Akinwumi Adesina: African Youths Lack Funds To Turn Ideas Into Viable Businesses

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.

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.