Blog – Investing in Youth: The Role of Development Banks

Global employment trends for youth

Sara Elder, Head, Employment Analysis and Economic Policies Unit, International Labour Organization (ILO), kicked off the webinar by emphasizing the importance of targeted investments in youth employment amid increasingly scarce resources. Referencing the ILO’s 2024 Global Employment Trends for Youth report, she noted that although global youth unemployment dropped to a 15-year low, recovery remains uneven with some regions still struggling to return to pre-pandemic employment levels.

The report highlighted the nuanced reality young people face, with increased access to education but growing uncertainties about the future of work, especially with the rise of artificial intelligence (AI). In rural areas like Uganda, the focus is not just on job creation but on transforming existing work into decent, sustainable opportunities.

A major concern is the growing number of youth who are neither in employment, education, nor training (NEET), with one in five young people globally in this category. This issue is particularly pronounced for young women, who face additional barriers, such as unpaid care responsibilities, that limit their access to work and education.

While progress has been made in skills development, a significant mismatch remains between the skills of young graduates and market demands. To truly tackle youth employment, the focus must shift from just skilling young people to creating future-proof jobs, while ensuring that the right institutional support systems are in place to help them succeed.

Download presentation in PDF: https://www.donorplatform.org/wp-content/uploads/2025/04/Sara_Elder_GDPRD_ILO.pdf

Insights from development banks

Edson Mpyisi, Chief Financial Economist and Coordinator, Enable Youth Program, African Development Bank Group (AfDB), shared key insights on the bank’s approach to addressing youth employment in Africa. He outlined the Jobs for Youth in Africa Strategy (2016-2025), which is built on three pillars: integration (embedding youth employment considerations across all projects), innovation (implementing initiatives aimed at supporting youth, particularly in agriculture, ICT, and industrialization, including tools such as Enabling Youth Employment Dashboard and the Innovation and Information Lab), and investment (catalyzing private sector capital to create jobs).

Key recommendations from the strategy’s 2022 midterm review include:

• Improved results measurement, particularly the indicators and frameworks for youth employment. The Youth Jobs and Skills Marker System has since been created to better track the impact of its projects on youth employment.
• Continued focus on mobilizing resources for small but impactful catalytic activities, such as the Youth Entrepreneurship and Innovation Multi-Donor Trust Fund.
• Strengthening leadership and coordination to ensure better governance for youth employment initiatives across AfDB.

Flagship examples highlighted were the Empowering Novel Agri-Business-Led Employment (ENABLE) Youth Program, which offers rural youth an enabling environment for entrepreneurship, agri-business incubation, and access to finance, and the Agri Pitch Competition, to encourage young people to develop innovative agri-business solutions.

Overall lessons learned from AfDB’s experience with investing in rural youth include:

1. An integrated value chain approach that combines skills development, access to finance, and markets is essential for unlocking opportunities for rural youth.
2. Tailored financial products, especially through blended finance, are critical in helping youth set up sustainable businesses or secure long-term employment.
3. Scaling up youth employment initiatives requires collaboration between the public and private sectors, especially in linking trained youth to agribusinesses, banks, and incubators.
4. Digital platforms are becoming a game-changer in providing services and training to youth, especially in remote or underserved areas.

Looking ahead, the AfDB recently approved a new 10-year strategy for 2024-2033, in which youth employment, skills, and jobs are cross-cutting priorities.

Download presentation in PDF: https://www.donorplatform.org/wp-content/uploads/2025/04/Edson_Mpyisi_GDPRD_ADB.pdf

Ousmane Diaby, Lead Youth Empowerment Specialist, Women & Youth Empowerment, Resilience & Climate Action Department, Islamic Development Bank (IsDB), shared the bank’s evolving approach to youth empowerment and employment, particularly in light of the unique challenges and opportunities presented by the youth bulge in its 57 member countries.

Historically, the bank has supported youth through initiatives such as offering over 18,000 scholarships across various educational levels. However, the bank’s focus has now shifted toward youth employment, skills development, and related areas as part of its new strategic alignment.

One of the key entities within IsDB is the Women and Youth Division. Established in 1998, this division ensures youth and women are integrated into IsDB’s operations and has contributed to over 30 projects in the past year, including the Youth Digitalization for Entrepreneurship and Employment Program (Y-DEEP) and the Empowering West African Women Small and Medium Enterprises in Rice Value Chains (EWASME), which empowers women entrepreneurs in West Africa.

Additionally, the bank has launched projects like the HOPE (Harvesting Opportunities for Poverty Eradication) in Tunisia and Côte d’Ivoire, focusing on SMEs and food security. At the country strategy level, IsDB integrates youth and women’s priorities, collaborating with governments and the private sector to address issues such as job creation, health, and skills development.

Through its Youth Development Strategy, which emphasizes education and economic empowerment, IsDB continues to explore digitalization and skills development partnerships across various countries, including collaborations with the ILO on the Green Skilling Accelerator. These efforts illustrate the bank’s ongoing commitment to ensuring that young people, especially in vulnerable communities, are equipped with the skills necessary to succeed in a digital economy.

Download presentation in PDF: https://www.donorplatform.org/wp-content/uploads/2025/04/Ousmane_Diaby_GDPRD_IsDB.pdf

Rahul Antao, Technical Specialist, Rural Youth and Social Inclusion, Office of Technical Delivery, International Fund for Agricultural Development (IFAD), outlined the organization’s strategies to address youth employment in rural areas. Since launching its Youth Action Plan in 2019, IFAD has reached 11 million young people, with a goal to add 8 million more in the next three years. A core element to IFAD’s approach is integrating youth-sensitive metrics into project design to track job creation, improve job quality, and ensure sustainable outcomes. This ensures that youth not only find employment but gain access to more resilient livelihoods.

A key shift in IFAD’s approach is recognizing that there is no one-size-fits-all solution for youth employment. The organization now focuses on both self-employment and wage employment opportunities, allowing young people to choose paths that suit their aspirations and circumstances. IFAD also acknowledges the diverse job interests of young people in rural areas, expanding beyond farm-related work to include non-agricultural sectors such as barbershops and tailoring.

IFAD’s investments target assets, services, and skills, ensuring youth have access to resources like land and equipment, along with financial services such as loans and business development. A youth-sensitive criteria is used when designing projects to ensure interventions are tailored to the specific needs of diverse youth populations.

A significant lesson learned is the importance of an ecosystem approach, which involves collaboration with public, private, and civil society actors. IFAD has experimented with various incentives to engage the private sector, such as through its Youth Agribusiness Hubs.

Moving forward, IFAD is focused on three priority areas while developing its upcoming second Rural Youth Action Plan:

• Climate and biodiversity (green jobs)
• Private sector engagement (access to finance)
• Addressing youth unemployment in fragile contexts

Conclusion

These efforts highlight the vital role development banks play in empowering youth, fostering entrepreneurship, and driving inclusive economic growth. Through targeted investments, these organizations are not only creating jobs but also ensuring that youth are equipped with the skills, resources and support they need to thrive in a rapidly changing world and secure decent employment opportunities.

The Rural Youth Employment Thematic Working Group (TWG RYE) remains committed to raising awareness and sharing knowledge on effective ways to support and empower rural youth and enable their contributions to sustainable food value chains.