Note: this article was adapted from a version originally published in “Ventures Africa.”
With 200 million people aged between 15 and 24, Africa maintains the youngest population in the world. The current trend indicates that this population will double by 2050, according to an African Economic Outlook report, which aggregates data from several multilateral organizations including the African Development Bank and the United Nations Economic Commission for Africa.
Gaining professional skills helps the West African business community engage in more trade and encourages economic growth for the region. (Photo Credit West Africa Trade Hub)
Sub-Saharan Africa’s workforce is also becoming larger and better educated, indicating that there is an overwhelming potential for economic growth and development. But even with this progress, youth unemployment and underemployment still remains a major constraint.
Youth in Africa are full of innovative ideas that seek to address a variety of societal challenges. With upwards of 10 million young people entering into the job markets each year on the continent, vastly outnumbering the jobs available in both public and private sectors, many of these youth have turned to entrepreneurship. Yet the fact remains that without an established credit history, significant assets, or business experience required by traditional investment models, young entrepreneurs are constrained by access to affordable capital to start or expand a business.
Investing in young people requires a unique set of skills, and an appetite for a different kind of portfolio. Some youth may require long term patient capital with a long tenor, as well as mentoring and training to manage risk. Others may require seed funding, or funding to develop a new technology, which requires shorter term financing. With web-based enterprise on the rise, investment in youth has become as easy as a funds transfer or mobile payment, and runs the same risk as any impact or venture capital investment. While many investments can be captured within traditional investment classes (such as debt, equity, venture capital), it’s clear that young people in Africa and other emerging markets present a tremendous market opportunity.
The United States Government recognizes the need to invest in young people on the continent, and the Obama Administration has already undertaken a tremendous effort to invest in Africa’s future. The President’s Young African Leaders Initiative, more commonly known as YALI-, empowers and bolsters young African leaders through academic coursework, leadership training, mentoring, networking, and ongoing support. Starting in June 2014, the YALI Washington Fellowship will bring 500 young Africans (between the ages of 25 to 35) to the United States to participate in a comprehensive six week “Institute” in one of three areas: public management, civic leadership, or business and entrepreneurship.
All of these sessions will culminate in a YALI Summit, to be hosted in July 2014 in Washington, DC. Not only will the Washington Fellows have the opportunity to interact with President Obama and senior staff, but they will be able to meet with private sector leaders, and interact with one another, allowing for a truly diverse mix of representatives from all countries, regions, and sectors.
Upon completion of the program in the United States, the investment in young leaders will continue upon their return to the continent, where USAID and the State Department in partnership with the private sector, host governments, and civil society, will offer growth opportunities in four key areas: networking, professional development, access to seed capital for entrepreneurs, and opportunities to give back to their communities. This will significantly increase opportunities for employment and accelerate professional development for leaders. The United States African Development Foundation is also supporting this program with a $5 million entrepreneurship grants program that will include competitively awarded grants for the Fellows with innovative business ideas.
For example, Fellows who have completed the business and entrepreneurship institutes will have built technical and leadership capacity in areas such as strategy, supply chain management, business ethics, social entreprenership, microfinance, management, and risk analysis. Though these skills are invaluable, paired with YALI’s provision of small grants, networks, coaching, and mentoring, the Fellows will be well equipped to build a viable enterprise.
The Washington Fellowship received thousands of applications for just 500 slots, demonstrating that young people are all too aware, and appreciate having an opportunity to substantively engage with senior leaders.
Though applications are closed for this year, its not too late to engage! The State Department’s Bureau of International Information Programs will continue to interact with a growing email list of over 38,000 self-identified young African leaders interested in the United States, known as the Young African Leaders Network (YALN). YALN is open for registration, and will transmit updates on future opportunities available for young Africans to engage the U.S. Government.
For a truly sustainable impact, governments can’t go it alone. As investors across Africa seek to diversify their portfolios, they may increasingly look to young people for high growth opportunities. A commitment to Africa’s future can be best demonstrated by investing in its young people, who will continue to be engaged in shaping their own futures.