There is nothing as socially destabilising as unemployed youth. It’s a lethal combination that usually does not end well. Rising inequality and inability to obtain employment opportunities herald Dickensian Hard Times– unless something drastic happens today.
The high number of unemployed youth generates undercurrents of conflict within the system. Unemployment is not only socially demeaning but it’s a drag on an economy and society. It undermines productivity, spending and investment, stunting national growth. It contributes to inequality and spurs social tension.
Joblessness and inactivity and the failure to tap into the economic aspirations and resources of young people carry an even higher price.
To navigate this minefield, people need financial knowledge and skills, access to resources and the capacity to apply those skills and habits in making the right financial decisions. When asked about their preferences to become self-employed or being employees if they had the choice, the majority of young people in Kenya aged 15 to 24 said they would prefer to become self-employed, contrary to other age groups.
Various government institutions have put their best foot forward in ensuring the necessary mechanisms to facilitate employment, a partnership that extends to the private sector.
Banks need to play an increasingly bigger role in providing funding that will enable the youth to exploit their potential. Access to financing has always been a weighty issue and, if the youth are engaged in initiatives that support their financial capability, it will be a big step towards self-efficiency.
To be financially capable entails individuals understanding and applying financial knowledge. People have to acquire healthy money habits, norms and rules of thumb (automatic, mental shortcuts that simplify decision-making), as well as the ability to stick to a plan and successfully complete financial tasks.
Developing financial capability is an important stepping stone on the path to financial well-being. People who have financial independence feel secure of their future and have the freedom to make choices.
We need a paradigm shift in our thinking of how to tackle youth unemployment. Hopefully, increasing adoption of the new Sustainable Development Goals will encourage the conversation to eliminate poverty, create equal opportunities for women and the youth and initiate an era where the youth will become the torchbearers on the journey to financial independence.
Technology is assisting the youth to bridge the unemployment gap. Many have ventured into areas that were originally no-go zones for them, such as agriculture. They now keep cattle, practise horticulture and stay abreast of new developments with the help of apps.
Technology has proven to be an important means through which youth can gain access to financial services and learning opportunities. Technological initiatives therefore need to be accelerated to contribute to the sustainability of business models run by the youth.
The setting up of a youth workforce development programme can provide significant opportunities for economic development. A skilled youth workforce provides the critical skills for economic growth and keep them out of mischief.
It is encouraging to see the youth increasingly seize control of their economic well-being, with many opting for entrepreneurship. But lack of access to finance, skills, knowledge and familiarity with the business world represent the main barriers to self-employment.
The recent Youth Summit at State House, Nairobi, that brought together key industry players in government, non-governmental and private sector institutions was a great step in the right direction.
Kenya’s greatest opportunity lies in exploiting our skills to make our own products and resist the importation of some of the most basic goods. The good news is that there are concerted efforts to address these challenges, from the government and the public sector.
Joshua Oigara is group chief executive officer and managing director, Kenya Commercial Bank.