How to boost decent employment for youth in Africa and the Middle East?

Challenge accepted

The Challenge Fund for Youth Employment (CFYE) started in 2019. Now at our midway point, we share our achievements for 2021 and the insights we have gathered about supporting initiatives to create decent jobs for youth in Africa and the Middle East.

About the CFYE

Funded by the Ministry of Foreign Affairs of the Netherlands, the Challenge Fund for Youth Employment (CFYE) aims to create a prosperous future for 200,000 young women and men in the Middle East, North Africa, Sahel & West Africa, and the Horn of Africa. We do this by providing funding and technical assistance to initiatives that offer youth, particularly young women, opportunities for decent work that delivers better prospects for personal development, is productive, and provides a stable income, social protection, and safe working conditions. The CFYE is managed by a consortium including Palladium, Voluntary Service Overseas (VSO), and Randstad.

Our Strategy

We believe that by supporting businesses and intermediaries with capital, capacity, and targeted strategies, these organizations will be able to generate more and better income-generating opportunities for youth. We support initiatives that . Our goal is to decent employment either by creating new jobs, matching them into existing jobs, or improving working terms and conditions.

2021 Achievements

In 2021, we achieved the following:

Funded 31 projects in Nigeria (8), Egypt (5), Kenya (11), Sudan (4), and Jordan (3) for a total of 37 projects in 6 countries

Initiated the implementation of 8 projects in Nigeria and 5 projects in Egypt

Supported 6 partners in Uganda to enable 2,087 youth, including 1,520 young women, to start new jobs or improve their income

Increased our total funding allocation to €23.46 million in investments, leveraging €43.33 million in co-investment (35% of total investment covered by the CFYE)

Boosted our actual portfolio target to 88,000 youth (65% women) against our ultimate goal of 200,000 (50% women)

Set up a Think Tank for Impact First SME Funds with participants from the IFC, ANDE, EU Commission, CDC, FMO, Mastercard Foundation, and others.

Hosted a peer-to-peer learning event in Uganda on the theme of decent work

Completed the first round of Challenge Calls in Kenya, Jordan, Sudan, and Ethiopia, and started the second round in Uganda

Prepared for the launch of our second Thematic Call for intermediaries to provide financing and business support to small and growing businesses

Completed scoping research in preparation to launch challenges in Tunisia, Morocco, Burkina Faso, and Senegal

Valuable lessons

Together with our partners, we have gathered valuable lessons about how to deepen our impact, especially around how to define and measure employment quality, how to engage young people in our decision-making, how to run our Challenge Fund mechanism more efficiently, and how to strengthen the evidence base for future programs.

1. How to define and measure employment quality

We can’t focus on job creation without job quality. But job quality is challenging to measure because it requires considering multiple aspects such as wages, working time, employment terms, job security, social benefits, and more. The young people our partners are employing come from the most diverse backgrounds, and the types of jobs they may be entering into are equally diverse: from self-employment to gig work, from part- to full-time, and from entry- to professional or management level.

Measuring jobs

To determine which jobs would be “good enough to count” and measure improvement, we first developed minimum standards and a scoring rubric. However, when we tried to operationalize these tools, we faced challenges, especially in measuring a living wage. The living wage is a gold standard and one that all employers should aim for. However, its actual value varies considerably in different contexts and can be difficult to calculate and monitor. This especially holds for self-employed, part-time, or gig workers. Our partners needed time to work towards this goal and collect the supporting data.

World of work

The world of work is also changing, and employment standards are still catching up. In addition to the living wage, other standards, such as limiting working hours and providing sufficient rest time, are essential for decent work conversations. Given the data risks, changes in the world of work, and the diversity of jobs in our portfolio, we realized we could not set a universal decent work threshold. Therefore, we assess each project’s job quality aspects in context, considering local labour laws, international guidance, and the youth perspective. We rely on our implementing partners to collect feedback from youth and provide specific guidance on areas they want to focus on. Together we establish clear definitions upfront for counting the jobs and encourage our partners to track additional feedback over time to measure and improve the qualitative aspects of the jobs they are providing.

2. How to amplify youth voices

We aim to generate employment opportunities for youth otherwise underserved by the existing system. In our focus countries, most employable youth, especially young women, are underserved, often subject to under-employment and poor working conditions. We explore in more depth who the underserved youth are in our scoping research and formulate challenges and our selection process around sourcing projects to reach them.
In order to support our partners in understanding and contributing to the actual needs and aspirations of youth, we piloted a youth-led approach via “youth champions”: one-year national volunteers whose mandate is to bring in a youth perspective across CFYE and partners using youth-friendly methods. These youth champs conducted youth-action research and helped shape some of the CFYE’s key activities. We will be scaling this initiative up in 2022.

Tool for youth champions

In addition to engaging designated youth champions, we also designed and tested a self-assessment tool for our partners to discover how to better integrate a youth and gender lens in their businesses. It is framed around three components: attracting, selecting, and retaining youth talent, and includes specific building blocks including marketing and community-based outreach, youth-inclusive recruitment, young professional development opportunities, peer networks, gender-inclusive practices, and youth-led benefits. Based on scoring in the matrix, partners may adapt their projects to improve their youth and female focus.

3. How to better run our challenge fund mechanism to achieve our goal

Invest in country teams in challenge design, selection, portfolio management, and learning

To achieve results, we need a strong local presence. A deep understanding of the context – both geographic and sector-based – in which we operate is critical to our success. In addition to conducting primary scoping research to design challenges, we rely on our Country Leads to provide guidance and tailor our selection and portfolio management strategy to fit the local context. Learning requires building trust and open communication with our implementing partners to freely share their challenges and insights. This comes from establishing solid relationships on the ground and over time. Want to meet all our Country Leads? Click here.

Support intermediaries to finance and scale small and growing businesses (SGBs)

One-third of our 37 implementing partners are intermediaries that support other enterprises and entrepreneurs with business support, entrepreneurship development, finance, training, and/or job matching support. Two-thirds are employers, i.e., private sector companies, who create jobs within their own company or supply and delivery chains.

We recognize that small and growing businesses (SGBs) are the engine of job creation in our focus countries. However, it would be inefficient for CFYE to fund most SGBs directly due to our co-funding requirement and limited capacity to manage and monitor smaller grants.

4. How to strengthen the evidence base for youth employment

In our first year, together with the Ministry of Foreign Affairs and our partners, we identified key learning objectives based on evidence gaps in our theory of change. These objectives include defining and measuring the quality of jobs (or decent work), the business case for decent work for youth, the future of work, and strengthening the youth employment ecosystem.

Three stage approach

We follow a three-staged approach in our learning: first, we gain more insights through engaging with our partners and (if needed) conducting additional research; second, we apply these insights to improve performance; and third, we build sufficient evidence to inform the wider sector.


An example of this approach has been on the topic of the future of work, especially green jobs, which are becoming more relevant as businesses commit to sustainability and achieving a low carbon future. In 2022, we will be working with INCLUDE to gain insights into green jobs, particularly how they are defined, how they relate to climate change mitigation and adaptation, key sectors that generate green jobs, and which skill sets they require.