Skills Training and Innovative Financing for Young Rural Agribusiness Entrepreneurs in Africa

Entrepreneurship has become a catch-phrase. It needs lot more focus, an effectively steered supportive framework and lots of financial investments especially in sub-saharan Africa. Entrepreneurial challenges are well known, but governments and their development partners’ commitment and pragmatic will to address the teething issues has always been very limited. The need for SME and entrepreneurship development is especially relevant in Africa, where young and expanding populations require the creation of jobs. Fostering entrepreneurship development especially in the agri-food sector will be key to the economic and social progress and in addressing the bulging youth unemployment challenges in the sub-region.

There is the urgent need for proactively supporting young people in the West African sub-region to identify business opportunities across the agricultural value chain and also re-focusing the mindset of governments, individual and institutional investors to be innovative in their approach to providing financing for young agricultural entrepreneurs.
The bulging African youth population coupled with high youth unemployment rate makes a case of exploring business opportunities across the agricultural value chain highly relevant today. According to the International Food Policy Research Institute (IFPRI), Agriculture contributes one-quarter to one-third of African gross domestic product (GDP) but employs 65-75% of the labour force. According to the World Bank, the value of food on domestic markets in Africa is projected to increase from US$ 313 billion in 2010 to US$1 trillion in 2030. World food prices are high and expected to remain so for at least the medium term. This is a massive opportunity before African producers, and especially for young Africans.

With various research works validating the fact that African agricultural productivity is ready for a massive boom, young Africans in the sub-region, not necessarily having much interest in the production level activities, can also discover that along the agricultural value chain, bounteous businesses can be created. Numerous opportunities are available to be explored across the value chain. These include participating as: Suppliers, Research and Development Service providers (including Knowledge Management services), Financing ( Debt, Equity, Commodity Investments), Agri-input dealership, Processors and Manufacturers, Retailers and Exporters, Agribusiness Incubator management, et al. This list is by no means exhaustive and the target market is vast with attendant high demand for products and services in the sector.

Historical evidence indicates that youth unemployment in Africa is due to, on the one hand, a more than a threefold increase in the youthful population over the last forty years, and on the hand, failure of most African economies to generate sufficient employment outlets. Opportunities for job creation exist for young Africans would not yield any meaningful impact if supportive frameworks are weak or even worse, non-existent and are mere rhetoric.

There is a real need for strategic interventions and approaches by African governments and development partners to face challenges of unemployment and underemployment of the bulging African youth population. Nurturing and impacting employable skills to unskilled youth in rural, peri-urban and urban communities to improve their chances of getting employed and/or becoming entrepreneurs is very essential. However, since majority of non-skilled youth reside in rural communities, they should receive greater focus and support. The demographic needs of young rural people are very challenging and they are prone to migrating to cities for non-available jobs if they are left idle and not supported. Development of a dynamic process of acquiring basic to advanced skills training in both farm and non-farm enterprises and provision of startup grants and loans ( at flexible interest rates and collateral arrangements) will go a long way to address youth unemployment and provide enterprise growth. Availability of mentoring and business development services would further improve the business and managerial skills of young rural entrepreneurs.

Financing has been a major drawback to sustaining entrepreneurial activities. Innovative financing for young entrepreneurs is still at embryonic stages. Access to capital remains a major obstacle to entrepreneurship development in the sub-region. Limited understanding of entrepreneurship activities relative to counterparts in developed nations effectively debilitate the growth of the sector. There is also the reality of high failure rate of new ventures. Although the exact failure rate across the West African sub-region is difficult to establish, estimates point to an average of 40% to 60% of new ventures failing within the first 2 years. This means that few ventures are moving from low-growth micro-enterprises to small, medium sized enterprises (SMEs), creating the so-called “missing middle.” There is the need for Venture Capital firms, Banks, non-bank financial institutions and other investment institutions to step out of their comfortable risk-averse desks and develop highly innovative financing mechanisms for high growth-oriented enterprises owned by young entrepreneurs in West Africa. With specific focus on young rural agribusiness enterprises, such innovative financial mechanisms can leverage on-farm resources such as land, crop insurance, ware-house receipt systems, and communal land ownership, as Guarantee for Collateralization. Financial institutions interested in scaling their client reach should develop tailor-made schemes for young rural entrepreneurs such matching grants, leasing and equity investments. Governments can initiate policies such as meaningful tax breaks for young entrepreneurs to cushion their operations.

This is the time for our leaders and development partners to initiate pragmatic projects to address youth unemployment in both farm and off-farm activities through providing employable skills development and financial intermediation for fledgling youth-run ventures. Youth issues are being discussed globally and we don’t have to disappoint this generation.

The time to think anew and act anew is now!

Solomon Elorm Allavi

Syecomp Ghana Ltd

sallavi[at]syecomp.com

+233 20 144 21 91

  12 comments for “Skills Training and Innovative Financing for Young Rural Agribusiness Entrepreneurs in Africa

  1. January 19, 2015 at 8:46 am

    Reblogged this on Ideation Station and commented:
    These are interesting thoughts on the intersection of entrepreneurship and agriculture!

  2. Nana Osei Akwasi Bonsu
    February 15, 2015 at 7:23 am

    I have add value to cassava finishing product.
    Such as Gari, Cassava Starch, Cassava Flour and Animal Feed for local consumption.
    I hope to build a loyal following by providing only the freshest most selected products all produce locally.
    I am looking for funding, loan or grant, to improve.

    • princess
      February 21, 2016 at 5:34 pm

      contact etic food chain supply limited.

  3. Ernest Dasaku
    March 1, 2015 at 9:55 pm

    Am a young guy who will complete university April this year. i plan to go into agriculture to produce yam, vegetables, maize, cassava and beans. this are initial project i want to do then go on to processing these products some years later when i have again grounds. however, funding is what i need to start this business. i have already arranged for land to begain. i project after 2-5 years, i should be able to provide employment to between 5-10 rural folks. your help is welcomed. you can call me on 233249856574. thank you

    • May 15, 2015 at 11:21 pm

      hi Ernest, glad to come across enterprising young Ghanaians like yourself. We will encourage you to start by developing a business plan. In the coming days, we will put up blog posts on developing business plans relevant to the agribusinesses in Ghana. Visit the Agricinghana site constantly and subscribe as well.

  4. June 4, 2015 at 5:25 pm

    I would like to contact you concerning Industrial skills training for youth both male and female, I am a Ghanaian by parentage but born in Nigeria, and now living in Ontario Canada, I am a Mechanical engineer with over 40 years of experience in the Manufacturing and training sector of Mechanical engineering, over the past few years I formed a non profit skills training organization to address the lack of participation of Black youth both male and female to the Industrial skilled trades TVET here in Canada, (Camara skills training network, http://www.camaraskills.org) we have a very high youth unemployment issue among Black youth, our training program is focused on introducing the Black youth to a sector of Industry that is wealth creating, and the focus is to train youth to train other youth but for the Africa primarily Ghana and Nigeria. Both these countries need industrialization, and that means training in the manufacturing sector to take advantage of the natural resources of these countries, but before that can begin we have to develop a sustainable and reliable electrical power source, this area is paramount to any other area, and i have a detailed plan to address Training of the youth for these sectors, which will utilize STEM, Local development, Transportation, Manufacturing, waste management and utilization.
    One of my biggest problem is the lack of contact to those in power who can assist in making this happen, any help you have to open dialog in the area would be greatly appreciated.

    Joseph Amankrah (Camara skills training network Canada)

    • June 20, 2015 at 7:14 am

      hi Joseph. great initiative you have there. We can put you in contact with the ATVET Project, funded by GIZ to explore further means to collaborate with their project. Can you be clear what specifically you needed for the successful implementation of the Camara Skills initiative in Ghana?

      • June 23, 2015 at 3:49 pm

        I welcome your introduction to those in the ATVET project, I’m in the process of trying to convene a collective of African Engineers,Technologist, Technicians and TVET professionals to try and come up with a proactive team of skilled of individuals both male and female to address the skills and educational mismatch that will help the start of a sustainable Industrial base the will address the youth unemployment and poverty in West Africa. We as a people have the knowledge and the skills, we just need to find those who want to help change the negative perspective that all Africans are a group are individualistic in thought and practice, Money should be the last thought in anyone who wants to be part of this collective, actions and results will reap rewards over time, we just have to show the world and the young in our race that there are those who truly care about there future and that of Africa..

        Regards Joseph

      • Joseph Amankrah
        June 23, 2015 at 3:57 pm

        I welcome your introduction to those in the ATVET project thank you for your response, one area that I am in the process of developing here in Canada is the renewable energy from Bio-mas and Bio-gas that is linked to industry and youth employment and training, at the moment here in Canada trying to convene a collective of African Engineers,Technologist, Technicians and TVET professionals to try and come up with a proactive team of skilled of individuals both male and female to address the skills and educational mismatch that will help the start of a sustainable Industrial base the will address the youth unemployment and poverty in West Africa. We as a people have the knowledge and the skills, we just need to find those who want to help change the negative perspective that all Africans are a group are individualistic in thought and practice, Money should be the last thought in anyone who wants to be part of this collective, actions and results will reap rewards over time, we just have to show the world and the young in our race that there are those who truly care about there future and that of Africa..

        Regards Joseph I can be reached at the following emails:

        jamankra@gmail.com jamankra@ryerson.ca

  5. Stephen Tweneboah Koduah
    September 5, 2015 at 4:37 pm

    I hold HND Electrical/Electronic Engineering from Koforidua Polytechnic in the year 2015,But I want to enter into rearing of animals such as goat,sheep,fowls etc.I have problems with financing the project so i need your help.0205909245

  6. princess
    February 21, 2016 at 5:38 pm

    i want to start a business in agricultural financing company. using value chain model. i need help to develop my business plan. any help?

    • February 25, 2016 at 4:15 pm

      Hi Princess, you may need appreciable knowledge in inclusive value chain financing for agriculture beforehand. You may begin by reading on Value Chain models to understand and appreciate the dynamics.

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