In a region strained by forced displacement, poverty, and limited access to economic opportunities, an innovative initiative is leveraging the synergy between training, entrepreneurship, and support to build sustainable alternatives to humanitarian aid.

In late June, the International Labour Organization (ILO) unveiled the results of an ambitious pilot program in Ethiopia’s Somali Region. Conducted under the PROSPECTS partnership, funded by the Dutch government and implemented alongside the World Bank and other global partners, the initiative focused on a business plan competition targeting young people from both refugee and host communities.

Out of nearly 2,000 applications, 100 young entrepreneurs were selected for intensive training. From that group, 50 viable business projects received comprehensive support, including startup financing, technical assistance, mentorship, and help with legal formalization such as registration and work permits. The goal was to create local value in a region still largely disconnected from the national economy.

Training, Innovation, Support: A Three-Phase Strategy

The program extends beyond one-time financial aid and follows a three-step approach. First, participants undergo rigorous training covering business plan writing, financial management, marketing, and pitching to expert juries. This is designed to strengthen their understanding of entrepreneurship.

Next, innovation is central to the model. Entrepreneurs are encouraged to develop solutions based on local needs in fields like agriculture, neighborhood commerce, recycling, and digital services. This fosters projects with high local potential.

Finally, winners receive tailored support from specialized organizations. This mentorship helps them tackle post-launch challenges, structure business operations, and integrate into regional value chains. In a region where urban unemployment exceeds 19% according to the ILO in 2023, this approach offers a credible alternative to long-term humanitarian dependency.

Where Urgency Meets Development

The project unfolds in a challenging socioeconomic landscape. According to the Oxford Poverty and Human Development Initiative (OPHI), over 80% of Ethiopians face multidimensional poverty and have limited access to basic services, including vocational training. The ILO notes that in towns like Jigjiga and Kebribeyah, refugee and displaced populations struggle to access formal employment.

In this context, the PROSPECTS program aims to reposition youth and refugees as active contributors to the local economy through micro-enterprise creation. This shift aligns with Ethiopia’s “Digital Ethiopia 2025” strategy, which seeks to create 14 million jobs, including 300,000 in the digital sector, by boosting tech and entrepreneurial skills.

Toward a Replicable Model

The ILO views this project as a test case to demonstrate the viability of a new model. It is part of a broader continental trend where countries are exploring synergies between training, entrepreneurship, and economic inclusion.

Rwanda, for instance, has launched public incubators since 2020 for unemployed graduates. These hubs, located in Kigali and other provinces, provide business training, access to finance, and professional networking. Internal evaluations show that around 67% of supported businesses remain active after two years, though results vary by sector and region.

Kenya is another case to watch, particularly in border counties with long-standing refugee camps. In Kakuma and Dadaab, UN-led projects have established vocational training centers for both refugees and host communities, with a strong focus on self-employment. The Kakuma Kalobeyei Challenge Fund has supported over 200 micro-enterprises in retail, food processing, and mobile repair. A joint study by UNHCR and the think tank Samuel Hall found that these initiatives raised average beneficiary incomes by 30% over 18 months while reducing reliance on aid.

In Ethiopia, the program's success will hinge on local government support, particularly in streamlining administrative procedures and integrating refugees into national employment policies.

Written in French by Félicien Houindo Lokossou (Intern),

Translated and adapted into English by Mouka Mezonlin