Wasoko founder Daniel Yu has launched the Africa Jobs Fund (AJF) to create jobs in Sub-Saharan Africa. The initiative, with a $100 million backing, aims to close the unemployment gap and back companies creating high-productivity jobs across Sub-Saharan Africa.
According to the statement seen by Technext, the fund, led by Daniel Yu, will be backing founders in this region to create jobs that raise incomes and transform the quality of life for workers.
Reports noted that about 600 million of the world’s extremely poor population will be living in Africa by 2040, provided the current rate of 3 million formal job creation per year persists. As the gap between the workforce and stable employment keeps widening, value-added activities and labour mobility are the two proven routes out of poverty.
The AJF investment aims to create income gains of more than $50 billion for African workers and more than double the lifetime income of at least 250,000 low-income people.
“Value-added manufacturing creates jobs and spreads skills across the local economy, builds supply chains and brings in foreign currency by connecting African manufacturers to global markets,” part of the statement reads.
By supporting founders across sectors, the fund aims to create quality jobs that improve living standards and reduce brain drain. Provision of funds also sees a farmer shift from subsistence farming to export manufacturing, thereby increasing productivity fivefold.
Reacting to the development, Daniel Yu noted that Africa has hundreds of millions of working-age people reliant on subsistence agriculture or informal work that pays a few dollars a day. He stressed that the same people, in the right job at home or abroad, could earn significant multiples of their income.
“Persistent poverty is, at its core, a jobs problem. AJF exists to back the companies that create those jobs and opportunities. Nothing else in development comes close to the impact of getting this right, and that is why I am building AJF,” he added.
Daniel Yu is joined by Ben Hyman as Operating Partner, who started a leading African recruitment firm, Talent Safari.
Other senior advisors to AJF include Iyinoluwa Aboyeji, co-founder of African tech firms Andela and Flutterwave, and Samantha Power, former Head of USAID and former US Ambassador to the United Nations.
The $100 million fund will seek to tackle the lack of large-scale, income-generating jobs capable of sustainably raising living standards.
Also Read: How African infrastructure companies are quietly powering the continent’s cross-border trade revolution.
Africa’s challenge with value-added service creation
An identified primary challenge facing Africa’s employment ecosystem is that its manufacturing style lacks value addition. The economy exports crude materials and imports already-made goods.
Exports are necessary to put a country’s current account on a positive note, but such must be value-added. While it leaves a general income gap, it reduces both the employment rate and the standard of living.
For instance, over fifteen million people migrate to high-income countries each year, according to AJF. The figure is projected to rise sharply as developed countries’ ageing populations drive demand for tens of millions of additional workers in care, logistics, and skilled trades.
The benefits abroad abound for African working-class groups. Earning about $2,000 a year in Africa can increase to $40,000 or more in a high-income country.
Iyinoluwa Aboyeji stressed that African founders have shown they can build category-defining companies. He added that the next decade is dedicated to building the ones that put millions of people to work.
“AJF deserves the attention of every founder and funder serious about jobs and growth on the continent,” he said.
Samantha Power said the most important thing to lift families out of poverty is helping people access better jobs through international labour mobility and export manufacturing.
