Preparing Youth to Thrive in the Informal Economy
what’s the challenge?
By 2050, the estimated number of young people entering the labor force in Africa will exceed that of the rest of the world combined. The collective talent, effort, and potential of these young people represent an incredible opportunity for Africa and the world – but if neglected, could lead to further inequality and global security risks, while eroding the critical progress made towards achieving the SDGs by 2030.
This Accelerator brings us to Kenya, where hundreds of thousands of young people are entering the workforce every year – largely in the informal economy. This diverse, ever-evolving sector is where 83% of Kenyans work – as motorbike couriers, vendors of day-to-day goods in small roadside kiosks, running small-scale restaurants, selling street food, and a vast array of other ventures. These businesses are a major source of income and opportunity but are also economically unpredictable and run on slim profit margins that make absorbing shocks nearly impossible. As a whole, the informal sector in Kenya lacks formal structure, with limited training available to equip people with a clear pathway and the necessary skills to work profitably or securely in the long-term.
This complex myriad of challenges disproportionately impacts young Kenyans who tend to dominate this space. Many out-of-school youth, for whom an academic secondary education is not affordable or feasible, are entering the informal sector without access to essential skills-based training that would make the transition less risky and more sustainable. Their daily earnings are often just enough to meet basic needs like food, shelter and healthcare for themselves and their families. This particularly impacts young women in this sector, who face exploitation, abuse and gender-based violence at higher rates.
The COVID-19 pandemic has only made these issues more difficult, placing young Kenyans at huge economic risk because of their reliance on the informal sector for work. Informal businesses are both on the frontlines and are most vulnerable to the pandemic’s economic devastation, usually without any safety net reserves to carry them through a shutdown – or weather a potential economic recession looming on the horizon.
what’s the opportunity?
It is a pivotal moment for youth in Kenya. A COVID-19-induced spike in joblessness is likely to result in greater and longer-lasting effects on the ability of youth to sustain themselves, their families and communities. But, if these young people are given access to the skills, tools, and resources they need to thrive, they will be a powerful engine for recovery and growth.
Educate! – an organization focused on preparing youth in Africa with the means to succeed in today’s economy – knows first-hand the impact these types of interventions can have. As the biggest youth skills provider in East Africa, they have been leading programs that measurably improve the lives of young people for more than a decade. In 2013, they helped launch a three-week business skills bootcamp called SEED, based in Uganda, which trained young people in areas such as sales, market research, public speaking and networking. A randomized control trial found that three years after completing this intensive course, participants showed a 31% increase in income gains compared to their peers.
With these insights in hand, Educate! created an online skills-learning platform, NawiriPro, whose Kenyan-led team engaged youth to design and pilot another bootcamp in 2019, this time focused on Nairobi's motorbike couriers – a major growth sector in Kenya's informal economy. Within several months, participants were earning over 110% more income, with top performers earning 4x more than their peers.
This Accelerator is now moving quickly to tailor this proven bootcamp model to today’s ever-changing reality, transitioning to fully virtual offerings and launching new bootcamps focused on training young people to provide indispensable services during the global pandemic. With the support of cross-sector partners – and government policies and national strategic plans that reflect strong commitment to empowering young people – this Accelerator will strive to lessen the immediate economic impacts of COVID-19, while also creating an ecosystem of affordable alternative education pathways for out-of-school youth to achieve improved incomes, financial stability and a better quality of life moving forward.
this accelerator will:
Educate!’s NawiriPro will launch a new series of skills-based, intensive training bootcamps to help young men and women in Kenya gain the skills they need to succeed in high-growth professions in the informal sector. The first virtual bootcamp will focus on training motorbike couriers, a profession that is proving particularly relevant during the pandemic—ensuring the delivery of essential goods and services is safely maintained.
Specifically, the Accelerator will:
- Pilot an eLearning platform to engage 100,000 youth motorbike couriers in Kenya by 2023 – providing business training and advice such as optimal locations for their business, use of technology and e-commerce, business registration, legal requirements and financial tools to build income statements -- along with critical education on how couriers can protect themselves and prevent the spread of COVID-19. NawiriPro will also experiment with different revenue models to make the platform financially sustainable.
- By 2021, ensure both young men and women – urban and rural – are able to successfully start their own businesses by launching at least one new business model that targets young women and more rural populations. Potential female-owned businesses include informal retail kiosks, small restaurant stalls, and second-hand clothes retail.
- Create a marketplace for youth where, in addition to skills-based learning and a fully packaged business model, young people have seamless access to the services, providers and resources they need for their businesses to thrive. Examples include access to loans for smartphones or motorbikes and discounts from service providers. The Accelerator aims to secure 6 new service partners by 2022.
- Expand from Nairobi County to potentially 6 additional counties in Kenya by 2022, and potentially a new country.
What you can do
Invest in Educate!’s work to build alternative education pathways for out-of-school youth, starting with NawiriPro and expanding into bootcamps for strategic East African growth sectors such as tourism and agriculture. Learn more here.
Add your product or service to NawiriPro’s growing business marketplace, providing incentives and support to unlock youth potential in Kenya – in and future markets. Learn more here.
Add your voice to the call for a viable marketplace of alternatives to academic secondary school for those who can’t afford it, with appropriate incentives and accreditation to ensure universal access to some form of post-primary education.
Get in touch with us at Accelerators@experienceeducate.org