If conversations between the African Development Bank (AfDB) and the Government of Rwanda go as planned, Rwanda will be among countries to host one among the many proposed youth entrepreneurship investment banks. This was recently confirmed by the President of the AfDB, Akinwumi Adesina, during the closing press conference of AfDB’s Annual Meetings in the Kenyan capital Nairobi. AfDB board of directors has already approved a $16 million youth investment bank in Liberia and $12 million for Ethiopia, and a few more in the pipeline. “I was talking to President Paul Kagame about one for Rwanda, as you know he is very pro-entrepreneurship for young people, and it’s going to be coming up,” Adesina told the presser. A youth investment bank would typically extend financing towards young people who are creatinginnovations and businesses with potential to generate jobs across the continent and potential for wealthcreation. ALSO READ: AfDB seeks to set up youth entrepreneurship investment banks According to AfDB, the initiative to establish youth entrepreneurship investment banks is intended toprovide both debt and equity financing for businesses of young people in African countries. Adesina lamented that current systems of commercial banks and other financial institutions are not accommodating for young people, noting it is completely pointless to ask for a land title as collateral from a 21-year-old youth seeking financing. “When young people go to the bank, they only see risks in them but not innovation, creativity and capacity to create wealth. We believe that young people are not risks but we need to put our resources at risk on their behalf because if we don’t, that will be the biggest risk Africa has,” he said. ALSO READ: Why existing banking system is not tailored for young entrepreneurs Investing in young people President Paul Kagame has been a strong advocate of increased investment in young people. At the 7th Edition of the Future Investment Initiative in 2023, he emphasised that investing in Africa’s youth and in the right way would quickly stimulate development on the continent. Data from the Ministry of Public Service and Labour indicate that the number of jobs created in Rwanda increased from 146,000 in 2014 to 235,332 in 2023, implying a 61 per cent rise within the last decade. However, AfDB noted that while 10 to 12 million young people enter Africa’s labour markets each year, only three million formal sector jobs are being created as Africa’s private sector has remained small and not industrialised enough to keep up with the labour market demand for decent jobs. ALSO READ: RSSB to launch Rwf30bn equity investment facility for SMEs With the youth investment bank, the development bank aims to finance youth entrepreneurship and innovation with a focus on emerging economic sectors, such as the creative industries, and climate-smart, digital and artificial intelligence (AI)-enabled businesses.
