The African Development Bank (AfDB) and the Government of Rwanda have announced plans to establish a Pan-African Youth Bank in Kigali.
This initiative positions Rwanda among the select nations set to host youth entrepreneurship investment banks, a move confirmed by AfDB President Akinwumi Adesina during the closing press conference of AfDB’s Annual Meetings in Nairobi.
The AfDB board has already approved major investments for youth banks in other African nations, including $16 million (approximately Ksh.2.09 billion) for Liberia and $12 million (Ksh.1.5 billion) for Ethiopia, with additional projects in the pipeline.
Financing Young Innovators
“I was talking to President Paul Kagame about one for Rwanda, as you know he is very pro-entrepreneurship for young people, and it’s going to be coming up,” Adesina stated during the press conference.
These youth investment banks are designed to provide financing for young innovators and entrepreneurs across Africa, aiming to foster job creation and wealth generation.
The banks will offer both debt and equity financing, addressing a gap in the current financial systems which often view young entrepreneurs as high-risk.
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“When young people go to the bank, they only see risks in them but not innovation, creativity, and capacity to create wealth. We believe that young people are not risks but we need to put our resources at risk on their behalf because if we don’t, that will be the biggest risk Africa has,” Adesina emphasized.
Despite 10 to 12 million young people entering Africa’s labor market annually, only three million formal sector jobs are being created, as the continent’s private sector remains relatively small and under-industrialized.
Youth Unemployment Rate
Youth unemployment refers to the share of the labor force ages 15-24 without work but available for and seeking employment.
Rwanda’s youth unemployment rate for 2022 was 22.17%, a 1.1% decline from 2021. Rwanda’s youth unemployment rate for 2021 was 23.27%, a 7.35% increase from 2020.
Kenya, on the other hand, also grapples with a persistent challenge of youth unemployment. Several studies have shown that the country is facing a youth bulge, with nearly 75 percent of the population aged below 30 years old.
The youth investment bank is designed to facilitate access to financing youth-driven businesses in emerging economic sectors.
This includes creative industries, climate-smart enterprises, and digital and AI-enabled businesses.
