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Youth unemployment in Africa: it's not about aid, but economics

Youth unemployment in Africa: it’s not about aid, but economics

BY TUNGA

Last week in Ivory Coast a top took place between African and European leaders to discuss future strategies to among others create youth employment in Africa. Leading Dutch radio station BNR invited Tunga founder Ernesto Spruyt, along with Irene Visser of the Netherlands African Business Council (NABC) and journalist-turned-entrepreneur Hans Moleman. They discussed what role European companies can play in these developments. You can listen the entire interview (in Dutch) online (from 0h50m to 1h10m). But for our non-Dutch speaking followers here are some highlights of Ernesto’s contribution to the discussion…

Equal opportunity more important than aid for addressing youth unemployment in Africa

When asked whether providing government aid to the African continent is a viable strategy, Ernesto responded:

“You know, the funny thing is, we started Tunga to address youth unemployment in Africa by creating IT jobs. And set the company up as a social enterprise. But in principle this is of limited interest to the developers who work for us. They don’t want to receive aid, they just want to participate economically. And to be productive and determine their own destiny. So I think there is a role for the government. But it would be healthy if that would center around facilitating the economic process.”

Interviewer: “But is your business model viable? Because I heard that in Uganda you pay developers as much as $2,000 per month whereas the median income in that country is $50 per month.”

Ernesto: “That is very viable as it is nevertheless a very attractive fee for companies around the world [to pay for a software developer]. Because there is still a major shortage of software developers globally.”

Then when one of the other panel members remarked that in terms of job creation software development is just a small niche, Ernesto rebutted very simply: “A $200 billion per year niche, that is.” In reality, the global software market annually stands at $443 billion, according to IDC data.

“Because of our approach, our developers go the extra mile for our clients”

Interviewer: “Why do companies work with Tunga? For doing good, or is price the most important reason?”

Ernesto: “It’s very simple. Software development is extremely suitable for having people work remotely. We have clients who hire developers via us that become part of their team as a remote worker. And we have clients who have a software project, say an app or a website, and we take care of everything for them.

We ourselves do this because we both want to run a profitable business. And we want to be part of the solution for youth unemployment in African. So it cuts both ways.

And most of the times that also counts for our clients. Listen, all of our clients want to receive a quality product, delivered through a smooth process. That is number 1. What makes us special is that we work with highly motivated developers. Because of our approach, they are willing to go the extra mile for you as a company. This message bodes well with those companies. And it is also being appreciated [by actual clients].”

Don’t depend on governments, go your own way

Ernesto was also asked whether African governments do enough to create a good business climate. Ernesto highlighted that Tunga tends to go its own way, without specifically relying on or crossing paths with government institutions.

“Let me say first that I really love being there [in Uganda]. And that certainly helps. But we have hardly experienced any significant problems in doing business, neither in Uganda, nor in Kenya, Nigeria or Egypt. We hardly have contacts with government institutions.

Before, I spent 7 years in Russia, and I have become aware that things can go wrong if you get on the wrong person’s radar. But I only know that in theory, because in practice I haven’t had such experiences myself.”

Listen to the full interview (in Dutch, 0h50m-1h10m)…

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