IFC, a member of the World Bank Group, and the International Labour Organization (ILO) have announced a new partnership to support entrepreneurship and skills development among young people in the Middle East and North Africa, part of a wider effort to foster private sector growth and drive economic development.
The MENA region has the highest official unemployment rate of any region in the world and the problem is especially acute among young people. Nearly a quarter of those under 30 are jobless and youth unemployment costs the region more than $40 billion annually. The new partnership will focus on overcoming the mismatch between supply and demand of skills, sharing knowledge about trainer networks, and helping schools across the region include soft skills and entrepreneurial training in their curricula. “The MENA region is hit particularly hard with rising youth unemployment and underemployment,” said Ruba Jaradat, ILO Regional Director for Arab States. “The shared objective of our new partnership with IFC is to help develop policies that support entrepreneurship, ensure youth have skills that are required by the market, and encourage more young people to become entrepreneurs.”
A recent survey by start-up incubator Wamda, supported by IFC, surveyed 963 entrepreneurs and 1,697 workforce participants. The survey found that nearly half of entrepreneurs surveyed struggled to find qualified hires. Job seekers with sales, business development, and management skills were in particularly short supply. About 40 percent of employers had trouble finding workers with essential soft skills, like motivation, independence, and high aptitude.
“Youth unemployment has an impact on the countries of MENA, creating instability and preventing many regional economies from reaching their potential,” said Dimitris Tsitsiragos, IFC Vice President of Global Client Services. “Addressing the challenge of youth unemployment is essential if nations want to combat poverty and lay the foundation for sustainable economic growth.”
The initiative is part of IFC’s wider strategy in the region to support small businesses, encourage entrepreneurship, expand access to finance, and create jobs. During fiscal year 2016, which ended in June, IFC committed $1.3 billion in MENA, including $331 million mobilized from other investors. The organization also launched 20 new projects to advise both governments and private businesses on issues ranging from regulatory reform to corporate governance and dispute resolution. The initiative is also part of the ILO’s ongoing work to support youth entrepreneurship in the region through capacity building and education programs targeting government institutions, business development service providers, private sector associations, entrepreneurs and education institutions. Since 2013, the ILO’s Know About Business (KAB) program, which targets youth enrolled in vocational, technical and higher education, has been rolled out across 366 educational institutions and reached some 150,000 students throughout MENA. Over the past five years, its Start and Improve Your Business program targeting small-scale entrepreneurs has resulted in 510 new enterprises opened and the creation of 1,345 jobs.