Ghana's youth enterprise support initiative.....

Will government prove skeptics wrong?

By

Prosper Hoetu

Addressing the challenge of youth unemployment remains a major nightmare to many governments. According to the International Labour Organisation (ILO) some 73.8 million youth are unemployed globally. The ILO reckons that the slowdown in economic activity is likely to push another half-a-million youth into unemployment this year. In many countries, the phenomenon of youth unemployment is not just a socio-economic problem but also a security threat. In its 2004 report titled: "A More Secure World: Our Shared Responsibility", the United Nations wondered "How have we let what should be our greatest asset, youth, become a threat to our security?" The same report revealed that youth unemployment levels in the West African sub-region are amongst the world’s highest, standing at 18.1% in 2005.
Obviously, the youth unemployment problem is a hydra-headed one that requires a concerted effort to address. It is estimated that there are about 230,000 new entrants into Ghana's labour market every year. The causes of unemployment in Ghana can be attributed to a combination of factors. One such problem is lack of education. According to the 2010 Population and Housing Census, while some 43 percent of the youth in rural areas are illiterate only 16 percent of their counterparts in urban areas are illiterate. Lack of education limits their opportunity to gain employment and undertake decent work. Other factors include lack of skills and labour market experience among the youth. As a matter of fact, the growing numbers of graduates cannot be absorbed by the public sector alone hence the need to support the growth of private sector to absorb other unemployed youth. However, the private sector also faces challenges that hamper its ability to employ more unemployed youth. Besides, Ghana's educational system prepares students to be job-seekers other than entrepreneurs. The fact that the skill sets of graduates from our educational system do not meet the demands of industry remains a major challenge that must be addressed.
As part of its strategy to address the youth unemployment problem, the Government of Ghana launched a programme dubbed Youth Enterprise Support (YES) initiative in August this 2014. According to government, the YES initiative has been designed to “…help young entrepreneurs turn their ideas into thriving business enterprises”. The programme, which is operating under the office of the President, is expected to draw support from other Ministries, Departments and Agencies such as the Ministries of Youth & Sports, Trade & Industry and Finance as well as National Board for Small Scale Industries (NBSSI) and the National Youth Authority (NYA). The programme targets aspiring young Ghanaian entrepreneurs aged between 18 to 35 years, with good business ideas looking for financial support and/or expert advice to bring their ideas to life. The initiative is also intended to support young entrepreneurs learn how to start and grow their businesses and also overcome related challenges. Through the programme, various training services are expected to be provided through business clinics to assist in business plan development. In addition, participants in the programme will benefit from mentoring support where experienced business professionals will be available to guide them to succeed.
The launch of the YES initiative was however greeted with mixed feelings. While a section of the Ghanaian public including young entrepreneurs considered the initiative laudable, others especially from some opposition political parties doubted the success of the programme and heavily criticized same citing the challenges that plagued the Ghana Youth Employment and Entrepreneurial Development Agency (GYEEDA) as a case in point. It is unclear whether or not beneficiaries would be required to pay back monies lent them. Barely two months after the launch of the programme, the first Coordinator was changed and no reason has been assigned for this development. Many commentators have also raised concerns about the need to ensure transparency in the assessment and selection of prospective beneficiaries.
Even though youth enterprise development is not a panacea to the youth unemployment problem, it has to be a crucial component of an overall strategy for tackling the problem. 'Youth and Entrepreneurship' is one of the priority areas in Ghana's National Youth Policy. Even though the National Youth Authority is acknowledged as a partner in managing YES it is not clear whether the YES initiative emanates from the policy or it is just an ad-hoc measure to help tackle youth unemployment just as how GYEEDA started. That notwithstanding, many experts and reputable international organizations such as the United Nations Development Programme, the World Bank and the International Labour Organization recognize the importance of youth enterprise development as key to helping address the youth unemployment problem and for this reason, they have partnered and continue to partner several governments to promote youth enterprise development.
One of the countries promoting aggressive youth enterprise development is Kenya. Through its Youth Enterprise Development Fund (YEDF), over 157,000 youth enterprises have benefitted from financial support. As at 2013, the YEDF trained over 200,000 young entrepreneurs, supported young Kenyans to take up jobs overseas through the Youth Employment Scheme Abroad (YESA) programme and helped created over 300,000 jobs in the past five years.
Again, Uganda's Youth Entrepreneurship Scheme (YES) established in 1995, is also a publicly funded programme which has succeeded in imparting business skills to more than 4,000 young people and provided credit to 1,812 others.
From the successes chalked in these countries, I have no doubt that the YES initiative if properly managed will help achieve its objectives of alleviating the youth unemployment conundrum. One of the issues the management of the programme should consider critical in its enterprise is to ensure equity, access, capacity building and involvement of the youth in the social audits of the fund. Management must take the pain to identify existing youth groups and Non-Governmental Organizations that are into youth enterprise development and draw on their experience and also help coordinate all youth enterprise development initiatives to avoid duplication.
Promoting entrepreneurship culture among the youth should be a cardinal focus of YES. Management should therefore consider partnerships with educational institutions for this purpose.
Again, the YES initiative must undertake research on the key impediments in the business environment that militate against the progress of young entrepreneurs and take steps to ensure that legal and administrative reforms are undertaken in favour of young entrepreneurs.
The Gh¢10million is a good start. However, with time this needs to be increased. Managers of the initiative should therefore consider looking for innovative ways to enhance the resource base of YES. But this will only work if prospective donors are convinced that adequate structures are in place to administer the resources well.
Finally, while I think this initiative is laudable and should therefore be supported by all and sundry to ensure its success, it is my view that since youth enterprise development is not the panacea to the youth unemployment problem, it is important to put in place the appropriate policy framework to comprehensively address the problem. This policy framework should be based on empirical study of youth unemployment to help appreciate the real nature of the problem other than speculations. Such a policy should pay particular attention to education and skills training for the youth taking cognizance of the demands of industry and the provision of career counseling and support services to students.