Recently I had to deliver a brief talk for a group of development professionals. I was asked to say something uplifting about  the entrepreneurship opportunities for youth active in agriculture in sub-Saharan Africa.

These “agri-preneurs” seems to be a trending topic these days. And yes, you can add that term to the development jargon list. Or as Tony O. Elumelu, a self-made billionaire tycoon from Nigeria puts it:  “Young entrepreneurs and those they inspire are the lifeblood of Africa’s rise”.

I really beg to differ. Quite often entrepreneurship seems to be a catchy phrase for the otherwise miserable livelihoods of small-scale farmers in developing countries, in the absence of decent jobs. I will acknowledge rural entrepreneurship could have many other forms as well such processing, agro-inputs supply, transport, etc. – but these jobs are more scare. There needs to be some level of increase in production-related activities to facilitate growth in value added activities. As farming is a darn difficult sell we repackage it, while adding a sauce of ‘youthiness’ and perhaps some ICT to top it off.

That is a very cynical way to put it, I do apologize. Perhaps a more intelligent way to look at this is to study the level of ‘entrepreneurship’ of the middle-class. Duflo and Banerjee conclude in a paper from 2007 “[that] nothing seems more middle class than the fact of having a steady well-paying job”.

What about the poor? In their standard work Poor Economics Duflo and Banerjee refer to a large study of 18 developing countries. They conclude that “[the poor] mainly operate tiny businesses. And second, these tiny businesses are, for the most part, making very little money [..] The enterprises of the poor often seem more a way to buy a job when a more conventional employment opportunity is not available than a reflection of a particular entrepreneurial urge.”

This is a more powerful rebuttal than the popular argument, which I have often used myself, that entrepreneurship is very difficult in sub-Saharan Africa and therefore we should not try it all. Indeed, in my home country the Netherlands more than half of young enterprises do not survive. But the mere fact that it is very difficult, does not mean it is more difficult than, for instance, large scale private sector development through medium and large scale national and international companies.

Does this mean we should refrain from supporting entrepreneurship altogether (including entrepreneurship opportunities for youth)? I do not believe so as entrepreneurship can still be a means through which livelihoods can improve. Some ‘learned lessons’ include (based on personal experiences, I was too lazy for problematic induction):

  • Entrepreneurs usually have multiple sources of income. Take for instance vendors of agro-inputs, also known as agrodealers. Besides selling inputs, which only brings in revenue during the planting season(s), they might sell cement, food, equipment etc. Or engage in other business ventures such as bulking and transport. Support interventions should take into account these other activities when aiming to be effective. So not just training in financial bookkeeping only focusing on the revenues retrieved through selling seeds, pesticides, herbicides and fertilizers.
  • Training of entrepreneurs by itself rarely works. Some form of financial support (loans, grants) seem to be essential.
  • In fact, there is mounting evidence that cash transfers show promising results. The co-authors Chris Blattman goes as far as to argue that cash transfers should be the basis and maybe skills training / capacity development could support this.
  • Make sure the training practical. Still much of training and education is basically a teacher standing in front of an audience, sending out information. Think of action and participatory research, as well as building in interactive games and dialogue.  Something we are currently experimenting with in one of our programmes in Mozambique are small action research grants. These grants will help students and teachers to get out of the classroom (i.e. comfort zone) and build a relationship with relevant actors in the field to understand what is really going on. Through internships and apprenticeships engagement with the private sector can be stimulated and the overall likelihood of employment increases.
  • Do not forget about the post-training phase. Indeed, a lot of programmes focus on the # of ‘graduated’ participants. While in fact ongoing support is key. Think of mentorship, refresher courses, finance etc.
  • Of course value for money is key here, how much does support of entrepreneurs cost vis-à-vis other interventions (education vouchers, unconditional cash transfers, deworming drugs, clean water supply, vaccines etc.).

The big elephant in the room here is scale. Tiny micro-enterprises are probably not the way to go. But what about rural entrepreneurs that employ 5, 10 or maybe 20 people and with a significant yearly turnover? Surely, micro-enterprises might lead to localized improved livelihoods at best, bigger SMEs hold more promise. The constraints, opportunities as well as the potential intervention mechanisms will differ significantly. It is this lack of clarity that clouds the discussion. Alas, something I only truly realized after I delivered my talk.

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