Friday, July 12, 2024

Opinion: The power of entrepreneurship to reduce inequality in Ghana

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Staff Writer
Staff Writer
Africa Feeds Staff writers are group of African journalists focused on reporting news about the continent and the rest of the world.

In our experience, working with young African leaders and entrepreneurs for over a decade, we have learnt that with the right support and access to resources, young people have the potential to create jobs and income opportunities for themselves and others.

We have debunked commonly accepted norms around entrepreneurship and job creation in Africa and modelled a perspective in the form of Very Young Entrepreneurs Scenario – demonstrating that accelerating employment creation through economic growth is achievable through higher levels of education and investment in entrepreneurs of all ages – especially those between the ages 15 and 22.

We have also theorised, based on research, country-specific interventions that are applicable and contextually unique to local economies. In Ghana for example, using inferential descriptive analysis and an Exogenous Switching Treatment Regression (ESTER) model, we explored the impact of entrepreneurship on job creation for the youth and relevant industries capable to be mass jobs-generative.

Youth-owned companies in the country have demonstrated the unique capability to address socio-economic challenges and consumer needs while also responding to youth unemployment. Entities such as Ako Fresh, a food preservation company incorporated in Ghana by  22 year-old Mathias Charles Yabe, offer innovative award-winning solar-powered cold storage and preservation services to help extend the shelf life of crops for up to 21 days in a bid to minimise post-harvest loss.

Having grown up in an environment prone to food insecurity and social injustice, Mathias established the company to not only mitigate these challenges but also to create jobs and income opportunities directly and indirectly. The company employs 20 people and serves an industry that employs thousands. And, combined with its ecommerce platform, the company plans to expand outside the borders of Ghana in the coming years. Amo Fresh is, currently conducting market assessment in Burkina Faso as its first potential country to branch into.

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Our research analysis on Ghana’s economic environment focuses on youth employment and was conducted during the height of the COVID-19 pandemic. It discovered that most young people have focussed their interest towards businesses and innovative ideas at varying scales and in different sectors of the economy, ranging from agriculture and food processing to service provision.

Youth unemployment in Ghana has increased over the past two decades, despite the economic growth witnessed over the same period. The unemployment rate for those aged 15 to 24 years old in Ghana is estimated to be about 26%. Urban youth unemployment is particularly pronounced and severe, with rural-urban migration being a key factor.

To mitigate the crisis and its accordant non-desirable outcomes, including poverty and inequality, the government of Ghana, NGOs and development partners have made several efforts, most of which are focused on promoting a shift from the conventional formal government provision of jobs, towards youth entrepreneurship.

The government introduced entrepreneurship studies across tertiary education institutions and  launched the National Entrepreneurship and Innovation Program (NEIP) as well as an entrepreneurship module under the Ghana Youth Employment Program (YEP). This is some evidence of the government’s commitment to youth entrepreneurship. It has contributed to an enabling environment for young entrepreneurs to thrive, although at a slow pace.

In agreement with Oxfam International’s recommendation, the quality of education in Ghana must improve in order to close widening inequality. And the introduction of entrepreneurship education in tertiary institutions is one right step in the right direction.

Over the last 20 years, Ghana has been somewhat successful in reducing poverty levels. Economic growth has been impressive, leading the country to become the second-largest economy in West Africa. However, increasing inequality is undermining strides in poverty reduction, holding back economic growth and threatening social stability.

We have a strong belief that entrepreneurship can certainly be a powerful tool to reduce high unemployment which in turn could decrease inequality levels. And, when combined with the right policies and innovation, entrepreneurship can have an impact on both joblessness and inequality.

It must be noted that the potential for entrepreneurship as a solution to ending unemployment is not instantaneous. The same is applicable to its potential  to reduce inequality. But, entrepreneurship in large industries such as in construction, transportation and utilities, financial services, professional business sectors have the highest potential to absorb large populations of the unemployed and therefore to fasttrack the mandate to end unemployment.

Agriculture, energy and technology, if applied with strategic intent to be jobs-generative,have a similar potential to achieving this. In Ghana particularly, it is these sectors that could turn the situation into a positive one. This is what we understand from our research analysis of the country.

Government and policymakers have a responsibility to fashion a path for this to become a reality. At the core of this are mechanisms and policies to effectively ease the provision of funding resources and credit facilities, entrepreneurship training and education as well as new innovative knowledge-based economic practices. These are key entrepreneurial recipes to halt unemployment in Ghana and to reduce the widening gap among the rich and the poor.

Author: Didi Onwu, Managing Editor: Youth & Investors

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