Closed: Call for Solutions – Ethiopia

CFYE strives to disrupt the employment status quo for Ethiopian youth. We are calling for innovative private-sector-led solutions that create, improve, or match decent work for youth in Ethiopia. Projects should result in decent employment for at least 250 young people with a focus on women in particular.  Any Ethiopia-specific questions can be sent to

Deadline – 31 January 2022

The Challenge

Ethiopia’s job creation challenge is in many ways typical of the Sub-Saharan African region. It has one of the youngest populations globally, and the working-age population is projected to reach about 75 million by 2025. While the youth unemployment rate in rural areas is relatively low (about 12%), urban youth unemployment reaches 26% and is even disproportionately high for females standing at 32%. In Ethiopia, the high unemployment rates for youth are driven mainly by first-time job seekers, meaning it is the first work experience that is so important yet so difficult to obtain. With more than two million entrants to the labor market each year, it is clear that there are not enough decent opportunities being created for Ethiopian youth. Including the backlog of at least 2.5 million unemployed in 2018, the country needs to create about 2.8 million jobs per year from 2020 to 2025.

The impact of the COVID-19 pandemic further compounded the vulnerability of youth and women, 90% of whom work in the informal sector.

The CFYE Youth Action Research found that a significant proportion of the youth aspires to be employed within IT, communication, leadership, agriculture, healthcare, and advocacy roles. Most youths feel that their education hasn’t equipped them adequately for the job market. Employers also report the need for extensive training and a lack of soft and employability skills. Action is needed to both stimulate economic growth and tackle the skills mismatch in the labour market so that young people are not left out. The Challenge Fund for Youth Employment will focus on co-funding initiatives with a short to medium-term impact, considering the structural barriers and testing innovative approaches that carry spillover effects on the systemic/macro-economic level.

Call for Solutions

Based on the scoping study conducted in 2021, this first call for solutions in Ethiopia is sector-agnostic, and proposals from all sectors will be considered. However, we specifically invite proposals covering the following sub-sectors based on their perceived high opportunities for the youth: Horticulture and poultry, textile and apparel, food and beverage processing (agro-industry), renewable energy (the green economy), the digital economy, and matching services. Training services, waste management, and scale-up of successfully-incubated projects are areas we consider to hold moderate opportunities for job creation as well.

CFYE wants to co-invest in innovative private sector-led initiatives that enable businesses to create, match, or improve the employment of youth. All projects should result in decent employment for at least 250 young people (aged 15 to 35), especially young women.

CFYE will work through private sector firms in high potential sectors, implementing sustainable solutions for the creation of jobs for women and youth, and embedding decency of work, aspirations of the youth, empowerment of women, sensitivity to gender and other inclusion requirements, and compliance with the labor laws of Ethiopia.

  • Opening: Our Ethiopia Call for Solutions opened on 20 December 2021.
  • Webinar: We hosted an informational webinar to formally launch the call for solutions on 20 December 2021, you can watch the recording below.
  • Deadline: The deadline for submission of Concept Notes is 31 January 2022.

There will be another information webinar on 14 January 2022, 13:00 (CET) to provide clarifications on the specifics of the application process.

Eligibility Criteria

The following eligibility criteria will apply:

  • Principles: Should be able to adhere to CFYE’s guiding principles & priorities.
  • Exclusion Criteria: The project and organizations involved in delivering the project must pass the FMO exclusion criteria.
  • Local Presence: You (the lead organization), or at least one of your consortium partners, has a local operating presence in the country.
  • Legality: The Lead Organisation must be a legally registered private sector entity.
  • Total Targets: The proposed project will create, match, or improve at least 250 jobs for young men and women.
  • Women Targets: Of the total youth employment created, matched, or improved, at least 50% are women. Note, however, that the higher this percentage is, the more competitive your Concept Note will be.
  • Decency of Jobs: Any jobs or dependent self-employment should require no more than 48 hours/week of work and respect the other requirements of the Ethiopian Labour Proclamation (No. 1156/2019), and jobs created should be maintained for at least six months.
  • Private Sector: Only private companies can be lead applicants, but they may partner with other organisations such as NGOs or government institutions.
  • Leverage & CFYE Contribution: We generally provide co-funding of 10-50%. The minimum co-funding of CFYE is 100.000 EURO, meaning total project budgets equal at least 200.000 EURO without a maximum value at this stage.
    The contribution requested from CFYE is expected to be within a reasonable range, in comparison with the lead organisation’s average annual turnover in previous years, or the income of the current year in case of a newly-established organisation. If the amount requested is significantly larger, CFYE requires an explanation as to how the organisation/project intends to manage the funds and match it with their own contribution. Guidance around the proof of managing finances is provided in the Business Case guidance.
  • In-kind contribution: Your co-funding consists of a maximum of 30% of in-kind contribution. The remainder should be a cash contribution.
  • Youth: The jobs created, matched, or improved would be for youth aged 18-35 years. Unless the minimum working age is otherwise stipulated by local labour laws.
  • Employment type: Initiatives in both the informal and formal sectors are eligible. However, they should focus on wage employment or semi-employment (working with agents or other semi- self-employed positions as part of a company’s business model).
  • Business Development stage: We are looking for tested concepts ready for scaling up or scaling out (meaning already scaled up but ready to diversify). Idea stage projects are not eligible. Lead applicants need to have been in active business for at least 2 years.

Want to apply?

Download the application brochure below.

Relevant Documentation

Want to know what to expect in our application process? Please have a look at the below documents.

Competitive Process

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.

In addition to the general funding criteria and eligibility criteria, we are particularly interested in the following project characteristics (not eligibility criteria):

  • Living wage: We would like to see applicants consider how to improve current wages/incomes and how they can work towards closing at least part of the gap with our living wage level of $255 per FTE in urban areas and $267 per FTE in pre-urban areas.
  • Non-financial decency: In addition to paying (closer to) a living wage or living income, the Fund is keen to see proposals with a strong strategy towards improving jobs on non-financial elements such as workplace wellness issues and non-financial benefits.
  • Sector focus: Although all sectors are eligible for this call for solutions, we specifically invite proposals covering the following sub-sectors based on their perceived high opportunities for the youth:
  1. Horticulture and poultry; textile and apparel; food and beverage processing (agro-industry); renewable energy (the green economy); the digital economy; and matching services.
  2. Training services, waste management and scale-up of successfully-incubated projects are areas we consider to hold moderate opportunities for job creation as well.

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