From captains of industry to young agro-entrepreneurs in Rwanda and Ghana: partners in SDGs?

This piece is written by Marije Balt, director of SpringFactor and former Dutch government diplomat

Gloria has been able to expand her farm thanks to microfinance for Rwanda Women Entrepreneurs – Georgina Goodwin, Hand in Hand International/Flickr


One year ago world leaders adopted the 17 Sustainable Development Goals (SDGs). A global agenda that should eradicate poverty and tackle inequality, aiming to leave no one behind in the process. What does this mean for the world’s younger half and their future prospects? We zoom in on examples of young agro-entrepreneurs in Rwandan and Ghanaian rural areas.

In a room filled with Dutch students, captains of industry were buzzing with optimism during the panel

discussion ‘Joint action to achieve the SDGs by 2030’ on 8 December 2016. “There is no business case in enduring poverty”, according to Unilever CEO Polman, “so we must embrace the SDG Agenda and recognize it as an important driver of business strategies, innovation and investment decisions.” Whereas students might have wondered what this meant for themselves in increasingly insecure job markets,  this goes even more so for the young generation in Africa.

Certainly, Africa is the second fastest growing region in the world. And young Africans’ enrollment in higher education more than doubled in a decade, according to the State of Education in Africa Report 2015. However African youth are still among the world’s least developed. The so called African youth bulge is often referred to as a ‘ticking time bomb’, with fears for increased migration not only to urban slums, but also to richer Europe.

From quick wins to youth smart agriculture

The majority of African youth still live in poor rural areas. They currently try to make a living in either nonfarm employment or are self-employed in agriculture. Stimulation of the agricultural market is therefore critical for boosting youth employment. This has become a popular theme among donors. However according to the ILO, policymakers are increasingly recognising that systemwide interventions (such as agriculture programmes) do not deliver help to young people with sufficient speed or certainty. The problem is that they do not sufficiently take into account specific constraints for young people. And if they do, quick wins prevail; after having ‘delivered’ skilled, coached and financed entrepreneurs, they are left to their own devices. Instead the focus should be on ‘youth smart’ agriculture by making the sector more competitive, profitable and dynamic (Sommers (2015) in the long term. A good vehicle are public private partnerships (PPP), as the below examples from Rwanda and North Ghana illustrate:

Competitive

From a political economy lens, in a patriarchical culture such as in North Ghana with traditional male leaders still being highly influential, the level playing field for young entrepreneurs, boys and girls, is limited. In this clientelistic environment, it is difficult for new entrants to penetrate existing supply chains and get through (often non-transparant) procurement procedures. A Dutch supported PPP engages young entrepreneurs through a merit based programme, taking entrepreneurs through a mandatory training and offering access to land and credit, based on their performance over a number of years. This combination offers youth the opportunity to show their relevance in the market, but at the same time requires a strong motivation which young people link to the prospects of profitability and dynamism.

Profitable

Making the enterprise profitable is key for attracting youth, but in both Ghana and Rwanda available land is scarce and the pay-back rate on credit provided for investments is low. Evaporation of credits is often due to obliged solidarity. Young Africans tend to be regarded as individual economic agents, but are deeply embedded in – and feeling indebted to – their communities. Helping young entrepreneurs to separate business from personal finance, the Rwandan company PEBEC Ltd. – Promotion and Export of Bird’s Eye Chili Company facilitated a common social fund together with Dutch NGO Help a Child. In addition, it opted to work with chili, a fast-growing crop with quick revenue which young entrepreneurs need, as they typically lack financial buffers to absorb fluctuations in income.

Dynamic

Agriculture is generally perceived by youth as a low-status livelihood that does not offer more than subsistence farming and is, therefore, stigmatized. In addition, rural areas lack the facilities offered by urban areas, not only in terms of health and education, but also connectedness, which is important to young people. In Rwanda there are rapid improvements, especially in the ICT sector (e.g. infrastructure, mobile telecommunication, internet and e-agriculture). These provide young people with alternative, off farm niches in value chains, as promoted by German and American supported Akazi Kanoze Access programme. However these kinds of donor and government-funded programmes won’t do much if there is a general lack of work opportunities. They should be connected to the development of promising value chains in specific regions, which is the case for the above public private partnerships in North Ghana and Rwanda.

Back to the airconditioned hall in Rotterdam with the captains of industry. CEO Feike Sijbesma presented DSM’s initiative with the Rwandan government to address malnutrition, sourcing maize and soybean from local farmers. However it takes a special effort to engage young farmer entrepreneurs in this. If we really want to contribute to SDG 8 on youth’s economic inclusion, we need concerted efforts. Per context, companies can take into account the specific constraints that youth faces to access work, and provide the necessary resources and incentives to address these constraints – in partnerships. The above PPP examples from Rwanda and Ghana show that business, NGOs and governments can be effective in promoting youth entrepreneurship in Africa – together.

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