Young people have been at the forefront of Kenya’s six weeks of protests against proposed tax hikes that have left at least 50 people dead and become a referendum on President William Ruto.
The protestors are against Ruto’s handling of the economy, the lack of access to basic services, stagnating wages, widespread corruption and visible policy failures.
But what are the protesters for? At last week’s Africa Impact Summit in Nairobi, impact investors and development finance institutions presented approaches around job creation, women’s economic empowerment, financial inclusion and energy access that might be at the core of a positive agenda.
Oddly, few investors made significant efforts to actually appeal to young people in describing their strategies.
“We talk about leaving no one behind, but in Africa it’s actually about not leaving young people behind,” Frank Aswani of the African Venture Philanthropy Alliance told ImpactAlpha. “The biggest group of people who are economically isolated are young people and women.”
Youth from Nigeria, Ghana, Tanzania and other countries have taken to social media to mobilize similar protests. Aswani says the protests indicate the need for youth-centric investment strategies by both public and private investors. Too few investment strategies specifically and intentionally measure their impact on young people and women.
“We need to honestly reflect, as the impact sector in Africa, on how we have done in opening up opportunities for young people,” he said.
More than 60% of Africans are under 25 years old. Kenya’s youth unemployment rate is 35%. The continent’s “youth dividend” can be an economic boon – or a social destabilizer. Supporting young people’s transitions into higher education, skills training, and ultimately, sustainable livelihoods is a challenge for nearly every African country.
“It’s a warning, and we need to act today on the warnings, and not wait another decade until they become social strife on a much larger scale,” says Tim Radjy of emerging markets-focused impact finance firm AlphaMundi.
Radjy spoke to ImpactAlpha on the sidelines of the Africa Impact Summit at the Emara Ole-Sereni hotel, a short drive from the central business district where the protests have focused. Panelists at the event took up the protesters’ key issues, such as jobs, economic and financial inclusion, access to affordable education and healthcare.
AlphaMundi is now considering how to factor young people and the demands of protesters into a new sustainable cities investment strategy. Radjy says the fundamentals of sustainable cities like good infrastructure, clean water, sustainable food production, and clean and affordable energy are key to minimizing future unrest.
Youth-lens investing
Few speakers at the summit put an explicit focus on youth.
Just as there has been intentionality in addressing gender inequality through gender-lens investment strategies, youth-lens investment strategies—and impact metrics to match—are needed to make sure business solutions and private-sector capital are reaching and positively impacting young people.
The Mastercard Foundation is is supporting nonprofits, academic institutions and fund managers aligned with its goal of connecting 30 million young Africans to job opportunities by 2030. Its $74 million Youth Forward Initiative, for example, aims to train 200,000 Ghanaian and Ugandan youth for jobs in construction and agriculture.
Mastercard Foundation provided small business-focused fund manager Grassroots Business Fund with $6 million from its Covid-19 Recovery and Resilience Program for pandemic emergency and recovery loans for Kenya’s small businesses. More than 40% of those the facility supported were youth-owned enterprises. Grassroots Business Fund is now deploying a much larger grant from the foundation for small businesses as a job creation strategy, especially for women and youth.
Mastercard Foundation is also trying to build up the evidence base for African youth interventions. It has published a series of youth labor market briefs in partnership with the International Labour Organization, and Youth Think Tank, an initiative that trains young people to research youth needs and challenges.
(Not all such funders are greeted warmly by the government. Last week, President Ruto accused the Ford Foundation of backing the antigovernment protests. The foundation denied the allegation and repudiated violence.)
Other players helping to build Africa’s field of youth-focused initiatives, enterprises and private capital include Shortlist, a Nairobi-based staffing and recruiting company that runs a series of training programs to prepare women and youth for Africa’s green transition. The Dutch government’s Challenge Fund for Youth Employment aims to help 230,000 young people in Africa and the Middle East secure green and digital jobs.
The African Development Bank has raised $40 million in a multi-donor trust fund for Youth Entrepreneurship and Innovation. The financing backs youth-led and -focused enterprises and startups and builds the bank’s youth employment investment and project pipeline.
Emerging strategies
Africa’s local fund managers are witnessing first hand the extent to which the economic and capital needs of young people have been overlooked by private investment. Youth-lens investment strategies are emerging in Kenya and elsewhere.
HEVA Fund in Kenya provides loans, grants and capacity building to entrepreneurs in the creative industries.
“We cannot ignore the place of young people in the creative sector and their need for very targeted financial instruments that take into account their social position,” HEVA’s Wakiuru Njunga tells ImpactAlpha.
In the film industry, for example, HEVA offers working capital and asset financing alongside grants that help young creators find platforms to publish their productions.
Aisiki Capital, a women-led fund manager that invests in small businesses in Southern Africa, applies both a gender- and youth-lens to its investment strategy. Its founders are based in Zimbabwe, a country dogged by decades of economic volatility, and South Africa, which has the highest youth unemployment rate on the continent.
Balloon Ventures is developing a new lending product for young African entrepreneurs. The six-year-old fund manager, which uses impact-linked finance for small businesses, is responding to the fact that young people hold 80% of the jobs in its portfolio businesses.
Because much of the capital funding these strategies—and the impact and development sectors in Africa more broadly—is from foreign institutions, AVPA’s Aswani says impact players need to be “deliberate about research, initiatives and advising impact capital coming from outside Africa to ensure that their cross-cutting themes include youth unemployment.”
Simunza Munyangana, who heads Zambia’s National Advisory Board for Impact Investment, cautions that as more youth-lens strategies emerge, it’s tempting to focus on projects and strategies that can impact large numbers of people. The focus needs to be on the quality of investments.
“The typical investor will look at a project and say how can I maximize profit?” he says. “Profit optimization is what is going to guarantee our assets for future generations.”
Disclosure: AlphaMundi Foundation has been a sponsor of ImpactAlpha.
