Poll: 1 in 5 African Youth Plan To Start A Business

African leaders convening this week at an African Union summit in Equatorial Guinea will address youth empowerment and the roles young Africans can play in positioning their countries for sustainable development. Gallup's measures of young people's attitudes about entrepreneurship inform such conversations, particularly the relationship between youth and economic development.

Gallup finds African youth believe they can rely on social networks to launch their businesses. A median of about 6 in 10 African women (57%) and men (61%) between the ages of 15 and 24 say they trust someone other than a family member enough to make them a partner in starting a business. Similar proportions of women and men in the older age group (aged 25 to 35) say the same.

Young Africans -- whether they are currently thinking about starting a business -- paint a mixed picture in terms of starting and running a business, be it a formal or informal venture. They are relatively positive about the safety of assets and the potential financial success of their business, but fewer find the paperwork process and access to loan money easy enough for would-be entrepreneurs. It is important to note that young people in the older age group as well as both genders share similar views.

Attitudes About Entrepreneurship Vary Across Countries

Young people in different countries, particularly those in sub-Saharan and northern Africa have different views about some aspects of entrepreneurship. Young people residing in northern African countries are less likely than their counterparts south of the Sahara to say they plan to start a business. Young people's perceptions about business outcomes in northern Africa are generally less positive than those in sub-Saharan Africa. At the same time, young people in each region found more agreement with respect to ease of business entry and trust in business partners.

Gallup finds other country differences across income groups. Intent to start a business among those aged 15 to 24 is highest in low-income rather than middle-income countries, and ranges from 3% in Morocco to 40% in Uganda. In many of the countries and areas surveyed in Africa, majorities of young people believe they can trust non-relatives to be their business partners, although in the Central African Republic, Chad, Djibouti, Egypt, Libya, and Tanzania, less than 50% of young people believe they can.

Young Africans' views about access to capital underscore the importance of developing country-specific initiatives. As few as 9% of young people in Libya and as many as 45% in South Africa say it is easy enough for anyone to obtain a startup loan, even though similar proportions of young people in each country plan to start a business in the next year and both countries are upper-middle income economies.

Majorities of young people in the Somaliland region (64%) and Chad (51%) say paperwork is easy enough. Young Libyans (11%) were the least likely to say paperwork is easy enough. These findings suggest the paperwork process may push many young people into informal types of entrepreneurship, which could lead to socio-economic marginalization.

Young Africans' perceptions about business profitability and asset safety are more positive across all countries. Views about would-be entrepreneurs' potential profitability range from 85% in Ghana believing the government will allow business owners to make a lot of money to 40% in Libya believing the same. Trust about the safety of business assets is also relatively widespread, ranging from 91% in Ghana to 37% in Chad.

Bottom Line

Young Africans, including young women, show a latent interest in business creation. Although entrepreneurship is not a panacea to the daunting challenge of youth unemployment across Africa, it is a critical pillar that stands to provide a livelihood for many and, in turn, create jobs for more young people. The findings also underscore the gap between relatively positive perceptions of business outcome versus the more negative views of business entry. However, the cross-country variations are important reminders to develop country-specific entrepreneurship programs to turn aspirations into successful ventures. Future research will explore potential gender differences in push-and-pull factors in business creation.