How Uwezo can address youth joblessness

Now that Parliament has finally passed legislation to put the Sh6 billion Uwezo Fund into operation, the government must put in place robust mechanisms to insulate it from the ills that similar initiatives have suffered.

Successive governments have correctly identified high unemployment among the youth as a serious problem, but the crisis appears to be getting out of hand each day if the numbers are anything to go by.

Over 70 per cent of jobless people are youth, and every year, 700,000 others join a constrained labour market. This is why it is important to interrogate any measure the government puts in place to assist the jobless.

With vital lessons from the National Youth Enterprise Development Fund, Kenyans are keenly looking at how the Uwezo Fund will navigate through the turbulence it is likely to face.

The Youth Fund was created in 2006, when former President Kibaki faced a strong opposition, just a year before a second term election. It was seen as a move to lure youth votes.

Uwezo was mooted when President Kenyatta and his Deputy, Mr William Ruto, were cleared by the Supreme Court after last year’s presidential petition. The fund was created out of the cash budgeted for a runoff election that did not take place.

POLITICAL PROJECT

With four years to an election, the Uwezo Fund has a chance to shed its political tag. This can only be achieved by professionalising the fund’s management.

One of the biggest challenges facing youth intending to start business on borrowed money is their profile as high-risk loan-seekers.

Although the Youth Fund has been keen on assessing the risk of borrowers by partnering with financial institutions, innovative measures are needed to qualify feasible business ideas from individuals not meeting loan requirements.

It is not clear how Uwezo Fund intends to address this question, or the disbursement of funds. Ideally, most of such funds are supposed to target those youth without any going businesses or collateral security.

The government must also move fast to address the confusion that exists between Uwezo and Youth funds. A lack of clarity on the distinction between the roles of the two Funds will cripple their effectiveness.

To reduce administrative costs and waste, the two funds should be harmonised and placed under the Ministry of Devolution and Planning.

Also, the fund should be integrated with other initiatives the government has started to empower youth with such as the 30 per cent procurement rule.

It is commendable that the government has indicated it will offer guarantees for loans from commercial banks for youth who secure tenders. However, more sensitisation and clarity are needed.

The government is one of the biggest consumers. Deliberate efforts must be made to create markets for the products that are supported by the two funds. This will not only reduce the chances of loan defaults, it will also help the fund to grow.