AgriBusiness To Curb Youth Unemployment Challenge: Stakeholders
Government can create opportunities in agribusiness that will lessen youth unemployment, as 9.6 thousand of the people are employed in the agricultural sector, states the Kenya National Bureau of Statistics (KNBS).
This is the message during the Institute of Economic Affairs (IEA) Kenya, event titled “The Big Forum on Business Opportunities in the Big Four Agenda,” which notes that there are employment opportunities in the agricultural sector, which according to the Food and Agricultural Sector (FAO) contributes 26 percent to the Gross Domestic Product of the Kenyan economy, whether directly or indirectly.
Yet, according to the United Nations (U.N.), out of all the continents, Africa is the most susceptible to hunger, as 22.8 millions of its citizens are hungry for food. It is a compounding challenge for those who are poor in the continent, a figure that stands at 428 million.
The event comes at a time when there is emphasis on the Big Four agenda, a policy action that was introduced by the Jubilee government. Under the Big Four agenda is affordable housing, manufacturing, universal health and food security, which is committed to providing 100 percent access to food and nutrition by this year, 2020.
The IEA Kenya meeting is thus exploring ways in which the youth can tap into the business opportunities that can be found in either agribusiness, agro processing and agro innovation.
The CEO of National Potato Council, Mr Wachira Kaguongo, says that it is committed to ensuring that the youth have the correct regulatory environment as well as investorS.
“Last year when we had the National Potato Conference and invited the youth to hear about business opportunities that pertain to them in the potato value chain, such as seed cutting and production of the potato itself. Agriculture has been demonised by the 8-4-4 system in such a way that those who failed to pass their exams were told that the only way that they could survive was to turn to farming,” he says during the meeting held at the Intercontinental Hotel.
Mr Kaguongo says that farming has been digitized, even in the potato industry, where Information and Communication Technology (ICT) and digital platforms that can be enticing to the youth. We have also partnered with the Kenya Private Sector Alliance (Kepsa) to support the youth seeking to make a career in farming.
“ My farm in Kirinyaga, Nallah Farms, has created agri business opportunities for young people like Mr Odipo Gerphas who is growing the Rosemary spice under contracts to farmers in the region. The farm has addressed the challenge of unemployment and training in the region,” says Honourable Francis Nyammo, the Founder of Nallah Farms and Chairman of Longhorn Publishers.
Mr Nyammo, who is the former Member of Parliament (MP) of Tetu Constituency, sponsored the Micro Small and Medium Enterprises (MSME’s) in 2011, urging for the financing of such businesses as they contribute 80 percent of the economy’s GDP, yet are often sidelined by commercial banks.
But the reality is often different, according to Ms Berncy Wanjira, a Relationship Officer from Springboard Capital during the Small and Medium Enterprise (SME) forum held at the Kenya International Conference Centre on February 24th 2020.
” When it comes to financing SME’s, it is not easy because they have a default risk. This means that they are unable to pay their loans well and on time. But we still target SME’s in our offering, which includes unsecured loans and the minimum time that they are supposed to pay it back is within three to six months after issue. The minimum rate of pay is Kshs 50,000. While there are SME’s that will payback their loans on time, there are others that will not,” she says.
Speaking during the IEA Kenya event, Mr Odipo, who is the Chief Executive Officer (CEO) of Judera Group, says that in agriculture, there is a huge market for the youth and that his company is committed to ensure that those who get into the industry do not make the same mistakes that he did when he started out.
“ I had started by planting green beans on land from a friend but the the broker that I had hired left, leaving the Kshs 10 million investment to waste. But we learnt from that experience. Today, we hope that small holder farmers can learn from our mistake and the focus is on the Rosemary spice, which is not only perennial but it has beenfits that cuts across powder, leaves and its extract,” he says.
During the event, IEA Kenya did a live study using the Aha software from the audience who expressed their opinion about the agricultural sector. 55 percent of the audience said that they were part of tan agricultural network. 28 percent of the audience stated that access to finance is the major challenge that is facing the industry, followed by 22 percent who were in business training development and 20 percent who felt that access to markets is a challenge.
Those in the audience felt that there solutions that could be applied to counter the challenges, such as policy reforms, better waste management, financing, protection of ideas and affordable insurance in the sector.
Another challenge has been the infestation of locusts in Eastern African countries such as Ethiopia and Kenya, which is touted to be the worst infestation that the country has suffered from since 1950, states the CNBC, as it tends to lower the production of food in the region.
Climate change has also added to the problem, with countries like Zimbambwe, whose half of the population has encountered the challenge of drought, while in Namibia, there are 350,000 people living in eight out of its 14 regions who are facing the insecurity of food because of lack of enough rain, states Afrik 24.
The World Food Programme (WFP) had in October 2019 predicted that there would be 45 million people in Africa who would face food insecurity.
There were those people in the IEA Kenya event who felt that the government could do more about the policies that could influence business opportunities in the potato value chain.
The industry draws from the National Industrialization Policy on Extension Services. The state of play is that Kenya produces 6.400 tonnes of certified seed, and the country is producing 1.3 million tonnes of the crop across 13 counties in Kenya such as Meru, Nyeri and Nyandarua, with counties such as Baringo, Kisii and Laikipa having the potential to produce more.
The passing of the Crops (Irish Potatoes) Regulations of 2019 has created an Agriculture and Food Authority that is key in regulating and attracting investment in the potato value chain at both the county and national levels.
According to the 2020 African Economic Outlook, the economic growth of Africa is expected to be 3.9 percent in 2020, though the report notes that the continent lags behind in terms of skills development and education.
Despite this, the World Economic Forum (WEF) estimates that the productive population in Africa will be approximately one billion by the year 2030. Sub-Saharan Africa has a literacy rate of 76.86 percent, states the World Bank.