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Market Access For Youth-Challenges and Prospects - Call For Action
Market Access For Youth-Challenges and Prospects - Call For Action
Market Access For Youth-Challenges and Prospects - Call For Action
This research paper was funded by the Youth Empowerment and Transformation Trust (YETT)
through their partnership with the Economic Governance Initiative (EGI). YETT is a youth
networking organisation committed to supporting the full participation of young people in
sustainable development through advocacy and capacity building of youth organisations in
Zimbabwe.
This report has benefitted from consultations with and contributions of youth experts, legislators
and youth groups in youth entrepreneurship support around in Zimbabwe and the input from the
Open Discourse on Youth Participation in Zimbabwe’s Economy held at Cresta Oasis on 11
March 2020. In particular I would like to thank Dr Mungure, Professor Pamela Machakanja,
Tafadzwa Macheka and the YETT team for their on-going input throughout the writing of this
paper.
2020
Thomas Masese
Assistant Dean and Lecturer
Africa University
College of Business Peace Leadership and Governance
P. O. Box 1320
Mutare, Zimbabwe
maseset@gmail.com; maseset@africau.edu
Tel: +263202060078; 0716661814/0783725322
1
Table of Contents
Title Page........................................................................................................................................................................0
Acknowledgements.........................................................................................................................................................1
1.0 Introduction........................................................................................................................................................3
1.1 Entrepreneurship and Youth Unemployment.......................................................................................................4
2.0 Objectives of the Paper......................................................................................................................................6
2.1. Methodology............................................................................................................................................................7
3.0 Challenges Faced by Youth Entrepreneurs........................................................................................................8
3.1 What is Market Access and Why is it Important?....................................................................................................9
4.0 Major Markets for Young Entrepreneurs and SMMEs...................................................................................10
Figure 1.2: Markets for Young Entrepreneurs.........................................................................................................10
5.0 Market Access Challenges Faced By Young Entrepreneurs..................................................................................11
5.2.1 Lack of Access to Information about Available Markets................................................................................12
5.2.2. Limited Access to Formal Credible Markets due to Informal Nature of Operations.....................................12
5.2.3. Discrimination by Gatekeepers and Resource Providers...............................................................................13
5.2.4. Access to Finance and Infrastructure.............................................................................................................14
5.2.5. Competition from Large Local Corporates and Foreign Companies.............................................................14
5.2.6. Poor Locations................................................................................................................................................15
5.2.7. Compliance with Standards for Export Markets............................................................................................15
5.2.8. Existence Tariffs and Non-tariff barriers to Market Access...............................................................................16
5.2.9. Transport Costs...............................................................................................................................................16
5.2.10. Hostile Operating Environment as a Market Access Barrier.......................................................................16
5.2.11. Negative Attitudes of Youth Entrepreneurs towards Certain Markets and Economic Sectors....................17
5.2.12. Youth Policies Formulated Without Youth Involvement.............................................................................17
5.2.13. Barriers and Impediments to Access to Global Markets..............................................................................17
6.0. Market Access Opportunities for Young Entrepreneurs.................................................................................18
6.1.1 Leverage on Existing Constitution Provisions and Global Frameworks to Lobby for Youth Friendly Market
Access Policies.........................................................................................................................................................18
6.1.2 Formalization of Young Businesses................................................................................................................19
6.1.3. Leveraging Preferential Procurement and Commercial Supplier Diversity Initiatives..................................20
6.1.4 Incentives for Youth Entrepreneurs in Agriculture Value Chains..................................................................21
6.1.5 Ease of Doing Business for Young Entrepreneurs..........................................................................................21
6.1.6 International Opportunities for Young Entrepreneurs and SMEs...................................................................21
6.1.7 Ensure Adequate Support Systems for Young Entrepreneurs.........................................................................23
8.0 KEY ISSUES AND PRIORITIES...................................................................................................................26
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1.0 Introduction
Unemployment, particularly youth unemployment, is a major concern and one of the main
challenges to sustainable development. Demographic pressure and the youth bulge in the
developing world pose a major employment challenge. A focus on youth is particularly relevant
today, given that young people account for a large and growing proportion of the population in
many developing countries (OECD, 2019). Youth, (those aged between 15 and 24 years) who
make up a quarter of the world’s working population (about 1.2 billion people) and represent half
of the world’s unemployed people. ILO (2017) points out that youth tend to face pressure to
migrate because they are three times more likely than adults to be unemployed. According to
UNESA (2015), of these 1.2 billion youth, 66 million young men and women are jobless and
145 million are working, but poor (ITC, 2019). Just under half of these youth live on less than
two dollars a day, as estimated by the UN1. Zimbabwe has a relatively youthful population with
about 62 percent of its 14.8 million total population (UN estimates) under the age of 25 years and
with an annual population growth rate of between 1.68 and 3 percent, projections point to a
population of approximately 23 million by 20302 according to the 2014 Human Development
Report. Youth unemployment, particularly in the developing world, is one of the most pressing
and challenging issues facing the global community.
With the education sector churning and offloading graduates into employment market every
year, the formal economy’s ability to absorb college graduates entering the labor market has
drastically shrunk and a secure wage employment is no longer guaranteed for these college and
university graduates and countries have failed to reap and benefit from the ‘demographic
dividend’. As a result, Zimbabwe faces an unprecedented level of youth unemployment which
has almost reached a crisis level among a plethora other economic challenges. The International
Labor Organization (ILO) and the World Bank estimates indicate that by the end of 2018,
Zimbabwe’s youth unemployment3 rate was 8.18%. The following graph shows the youth
unemployment level in Zimbabwe between 1991 and 2019. Figure 1.1 below tracks Zimbabwe’s
1
State of the Urban Youth 2010/2011: Leveling the Playing Field’,
http://www.unhabitat.org/pmss/listItemDetails.aspx?publicationID=2928
2
Human Development Report, 2014
3
Youth unemployment is the share of young man and women in the 15-24 years age group who are part of the
labor force available for and seeking employment but are neither employed nor in the education or training system
3
youth unemployment from 1991. For these reasons, fostering youth entrepreneurship has gained
traction in the global and national development policy agenda.
Figure 1.1: Youth Unemployment in Zimbabwe
4
Chigunta (2002) defines young entrepreneurs as young individuals developing and making full
use of their own abilities, alone or in groups; young people defining their own problems,
identifying solutions and finding resources to realize their vision; and young people realizing
their own potential and vision, growing in confidence and taking active roles in their own
communities. Entrepreneurship has proved to be one of the formidable responses to youth
unemployment. Entrepreneurs create jobs, increase innovation, raise competition and are
responsive to changing economic opportunities and trends (Green, 2013) and offer indigenous
solutions to economic disadvantages (De Clercq and Honig, 2011). The role of entrepreneurship
in economic development involves more than just increasing per capita output and income: it
involves initiating and constituting change in the structure of the business and society through
innovation and commercialization of ideas (Hisrich, and Shepherd, 2008) and it also spurs
national prosperity and competitiveness (Saemundsson & Schott, 2010). Its role in economic
development through employment creation has become a priority for many countries.
One of the goals of the 2030 Agenda for Sustainable Development is to build dynamic,
sustainable, and innovative and people-centered economies, promoting youth employment and
women’s economic empowerment, in particular, and decent work for all (UN, 2015). Youths
who have embarked on entrepreneurship have become one of the main driving forces behind
wealth creation, job creation, poverty reduction, and reduction in income inequalities
(Chingunta, 2002). The Government of Zimbabwe considers entrepreneurship and the creation
of job opportunities for the large and growing number of young people a top priority—and a
prerequisite for maintaining peace and promoting pro-poor growth. Zimbabwe has been
promoting entrepreneurship and has promulgated many policies to support entrepreneurship as
part of youth and women economic empowerment. Youth economic empowerment impacts the
future of small and medium-sized enterprises, the quality of their products and access to viable
local and export markets (WTO, 2019). The ballooning body of unemployed youths in
Zimbabwe places an additional burden on limited government fiscus that already has a large
number of demands on it (Herrington et al, 2009). Young people’s engagement in
entrepreneurship helps them to achieve economic independence and reduce their reliance on state
welfare (Fatoki and Chindoga, 2011). Given that young people account for a large and growing
proportion of the population in many developing countries, a focus on youth in entrepreneurship
is particularly relevant today as part of the discourse to solve youth unemployment.
5
2.0 Objectives of the Paper
According to Jefferis (2010) young entrepreneurs face a plethora of challenges that threaten the
survival, growth and sustainability of their small, micro and medium enterprises. These
challenges include access to markets, financial issues and competitiveness (CEDEFOP, 2010;
Centre for the Development of Enterprise, 2013). Although SMEs account for more than a third
of gross domestic product (GDP) in most developing countries, skill shortages restrict their
capacity to change, compete and connect to key markets. Young entrepreneurs face an
environment, which is volatile, uncertain, complex and ambiguous (VUCA) with a variety of
constraints, and impediments that hinder the growth and development of their enterprises.
This paper explores challenges faced by young entrepreneurs in accessing local, national,
regional and global markets. Specifically, the objectives of this paper were to objectives were to
identify challengers and constraints to market access faced by young entrepreneurs in Zimbabwe;
identify and explore opportunities for increasing market access for young entrepreneurs to local
and global markets with the aim of reducing poverty. Other issues include determining how to
reduce information asymmetry about existing and emerging market opportunities in local,
regional and global markets for young entrepreneurs. Mechanism to expand linkages for young
entrepreneurs to large corporate value chains and government markets. Formalizing their
businesses and meeting standards are major obstacles to market access and the paper also seeks
to identify how young entrepreneurs can be assisted to regularize their operations in order to
meet standards needed to access local, regional and global markets. A range of contemporary
policy initiatives to address business constraints on market access and catalyze new market
opportunities for youth-led enterprises in Zimbabwe are proposed and examined.
While a lot of effort has been put by the government and other stakeholders such as banks to
finance SMMEs to help them succeed; it should be noted that no matter the amount of funding, if
an SMME has little or no access to markets, failure is imminent as business success comes
through sale of goods and services (Mutoko, 2014). Special attention needs to be given to role of
market access on the potential success of youth-led businesses.
This paper aims to analyze challenges faced by young entrepreneurs in business especially with
regards to accessing local, national and regional markets as well as identify ways of increasing
6
access by young entrepreneurs in developing countries to markets with the objective of poverty
reduction. Effectiveness of lobbying and advocacy efforts by youth oriented CSOs for effective
youth policies depends on their understating of challenges faced by your entrepreneurs in
accessing markets for their products. This report surveys what young entrepreneurs must do to
achieve effective and sustainable access to markets, and how different private and public
organizations can contribute to this. Existing local and international legislative and policy
frameworks that advocate for market access by Zimbabwean business with special emphasis on
young entrepreneurs are also analyzed. Following engagement with young entrepreneurs and
youth in various sectors, the paper also outlines impediments they face in accessing markets like
government institutions, large corporates, small business to small business (S2S) opportunities,
local authorities (S2L) and export markets. It maps entrepreneurial skills needed by young
entrepreneurs needed to create export-ready companies and make companies go global. The
study will also point to action areas for youth based CSOs in advocating for market access for
youth-led businesses and young entrepreneurs.
2.1. Methodology
This paper uses a framework of analysis based on literature review and input received from
stakeholders at the Open Discourse on Youth Participation in Zimbabwe’s Economy facilitated
by the Youth Empowerment and Transformation Trust (YETT) through the Initiative for
Economic Governance held at Cresta Oasis Hotel on 11 March 2020. It also took into account
input from youth experts, young entrepreneurs, legislators and academics
When engaging with these young entrepreneurs on the challenges they face, the list is endless
According to OECD and EC (2014) young entrepreneurs face a variety of real barriers and the
principal areas of concern affecting the development of businesses owned by the youths outlined
in the following table:
2. Marketing and Market Lack of marketing skills and/or lack of sales and
marketing support;
Access
Market barriers, and ‘discrimination’ in product
markets,
Lack of visibility in the market due to lack of scale,
poor products and negative perceptions on youth
entrepreneur’s products quality;
Lack of access to local, regional and global markets due
to failure to meet standards of these markets.
Stiff competition from well-established local and
foreign businesses
3. Product Quality Failure to meet quality standards
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producers face difficulties, for example in meeting high standards, but also see new initiatives
(Page, 2003).
Entrepreneurs with greater product market access have a wider range of opportunities to
consider, while those with limited product market access must consider a more reduced range of
options. For most young entrepreneurs, accessing viable markets and value chains with
supportive ecosystems is one of the major challenges and may be limited either because markets
may be highly localized, vertically integrated, or export oriented or the young entrepreneurs
themselves have a limited understanding of the needs of their markets. Accordingly, limited
product market access is a key barrier to the survival and growth of minority entrepreneurs
9
especially youth and women (Sonfield 2014). To build successful business profiles and
profitability, young entrepreneurs need to understand the needs of their local, regional, and
global customer base and should have entry points and connections to them. Organizations
supporting young entrepreneurs and policy makers are increasingly beginning to understand that
intermediation can be pivotal to their success and there is need to support youth led businesses in
their quest for market access. When young people are prepared and empowered to take
advantage of emerging market platforms, the challenge of youth unemployment diminishes.
In developed economies, private sector takes a leading role in offering the market for young
entrepreneurs. Direct consumers, other small businesses and large corporates are a ready market,
through the vertical and horizontal linkages. Over 50% of businesses in Zimbabwe, however,
rely on government for market.
Market access is a multistage process with a number of preconditions. Factors that influence
market access vary from market to market and commodity to commodity. These include:
Supplier- Customer Links- whether they are permanent or not, formal or informal,
repeated contracts or once-off
Levels of deliberate barriers (tariffs and other trade barriers) and unintentional
barriers (administrative inefficiencies)
Whether trading arrangements are local within the country or across the borders
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Nature of the markets- whether selling standardized commodities or differentiated
products
Nature of quality and consumption standards in the markets
To move into new production and new markets a potential producers must have the awareness of
market existence or new product and must meet the requirements necessary to enter the market.
They must also be aware of the need to change products, to improve them and adapt, because
markets and therefore market access are not static. They must be able to produce the product:
this means access to technical capacity, labour, investment and working capital as well as to the
necessary inputs. At the marketing stage, a seller needs information about the market: tastes,
standards, how products are sold, or access to support services which offer these. A seller needs
efficient communication links and then transport links, and benefits from low deliberate barriers
(such as tariffs or other trade restrictions) and unintentional barriers (inefficient administration).
A number of challenges limit market access for young entrepreneurs and their businesses
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information available to network members (Shelton 2010). This limited exposure and access
could arise from a lack of professional and educational connections.
Second, some resource providers deliberately refuse to provide valuable information to young
entrepreneurs because they do not view these entrepreneurs as capable. Lack of timely and
relevant market information to all market actors’ results in lack of trust and sometimes
dishonesty. This information asymmetry undoubtedly lead to rent-seeking behavior and the
emergence and flourishing of dubious intermediary actors who further damage the trust
relationships required for efficient and profitable marketing along the whole value chain
(Robertson, et al, 2003).
Most young and potential entrepreneurs are also not aware of government programs specifically
designed to help them start businesses and access markets. Mass and Herrington (2006) aver that
most young entrepreneurs are not aware of the various support programs available and as a
result, youths with entrepreneurial tendencies perceive that there is no support from government.
Young entrepreneurs need to do a lot of market research to understand the needs of their markets
as well as build strong social networks that give the strong market fillers.
5.2.2. Limited Access to Formal Credible Markets due to Informal Nature of Operations
Certain characteristics of youth-led businesses have largely affected their access to formal
markets, profitability, survivability and growth. In Zimbabwe, most young entrepreneurs face
market recognition and acceptance challenges because they have largely remained informal and
unregistered. Being part of the informal economy restricts how much the youth entrepreneurs’
businesses can grow. They cannot legally respond to the numerous tenders that potentially large
clients from the public sector may float. Scrutiny of their business models generally reveals that
young entrepreneurs are often viewed as not creditworthy, or suitable for investment, primarily
because they lack consistent and deep access to their perceived target markets. In other words,
their order books are lean and their access to markets is limited. Ensuring that young business
people are linked to the right markets is one of the important support systems that both the public
and private sectors can give to support their growth.
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Entrepreneurs with greater product market access have a wider range of opportunities to
consider, while those with limited product market access must consider a more reduced range of
options. In most markets be it in government or the private sector, gatekeepers (e.g. procurement
officials) influence the allocation of both resources and opportunities across individuals and
firms (Shelton 2010). Gatekeepers influence which entrepreneurs and firms have the opportunity
to establish exchange relationships with a particular group of customers and vendors. The
entrepreneur’s access to a product market is, at least to some extent, a function of the
entrepreneur’s access to information and the preferences of resource providers and gatekeepers
(Shelton 2010). The preferences of resource providers and gatekeepers can be social, economic,
or both. A gatekeeper will allocate more opportunities to a firm launched by an entrepreneur
whom he prefers. Similarly, a resource provider will have more extensive exchanges with a firm
launched by an entrepreneur whom he prefers (Cook and Whitmeyer, 1992). The political
background of the entrepreneur can influence whether her firm will be favored or disfavored. In
Zimbabwe, political inclinations, alliances and affiliations determine an entrepreneur’s ability to
access certain markets especially government markets. Bates and Tuck (2014) document overt
and covert discrimination experienced by youth entrepreneurs from customers, government
departments, banks and financial institutions.
Young entrepreneurs find it difficult to get information regarding access to capital and the
available investment funds. Even for those who would have had access to such information, the
processing itself is usually too long and characterized by bureaucracy and corruption. Thus, by
the time loans were processed some economic opportunities would have been lost.
The pricing of equipment is also beyond the reach of many youth entrepreneurs as they often
cannot afford to purchase locally manufactured pricier options and where affordable,
transporting the equipment to operational points is a mammoth task. Adding to the above, the
geographical location of some youth-run enterprises makes it difficult to move goods to where
the markets are due to lack of the transport infrastructure, or where present; the exorbitant
transport costs.
13
Youth entrepreneurs also face stiff competition and market acceptance challenges in the markets
they operate as customers prefer to work with large and established companies. As protectionist
barriers crumble in emerging markets around the world, multinational companies are rushing in
to find new opportunities for growth. The formation of regional groupings like SADC,
COMESA and the recently signed African Continental Free Trade Area (AcFCTA) create both
market opportunities and threats for entrepreneurs and consumers. For local consumers, the
immediate benefit is availability of wide choices but for small businesses and young
entrepreneurs, the influx often appears to be a death sentence with the loss of dominant positions
in protected markets. In addition to competition from large local corporates, young
entrepreneurs face foreign rivals wielding a strong spectrum of advantages ranging from
seasoned marketing and management skills, advanced technology, superior products, powerful
brands and substantial financial resources. Locally, young entrepreneurs face market recognition
and acceptance challenges as well as stiff competition from well-established local businesses and
other foreign businesses that operate in the country especially those operated by Nigerians,
Indians and Chinese. This has led to many entrepreneurs failing to scale their operations, and in
some cases being relegated or forced to operate in the informal sector. The monopolistic
behaviors of some of the foreign companies businesses create barriers that inhibit entry into the
market by those young entrepreneurs who do not have the critical mass and muscle.
Although the youth entrepreneurs are very innovative and skillful, locations in which most the
young entrepreneurs operate from especially from under trees, make shift shacks, plastic made
shades, dilapidated buildings in the city centers and high crime areas like Magaba Market in
Mbare, Sakubva and Green Market in Mutare make them lose part of their market share since
customers usually develop a negative perception and attitude about the products and services
which are being produced and marketed in these areas.
A number of countries and trade blocks to which Zimbabwe exports have also raised an array of
entry barriers both tariff and non-tariff based. The non-conforming quality of products produced
by some of the young entrepreneurs has inhibited their access to export markets like the EU
14
where standards and certifications by recognized bodies are conditions for entry. Standards
encompass technical standards that save production costs, safety and health standards (both of
the product itself and how the good is produced or a service is performed), social standards
(including both labour standards for all sizes of employer and the complex of labour and
empowerment standards in fair trade) and environmental standards (including types of
agricultural production). Some standards are illegally imposed, leading to extra costs of meeting
them and of trying to dispute them. Though most of these standards are not legally, compliance
protects sellers from the risk of being perceived as having fallen below standards by
inadvertence.
Compliance with some of the standards has cost implications which affects competitiveness for
most producers hence creating entry barriers to such markets. Monitoring external standards
requires an external structure, in contrast to those imposed and enforced by local buyers. For
certain production standards, where there is no visible evidence from the product (organic
production, labour or environmental standards), there is there is an additional cost of obtaining
external certification that the standard has been met. Setting up the institutions to provide the
internationally recognised certifications requires some fixed costs and this cost will be
particularly high if production scale is small, either because a country is small or for a new
producer building up capacity. In Zimbabwe all imported products need standards certification
from Bureau Veritas, a government appointed international standards organisation and this
imposes additional costs to importers who pass this cost to consumers
Many of the access barriers to international markets are NTBs (non-tariff barriers), and often
relate to the need for smaller firms to deal with two or more sets of regulatory requirements once
they go beyond a single market or across borders. There are significant tariffs and quotas on
various products like agricultural crops and other products which compete with those of
developed countries. Any new initiative to access foreign markets must take these into account or
indicate how countries could negotiate for changes that allow for preferential entry treatment.
15
Other barriers to market access include the high cost of the transport system in Zimbabwe for
transporting raw materials and finished products and its lack of reliability (Fatoki and Chindoga,
2011). Transport system in Zimbabwe is very unreliable and costly hence young entrepreneurs
face difficulties in transporting their products and raw materials which are mainly sourced from
farms, mines and major cities like Bulawayo and Harare and across the national borders namely
in South Africa or via Beira in Mozambique. Most young entrepreneurs who are in business do
not have transport of their own so they depend on the public transport which is costly and
unreliable. The high cost and erratic nature of supply make transport both expensive and
unreliable with negative competitiveness implications for young entrepreneurs.
Youth entrepreneurs face difficult operating environments as a major challenge which make
compliance with regulations both difficult and costly. These include high licensing fees charged
either in foreign currency or on prices rated at black market exchange rates which act as
deterrents to the formalization of businesses in terms of company registration, sector licensing,
shop licensing and tax registration thresholds. Erratic utilities also contribute to operational
difficulties, as the local power and water companies are inconsistent in supplies with the
alternatives not being economic for micro enterprises. Political uncertainties is also a challenge
for youths entrepreneurs on the premise that they become reluctant to invest much into their
businesses, with the fear that political and policy directions may change and impact committed
investment (Mukora, 2017)
5.2.11. Negative Attitudes of Youth Entrepreneurs towards Certain Markets and Economic
Sectors
Government and development partners keen to address youth unemployment and promote youth
entrepreneurship should recognise that the negative perception among youth regarding
agriculture and agribusiness as a potential career path is partly driven by the difficulties they
encounter in penetrating these markets with their products. Compounding the problem is the fact
that young agribusiness suppliers often lack the requisite quality and volumes to compete with
other rival producers.
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5.2.12. Youth Policies Formulated Without Youth Involvement
The major challenges facing youth entrepreneurship descend from policy formulation level.
Some policymakers have negative perceptions of the youth as a high risk group. Policies that
boost the participation of women, youth and other marginalized groups in global commerce can
make trade more inclusive and promote economic empowerment. However youth
entrepreneurship policies are scattered over many legislative pieces rather than aggregated in one
document.
SMEs are less well-resourced than large firms for meeting globalization challenges but
experience the same needs as larger firms for prior research and preparations before embarking
on global markets. The internationalization process for young entrepreneurs and their SMEs can
be achieved through any of a range of cross border activities, including trade (export and
imports), international investment, and participation in strategic alliances, partnerships and
networking arrangements affecting a variety of business functions ranging from research and
product development to distribution (OECD, 2004). Barriers and impediments that deter or
inhibit SME access to global markets deny enterprises and ultimately domestic economies the
significant potential gains to be reaped on global markets (OECD, 2004). The unique business
environment of each target “foreign” market, characterized by its own configuration of
regulatory, administrative, policy and cultural dimensions, embodies a formidable challenge to
the would-be young exporter, investor, or future network partner, involving both complexity and
risk dimensions, for which the exporting SME is largely ill-prepared. Competition policy,
legislative and regulatory frameworks, telecommunications infrastructure, research and
education policy all contribute to SME preparedness or lack of preparedness for globalization.
Barriers can include intellectual property rights; political risks; corruption and rule of law issues.
They can relate to the entire range of business operations, having implications for business and
organization models, managerial and technological capability; and innovative capacity.
17
6.0. Market Access Opportunities for Young Entrepreneurs
There is need to identify ways of increasing the access by young entrepreneurs in developing
countries to markets, with the objective of reducing poverty. Strong evidence is abound
indicating that those who are not integrated into markets are among the poorest (Page, 2003). A
variety of market initiatives can help small producers into new markets. There is a wide variety
of interventions recommended to support young entrepreneur’s access to various markets levels
ranging from micro, meso and macro. Micro level interventions are those designed to assist
specific individuals or businesses while meso level interventions are designed to create the
institutional environment necessary to facilitate entrepreneurial activity market access in
particular sectors or areas. Macro level interventions are designed to create a good business
climate across the economy broadly. Given the issues raised above and their implications on
advocacy, a number of questions arise on the way forward. How can young entrepreneurs gain
access to markets? How can government and corporates be assisted to open up and facilitate
product access for young entrepreneurs? How can young entrepreneurs be supported so that they
can comply with local, national, regional and global regulations, standards and certification?
6.1.1 Leverage on Existing Constitution Provisions and Global Frameworks to Lobby for
Youth Friendly Market Access Policies
The Constitution of Zimbabwe in Chapter 2, Section 14:2 Empowerment and Employment creation
provides that: At all times the State and all institutions and agencies of government at every level
must ensure that appropriate and adequate measures are undertaken to create employment for all
Zimbabweans, especially women and youths. Chapter 2 Section 20 (1) (c) of the Constitution also
states that the State and all institutions and agencies of government at every level must take
reasonable measures, including affirmative action programmes, to ensure that youths, that is to say
people between the ages of fifteen and thirty-five years— are afforded opportunities for
employment and other avenues to economic empowerment; The 2030 Agenda for Sustainable
Development promotes market access to developed markets for less developed countries. Goal 17.1
calls for the strengthening of the means of implementation and revitalization of the global
partnership for sustainable development and the realize timely implem entation of duty free and
quota free market access on a lasting basis for all least developed countries, consistent with World
Trade Organization (WTO) decisions including by ensuring that preferential rules of origin
applicable to imports from least developed countries are transparent and simple and contribute to
18
facilitating market access. Globalization and trade offer new market opportunities for young
entrepreneurs, but they have also upped the competitive pressure on firms. This means that young
entrepreneurs must understand the needs of global markets both in terms of standards to be met and
regulatory requirements to access these markets.
6.1.2 Formalization of Young Businesses
Formalization of the informal economy can take different forms: registration, taxation,
organization and representation, legal frameworks, social protection, business incentives/support
Governments need to begin investing in national support programmes for SMEs to build their
capacity and provide business growth, so they are able to produce export-ready products and
services for a much larger market. However procurement quotas would only be effective to
SMEs in a framework of formalization. Successful formalization of SMEs require that
government should focus on key areas which include sectoral registration, labor formality,
financial inclusion, market linkages and pricing as well as formalization of their work-spaces
especially informal traders (Milanesi, Guercini & Tunisini, 2020). Success in these areas means
that these entrepreneurs can now formally respond to government tenders, gain access to finance
and market information, enter enforceable commercial contracts, gain access to government
subsidies and incentives, including procurement bids and export promotion packages and
membership in formal business associations. Formalization brings benefits, such as improved
quality and quantity of employment, increase in fiscal revenue and overall improvement in
quality of life. Formalization helps out government in policy targeting and formulation of
strategies to address the challenges faced by the SMEs sector. Young entrepreneurs should be
encouraged to formally register their businesses in order to gain recognition in the market. Most
companies and government entities want to know that their suppliers are responsible corporate
citizens who comply with government regulations and pay their taxes. Companies no require
their suppliers to provide their tax clearances and proof of registration in order to prove
compliance.
19
participate in the procurement process, particularly in comparison to large companies. As alluded
to earlier, barriers may take the form of information, finance, regulatory and capacity obstacles
that can occur throughout the procurement process, from the initial preparatory stage to the post-
award and conflict resolution stages (Rainier and Veiko, 2010).. The artificial expansion of
product market access produced initially by the programs allows young firms to achieve a critical
threshold levels beyond which entrepreneurial success and, in some cases, growth are
increasingly likely. The young entrepreneurs gain the opportunity to serve large government and
commercial clients, thereby penetrating rapidly growing industries and/or market segments.
SMEs may receive preferential support through public procurement due to their prevalence in
nearly all economies and the benefits from engaging with them (DCED, 2017).
These initiatives can be incorporated in legislation like the Procurement Authority Act of
Zimbabwe (PRAZ). Some countries, such as Kenya, Rwanda and South Africa have in recent
years, passed public procurement laws that seek to allot a percentage of government spending to
purchase goods and services produced by enterprises owned by youth (and women). In 2012,
South Africa crafted a procurement accord which was ratified in line with the country’s
Preferential Procurement Policy Framework Act of 2000 and it requires state enterprises to
ensure that only locally produce goods and services with a stipulated threshold for local
production and content are procured. Some large corporates have also started to solicit input
supply from young farmers and aggregators. But despite this positive move, far more can and
should be done to support and encourage youth entrepreneurs in Africa’s food value chains. This
can be done by ring-fencing market opportunities for youth to supply component and end
products to public and private buyers willing to allocate a portion of their spending specifically
to youth-owned farming and agribusiness companies. In this regard, the government can come up
with the Youth Access to Government Procurement to help youth entrepreneurs access
government tenders. Large corporates can create value chain linkages and pairing between large
companies and youth-led businesses
6.1.4 Incentives for Youth Entrepreneurs in Agriculture Value Chains
The value chain concept is based on the idea that at the top there is a principal off-taker, and
cascading down from there are various suppliers, providing components of the end product. In
agriculture, this value chain moves from ‘farm to fork’, and from primary produce grown on
farms to finished, packaged, products sold in supermarkets. Even with market access, not all
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youths find find agriculture, agribusiness, or the value added food sector attractive. If we are to
encourage greater participation in the sector – which will be critical for food security in Africa –
we will need to provide incentives. That means ensuring a degree of guaranteed market access,
coupled with supplier development related technical assistance and debt and equity capital. The
aim is to provide certain minimum levels of profitability and sustainability for youth-led
enterprises. Such a scenario is likely to change the way that youths in Africa think of agriculture.
From being a dead-end prospect with few opportunities, it could well emerge as the career path
of choice for a large sector of the continent’s young people.
21
(AfCFTA) gives entrepreneurs across the continent access to a much larger market. Africa is
creating one of the world's largest single markets. What does this mean for entrepreneurs? If
every African country joins AfCFTA, it’s expected to be one of the world’s largest single
markets, accounting for $4 trillion in spending and investment across the 54 countries. It is
therefore important that young African entrepreneurs understand how these regional and global
markets could benefit them and their ventures. For many enterprises gaining access to
international markets and internationalization is a strategic instrument for their competitiveness
and their further development. Gaining access to global markets can help realize the potential for
prospective high-growth firms, and is often an essential strategic move for SMEs with large
investments in intellectual property.
Entrepreneurs should design new trade roadmaps for their businesses, informed by the
agreements to widen the markets they have access to. Governments, the private and civic sectors
still need do a lot to help young entrepreneurs with market access and youth empowerment
programs should targeted at. There is need for governments, private sector and the civic society
to help the youth access markets that they are locked out of because of capacity, duration in
business or barriers of trade. Governments have a role to play in order to lower the barriers faced
by entrepreneurs who wish to globalize their activities – thereby benefiting, in particular, a
category of entrepreneurs whose businesses have high growth and export potential and who
could develop and exploit niche markets and expand their businesses on international markets.
Governments need to ensure that regulatory, administrative and policy environments do not
inhibit access to global markets. Efforts by governments seeking to ease such barriers through
the WTO Round and the appropriate channels would benefit SME trade and FDI involvement.
Government and other market development agencies need to facilitate trade and investor
missions platforms for young entrepreneurs on the continent who are looking to expand their
markets. There is a huge amount of talent and potential that exists in Africa, but without a
platform, it will be difficult for some of this talent to scale beyond their communities, let alone
the continent. However, before even discussing scale, there is need to ensure that entrepreneurs
are adequately trained in selling their products and services to international markets;
entrepreneurs are well informed of export procedures, including customs processes and quality
22
requirements; entrepreneurs understand financing facilities available for export businesses and
that entrepreneurs produce goods and services that are in demand beyond their communities
Information asymmetry creates one of the major barriers to market access. Information provision
mechanisms and training for youth by government agencies responsible for trade on entry
requirements into foreign markets. Creation of rapid knowledge networks which help provide
information about current prices in different markets, marketing opportunities, products that need
to attract a range of customers. Social media can be leveraged in facilitating market access for
youth and reducing information asymmetry. Technology is integral to the movement of goods
and services, especially with the introduction of pan-African business-to-business (B2B) and
business-to-consumer (B2C) platforms. Examples including Jumia, Kenya’s MPESA and
Zimbabwe’s Eco Cash already show that Africa is truly becoming one market. Technology can
create new spaces for youth participation in markets. A mix of mobile and web technology can
23
harness the best of both mobile and web-based functions, allowing organizations to innovate
business communications and facilitate transactions between producers, marketers, traders, and
exporters who are disadvantaged by their location and/or the level of economic development.
With technology , the following services or products can offered: market intelligence (SMS
price bulletins, trade alerts, advertisements on information boards); product marketing
opportunities (agro-inputs, processed flour, mobile money, water tanks, etc.); transaction security
services (TSS) tracking platform (commodity trade facilitation on commission basis); SMS
platform for sharing market intelligence; business-to-business (B2B) learning platform for
sharing new business opportunities; finance for short-term credit on registered transactions.
7.0. Possible Initiatives by YETT and CSOs in Promoting Market Access: Agenda for
Greater Youth Participation in the Zimbabwe Economy
In conjunction with ZimTrade and other trade related CSOs, YETT can, annually, facilitate
young entrepreneurs to undergo youth export incubation and acceleration programs that aim to
capacitate youth-owned businesses to become export-ready through training and hands-on
mentorship from local and international experts as well as developing market linkages. will
24
focus on youth-led businesses with potential for export markets. This youth incubation
programme will ensure that young people are capacitated and able to create sustainable
export enterprises that guarantee the future trade success for Zimbabwe, s the young
people account for a large and growing proportion of the population in many developing
countries.
25
7.1.6. Seek, through the WTO Round and other channels, to ease trade barriers. Progress in
this regard will facilitate efforts by SMEs to access international markets.
7.1.7. Promote the role that foreign direct investment can play as a vehicle for SMEs to access
international markets. In particular, the inclusion of local SMEs in the supply chains of
multinational enterprises, and their resultant (indirect) involvement in exporting activity can
lead to significant diffusion of technology and more efficient business models, thereby
raising the international competitiveness of SMEs.
7.1.8. Encourage the smooth, cross-border growth of SMEs by reducing the need for
internationally active SMEs to comply with multiple sets of rules or requirements.
Important areas in this regard include standards, intellectual property rights, financial market
regulations and other regulatory domains.
7.1.9 Facilitate access to the information SMEs need to operate internationally. Particularly
important is information relating to tax, regulatory frameworks and requirements, advisory
and support services for SMEs and dispute resolution procedures.
Lack of information on how to access both - Have workshops or platforms and invite experts
local and international markets from various key institutions to explain their
procedure or regulations to young entrepreneurs
Target institutions like:
o ZIMRA
26
o ZIMDEF
o ZIMTRADE/ZIDA
o ZIMRA
o Ministry of Mines
o Registrar of Companies
o NSSA
o
Haven information platforms- online and offline
databases accessible to the youth that give and
provides information in various languages
creation of rapid knowledge networks among youth
businesses
Large corporates not very supportive to small Advocate for strong value chains
business
Young entrepreneurs should understand the Design thinking
available market opportunities Capacity building
Consider quality and standards when you are YETT should come up connections or workshops
a young entrepreneur that
Create or support Innovation HUBs to improve
quality
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