“Investing in young entrepreneurs is a necessity”

For some years now, the geopolitical landscape has been changing rapidly. However, what has not changed is the steady pressure on rural people and food systems. More than ever before, recurring climate shocks, rising fragility and persistent under-investment have been shaping reality in the rural regions. “These forces squeeze farmers, agricultural workers and rural enterprises first of all. And when the first mile is under strain, the whole food system feels it.” With these words, Alvaro Lario, President of the International Fund for Agricultural Development (IFAD), opened the 49^th session of IFAD’s Governing Council, which was held in Rome, Italy, in mid-February.

At the meeting, IFAD Member States came together for consultations for the fourteenth replenishment of the Fund – “IFAD 14” –, starting a year-long consultative process to set its strategic priorities for the 2028 to 2030 period and commit new financial contributions to support its work. Here, against the background of declining finance for development, the emphasis was on sounding out options to cooperate with the private sector.

Making farming a business

Three priorities guided the agenda for the consultations: investing in small small-scale farmers to make sure they have access to markets and to value chains – by providing them with know-how, technology and finance; fostering entrepreneurship and empowering rural youth and women to create rural jobs; and raising resilience of rural communities to food and climate shocks.

Impact assessments of IFAD’s work were said to have shown that the resilience of rural communities – climate or economic – could be improved through the measures by one third, Lario claimed, with one goal always being not only to invest in subsistence agriculture but to make farming a business as well.

Taking advantage of the demographic dividend

And here, young people constitute one of the key target groups – not as beneficiaries, but as leaders in the centre of rural transformation, the IFAD President said, reminding the meeting that there are 1.3 billion adolescents in the world today (defined by the United Nations as those between the ages of 10 and 19), making up 16 per cent of the world’s population. Roughly half of them live in rural areas in developing countries or emerging economies, where investment gaps have created an “opportunity deficit” that keeps them from reaching their full economic potential. Closing that gap was central to producing more food for a growing global population and creating jobs across the entire agricultural value chain, from farming to storage, processing, marketing and export, Lario maintained, insisting: “Investing in young entrepreneurs is therefore not a choice, but a necessity if we are to build sustainable and resilient food systems.”

Tony Elumelu (l.) and Alvaro Lario. Photo: IFAD/ Hannah Kathryn Valles

The philosophy of “Africapitalism”

“When we invest in young entrepreneurs, we do not just support individuals – we reduce poverty and enable rural communities to grow from within,” stressed guest speaker Tony Elumelu, Chairman of the United Bank of Africa (UBA) and pan-African investment group Heirs Holdings, as well. In a discussion with the press in the run-up to the consultations, Elumelu gave an insight into his philosophy of “Africapitalism”, which positions the private sector, and most importantly, African entrepreneurs, as the catalysts for the social and economic development and thus for spreading prosperity on the continent.

Getting the private sector on board

Emulelu called on the private sector – in Africa in particular – to invest in critical sectors that have the ability to catalyse economic transformation. He referred to the example of electricity. Without improvements in this sector, one would not achieve much – neither in industrialising Africa and in the digital revolution nor in creating employment and in helping to empower young Africans. “We cannot grow Africa without power and we cannot grow Africa without food,” said the Nigerian economist, who has funded over 24,000 young African business entrepreneurs with his Tony Elumelu Foundation, around a fifth of whom operate in agriculture and agribusiness.

Silvia Richter, Rural 21

More information:

• IFAD’s position paper “Matching the Moment: The role of the private sector in delivering rural transformation”
• Link to IFAD’s website
• Link to the website of the Tony Emulelu Foundation

Further reading:

Rural 21 issue no 3/2024: “Boosting entrepreneurship”

Rural 21 issue no 3/2023: “Joining forces for agri-food systems transformation"

Rural 21 issue no 4/2022: "Financing sustainable agri-food systems"

Rural 21 Dossier on “Rural Youth”