Prime
Create jobs, develop skills to sustain livelihoods
Kuda Mukova
What you need to know:
With properly structured loan investments, these drivers can grow their businesses, and boost their income.
Despite the immense developmental gains that sub-Saharan Africa has seen over the past few decades, there is no doubt that much work remains to be done. According to the 2023 Multidimensional Poverty Index (MPI) released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford, some 534 million people live in poverty across the region.
We still fall behind on other developmental indices too. Data from the World Bank shows that nearly half the region’s population doesn’t have access to electricity and, according to the World Economic Forum, just 39 percent of people in the region have water connected to their homes. Mobile internet connectivity rates are similarly low, at 40 percent, according to GMSA. While it is important that governments and private sector partners across the region work to address those infrastructural challenges, additional action is required too.
It is equally critical that people, particularly in low-income communities, are given the skills they need to build sustainable jobs and livelihoods. Doing so is crucial not only to lifting people out of poverty but also to the long-term future of these communities.
The absolute key word, when it comes to building livelihoods that help people escape poverty, is sustainability. While initiatives like public works programmes can help provide income boosts, particularly in poorer areas, the work is often temporary. That means that, once a road is repaired, trees are planted, or a park is cleaned up, the work goes away until the next project comes up.
In many cases, these programmes also don’t come with skills development components. That, in turn, means that people are left dependent on these programmes, rather than being able to build sustainable livelihoods for themselves.
Fortunately, it doesn’t have to be that way. The right investments, made in the right ways and the right places, can help create sustainable jobs and develop skills that offer people a sustainable path out of poverty.
In fact, companies across the region are desperate for skilled workers. While more current statistics are difficult to find, it’s telling that a majority of private African companies, according to Statista, reported losing out on revenue because of skills shortages in 2019. These skills shortages are keenly felt even in the region’s most industrialised economies. It is critical, therefore, that investors in the region look at ways of building skills development into their investments.
It is also important to note, however, that it’s also critical to empower and upskill people across the region from an entrepreneurial perspective.
For many people struggling to earn a sustainable livelihood, the boda boda business has enabled them to become entrepreneurs and indirectly offers employment opportunities to many others. With properly structured loan investments, these drivers can grow their businesses, and boost their income. Over time, they may even be able to employ other drivers, which not only aids with job creation but also in boosting local economies.
Ultimately, what these examples show is how powerful the right approach to African investment can be. By focusing on long-term sustainable job creation and skills development, many more people will be pulled out of poverty, to the benefit of both themselves and the communities they live and work in.
And given the immense potential waiting to be unleashed across the continent, it’s an investment approach that could deliver seriously rich dividends.
Mr Kuda Mukova, Head of Impact and Sustainability, Norsad Capital
