The African Commission has proposed the creation of an African Guaranteed Fund in partnership with African Development Bank (AfDB) aimed at mobilising three billion dollars to on-lend to small and medium-sized enterprises in Africa.
This was contained in the final report of the Commission launched in Copenhagen on Thursday, a release from the World Bank Office in Accra has said.
The release said: "The Commission is proposing a new consensus for international development cooperation with Africa. Focus should be directed towards private sector-led growth, which creates jobs. The Commission also decided to take action. It will launch five ambitious initiatives aimed at creating job opportunities for Africa's youth."
These are: "The creation of an African Guarantee Fund in partnership with the African Development Bank aimed mobilizing loans for three billion USD and reducing the cost of access to finance for small and medium-sized enterprises, SME's. Africa's SME's provide 80 percent of output and jobs in Africa.
It would ensure access to energy at the local level by launching a new initiative in partnership with the EU and the African Development Bank. More than three-quarters of Africans lack access to electricity - a major constraint to economic development, doing business and standards of living.
It would also improve the business climate and Africa's competitive edge by making sure that the World Economic Forum's Global Competitiveness Report covers all African countries. More than that, the Commission will work with a range of Africa-based entities to ensure that the findings of this benchmarking process is followed-up by the development of detailed policy responses and concrete reforms;
It would aim at unleashing the power of African entrepreneurship, both in start-up and existing enterprises, by providing advisory services and access to finance in order to allow young people to translate their good ideas into practical plans. The initiative will be implemented in partnership with the ILO and Youth Employment Network (a partnership between the UN, ILO and World Bank). It is expected that this initiative alone will create 40,000 new jobs and 20,000 new businesses.
It would in addition support higher education and research. Specifically, the initiative will increase the quantity and quality of artisans through apprenticeships, especially in the rural areas. Also, it will link tertiary research and business practices especially to expanding agricultural output.
Dr. Donald Kaberuka, President for the African Development Bank and member of the Commission, who will head the establishment of the fund, said: "Small and medium-sized businesses and entrepreneurs lack access to financing for investments and the economic crisis has just worsened the situation. That is why we want to establish the 'African Guarantee Facility' with the aim of mobilizing loans for three billion USD. This can open up for about 20 billion USD in investments, equalling 1.5% of Africa's GDP. It will be the most innovative initiative launched in Africa in decades, and we are convinced that it will create millions of productive and decent jobs."
The President of Tanzania and member of the Africa Commission, Jakaya Kikwete said: "The Africa Commission's report and recommendations fill out a vacuum. The lack of employment opportunities for the youth is one of the key challenges on the Continent and is not reflected in the current international development focus. With the involvement of all the significant African stakeholders in the development of the report, the recommendations represent African solutions to African challenges. This is why I am very optimistic as regard to the prospect of living up to the high ambitions of the report; to create a whole new agenda for development policy in Africa."
The Danish Prime Minister Lars Løkke Rasmussen, Chairman of the Africa Commission, said: "With the report of the Africa Commission, we have outlined a clear path towards strengthening private sector-led growth, and we have already established strong and promising partnerships with key actors such as the African Development Bank, World Economic Forum, ILO, the World Bank and the African Union Commission. All of whom will support the realization of the five main initiatives. It is now that the work begins. All the members of the Commission have today committed themselves 100% to the recommendations and initiatives of the report. This demonstrates the genuine engagement we all feel towards creating more and better jobs for Africa's youth."