The biggest challenge facing Africa isn’t that its young people don’t want to work. It’s that the economy isn’t creating enough opportunities for their ambition.

Every year, an estimated 10 to 12 million young Africans enter the labour market. Formal economies across the continent create, in good years, perhaps three to four million jobs. The arithmetic is brutal.

The informal economy is not the enemy

The standard policy response treats the informal economy as a problem to be formalised away. This is a mistake. The informal economy employs the majority of working Africans and is where most entrepreneurial energy lives.

The informal economy isn’t a failure of development. It’s a rational adaptation to systems that were never designed to include everyone.

What actually works

Three interventions have shown consistent results: skills training that is demand-led, digital identity systems that allow informal workers to build credit histories, and targeted reductions in the cost of formalising a small business. Rwanda has cut business registration to under six hours. Kenya’s M-Pesa has given millions of informal traders a financial footprint visible to lenders.

Image: Stori.