Guest post by Arancha González
Arancha González is Executive Director of the International Trade Centre (ITC), the joint development agency of the United Nations and the World Trade Organisation. She is a member of the Ibrahim Index of African Governance (IIAG) Advisory Council.
Youth entrepreneurship in Africa: jobs and dignity
In February 2016, Bubacarr Jaiteh left his home in The Gambia in search of greener pastures. His destination: the ‘backway’ – what Gambians call the overland journey through neighbouring African countries to get to Europe.
He would have had company. The World Bank estimates that The Gambia has sent a higher share of its population to Europe than all but one other country. But Bubacarr’s journey did not go as planned. Not long after leaving, he found himself in jail.
Bubacarr spent much of the next year and a half between Agadez – the city in central Niger dubbed the gateway to the Sahara Desert – and Libya, where he was imprisoned by warring factions in the country’s ongoing civil conflict. He was only freed after family and friends in The Gambia managed to sell family property and raise money to pay for his release.
Since August 2017 the 31 year old has been back home in Old Jeswang, his village next to the Gambian capital of Banjul. He now runs Sonaba Poultry, a registered business with two full time employees. The business started small in January 2018: Bubacarr purchased 75 chicks with the goal of selling meat and eggs to people in his village. Around the same time, he applied for a mini grant through the International Trade Centre’s (ITC) Youth Empowerment Project, an initiative financed by the European Union under its Africa Trust Fund that aims to address the root causes of irregular migration. One focus of the fund is to support economic development programmes addressing skills gaps, improving employability and supporting job creation through entrepreneurship.
The mini-grant scheme is one of three related programmes designed to help Gambian businesses of different sizes overcome a chronic lack of financing: private sector credit in The Gambia is equivalent to only 15% of GDP, well below the West African average of 59%. Young entrepreneurs report that high interest rates and collateral requirements make it extremely difficult for them to start and grow new ventures.
The mini-grant scheme targets grassroots entrepreneurs, with the aim of making it possible for successful applicants to purchase equipment, materials, permits, and other business-critical inputs. Grantees, who receive up to $1,000 based on the business plans they submit, also receive training in financial literacy to help them improve financial planning and practise.
In his application for the grant, Bubacarr requested funds to buy 300 chickens along with feed and feeding equipment. Once his application was approved, in April 2018, Bubacarr submitted invoices for the purchases, which came to the equivalent of about $850. The National Association of Cooperative Credit Unions, the local financial institution partnering with ITC on the initiative, procured the items directly from vendors and supplied them to him.
According to Bubacarr’s estimates in his application, receiving the grant would enable him to earn a profit of approximately $750 in the following six months. He was being conservative: sales to mini and supermarkets in the Banjul area pushed his profits above $1,300. As of autumn 2018, Sonaba Poultry had over 1,000 chickens.
Isatou Jobe, a 21-year old with experience in the hospitality industry, used a mini-grant to open a restaurant in her home town of Farafenni in the country’s North Bank Region. Her restaurant, where she prepares breakfast, lunch, and dinner, now employs three women. Isatou says that training she received in tandem with the grant has helped her manage the business’s finances more effectively.
Another grantee, Kebba Tiyana, used a mini-grant to build a fence around his organic farm in Central River Region North and to help pay his four employees. With less of his business’s peppers, onions, cassava, maize, potatoes and watermelons being lost to incursions by wild animals, the 29 year old anticipated a bumper harvest.
Mam S. Danso applied for a mini-grant after coming across an advertisement for the scheme on Facebook. With the grant, she moved from Banjul back to her home in Jarumeh Koto village in Central River Region North’s Sami district, and opened up a clothing design and tailoring business, purchasing tailoring machines and office equipment. With demand for her clothing particularly strong during religious festivals, she says her profits have been sufficient to pay the two people she now employs, with enough left over that she has no cause to envy people in the capital. She aspires to become one of the biggest entrepreneurs in her region.
Businesses of different sizes have different needs, and ITC’s Youth Empowerment Project is also working to ensure that entrepreneurs targeting markets beyond the local grassroots level are able to access the financing they need. For young Gambian entrepreneurs and MSMEs currently unable to access bank credit, a mini-loans scheme offers credit products at reduced interest and against modest collateral. The loans, which average $3,000 in value, aim to serve as working capital for up to 580 entrepreneurs and existing small businesses to scale up.
For high-growth enterprises, ITC is working to establish an angel investors network. For young Gambian entrepreneurs, the network would offer access to both capital and mentorship. For potential investors, it would serve as a transparent and impartial channel for assessing potential deals in the country.
The lessons are clear: creating a conducive ecosystem for starting and growing businesses, using public support to leverage the private sector, bridging market failures and investing in skills, helps generate much-needed jobs through entrepreneurship. At the end of the day, the acid test against irregular migration is about jobs at home. Jobs mean income but more importantly, they mean dignity and hope in the future.
When young entrepreneurs succeed in The Gambia, they prove to others at home and elsewhere that it is possible to ‘make it in The Gambia’. Or as they say in Wolof, ‘Tukki wala tekki fii? Tekki fii!’ Go abroad or make it here? Make it here!