths are still faced with financing challenges to turn their ideas into viable businesses.
“It is time to put the capital of Africa at risk on behalf of the youth.
“It is time to create new financial ecosystems that are able to support the businesses of the youth, grow them, and unlock the latent demand for financing by millions of the youth.
“This will help to turn Africa’s demographic asset into an economic asset for Africa, and for that, we must nurture the businesses of young people.
“We must tackle market failures and missing institutions that prevent the youth entrepreneurs from reaching their potential,” NAN quoted him as saying.
The former Nigerian minister believes that with a new financial ecosystem around the youth “that was systemic, scalable and sustainable, Africa would create youth-based wealth and jobs across the continent.”
In her address, Arancha Laya, minister of foreign affairs, European Union and Cooperation, Spain, noted that entrepreneurship was recognised as a driver for economic growth but pointed out that there were too many hurdles confronting intra-African trade.
“In this endeavour, I believe it will be crucial to give youth access to appropriate financing mechanisms, capacity building and implementing legal and institutional reforms to address the barriers that young people face in accessing corporate financial markets,” she said.
In its Job for Youth in Africa Strategy, AfDB plans to create 25 million direct and indirect jobs and empower 50 million youth over ten years.
Nigeria is on the list of countries with the highest unemployment rate globally. According to the latest unemployment report by the National Bureau of Statistics (NBS), a total of 23.18 million persons in Nigeria either did nothing or worked for less than 20 hours a week, making them unemployed during the fourth quarter 2020.