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.