African youths have business ideas but lack funds – AfDB boss

African youths are faced with lack of funds to turn their brilliant ideas into viable businesses, President of the African Development Bank (AfDB), Akinwumi Adesina, has said.
He therefore urged governments and private sectors on the continent to support large-scale youth businesses with needed funds.
Adesina said this on Monday at a virtual high-level roundtable discussion on ‘Scaling up Financing for Youth Entrepreneurship and Innovation in Africa’.
He said leaders must go beyond sermonizing about creating jobs by funding the capacities and entrepreneurial drive of the youths in Africa.
He said, “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.”
He also said, “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.”
According to Adesina, the continent has several programmes directed at improving the skills of the youth by countries, supported by bilateral and multilateral finance institutions.
He said though such programmes might have helped to impart some skills to support entrepreneurship, the youths were still faced with financing challenges to turn their ideas into viable businesses.
He said, “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.”
He noted 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.”
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.