African governments should do more to support small businesses, as they could be key to solving the continent’s youth unemployment crisis, Amujae Leader Tejumola Abisoye, who is the CEO and Executive Secretary of Lagos State Employment Trust Fund (LSETF), wrote in a recently-published Apolitical article.
Micro-, small-, and medium-sized enterprises (MSMEs) are often viewed as the backbone of African economies, and for good reason—they account for about 90% of private businesses in Africa. Not only can these businesses serve as an important source of innovation, they also “present huge opportunities to meet the demands of Africa’s growing labour force,” Ms. Abisoye wrote.
In Africa, one-third of the continent’s 420 million people between the ages of 15-35 are unemployed. Supporting business development would help governments tackle the pressing issue of youth unemployment, Ms. Abisoye said, noting that MSMEs are often “the most effective and lowest-risk method for increasing employment.”
To better support MSMEs, Ms. Abisoye outlined three key actions governments can take. Firstly, she recommended increased collaboration with the private sector. Using LSETF as an example, Ms. Abisoye explained how, by partnering with Nigerian commercial banks, the government agency has been able to “ease access to finance (loans and grants)… over 16,000 MSMEs…creating and supporting over 140,000 direct and indirect jobs.”
She also recommended that governments and private sector actors work together to establish wider networks of support and ecosystems in which MSMEs can thrive. By building business parks that “provide startups with access to machinery and other infrastructure, such as electricity and internet, that would otherwise pose a heavy cost burden for young companies,” and by offering young entrepreneurs targeted support through programs designed specifically for founders and start-ups, as LSETF has done, businesses and business owners have greater access to the tools they need to succeed.
Finally, Ms. Abisoye emphasized the importance of taking the time to listen to and learn from entrepreneurs in order to better meet their needs. For LSETF, this includes not only regularly running surveys and commissioning impact studies “to ensure that our interventions are truly addressing the problems they are intended to solve,” it also involves being able to adapt programming when new challenges emerge.
Read the full article in Apolitical here.