Expanding business opportunities for African youth in agricultural value chains
ATDF ENTREPRENEURSHIP HUB
In Africa there is growing interest in promoting agribusiness to improve food security, diversify exports, create jobs, and reduce poverty. However, in Malawi, Zambia, and Zimbabwe — where poverty and unemployment remain high, especially among youth and rural populations — there are very few programs that encourage young people, especially women, to pursue agribusiness opportunities. The rapidly expanding populations in these countries are expected to increase pressure on food security and jobs. There is a pressing challenge to harness an educated and entrepreneurial workforce to drive growth in agribusinesses and to create decent employment, especially in rural areas.
Building bold business models
This project aimed to generate and test novel, creative, and bold business models to increase youth participation in the fish industry in Malawi and Zambia and the maize post-harvest agribusiness sector in Zimbabwe.
To achieve this, researchers took a multi-pronged approach that included training, funding, and mentoring. The first step involved generating a mapping tool to assess the agribusiness environment and opportunities and challenges for youth entrepreneurs. Based on these findings, a training framework was developed to build the capacity of entrepreneurial youth. The training component of the project, completed by more than 70 youth, consisted of courses in business management, entrepreneurship, marketing, and recordkeeping, with the ultimate goal of helping youth create and implement effective business plans and models.
In addition, a business plan competition was launched in each of the three countries to scout youths with an interest in and aspirations to pursue business opportunities. Business proposals were judged by panels in each country and shortlisted based on the product idea, strategies for capturing the market, business vision, relevant skills and experience, and the composition of the management team (in terms of age and gender). In total 22 applicants were awarded with funding for businesses that range from producing solar tent driers to transportation services. All of the awarded teams received additional technical and management support that included business linkages and follow-up to assess performance.
Gender inclusion was a priority, but it proved to be challenging. The number of female applicants was lower than desired, but the research team made efforts to ensure the proportion of females trained or funded was higher than their proportion at the application stage.
The project’s main contribution is in inspiring young people to recognize and pursue entrepreneurial opportunities in the fish value chain and in maize or grain storage. Data from feedback surveys and interviews suggest that almost 30% of those supported by the project (funded, mentored and trained) indicated that they have applied for funding from elsewhere (i.e. from microfinance institutions and some commercial banks), 65% have increased their customer base, and 76% have introduced a new product or business opportunity. Of the teams that received seed investment, 60% have used the funds to acquire simple but new and essential technologies for their businesses (e.g. digital scales and freezers) or to build/rent new facilities.
In Malawi, such support has had some significant impacts. One competition winner was the Nsumbi Youth Club in Mangochi, which has used their funding to set up a fish mart in town selling fresh and dried fish. This has provided the women running the club with another source of income and has enabled them to contribute to household needs. The model used in this project is already being used in the development of new ideas for a number of potential agriculture-based businesses.
Methods and tools of the project, including a system that combines four business support elements — training, funding, mentoring and peer-to-peer learning — are in use in all three countries in selecting, assessing, and evaluating business ideas.
The performance and effectiveness of the support measures provided are being assessed and broad lessons to inform business development and support methodologies, frameworks, and tools will be documented. When conducting entrepreneurship projects such as these, applicants are most interested in the grant funding and training, rather than mentorship. However, mentorship proved to be very significant to the success of most of the illiterate groups.
Cultivate Africa’s Future is jointly funded by IDRC, the Australian Centre for International Agricultural Research, and the Australian International Food Security Research Centre.