AfDB fuels youth’s business innovations

Malawian business starts ups and their counterparts in the Sub-Saharan region have an opportunity to tap into 10.5 million euros (about K10 billion) funding for starting and boosting their businesses.

The board of directors of the African Development Bank Group recently approved an equity investment pool of the said amount toward the first close of the Janngo Start-Up Fund, a pan-African tech start-up fund.

The pooled funds comprise seven million euros provided by the African Development Bank and a 3.5 million euros contribution by the European Union and the Organization of African, Caribbean and Pacific States.

The Janngo Start-Up Fund, managed by Janngo Capital, builds, grows and invests in tech start-ups with proven business models and inclusive social impact.

Its focus areas span agribusiness, financial services, energy, education, and healthcare.

Stefan Nalletamby, the bank’s director for financial sector development, said the Janngo Fund can drive the transformation from a more traditional business ecosystem into a dynamic, youth-driven, and technology-focused entrepreneurial community.

Nalletamby said: “Africa is experiencing rapid mobile penetration with Android and other platforms. This provides huge opportunities to develop innovative and high-growth-driven start-ups and SMEs.

“But there is a severe scarcity of risk capital for the new and upcoming first generation of venture capital funds targeting early-stage businesses.” 

A young entrepreneur who is managing director of Honey Products Limited Mathews Dunga said tailor made cheap capital for start ups, including capacity building is ideal to ensure young people participate in economic development through various investments.

He said: “We need affordable capital facilitated by government policies including provision of grants for us to invest and participate in the Malawi 2063.

“We applaud the government for introducing the National Economic Empowerment Fund (Neef) but it’s loans are unfavourable for innovations and start-up businesses. Start-ups require more time to invest and settle but Neef loans require almost instant repayment”.

Other than that, he said the youth lack information on investment opportunities, available markets, pricing, among others, for them to participate favourably.

Principal secretary in the Ministry of Trade Francis Zhuwao said the major challenge that affects the young people from making a breakthrough in investment is because they work in isolation.

He challenged the youth to work in groups including forming the youth association that will be speaking for the youth at policy level.

He said: “The moment you regroup and stop working as individuals, there is predictable financing out there that you can tap into for your investment”.

The AfDB fund is expected to enhance the private sector by deploying technology-enabled business models for small and medium enterprises that address the needs of underserved populations; create significant employment opportunities for youth and women, and improve the quality of life for Africans.

The pooled investment advances the Boost Africa Program, a collaboration among the contributing partners and the European Investment Bank, to back investment funds that target early-stage innovative enterprises across sub-Saharan Africa.

The bank’s support for the Janngo Start-Up Fund aligns with its jobs for youth strategy, as well as its support for private sector-led growth and entrepreneurship in African economies.

In Malawi, there are many African Development Bank (AfDB)-funded projects, including Jobs for Youth and Support to Higher Education, Science and Technology (Hest) aimed at fighting unemployment among the youth.

The two projects have been imparting skills to the youth through business incubation interventions and utilisation of the science and technical laboratories and information and communication technology (ICT) equipment in the universities and technical colleges across the country.