The Value of Youth Entrepreneurship and Self-employment

It is now widely accepted that there are many good reasons to promote entrepreneurship among young people. While caution should be exercised so that entrepreneurship is not seen as a ‘mass’ or wide-ranging solution which can cure all society’s social ills, as many experts such as Curtain (2000) warn, it has a number of potential benefits. An obvious, and perhaps significant one, is that it creates employment for the young person who owns the business.  For a young man or woman, there are two career options: one is wage-employment in which he works in government or non government organisation on a fixed wage or salary. The other is self-employment in which an individual employs himself either in producing goods or rendering services for a price run by you. Similarly, you may start a tailoring, shop to stitch clothes of others.  

Entrepreneurship involves risk. An entrepreneur is a person who undertakes projects involving risks. He tries to Innovate new products, new methods of production, and marketing. He bears the risk of uncertainty in the hope of profit. Greater is .the risk Involved, greater may be the profit.  
 

Self-employment, on the other hand, refers to full-time involvement in ah occupation. Self-employment may or may not involve risk. A tailor, for example, may start a business by purchasing a sewing machine with his own resources at his . own residence. It involves very less risk. But if he expands his business by employing many people using modern machines, it may be more risky to invest his own savings or borrow money for that purpose. If he decides to take the risk, there may be an element of entrepreneurship in that venture. If he is continuously engaged in expanding his business by innovating new products, he will be engaging in entrepreneurial activities. However, strictly speaking, an entrepreneur does not continue to run the same business for a long period of time.  
 

Self-employment, thus, does not mean the same thing as entrepreneurship. But self-employment promotes entrepreneurship. A self-employed person has to be innovative, to be able to prosper and must take risks where necessary in his own interest.  
 

One need only look at companies like Facebook, Twitter, Apple. One of the characteristics that these companies have in common is their ability to see opportunities, seize them and promote innovation as part of their system. Entrepreneurial companies have extraordinary growth over a sustained period and thus impact remarkably on economic growth.    
 

Due to the many strong arguments for entrepreneurship, promoting an entrepreneurial culture should be encouraged by word and might from the country’s leaders. This should be accompanied by directing our education system to deliver individuals with a good combination of specialist and generalist skills. On top of this, the main tenets of entrepreneurship should be a common course for all students so as to equip them with necessary skills like writing a business plan, preparing a proposal to present to investors, how to register a company, general accounting skills and other necessary skills.

Youth and Entrepreneurship

Given the right combination of motivation, ideas and opportunities, youth are more than able to establish productive and creative businesses. Engaging in entrepreneurship shifts young people from being “job seekers” to “job creators,” and also from social dependence to selfsufficiency. Many self-employed youth also contribute to the upkeep of their family, sometimes in a leading role in the absence of parents.

Despite these potential benefits, the majority of youth continue to look up to the state for employment rather than creating their own jobs and employing others. This failure of young  people to engage in entrepreneurship has also been attributed to a range of factors: sociocultural  attitudes towards youth entrepreneurship, lack of entrepreneurial training in the school curriculum, incomplete market information, absence of business support and physical infrastructure, regulatory framework conditions, and in particular, poor access to finance.

In a global youth dialogue held in 20044, the youth strongly recognized their involvement  in small business development as an important vehicle for national development. Participants  were quick to cite lack of financial resources as major constraint for youth entrepreneurship and business development. Owing to the lack of collateral and business experience, young people are considered a very high risk by lenders. The limited number of micro-finance institutions that  target young people in business continues to constraint the development of youth entrepreneurship.

On the gender front, very few young women in Africa engage in establishing and running their own enterprises. For instance, in Zambia only around 5 per cent of females aged 15-19 are running enterprises as proprietors compared to 15 per cent among their male counterparts. While 25 per cent of female youth aged 20-24 are engaged in running enterprises in Zambia, as much as 40 per cent of male youth are self-employed.

To improve access to credit in the formal market, a number of African governments and some private organizations (profit and non-profit) have established funds and micro-credit  institutions to provide finance to young people. The Zambian government, for example, has setup a K40 billion Youth Empowerment Fund to provide venture capital to young people with sound business projects. However, more public and private schemes are needed to increase opportunities for youth.

Young Africans can also benefit from the experiences of established business leaders. Through mentoring schemes, internships and training opportunities, young people can gain an insight into setting up and running a business, and importantly, how to avoid the potential pitfalls in the real world of business. Governments need to encourage the private sector to take on this role.

Promoting the benefits of migration while mitigating the costs

While migrating to an urban area is a rational act for a young person in search of a job and a better life, too often, the end result is poverty and exploitation. To rectify this,  governments are now looking at job creation in rural areas, though these initiatives need to be both intensified and expanded.

At the same time, very little effort has been made in Africa to reduce emigration or to promote the return of emigrants. In response to this situation, the African Union has established a “Strategic Framework for a Policy on Migration” with the goal of addressing the causes of internal and international migration and its challenges.

The ILO together with the European Commission has also set up a project on “Managing Labour Migration for Development and Integration in the Maghreb, West Africa and East Africa”. This project has increased awareness of stakeholders on different aspects of labour migration, promoted understanding of its causes and consequences, and collected data and information, which are critically needed to develop comprehensive policy frameworks and labour migration management measures.

Discussion Questions:
1. How can young people be supported in coping with the transition from school to work? And from informal to mainstream employment?
2. How best can African countries integrate youth employment policies into more general employment generation strategies, and more importantly, into the design of Poverty Reduction Strategies (PRSs)?
3. Beside employment promotion to raise the hopes of young people in their communities, what is the best approach to addressing the tragedies in the migration of young people from Africa to Europe?
4. Why have African countries been slow in joining the Youth Employment Network, and what should be done to accelerate implementation of the objectives of YEN?

Tackling the challenges of youth employment

For many decades, governments and international partners focused on macroeconomic stability and structural adjustment as a means to promote economic growth and thereby create  jobs. The underlying faith in this approach was that these measures alone would lead to job creation and poverty reduction, for youth and adults alike.

There is now a growing consensus among governments and development partners that specific policy measures are required to tackle the main barriers to employment generation for One relatively effective measure is the public works programme, which has been  implemented in a number of African countries with some success in creating jobs for unskilled youth.

The International Labour Organization (ILO) is involved in a number of projects that target job creation for young people as part of their Employment Intensive Investment Programme (EIPP). EIPPs are public works-type projects in the area of infrastructure, and have  been implemented in over 20 African countries. Under the umbrella of this initiative and with  assistance from donors, a number of projects in labour-based road construction and maintenance have been supported on the continent.

Facing a dire situation in the labour market, many young people stop actively searching  for a job. A South African survey in 2000 revealed, for example, that 39 per cent of unemployed youth had stopped searching for employment.3 Job-search assistance can be provided or funded by the government to help encourage African youth to re-engage with the labour market through activities like writing job applications and curriculum vitae, and preparing for interviews.

A number of global initiatives have been set up to accelerate efforts in tackling youth unemployment and underemployment. For example, the United Nations, along with the ILO and World Bank, established the Youth Employment Network (YEN) in 2001 to provide support to the global commitment of “developing and implementing strategies that give young people everywhere a real chance to find decent and productive work” as embedded in the United Nations Millennium Declaration of 2000.

National and regional programmes aside, young people continually demonstrate their  own ability to cope with the situation they face in the labour market. One response is  entrepreneurship as addressed in the next section.

Youth Employment and the Challenges of Migration

Having a job provides a person not only with a source of income but also a basis for dignity and self-respect. To be leaders in the context of their families and in the broader community, young Africans need to find a decent job.

However, young people have a hard time in African job markets; with inadequate education and skills and few opportunities, most young Africans face a future of low-wage employment, unemployment and underemployment. An increasing youth population adds to the pool of job seekers every year, worsening the situation.

Young African women also face particular barriers in the labour market, much of which is attributable to cultural attitudes towards them. The expansion of employment opportunities is far below the growth in the youth population because of a lack of appropriate technologies and investment. For example, Africa’s
continued dependence on rain-fed agriculture causes much underemployment among rural youth  for most part of the year. With little access to land, these youth lack educational, economic and cultural opportunities. As a result, young people consciously decide to move to the towns in the hope of greater chances for employment, as well as a more exciting life, causing massive urban drift.

Sadly, once in the big city, African youth lose hope of finding a decent job and are compelled to cross dangerous paths and waters to better pastures, with all too tragic  consequences. International observers report that less than one-third of the thousands of young Africans who attempt to reach Europe through the Sahara desert make it to their dream destinations.

Another problem is the rising incidence of youth poverty, crime, prostitution and drugs among youth, as well as the involvement in armed conflict - direct consequence of the lack of decent jobs.2 This is of particular concern, not only due to its profound impact on the lives of young people but for society as a whole.

Education and Skills Training for African Youth

Young Africans need access to both decent formal education and opportunities to acquire a range of vocational and life skills to actively participate in all spheres of an increasingly knowledge-intensive society, today as young citizens and tomorrow as the continent’s future leaders. Unfortunately, young people in Africa struggle to acquire an education that provides them with the right set of skills and knowledge. As a result, the transition from school-to-work is a major challenge such that many young Africans end up either unemployed or underemployed in the informal sector with little protection and prospects.

Governments and international partners have made concerted efforts in recent years to improve this situation. In particular, to achieve the goal of universal primary education, many African countries have directed much effort and resources to improving primary school enrolment.

The abolishing of school fees at the primary level has been a major driving force to achieve this goal. In Malawi, for example, free primary school education has considerably increased the youth literacy level from 63 per cent in 1990 to 76 per cent in 2004.

A number of major challenges remain Even while enrolments have been increasing, the quality of education in many African countries appears to be on the decline. Inadequate infrastructure and training facilities, poor and
inappropriate curricula, and lack of well-trained and motivated teachers are among the main reasons explaining this decline. Though access to primary education is a necessary first step and a fulfilment of a human right, it is also clear that it does not provide needed skills for a young African to compete in an
increasingly competitive labour market. Moreover, at the country level, a critical mass of secondary and higher education graduates are required in order to accelerate economic development.

In most African countries, secondary schools are limited in capacity, which is largely due to inadequate budgetary resources for this sector. Consequently, the chances of young people proceeding to secondary school, not to mention tertiary institutions, are significantly hampered.

To deal with this predicament, African governments and international partners must take a more holistic approach to education, broadening their focus from just primary education.

In this context, African girls and young women need special attention. Overall, in most of Africa, gender disparities continue to impede young girls’ acquisition of a decent education and employable skills. This keeps young African girls away from their rightful place as agents of development and leaders of tomorrow.

Fortunately, the gender situation has greatly improved in recent years in some African countries. A number of them, such as Botswana, Lesotho, Mauritius, Namibia, Rwanda, Swaziland and Zimbabwe, are in fact on track to achieve the goal of eliminating gender disparities in primary education.1 Other countries have turned to a range of measures to reduce the gender disparity in access to education – one illustration is the provision of free uniforms and books to girls in Kenya.

There are also considerable regional disparities within countries in terms of education and educational attainments. In this regard, the uneven distribution of educational infrastructure in most African countries reflects the weak commitment of governments in addressing this issue.

Most secondary schools and tertiary institutions in Africa are located in the cities, with rural pupils struggling for access. This situation contributes to the persistent urban-bias that has so much distorted Africa’s development.

The Way Forward for Youth Entrepreneurship in Ghana

Addressing the issue of youth entrepreneurship must be a top priority for government. Ghana, like any other developing country in the world, must take the necessary steps to encourage entrepreneurship in young people to reduce unemployment, increase productivity, and make the economy more dynamic. Below are practical steps the Ghanian Government can take to address the issue of youth entrepreneurship:

Creating a Business-Friendly Environment. There should be a conscious and deliberate policy effort by the government and the private sector to create a business-friendly environment. Currently, many government programs and policies are burdensome to the business community. For example, in Ghana small business owners must pay a multitude of different taxes without any tax breaks. Policies and programs should be reformed in such a way that even those who are not inclined to start their own business will see its evident advantages. Additionally, property rights must be guaranteed and enforced by an unbiased and impartial legal system.

Specialized/Technical Training. Specialized institutions for entrepreneurship training outside traditional schools need to be established. These institutions should offer practical training so that even those with little formal education can follow the instructors. Entrepreneurs and successful businessmen and women should be encouraged to teach at these institutions.

Business Funding. Either through the government, the private sector, or public-private partnerships, viable small businesses need to have access to the capital they require to succeed. Incentives for banks and micro-finance institutions to lend to small businesses and entrepreneurs should be put in place. Lending institutions with programs and facilities that support young entrepreneurs should be given tax incentives to expand their work. No business can survive without access to capital. Small businesses and entrepreneurs in particular need special financial support in the early stages of their business.

National Awards. The government and/or the private sector should institute an award program to recognize the efforts and contributions of young entrepreneurs in Ghana. At the moment, youth entrepreneurship is hardly mentioned. However, if an award were established to recognize youth

The Current State of Youth Entrepreneurship in Ghana

Ghana was the first country south of the Sahara to attain political independence in 1957. At the time of the struggle for independence, Ghana’s first Prime Minister and President Dr. Kwame Nkrumah said in a speech that Ghana should “seek ye first the political kingdom, and all things shall be added unto you.” He then introduced an economic system he called “scientific socialism,” which proposed that the state be at the center of economic planning and activities. So Dr. Nkrumah went on to build industries that were charged with taking care of the needs of the people. The government became the beginning and the end of all economic activities.

Yet, rather than building a great industrial society, scientific socialism led Ghana into economic decline. Most people in Ghana, and especially young people, have been made to believe that it is the responsibility of the state to provide for their economic needs. Whenever the issue of unemployment rises, people still refer to the Nkrumah’s era as the “good old days.” However, it was wrong for the state to take charge of economic activities directly. While the state sometimes must intervene to support the weaker sections of the economy, it should not control the bulk of it.

Today in Ghana, most young graduates expect the government to employ them and in the absence of government employment, they cannot do anything for themselves. Entrepreneurship and leadership education is all but non-existent. The best business schools in Ghana still teach archaic and outdated business concepts that have very little to do with the country’s current level of economic development or future prospects. Most lecturers in Ghanaian business schools have never started their own businesses. The old concept of “go to school, get good grades, and you will get a good job” is still the order of the day. Students read only their course materials – nothing more – as they have no incentive to excel.

Although no official statistics exist, very few young people in Ghana can be classified as entrepreneurs. Most are not familiar with modern business, management, or leadership principles. Yet, entrepreneurs and leaders are a special breed of people who by the virtue of their existence make the world go round. If there are none to be found among Ghana’s youth, how can the country progress?


A Personal Perspective
To be young and start your own business in Ghana is one of the most difficult things one can choose to do. The business environment is extremely unfavorable to a young entrepreneur. I know these challenges from first-hand experience. In 2003, just after completing senior high school, I decided to form a community-based non-governmental organization. It was the first time I had started anything on my own. Fortunately, I was introduced to the concepts involved in starting a business in a book by David Schwartz The Magic of Thinking Big. This book helped me build the necessary confidence and courage to take on the world and create something new.

I established AVERT Youth Foundation to serve as a platform for young people in my community to share ideas on how we can make meaningful impact. This organization is still serving its purpose. A significant challenge that I faced in the beginning was funding, which is normal. Compunding that, was the difficulty of recruiting members as it was the first time such an organization was in our community.

entreprenuership

Llife as the say is in our own hands, as the youth of this world it is our sole responsibility to find ways and means to make life better for us and our children.

As i grew as a little child i had a great hope and wonderful inspiration for the future, but you never knows what would change your life for you. Sometimes you always wished you were born in a rich family, when you see rich children having things you wished you had in your life. But i never knew that God has a purpose for each and everyone of us in our lifes. Our father left us with our mother when i was a little boy, when a family of nine children, i was the 8th child. Five boys and four girls. it was not easy for our poor mother to take care of us. sometimes just getting one meal a day was a problem. Sometimes it comes to a situation that you have to choose either you eat groundnuts or eat grind millet that is always mix with water and shea butter, i remembered one day we had to choose one of the food and one of my elder brother seeing that none of the food could satisfy him, he said he wanted both the groundnuts and the millet and till day we called Baazaa (both). Lokking at the way my mother was able to struggle for us till we all grew to adults i will always remain to indebted to us and all women who have struggle to cater for their children inspire to all the problems the encounter.

Sometimes i always fear i that all my hopes and inspiration are to be dashed one and that i had no future, but our mother used to encourage us in the Lord Jesus, as she always says that is the source of her strength and power to carry out her duties. and that has never been false.

As a single mother she brew logal gin called pito to earn some little income to cater the family. But with nine children it was not easy as some one my brothers were now involve in drinking and fighting carelessly which all add stress to this poor lady. i remembered most of the time she had to cry just because of what she was going through.

i went to  St. Joseph R/C primary at the age of nine(9) in primary one which was so late for me. From primary to JHS. During the time of my final exams i had a serious sickness that i could not even write the mock exams, as i could not walk for just five footsteps, i went from  hospital to hospital and getting the same report that there was nothing wrong with me. Eeh! when i was dyinng how can the doctor's report says am ok. so we have to go to treat it with traditional medicine and God been so good and so kind, it works for me and i was back, and that was when just when we were writing or final exams, so i had to write the exams with doubts of what i was writing.

Mostly, if you ask a youth what he/she expects after going to school, what they would say is that they want to find a nice job, but none never says , they want to create jobs. I had the passion of opening my own business when i completed SHS, but as at then i had no capital to start with.

Mostly, if you ask a youth what he/she expects after going to school, what they would say is that they want to find a nice job, but none never says , they want to create jobs. I had the passion of opening my own business when i completed SHS, but as at then i had no capital to start with.