Financial Institutions Must Re-Imagine Solutions In Addressing Youth Unemployment11th Jan, 2017
There is nothing as socially destabilizing as unemployed youth. It’s a lethal combination that usually does not end well. Rising inequality and inability to obtain employment opportunities herald Dickensian Hard Times— unless something drastic happens, today.
The youth of Kenya—from my interactions with them—are more upbeat about their ability to improve their economic status than their peers in any other region. But is this really happening?
The high number of unemployed youth generates undercurrents of conflict within the system. Unemployment in any form is not only socially demeaning, but it’s a drag on an economy and society in general. It undermines productivity, spending, and investment, stunting national growth. Further, it contributes to inequality and spurs social tension. Joblessness and inactivity and the failure to tap into the economic aspirations and resources of young people carry an even higher price.
To navigate this minefield, people need financial knowledge and skills, access to resources, and the capacity to apply those skills and habits in making the right financial decisions. When asked about their preferences to become self-employed or being employees, if they had the choice, the majority of young people aged between 15 and 24 years in Kenya responded that they would prefer to become self-employed, while the reverse was true for other age groups.
Various government institutions have put their best foot forward in ensuring they put in place the necessary mechanisms to facilitate the development of employment. However, this is a partnership that extends to us in the private sector. We need to take charge of our own destiny and extend our reach beyond our limits to make this happen.
Banks need to play an increasingly larger role in providing funding that will enable the youth exploit their potential. Access to financing has always been a weighty issue and if the youth are engaged in initiatives that support their financial capability it will be a big step towards becoming self-efficient.
To be financially capable entails that individuals are able to understand and apply financial knowledge. People have to acquire healthy money habits, norms, and rules of thumbs (automatic, mental shortcuts that simplify decision-making), as well as the ability to stick to a plan and successfully complete financial tasks. Developing one’s financial capability is an important stepping-stone on the path to future financial well-being. People who have financial independence feel secure of their future, and have the freedom to make choices.
We need a paradigm shift in our thinking of how to tackle youth employment. Hopefully, increasing adoption of the new Sustainable Development Goals will encourage the conversation to eliminate poverty completely, create equal opportunities for women and the youth and initiate an era where the youth will become the torchbearers on the transformational journey towards financial independence.
Technology is assisting the youth bridge the unemployment gap. Many young people have embraced technology in venturing into new areas that were originally no go for them such as agriculture. They now keep cows, practice horticulture and keep themselves abreast with the help of apps that increase productivity. Additionally, technology has proven to be an important means through which youth can gain access to financial services and learning opportunities across many platforms. Technological initiatives therefore need to be accelerated in this regard to contribute to the sustainability of business development models run by the youth.
At the same time, the setting up of a youth workforce development program can provide significant opportunities for the economic development process of a country. A skilled youth workforce provides the critical skills to promote economic growth, and keep them out of mischief. It is encouraging to note that increasingly the youth are seizing control of their economic well being, with high numbers opting for entrepreneurship. Today’s young people are ready and willing to put their ingenuity and resources to work for themselves and their communities.
The lack of access to finance, skills, knowledge and familiarity with the business world represent the main barriers to becoming self-employed. The recently held Youth Summit at State House Nairobi that brought together key industry players ranging from the government to non-governmental and private sector institutions was indeed a great step towards the right direction on pushing the envelope towards Youth Development and Empowerment towards a greater future. Through that forum and many others, Kenya will eventually create a positive impact addressing this impending issue once and for all. Kenya’s greatest opportunity lies in exploiting our skills to make our own products and resist the importation of some of the most basic goods from overseas.
The good news is that there are concerted efforts to address these challenges, from the government and public sector. The recent order by President Uhuru Kenyatta that the youth, the disabled and women should be paid their outstanding dues by the Government is a pointer to the seriousness that the Head of State places on the youth development.
On our side, we are looking at empowering the youth through our Ksh50 billion 2jiajiri programme over the next few years. With these initiatives, we expect that we will provide the necessary push for the youth to prosper and enable them to create more than 2.5million jobs to the economy by the year 2020.
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