Burkina Faso, a country of 22m, is one of the world’s poorest countries with a GDP of $14bn, an extreme poverty rate of 40%, and a Human Development Index (HDI) that ranks 182/189. While there has been a significant push by the international community and the government to reduce poverty and develop the economy, the country’s multiple challenges have meant that growth has remained too low to improve living standards.
Burkina Faso also has a very dynamic demographic growth and a young population. The median age is 18 years, and 64% of the population is younger than 25. In recent years, the working-age population has been growing by an average of 0.6m annually, with nowhere near enough new jobs created every year to provide them with jobs. The youth is increasingly moving towards urban centres, with 31% of the population living in cities.
A low-skilled yet growing workforce, low job creation, and a weak entrepreneurial culture have led to sluggish growth and serve as one of the major impediments preventing Burkina Faso from developing its economic potential. Educational institutions and vocational training programmes produce limited outcomes, and new labour market entrants are ill-prepared for both the technical and soft skills required for the jobs available.
This phenomenon of low job demand and a mismatch of skills gives rise to alarming unemployment figures; in urban areas, youth unemployment is estimated to be 25%. Although in rural areas, these figures are believed to be lower as there are more (temporary) informal jobs in the agriculture sector.
We observe several key challenges to youth employment in Burkina Faso: low job creation, lack of inclusion, skills mismatch, weak dedicated public structures, difficult environment for entrepreneurs, and poor quality of jobs. Action is needed to stimulate economic growth, tackle the skills mismatch in the labour market, address the exclusion of women and youth from the labour force and improve the decency of existing jobs. The Challenge Fund for Youth Employment focuses on co-funding initiatives with a short to medium-term impact, which consider the structural barriers and test innovative approaches that carry spill-over effects on the macro-economic level. Our goal is to help create more jobs for young people.
Call for Solutions
Based on the study conducted on Burkina Faso and discussions held with multiple in-country stakeholders, our Call for Solutions is aimed at two themes: financial service providers (FSPs) and rural areas. We aim to work with FSPs or/and social enterprises or/and NGOs in key growth sectors, implementing sustainable solutions for the creation of jobs, improving decency of work, responding to youth aspirations, developing gender sensitivity, and operating under other requirements and compliance with the labour laws of Burkina Faso.
Given the specificities of Burkina Faso and a new country approach for the fund, we are looking for implementing partners capable of leading the co-investments in selected projects. Each project should match with the fund’s eligibility criteria, go through a selection process, and share the objectives of the fund.
Our objective is to impact decent jobs for the country’s youth, especially women, by providing additional financial and technical support to actors working with high-potential SMEs across sectors, notably in rural areas, and with the local network & understanding to successfully lead projects.
Our Burkina Faso Call for Solutions opened on 1 March 2022:
- Webinar: we will host an informational webinar to formally launch the Call for Solutions on 1 March 2022. A recording will be made available on this page.
- Deadline: the deadline for submission of Concept Notes is 15 April 2022.
There will be a second information webinar on 18 March to provide additional explanations on the specifics of the application process. Our team for Burkina Faso will also be available to answer any questions you may have during the application process.
The overview below regards the eligibility criteria for applicants. Please note that the fund is somewhat flexible regarding the application of these criteria, as our main issue is to engage with partners that have decent experience in operating projects and investing in activities that generate a decent number of jobs for young people.
Interested organisations, projects, and enterprises are invited to connect to CFYE. During a discussion, we will clarify if your project is eligible for funding or how it can be adapted to become more interesting for a partnership.
- Principles: Should adhere to CFYE’s guiding principles & priorities.
- Exclusion Criteria: The project and organizations involved in delivering the project must pass the FMO exclusion criteria.
- Operational Criteria:
- The lead applicant, or at least one of the consortium partners, must have a local operating presence in the country or prove activities in the country in the past five years.
- Selected applicants must begin project activities for the CFYE co-funded initiative by October 2022.
- Applicant Profile:
- We welcome partnerships or consortium responses to this challenge.
- We strongly invite applications from private sector companies, social enterprises, and NGOs. We believe that private sector involvement is the most effective way to develop and test market-based solutions that respond to the challenge of youth employment.
- Business accelerators and impact investors are also eligible.
- We strongly prefer to work with fast-growing small and medium-sized enterprises (SMEs).
- Job type: Jobs should focus on wage employment or partial self-employment (working with agents).
- Decency of Jobs: For any job created, matched, or improved, the average monthly income should be above the subsistence level, has no more than 48 hours per week of work, and preferably be maintained for at least six months.
- Total Youth Job Targets: The project must meet the minimum eligibility criteria for job targets through a combination of CFYE categories: create, match, or improve. The minimum job targets are 50 jobs per project. Higher job targets showing cost-effectiveness will be regarded favourably during evaluation.
- Women Targets: Of the total youth employment created, matched, or improved, at least33% are women. Higher women inclusion targets will be regarded favourably during the project evaluation phase.
- Budget Guidelines:
- The minimum contribution of the fund is €50,000. This should be matched by a co-investment that is at least equal to the requested contribution. Sources of co-funding must follow the guidance provided in the Concept Note guidance pack on the website.
- The contribution requested from CFYE is expected to be within a reasonable range compared to the lead organisation’s average annual turnover in previous years or the current year’s income in the case of a newly-established organisation. If the amount requested is significantly larger, CFYE requires an explanation of how the organisation/project intends to manage the funds and match it with its own contribution. Guidance around the proof of managing finances is provided in the Business Case guidance.
- There is no maximum grant amount stipulated, but we will consider whether the budget is realistic and whether the applicant can raise the required co-funding. We will also assess if the cost per job is competitive.
- The suggested range for cost per job to CFYE (Total CFYE co-investment / total # of jobs) is around €1,000.
- Projects with a higher budget than this range may be considered if there is a compelling and feasible developmental additionality (e.g., very high inclusion of women or high inclusion of youth in remote areas).
- Projects that demonstrate value for money and cost-effectiveness will be viewed favourably during evaluation.
- The company’s in-kind contributions must not exceed 30% of its total co-investment.
- Capital investment (CapEx) requests from CFYE must not exceed 33% of the total investment.
- Youth: The jobs created, matched, or improved must be for youth aged 15-35 years. The proposal must demonstrate that the aspirations and requirements of youth have been taken into consideration in the design of the concept.
- Additionality: Additionality is a central consideration in the review of proposed projects. CFYE co-financing must be additional to the proposed project, i.e., funding is channeled to bring about activities and further investments in youth employment, which would otherwise not occur (either at all, in the same timeframe, or to the same scale or quality). The provision of funding through a contract or grant agreement must not substitute or replace an organisation’s core funding or crowd out other funding sources.
Large enterprises are welcome to apply but must demonstrate the strong additionality of CFYE co-funding.
The Challenge Fund for Youth Employment will apply a competitive process to select the projects that will receive a grant. That means that only those projects that present a clear and convincing pathway to employment, lead to significant and sustainable results in terms of decent employment for youth, with a focus on young women, and can demonstrate high leverage will be selected.