Michael de Laine

Africa Commission initiatives aim at bringing change for young people

By Michael de Laine, Copenhagen, 23 March 2009

The Danish government’s Africa Commission has announced five concrete initiatives designed to bring real change for the continent’s growing number of young people. Poverty can be fought with jobs and development, the Prime Minister said.

Announced and discussed on 12 March by Prime Minister Anders Fogh Rasmussen and Ulla Tørnæs, the Minister for Development Cooperation, the initiatives are:

Access to investment finance for small and medium sized enterprises (SMEs). SMEs have huge potential in creating millions of good and sustainable jobs, but are severely constrained by lack of access to financing of investments as financial markets are not sufficiently developed.

The Commission said it is necessary to explore how to introduce new ways of promoting access to longer-term finance, including risk capital and loan capital, for SMEs’ investments, including in agriculture, by further developing African finan­cial markets. This initiative to help develop new financial products, financial institutions and facilitate advisory services to SMEs could support investments in Information and Communications Technologies (ICT).

Promoting post-primary education and research. To facilitate growth led by the private sector and to improve competitiveness, additional and relevant post-primary education is needed, including technical and voca­tional education and training.

This initiative has two components: The first component would explore possibilities for expanding vocational and technical training and education through a fast track, which could provide financial support to country programs. The feasibility of using a regional approach should be studied further. The other component would develop the capacities of universities in prioritized areas such as science, agriculture, ICT, business and engineering. This would support upgrading of undergradu­ate and graduate studies and research based on private sector demand.

Promoting initiatives supporting young entrepreneurs. Young Africans represent an under-utilised potential. Young people must become job creators, rather than job seekers, but face specific constraints. The initia­tive will support young female and male entrepreneurs, including in agriculture, who have promising ideas for busi­ness. Support could include facilitation of access to basic infrastructure, risk capital and mentoring in public private partnerships, e.g. establishment of incubators.

Providing access to sustainable energy. Africa is in dire need of sufficient and reliable energy in both rural and urban areas. Lack of energy reduces the competi­tiveness of otherwise healthy African enterprises.

By promoting access to stable – and climate-friendly – energy in Africa to improve com­petitiveness, this initiative could help Africa leap-frog in energy solutions by facilitating advocacy for effective energy market regulations, e.g. to make it easier for small and medium-sized energy suppliers, especially in rural areas, to operate.

The initiative should also study innovation of climate-friendly and competitive energy solutions (sun, wind, water, geother­mal, bio-fuel) and foster Africa-based production of climate-friendly energy solutions, using existing technologies, easier access to technology transfer, and African best-practice examples.

Creating benchmarks for African competitiveness. There is a need to focus action on the constraints that prevent African businesses from growing through exports. This initiative would assess the feasi­bility of promoting and developing a global competitiveness index to benchmark African countries and to spur debate and action on concrete measures that African countries should take to ensure private sector-led growth.

A sixth initiative, announced earlier but not included in the latest release, applies to the value chain approach to private sector development. Efforts to facilitate market development and create a competitive edge in important potential industries and value chains are crucial. This initiative would bring public and private stakeholders, including labour market organisations, together at different levels to identify and agree overall actions for private sector led growth and job creation.

It would support analysis of bottlenecks in high potential industries and value chains and establish costs and benefits in ad­dressing these constraints. Such analysis would provide a demand-driven basis for providing public goods needed to develop industries and value chains. It would also provide support for delivering public goods, including infrastructure, vocational training and education, trade facilitation such as effective customs procedures, research, certification of goods for export and advisory services to businesses.

The initiative would focus on agro-based businesses and would aim at promoting trade, including south-south trade.

The Africa Commission stressed that African governments and their international partners should:

• Focus on private sector-led rather than donor-led growth in Africa, fuelled by increased competitiveness of the private sector and open markets, including south-south trade. This would include continued efforts to improve the investment climate and business environment.

• Strengthen the efforts towards good governance, which is a necessity for economic growth and de­velopment. This means developing effective public sectors in order to combat corruption, protect private property rights and ensure the rule of law, and at strengthening civil society in its role to hold governments accountable.

• Ensure that the focus on growth and employment is based on country-specific strategies that involve stakeholders in the private sector, e.g. agriculture, and the civil society, including youth organisations, in policy formulation and implementation, e.g. through tripartite dialogue.

“There is a need to create 10-15 million new jobs for young Africans in the coming years,” said Tørnæs. Solving the challenges facing Africa means that the many young people must have jobs in economies with sustainable growth.

If the west, and particularly Europe, cannot provide this, then the consequences will be “greater illegal immigration into the European Union, more conflicts and more widespread poverty,” she added.

“We must ensure effective and sufficient means, so these initiatives can be turned into reality,” the Minister for Development Cooperation said.

“The government created the Africa Commission because Africa must be placed higher on the agenda,” said Anders Fogh Rasmussen. The commission is also expected to contribute to the Danish and international debates on development aid and Africa.

“Taken as a whole, the African continent is way behind in reaping the benefits of globalisation,” Rasmussen said. “But there is a great potential in bringing Africa into the globalisation efforts. This will result in better conditions for life in Africa, and better future prospects for the people if they stay in Africa rather than emigrate to say Europe.”

Noting that economic growth in Africa has been almost halved to about 3.6% a year in recent months because of the worldwide economic meltdown, the Danish Prime Minister said Africa’s young people account for 40% of the continent’s labour force - but also a very large part of the unemployed.

“And in 2025 one-fourth of the world’s population will come from Africa,” he added. “Poverty can be fought with jobs and development. Africans should be encouraged and enabled to work and provide for themselves - this is the most effective way of combating poverty.”

He added that 500 million Africans do not have access to electricity.

Rasmussen said Africa’s economies should be based on processing of Africa’s own produce, with climate-friendly production forms and sustainable energy sources.

To help the young Africans get work, the Africa Commission is proposing strengthened universities’ ties with the business community through more business-related courses and research and greater promotion of entrepreneurialism.

Expecting to announce concrete projects that will start in 2009 and 2010, Anders Fogh Rasmussen said two-thirds of Denmark’s bilateral development aid will continue to go to African nations, and there will be increase in the funding to Africa: DKr 200 million will be spent on following up the Africa Commission’s initiatives in 2009. But he said the international community must also increase its development aid to Africa.