20 January 2014

Cote d'Ivoire: How Can Young Ivorians Fund Their Entrepreneurial Dreams?

Abidjan — Ivorian president Alassane Ouattara has recently committed to creating one million jobs for his country's youth. But not all young Ivoirians will find meaningful labour. After overcoming various obstacles, some will have to become their own employers.

It's 7.45 a.m. in Anono, in Abijdan's Riviera 2 neighbourhood. Michel Konan starts his day by checking last night's books.

Less than six years ago, he was just a callbox manager. Today the 37 year old is a symbol of entrepreneurial success, earning a living as the head of an SME that offers various professional services to its clients.

"I fled Bouaké in 2002 when the political crisis started. Once in Abidjan, the hardships of life made me realize that I had to take charge of my own destiny," he recalls.

With a phone and a savings of 50,000 CFA francs, Konan set up his first callbox. His managerial skills quickly enabled the young Ivorian to set up a second and then a third callbox.

Before long, he had launched a cybercafé, a call centre, a chair rental business and had his own taxi. He now employs four people and hopes to double his workforce with the launch of an agricultural venture in the coming months.

Entrepreneurial dreams

Like Konan, many other young Ivoirians dream of being self-employed. They want to become independent by building their own wealth. But the dream often turns into a nightmare with the harsh reality of funding.

"Ivorian youths are very creative. They have projects. They want to be socially and professionally integrated, but they lack funds to launch their activities," says university student Mory Diabagaté. "The reason for this is very simple: financial institutions do not trust the youth."

To finance a project, banks often require a ton of paperwork and good securities - something many young people are unable to produce.

This lack of trust from financial institutions goes back to the 1990s, with the famous Fonds sociaux (FS), or social service funds.

The securities offered by the government to financial institutions did not encourage good management of the loans by their beneficiaries. Many leaders of cooperative groups known as GVC (for groupements à vocation coopérative) instead used the funds to leave the country and buy houses or cars.

The government was later forced to reimburse the loans and shut down the project.

"The youth are to blame for this lack of trust when it comes to funding their projects," says Fahan Bamba, founder and managing director of Afrique Emergence et Investissement, a microfinance company.

"On the other hand, I don't blame them: the government should have set up monitoring structures to ensure the effective implementation of the projects. Instead, they just handed out cheques that were sadly used to buy alcohol in pubs."

New policy

The new governmental policy is now meant to put in place monitoring measures to ensure the implementation of youth projects funded by the Ivorian government.

That implementation is monitored through the banks and other microfinance institutions in a new system: instead of handing the money directly to the youth, it is used to develop SMEs or buy equipment for revenue-generating activities known as AGR (activités génératrices de revenus).

This is the policy promoted by the government through the FNJ, the national youth fund, which in 2012 replaced the FNS, the national solidarity fund.

The goal is to cut down misspending, follow the reimbursement mechanism and enable young entrepreneurs to finance their projects.

Konan welcomes this initiative by the Ivorian government. But he has one pertinent question for his young compatriots: why wait for funding from the FNJ or a bank? According to Konan, youth should accept the need to work hard in order to create their own businesses. What is important, he adds, is good management.

Bénédicte Ahoulé, a young businesswoman, also expresses caution. "When young Ivoirians make a profit of 20,000 CFA francs in their businesses, they only think about enjoying themselves with alcohol and women," she says. "They do not differentiate between capital, profit and operating funds. They end up closing down."

But being independent, self-employed and enjoying professional success in a country gangrened by unemployment starts with ambition. Needed, too are a profitable business idea and, as young Ivorians are seeing for themselves, managerial skills.

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