Curb Youth Unemployment In Cameroon

The promotion of entrepreneurship as a possible source of job creation, empowerment and economic dynamism in a rapidly globalizing world has attracted increasing policy and scholarly attention and Cameroon is of no exception. Despite the efforts made in addressing the issue, problems of unemployment as experienced by the educated youths and uneducated but skilled youths have become a major problem in many developing countries. A Poverty Reduction Strategy Paper (PRSP) report published in 2003 by the Cameroon government identified youth unemployment to be a major problem in the country. Cameroon has a relatively youthful population with 40 percent of its population being below 15 years and two third being under 30 years. The PRSP report identified the average age of the country’s population to be 22 years. Although the high proportion of young people is considered as an asset by the PRSP report, it is however mounting pressure on the labor market.

Despite the yearly increase in the number of children attending school and those completing tertiary education, millions of young people face bleak employment opportunities (Longe Report, 1992). According to the ILO (ILO publication, 2007), about 400 million new jobs would be needed to absorb today’s youths. Due to this decline in jobs and the rise in the number of those unemployed, young people are forced in the informal sector. Factors that led to the emergence of high unemployment rates in the country can be traced as far back as 1980s, the era during which Cameroon was hit by economic crisis. The main aim of this study is to stimulate policy debate on the potential benefits of entrepreneurship as a viable mechanism to curb youth unemployment, obstacles that stand in its way, and policy measures and strategies that can be initiated to support the program.

Objectives of Study

The objective of this study is to examine the constraints that youths face in acquiring employment and the urgent need to orient those affected towards imbedding self-employment and entrepreneurship through vocational and entrepreneurial training programs as a mechanism to curb unemployment. Practical recommendations are suggested to Government and youths to overcome these problems and to ensure that youth as entrepreneurs sufficiently contribute to the economy and empower themselves economically.

Research Questions

How can entrepreneurship development curb down youth unemployment in Cameroon?

This question aims at outlining the different mechanisms of looking at entrepreneurship. To be able to answer the above question, the following questions were formulated as a guide:

What is the situation of youth entrepreneurs in Cameroon?

What are the constraints faced by youth entrepreneurs?

What are the policy measures to promote entrepreneurship?

1.3 Significance of the Study

This study will stimulate policy debate on the potential benefits of youth entrepreneurship as a viable career option, obstacles that stand in its way, and policy measures and strategies that can be initiated to support it.

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CHAPTER 2

An overview of Cameroon

The Republic of Cameroon is a unitary republic of central and western Africa. It is bordered by Nigeria to the west; Chad to the northeast; the Central African Republic to the east; and Equatorial Guinea, Gabon, and the Republic of the Congo to the south. Cameroon’s coastline lies on the Bight of Bonny, part of the Gulf of Guinea and the Atlantic Ocean. The country is called “Africa in miniature” for its geological and cultural diversity. Natural features include beaches, deserts, mountains, rainforests, and savannas. The highest point is Mount Cameroon in the south west, and the largest cities are Douala, Yaoundé, and Garoua. Cameroon is home to over 200 different ethnic and linguistic groups. The country is well known for its native styles of music, particularly Makossa and Bikutsi and for its successful national football team. English and French are the official languages. The table below portrays the main demographic and economic statistics of the country:

Country facts

Population: 20,129,878

Age structure:

0-14 years: 40.5% (male 4,027,381/female 3,956,219)

15-64 years 56.2% (male 5,564,570/female 5,505,857)

65 years and over: 3.3% (male 300,929/female 356,335) (2011est.)

Median age: 19.6 years

Population growth rate: 2.082%

Birth rate: 32.49 births/1,000 population

Death rate: 11.66 deaths/1,000 population

Life expectancy at birth: 54.71 years

GDP- Per Capita (PPP): $2,300 (2011est.)

Labor force: 8.083 million (2000est.)

Unemployment rate: 30% (2000est.)

Population below poverty line: 48% (2000est.)

HIV/AIDS – Adult prevalence rate: 5.3% (2009est.)

Source: CIA (2012

Economically, because of its modest oil resources and favorable agricultural conditions, Cameroon has one of the best-endowed primary commodity economies in sub-Saharan Africa. Still, it faces many of the serious problems confronting other underdeveloped countries, such as stagnant per capita income, a relatively inequitable distribution of income, a top-heavy civil service, endemic corruption, and a generally unfavorable climate for business enterprise. Since 1990, the government has embarked on various IMF and World Bank programs designed to spur business investment, increase efficiency in agriculture, improve trade, and recapitalize the nation’s banks. The IMF is pressing for more reforms, including increased budget transparency, privatization, and poverty reduction programs. Subsidies for electricity, food, and fuel have strained the budget. New mining projects – in diamonds, for example – have attracted foreign investment, but large ventures will take time to develop. Cameroon’s business environment – one of the world’s worst – is a deterrent to foreign investment.

2.1 YOUTH UNEMPLOYMENT IN CAMEROON

In recent decades, the number of young people ages 15 to 35 has increased significantly in Cameroon. According to the World Bank report of 2009, Cameroon has an unemployment rate of 30 percent with 48 percent of the total population living below poverty line. The situation has a severe effect on development, particularly in the areas of education, health, and professional training.

In urban areas, youth unemployment stands at over 20 percent, compared to just over five percent in rural areas. This unemployment rate, particularly in cities, is a result of the rural exodus and the decline in the number of jobs available in the modern sector. David Smith (2003) explained city growth in Africa to be most often attributed to the process of mass rural exodus indulged mostly by youths. These youth leave rural areas for cities and towns in search of employment opportunities which are most often not sufficient.

The soaring population and therefore soaring labor force has also left fewer jobs available. In addition, inadequacies exist in the current socioeconomic integration system for youth, which does not have appropriate and comprehensive mechanisms for promoting self-employment among this population group. Jairo Munive (2008) explained that most policy makers in Africa perceive young people as being economically inactive since the bulk of them lack employment in the formal sector, thus they are often labeled by statistical surveys as unemployed.

According to the Growth and Employment Strategy Paper of 2010/2020, poverty indicators per type of position held by the household head help in showing that households headed by workers are more poverty-stricken (41.0 per cent) than those headed by no workers (29.9 per cent) or applicants (11.9 per cent). This paradoxical result is more common in the rural areas. In the urban areas, the poverty rate of unemployed and working class households is lower.

Underemployment affects seven of every ten workers (71.7 percent). It is of broader scope in the rural areas (78.8 percent) than in the urban areas (57.4 percent). It is hence the real problem in Cameroon’s employment market, with significant disparities according to region of survey and gender. According to the Minister of Employment and Vocational Training of Cameroon, there are two million unemployed youth in the country based on a study conducted in 2007, with one million youths thought to be employed but actually underemployed.

Division of the employed per sector (in %)

Source: ECAM3, NIS

On the whole, 43.1 per cent of workers are poor. Workers in the informal agricultural sector are more poverty-stricken, and almost half of them are poor (56.9 per cent). It follows that workers of the informal sector are more exposed to poverty than those of the formal sector. Generally, the income generated in the informal sector does not help in poverty alleviation.

2.2 YOUTH ENTREPRENEURSHIP IN CAMEROON

In this paper, ‘youth entrepreneurship’ is defined as the “practical application of enterprising qualities, such as initiative, innovation, creativity, and risk-taking into the work environment (either in self-employment or employment in small start-up firms), using the appropriate skills necessary for success in that environment and culture” (Schnurr and Newing, 1997).

The application of these qualities, a process known as ‘entrepreneurism’ (Schnurr and Newing, 1997), leads to ventures in the social, political or business spheres. The emphasis in this paper is on self-employment. ‘Self-employment’ is defined as anyone who works for himself or herself but for anyone else, except under arm’s-length contracts (OECD, 2001). The OECD definition includes those who work alone – at home, from a workshop-truck or in separate businesses.

Among others, the importance of promoting youth entrepreneurship lies in the following:

Creating employment opportunities for both the self-employed youth and other young people

Promoting innovation and resilience in youth

Young entrepreneurs may be particularly responsive to new economic opportunities and trends

Enterprise helps young women and men develop new skills and experiences that can be applied to many other challenges in life.

‘Youth’ is defined by the United Nations as those between 15-24 years of age. In Cameroon youths are considered from 15-35 years. It is now widely accepted that there are many good reasons to promote entrepreneurship among young people. While caution should be exercised so that entrepreneurship is not seen as a ‘mass’ or wide-ranging solution which can cure all society’s social ills, as many experts such as Curtain (2000) warn, it has a number of potential benefits. An obvious, and perhaps significant one, is that it creates employment for the young person who owns the business.

Youth-run enterprises (YREs) also provide valuable goods and services to society, especially the local community (OECD, 2001; Stone, et al.). This results in the revitalization of the local community. It has also been observed that new small firms tend to raise the degree of competition in the product market, thereby bringing gains to consumers (Curtain, 2000). In addition, the enterprises may create linkages between youth entrepreneurs and other economic factors, such as through sub-contracting, franchising, and so on (White and Kenyon, 2000).

Youth entrepreneurship also promotes innovation and resilience as it encourages young people to find new solutions, ideas and ways of doing things through experience-based learning (OECD, 2001; White and Kenyon, 2000). In certain circumstances, young entrepreneurs may be particularly responsive to new economic opportunities and trends. This is especially important given the on-going globalization process. It is increasingly accepted that youth entrepreneurs can present alternatives to the organization of work, the transfer of technology, and a new perspective to the market (White and Kenyon, 2000).

White and Kenyon further note that social and cultural identity is promoted through youth enterprises, as is a stronger sense of community where young women and men are valued and better connected to society. They noted that youth enterprises give young people, especially marginalized youth, a sense of ‘meaning’ and ‘belonging’. This can shape the identity of youth and encourage others to treat them as equal members of society.

The Cameroon government has come up with a number of projects to redress youth unemployment. The main objectives of these projects is to enable trained youths acquire start-up loans which will enable them start their own business across the country. Amongst this projects are the Integrated Support Project for Actors in the Informal Sector, known in its French acronym as (PIAASI), National Employment Fund, Rural and Urban Youth Support Program (PAJER-U), Youth Socio-Economic Integrated Project for the Manufacturing of Sporting Materials (PIFMAS). An effective youth development program cannot be successfully implemented without support fund for the trainees, favorable business environment and political strategy. In the absence of the aforementioned, youths are bound to face some constrains.

CHAPTER 3

BARRIERS TO YOUTH ENTREPRENEURSHIP

Even though the Government has made major strides in the areas of trade facilitation by creating the single window, transparency in the mining sector and the functioning in the judicial system, the business climate remains unfavorable to economic activity. The 2012 Doing Business report and the World Economic Forum ranks Cameroon128th out of 183 economies assessed in the report regarding ease of doing Business, and 32nd out of the 46 countries in Sub-Saharan Africa. Cameroon’s most satisfactory performance concerns the “getting electricity” indicator where it is ranked 66th. The most problematic factors for doing business were corruption, access to financing, inadequate supply of infrastructure, inefficient government bureaucracy and tax rates.

Cameroon’s economic freedom score is 51.8, making its economy the 135th freest in the 2012 Index. Its overall score is the same as last year, with declines in monetary freedom and trade freedom offset by gains in fiscal freedom and business freedom. Cameroon is ranked 29th out of 46 countries in the Sub-Saharan Africa region, and its overall score is lower than the regional average.

Cameroon’s performance on most of the indicators of economic freedom has been dismal, and its economic freedom score has been in decline over the past five years. The weak foundations of economic freedom prevent sustained economic expansion. An unreliable legal system provides little protection for property rights and engenders widespread corruption. High tariffs and investment restrictions undercut potential gains from international commerce.

Cameroon’s economy, although relatively diversified with services accounting for around 40 percent of GDP, remains dominated by the public sector. The global economic slowdown had a significant impact on growth, and economic development continues to be hampered by the lack of a dynamic private sector. Progress in structural reform has been only marginal, and the overall entrepreneurial environment is not conducive to creating more economic opportunities.

In discussing the constraints and barriers that youth entrepreneurs face in Cameroon, it is important to present the crucial factors which include the following:

1. Social and cultural attitude towards youth entrepreneurship;

2. Entrepreneurship education;

3. Access to finance/Start-up financing;

4. Administrative and regulatory framework; and

5. Business assistance and support.

3.1 Social and cultural attitude towards youth entrepreneurship

As cultural and social backgrounds influence an individuals’ approach to life, they similarly influence entrepreneurial activity and enterprise culture. Gibb (1988) defined an enterprise culture as “set of attitudes, values and beliefs operating within a particular community or environment that lead to both “enterprising” behavior and aspiration towards self-employment.”

According to McGrath et al., (1992) a cultural environment in which entrepreneurship is respected and valued, and in which business failure is treated as a useful learning experience rather than a source of stigma, will generally be more conductive to entrepreneurship.

Wilken (1979) observed that the degree of approval or disapproval of business activity will influence its emergence and characteristics, being favored by those environments in which entrepreneurs enjoy greater legitimacy. Furthermore, parents, relatives and friends can have a crucial influence on young people’s opinions about entrepreneurship, playing a strong role in imparting positive or negative views of business. Family background, in particular, plays an important role in the formation of a mindset open to self-employment and entrepreneurship. Some studies suggest that overall family background seems to play a more important role in the

Entrepreneurial attitude of students than general cultural variables associated with the country (Postigo et al., 2003).

3.2 Entrepreneurship education

Entrepreneurship education is crucial in assisting young people to develop entrepreneurial skills, attributes and behaviors as well as to develop enterprise awareness, to understand and to realize entrepreneurship as a career option.

The Australian Ministerial Council on Education, Employment, Training and Youth

Affairs (MCEETYA) defined enterprise education as: “Learning directed towards developing in young people those skills, competencies, understandings, and attributes which equip them to be innovative, to identify, create, initiate and successfully manage personal, community, business and work opportunities, including working for them (DEST, 2005).”

Furthermore, entrepreneurship education is not only a means to foster youth entrepreneurship and self-employment but at the same time to equip young people with the attitudes (e.g. more personal responsibility) and skills (e.g. flexibility and creativity), necessary to cope with the uncertain employment paths of today’s societies. Young people can no longer expect to find the traditional ‘job-for-life’ careers but rather ‘portfolio careers’ (contract employment, freelancing, periods of self-employment, etc.). Enterprise education is therefore seen as a highly valuable preparation for the changing job market and economy in which young people have to operate (Gallaway et al., 2005).

Haftendorn and Salzano (2003) indicates that in many countries, particularly in developing and transition countries, enterprise education simply does not exist or has not been sufficiently adopted. When not applied in a holistic manner, it is often not including both the in-school and out-of-school youth. Furthermore, it is not applied on all different levels of education (primary, secondary, technical and vocational and higher education).

The teaching of entrepreneurial skills and attributes is often not properly integrated into school curricula or not adequately taught on different educational levels. Most education systems still teach traditional values of compliance to the norm rather than independent thinking and acting, risk-taking and self-reliance. Moreover, an academic approach to education nurtures skills that are appropriate to working in the public sector or large organizations and companies but not for an entrepreneurial career.

Even business study programs at universities in many countries often do not include sufficient entrepreneurial elements. Thus students are neither encouraged nor educated to become entrepreneurs but rather managers.

In most education systems including Cameroon, there is still a clear lack of practical and experiential learning as well as of teamwork learning. Experiential learning is very rarely used, as an effective way of gaining knowledge and experience, yet it is probably the most powerful way of learning entrepreneurship.

School environments often do not sufficiently introduce youth to the concept of entrepreneurship and self-employment as a career option. Tools, resources and information material to support youth entrepreneurship are not readily available. Relationships between educational institutions and the business community (school industry partnerships, combination of classroom learning and structured on-the-job experience) do not exist or are poorly developed.

3 .3 Access to start-up finance

The lack of adequate start-up finance is one of the most prominent (at least most talked about) impediments to young people seeking to create their own business in the country. According to the Euro barometer Survey (2002), the lack of finance was also considered to be a more severe barrier than administrative procedures/burdens or an unfavorable economic climate.

Due to the lack of self-sustaining resources, the absence of a substantive credit history, sufficient collateral or guarantees to secure loans or lines of credit, young people are often seen as particularly risky investments and therefore face difficulties in accessing finance. In addition, funds requiring less or no collaterals (except a viable business plan) often charge significantly higher interest rates and fees. Furthermore, the inability to show proves of experience and business skill is also another aspect that young people face as a constraint to start-up.

Another problem is the time needed to decide on an application for funding (minimum 30, 60 or 90 days), particularly from public support agencies and programs.

In many cases, the time spent on preparing (entrepreneur) and processing (agency) an application can easily exceed 5 months, which is a very long time for a potential young entrepreneur.

Heidrick, 2002 suggest that the largest sources of start-up funding for young entrepreneurs are personal savings/assets, foregoing salaries and money from friends and family (either loans or donations). The previous RSA (The Royal Society for the encouragement of Arts, Manufactures & Commerce) study on young entrepreneurs in the UK and the most recent survey of finalists in the Shell Livewire awards confirm that friends and family were the third most popular source of start-up capital (after foregoing salary and personal savings) for a young entrepreneur and were a more popular financing source than banks.

3.4 Administrative and regulatory framework

Government regulations and bureaucratic formalities also are seen as one reason for large informal sectors in many developing countries, since the costs of formalizing are higher than the gain in productivity from entering the formal sector (World Bank, 2005).

In Cameroon today, entrepreneurs face numerous administrative burdens including business registration, tax administration, obtaining investment approvals and business licenses, coping with copyright and patent regulations, competition law, access to work space and long-term leases, construction and building permits, customs clearances, utility hook-ups, etc.

3.5 Business assistance and support program

The more business assistance a young entrepreneur obtains in the start-up and new business phases the better his or her chance of creating a successful and sustainable business. Support services, including mentors, support networks, business clubs and incubators can hold the key to transforming one-person youth start-ups into successful small and medium businesses. However, as was seen on social legitimacy, finance, regulations and enterprise education, there is a general lack or insufficient awareness and knowledge among young people on how to start and run a business.

CHAPTER 4

DEVELOPMENTS IN YOUTH ENTREPRENEURSHIP POLICY

Youth entrepreneurship can be an important avenue of opportunity for young people. Within the framework of potential efforts to boost employment for young people, it is an additional innovative way of integrating youth into the labor market. In view of rising youth unemployment and the increasing lack of labor demand, promoting youth entrepreneurship can be a valuable additional strategy to create jobs and improve livelihoods and economic independence of young people. Furthermore, it has a multidimensional approach as it fights youth unemployment in two different ways: On the one hand, it creates employment opportunities for self-employed youth as well as for other young people being employed by young entrepreneurs. On the other hand, it provides youth with entrepreneurial skills and attitudes that are necessary to cope with the general shift from traditional ‘job-for-life’ careers towards ‘portfolio careers’. Thus it improves young people’s general employability for today’s and tomorrow’s labor markets.

Entrepreneurship policy has been defined by Stevenson and Lundström (2001) as: Policy measures taken to stimulate entrepreneurship, aimed at the pre-start-up, start-up and post-start-up phases of the entrepreneurial process.

Designed and delivered to address the areas of motivation, opportunity and skills with the primary objective of encouraging more people to consider entrepreneurship, to move into the nascent stage and proceed into start-up and early phases of a business.

Drawing up on this definition, youth entrepreneurship policy can be defined as:

Policy measures taken to foster entrepreneurial activity of young people aimed at the pre-start-up (including entrepreneurship education), start-up and post-start-up phases of the entrepreneurial process.

Designed and delivered to address the areas of motivation, opportunity and skills with the main objective of encouraging more young people to start an entrepreneurial undertaking or venture and at the same time to improve young peoples’ general employability.

This broader definition recognizes all the different types of entrepreneurial engagement (e.g. economic, social and public entrepreneurship, entrepreneurship and cooperatives). Furthermore, it refers to the particular role of entrepreneurship education and training in improving young peoples’ employability on today and tomorrow’s labor markets.

Entrepreneurship policy in general and youth entrepreneurship policy in particular, are still fairly recent and evolving areas. Therefore, it is crucial to understand where these policies are or should be situated. Youth entrepreneurship policy is cross-cutting in nature and therefore necessitates a collaborative multi-stakeholder approach on the part of government and society. This means that for successful policy development in youth entrepreneurship collaboration between different line ministries (education, labor, employment, industry, youth and finance in particular) is vital. As a matter of fact, it is almost impossible to outline the entire array of policies that affect entrepreneurship. As its objective is to foster job creation and to contribute to economic development and growth, it can be seen from different policy angles.

4. Developing and implementing youth entrepreneurship policies

The OECD (2001) observed that there is no single policy model for the promotion of entrepreneurial activity among youth, and that as new programs develop in different cultural and national settings, they tend to show more rather than less variety in their content and delivery mechanisms.

The following are guidelines and suggestions on the development and delivery of youth entrepreneurship policies.

Develop an individual, tailor-made approach

Initiatives and policies promoting youth entrepreneurship should focus on the main factors that facilitate and stimulate, or hinder and impede, the entrepreneurial activity of young people. Nonetheless, every country has to find an appropriate policy mix of initiatives that correspond to the most important barriers and constraints that exist in their countries. Therefore, a tailor-made, holistic approach that responds to different economic, social and cultural situations as well as to particular entrepreneurial framework conditions is required. Successful programs and best practices from other countries can rarely be simply adopted and replicated one to one, but they serve as highly valuable orientations.

Invest in research, benchmarking and testing

Regarding the huge variety of barriers and difficulties young would-be entrepreneurs face, it becomes obvious that primary research is urgently required to get a better understanding of the specific problems and needs of young individuals and entrepreneurs in different countries and environments. An appropriate review of the quality and range of available data and statistics regarding youth in general, and entrepreneurship and self-employment among young people in particular, is also one of the YEN guidelines for the preparation of national reviews and action plans on youth employment.

Carry out detailed evaluations and impact assessments

Objective and accurate impact assessment and evaluation of introduced programs and initiatives are not only relevant for those interested in improving entrepreneurial conditions for young people, but also to those concerned about the cost-effective use of private or taxpayers’ money. A study on “Evaluating Youth Entrepreneurship: the case of the Prince’s Trust” by Greene148 revealed how different evaluation methodologies impact upon program outcomes. Thus particularly less sophisticated studies can lead to different and more positive results. There is a clear need for further methodological development.

Promotion of enterprise education

The promotion of enterprise education is the heart of any YE policy. Identifying and filling the gaps in this field should be the prime task for every government and country. Through awareness raising and familiarizing young people with entrepreneurship as a valuable career path, it promotes positive attitudes towards entrepreneurship and thus a higher acceptance and legitimating in society in the long run.

Mobilize, activate and involve all major stakeholders

Identifying and mobilizing all key stakeholders in this field, defining their particular roles and involving them in an integrated and result-orientated YE policy is vital and necessary. Stakeholders in this area include the public sector, private sector, non-profit sector and other stakeholders. It is apparent that the promotion of youth entrepreneurship is a field which is conclusive for public-private partnership and collaboration. Bringing the various partners closer together on a national, regional and local level is therefore particularly beneficial.

Close the gap between national policy and grass-root, regional and local initiatives

When searching for good examples, practices and initiatives for the promotion of youth entrepreneurship, it is observed that in many countries there are numerous isolated or small-scale initiatives and pilot programs, aimed at developing enterprise skills or supporting young people in business. A major problem seems to be the incoherency, poor co-ordination and the lack of synergy of these projects. Between the high-level national policy for SMEs or entrepreneurship and the grass-roots initiatives operating in communities often lay a clear gap. At the regional and local levels, there is an opportunity to promote and support those currently working at grass roots level and at the same time to gain syne