Africa throws cash at youth to rein in unemployment

Youth State Minister Balaam Barugahara (centre), checks some of the youth works at the Innovations Village in Kampala recently. Centres such as the Innovation Village have been key channels through which youth continue to receive funding for job creation and livelihood improvement. Photo / Stephen Otage
What you need to know:
- The Africa Youth Employment Clock, a lobby, indicates that in 2025, about 121 million youth aged between 15 and 35 will be unemployed or classified as “not in education, employment, or training”
Ten years after adoption of the 2030 Sustainable Development Agenda by the United Nations, Africa remains far from achieving the goal of taming youth joblessness and many countries are shifting their focus to financing youth enterprises as a means to boost self-employment.
The latest estimates from the Africa Youth Employment Clock, a lobby, indicate that in 2025, about 121 million youth aged between 15 and 35 will be unemployed or classified as “not in education, employment, or training (NEETs)” – 2.8 million more than in 2024.
This represents 23 percent of this age group, which makes up about 60 percent of the continent’s population.
Compared with 2015, the unemployment rate has worsened, highlighting a lack of progress towards the crucial SDG pillar.
In Uganda, for instance, according to the 2024 National Population and Household Census, at least more than 5.29 million youth aged between 18 and 30, representing 50.9 percent of the youth population are, neither in school nor in employment.
The figure above denotes high unemployment levels among the youth, notwithstanding the huge sums of money directed mainly towards youth-led enterprises through programmes such as the Youth Livelihood Fund.
The Youth Livelihood Programme was designed as an intervention in response to the high unemployment rate and poverty among youth.
In the five years to June 2018, government allocated the programme Shs265b (about$100m). But the figure was revised upwards to Shs314.6b under a new revolving five-year window.
However, despite the intervention, poverty and unemployment among the youth has remained and continue to grow at an aggressive pace.
Across the globe, most of the developed world, unlike Africa, has made strides in terms of youth employment.
Countries in East Asia, North America, and Europe have managed to cut youth unemployment from about 21.4 percent in 2015 to less than 15 percent currently, according to the International Labour Organisation.
Yet, unlike these developed countries, Africa is experiencing a rise in youth population, compounding the problem.
The World Data Lab estimates that Africa will add 132 million youth this decade, while the rest of the world’s youth population will decline by 56 million.
This means that jobs created on the continent cannot suffice for the exponentially growing youth numbers.
As such, many countries are starting to pay more attention to tame the age-old problem that many scholars have termed a ticking time-bomb.
The African Development Bank (AfDB) has become a key player in this shift, disbursing a record $577m in loans and grants last year for youth enterprises and job creation.
At least 13 countries, including Uganda, Tanzania, Somalia, and South Sudan in East Africa, benefited from this funding under different programmes including Youth Entrepreneurship and Innovation Multi-Donor Trust Fund, which supports projects in low-income countries, countries in fragile situations and countries that are economic migration hotspots.
Jobs needed annually
Through its various projects, the AfDB projects that Africa will need to create at least 20 million jobs annually through 2030 just to keep the current unemployment levels constant.
While economic growth has been strong in Africa, there is an urgent need to promote inclusive economic transformation.
Thus as a measure of support to spur jobs creation, in September 2024, the AfDB extended a loan of $130m to Tanzania to support youth-led agricultural enterprises.
In the same measure, a $5m grant was extended to youth-led businesses in South Sudan last year.
AfDB President Akinwumi Adesina has emphasised that investing in youth entrepreneurship is not “the riskiest” venture, pledging to increase funding for youth-led initiatives.
“We will be putting our risk capital to the benefit of youth. The greatest risk is not investing in youth. The future of Africa is on the continent,” he said last October at the signing of a partnership with the French Development Agency (AFD) to support youth entrepreneurship.
Beyond AfDB-backed initiatives, countries are dedicating significant portions of their budgets to youth enterprises.
In Uganda, going by allocations to the Youth Livelihood Fund, government at least allocates Shs53b ($14.3m) to youth development annually.
However, this does not compare well to other regional neighbours such as Kenya and Tanzania
Kenya, for example, last year launched a $385m fund to finance small businesses and young entrepreneurs who struggle to access traditional bank loans.
Tanzania has allocated $110m to incubate 6,000 young agribusiness entrepreneurs under its Building a Better Tomorrow: Youth Initiatives for Agribusiness programme.
But beyond job incubations, even among employed African youth, job security remains a major concern across the continent.
According to the International Labour Organisation, 83.3 percent of young working Africans fear losing their jobs – the highest share globally.
Moreover, 80 percent believe there are insufficient economic opportunities in their countries, compared with 44 percent in North America and 47 percent in South Asia.
“Entrepreneurship is one solution to address the “not in education, employment, or training” [youth] challenge, but other factors like ending early marriages, teen pregnancies, and advancing education are equally important,” Dr Wolfgang Fengler, the World Bank's lead economist in the Nairobi office.
Solving women's social issues
According to him, addressing these social issues that affect women and girls could significantly reduce the number of “not in education, employment, or training”, as 65 percent of them are female.
With three in four African youth self-employed and only 25 percent in wage employment, scaling up support for youth enterprises could substantially improve their livelihoods.
While entrepreneurship alone cannot solve the unemployment crisis, experts contend that it represents a crucial piece of the puzzle in tackling this continent-wide challenge but warn that the other social issues cannot be ignored.