Consultant: Developing a Special Report on Youth Financial Inclusion and COVID-19 Policy Response in Africa

1. AFI & Project Background

The Alliance for Financial Inclusion (AFI) is an innovative, member-driven organization that enables policymakers in developing countries to share their knowledge of financial inclusion policies that have delivered tangible results. The network currently comprises 100 central banks, government ministries and other financial policymaking institutions from more than 88 emerging market & developing countries. Through providing members with the opportunity for peer learning and supporting technical level knowledge exchange on key aspects of financial inclusion policy, AFI works with its members to influence policy reforms, which results in expanding the reach of quality financial services to the poor.

AFI has 7 Working groups (WGs): Consumer Empowerment and Market Conduct Working Group (CEMCWG), Digital Financial Services Working Group (DFSWG), Financial Inclusion Data Working Group (FIDWG), Financial Inclusion Strategy Peer Learning Group (FISPLG), Global Standards Proportionality Working Group (GSPWG), Inclusive Green Finance Working Group (IGFWG) and SME Finance Working Group (SMEFWG). WGs are the key source of policy developments and trends in financial inclusion and serve as “communities of practice” on key financial inclusion issues. They are the primary mechanism for generating and incubating knowledge in the AFI network and provide a platform for knowledge exchange and peer learning to allow policymakers to share, deliberate and deepen knowledge and understanding on key financial inclusion issues.

While AFI’s working groups provide leadership and expertise in clearly defined traditional policy fields, the AFI network is constantly monitoring new developments and maintains a commitment to supporting financial inclusion efforts in emerging fields and regions. The AFI network is engaged in various dedicated regional initiatives: African Financial Inclusion Policy Initiative (AfPI), Latin America and the Caribbean (FILAC), Pacific Islands (PIRI), Eastern Europe and Central Asia (ECAPI) and Arab Region (FIARI).

The impact of AFI’s work over the past decade has been substantial. Since AFI’s launch, members have attributed their participation in AFI with the development and implementation of over 680 financial inclusion policy improvements which have enabled access to formal transaction accounts for over 650 million unbanked people worldwide.

2. AFI COVID-19 Policy Response

Since the offset of the COVID-19 crisis, AFI has taken stock and compiled a comprehensive dashboard on members’ policy responses that address the impact of COVID-19[1].

AFI COVID-19 Policy Response aims to deliver systematic, effective and coordinated policy responses to help AFI members mitigate the effects of COVID-19 on financial inclusion policy implementation, especially for micro, small and medium enterprises and the most vulnerable segments of the population. The AFI Response combines quick, needs-based, highly practical and high-impact interventions that enable the implementation of rapid response policies and regulations in highly-affected countries.

AFI has also conducted a series of virtual engagements with members, tailored to engage technical teams and leadership across the network, as well as address region-specific issues. The virtual meetings are set up to deliberate and present practical policy responses that have the potential to alleviate the impact of COVID-19 on financial inclusion objectives set out by our members.

In addition, AFI is implementing a COVID-19 Policy Response program in Africa in response to the devastating impacts of the global pandemic.

3. About the AFI COVID-19 Policy Response – Africa Focus

The aim of the program “AFI COVID-19 Policy Response – Africa Focus” is to enable financial sector regulators in Africa to deliver quick and appropriately gender-sensitive policy responses that mitigate the effects of COVID-19 on businesses and individuals, especially for MSMEs, women, young people, and Forcibly displaced persons.

Africa is the largest region represented in the AFI Network with approximately half of the overall AFI membership. The COVID-19 Policy Response program in Africa is targeting 49 financial sector regulators and policymaking institutions across the region to strengthen their capabilities to effectively respond to the economic consequences of COVID-19.

The objectives of the project are:
o Mitigate the impact of COVID-19 on the gains that have been made in advancing financial inclusion by AFI members in Africa.
o Capitalize on opportunities presented by this crisis to advance financial inclusion agendas in key areas, such as digital finance, access to finance for MSMEs, inclusive green finance and women’s financial inclusion.
[1] The information can be found at: https://www.afi-global.org/afi-covid-19-policy-response
This two-year project prioritizes the two following policy areas which have clearly emerged as a priority for AFI members, in relation to mitigating the impact of COVID-19 on businesses and households and building financial sector resilience:
o MSME finance with the objective of alleviating the impact of the crisis on micro, small and medium enterprises which are disproportionately affected by the dramatic slowdown of the global economy.
o Digital finance with the goal to fast track the uptake of digital financial services to enable governments to make ‘cash’ transfers safely to those who need them, and to allow businesses and individuals to transact in the COVID-19 crisis thereby enabling continuity of economic activity.
AFI’s work in Africa aligns with the network’s ambition to leave no one behind by building on its 2019 Kigali Statement[2], which calls upon the acceleration of financial inclusion for disadvantaged groups, including the youth.
In this area of crisis policy response and financial inclusion, AFI aims to develop a Special Report on Youth financial inclusion and COVID-19 policy response in Africa.

4. Background and Justification

In Africa, the number of youth is growing rapidly[3], representing a critical population segment for economic development. By 2050, there will be more than 400 million young Africans between, more than double the number today. The International Monetary Fund reports that by 2035, there will be more young people entering Africa’s workforce each year than in the rest of the world combined.

The impact of COVID-19 has hit youth disproportionally. For young people, and especially for vulnerable youth, the crisis poses considerable risks in the fields of education, employment[4], mental health and disposable income. The current economic crisis resulting from the COVID-19 pandemic exacerbates the vulnerability of youth and is likely to have a greater negative impact on young people’s livelihoods, which could lead to the emergence of a “lockdown generation” (ILO 2020).[5]

The sectors that are most at risk of COVID-19 disruptions in Africa (wholesale and retail trade, manufacturing, administrative services, hospitality and tourism), along with agriculture, represent many of the key industries where young people currently find employment. Many of these “at-risk” sectors are also the growth sectors targeted for Africa’s longer-term youth employment strategies.
The current crisis has further amplified young people’s need for mechanisms to invest in income-generating activities and improve their resilience to cope with financial shocks. However, youth are disproportionally excluded from the formal financial system: In Sub-Saharan Africa (SSA) only 37% of youth declared having an account at a formal financial institution (being this number below the average of low-medium income countries: 53%) Young women show consistently lower levels of access to formal financial institutions in all other regions, with SSA showing the lowest financial access among female youth.

Policymakers in the developing world, including Africa, have taken swift and dynamic action to contain the spread of the virus, as well as mitigate the economic impact on economies and livelihoods. Financial sector regulators have been central to the governments’ response to COVID-19, taking measures to ensure liquidity in the system, promote digital payments to replace the hazards of cash and provide relief to financial institutions in order to maintain the stability of the financial sector. However, the full impact of the pandemic on economies is still unfolding and policymakers will need a broader and more innovative set of policy responses in the coming months, to enable businesses and households, especially disadvantaged groups to withstand the economic shock. Furthermore, with the ongoing pandemic threatening financial inclusion gains made over the past decade, the prospects of many young people have worsened. Regulators and policy makers play a major role implementing a youth-sensitive policy response in the mitigation and recovery phases.

In this area of crisis policy response and financial inclusion, and specifically within the program “AFI COVID-19 Policy Response – Africa Focus”, AFI aims to develop a Special Report on Youth financial inclusion and COVID-19 policy response in Africa.

[2] For more information, please visit: https://www.afi-global.org/publications/3091/Kigali-Statement-Accelerati…
[3] Youth population trends and sustainable development, https://www.un.org/esa/socdev/documents/youth/fact-sheets/YouthPOP.pdf
[4] In 2019, 15.7 million young people in Africa, around 13.4% of the total labor force of 15-24 year old, were facing unemployment. This rate is more than twice the unemployment rate of those aged 25+ (6.1%), underlining that unemployment on the continent is hitting the younger generation, https://mo.ibrahim.foundation/news/2019/weak-economic-prospects-unemploy…
[5] Youth & COVID-19: Impacts on jobs, education, rights and mental well-being, https://www.ilo.org/global/topics/youth-employment/publications/WCMS_753…
[6] Africa’s Youth Employment During a COVID-19 Recession: We Must Innovate to Achieve a Job-Rich Recovery, https://nextbillion.net/africa-youth-employment-covid19-recession/

5. About the Special Report – Youth Financial Inclusion and COVID-19 Policy Response in AfricaObjective:

The main objective of the Special Report is to analyse financial inclusion policies implemented in response to the impact and consequences of the COVID-19 pandemic on youth in Africa, in order to support and enable effective peer learning amongst AFI’s policymaker and regulator membership in this region.

Some specific objectives are:
o Analyse the potential impact of the financial regulatory policies in mitigating the negative impact of the COVID-19 pandemic on youth.
o Provide key information of specific discussions, experiences and learnings by financial regulators on how they are tackling the risks, challenges and opportunities that the current epidemic brings in relation to youth financial inclusion.
o Provide strategic recommendations on effective financial regulatory policies in the current context, envisaging the post-crisis recovery phase (medium and long term) that can act as main pillars for policymakers to focus on.
The analysis should include policies to leverage the potential of digital financial services in the crisis, as well as policies to support the Youth MSME sector. In addition, gender policy considerations should be integrated in this Special Report as cross cutting-theme, along with considerations of the impact on other disadvantaged population segments, as defined by the AFI Network’s “Kigali Statement”.[8]

[8] ‘Kigali Statement: Accelerating Financial Inclusion for Disadvantaged Groups’, AFI (2019), https://www.afi-global.org/publications/3091/Kigali-Statement-Accelerati…

6. Key Deliverables and Activities

The consultant is expected to:
(a) Review the AFI COVID-19 Policy Response (focused on African countries) dashboard and other policy trackers (e.g. IMF, World Bank etc.), available published research on policy response to COVID-19 in Africa, as well as minutes/recordings of AFI’s relevant high-level and technical webinars.
(b) Prepare a literature review summarizing available published material and a provisional Special Report outline, to be agreed with AFI Management Unit.
(c) Prepare a mapping document with African FinTechs which are mitigating the impact of the pandemic on youth population (covering the following areas: Digital financial literacy, financial health and lifetime planning, digital payments in the crisis response, access to finance for youth entrepreneurs, etc)
(d) Conduct phone interviews with approximately 4 AFI members in Africa to capture AFI member experiences in the COVID 19 Policy response on youth envisaging the medium/long term policies during the recovery phase (to be agreed with AFI Management Unit). The selection of those countries should maintain a balance within the sub-regions in the African continent.
(e) Conduct phone interviews with approximately 8 key organizations (to be agreed with AFI) such as youth associations, representative bodies and other organizations with the objective to incorporate voices and experiences of the youth, captured through engagement with those institutions.
(f) Prepare a draft of the Special Report synthesizing the findings from the informant interviews with the available published research and information reported by AFI members in the policy trackers and member needs assessment.
(g) Following review of the Research study draft by AFI Management Unit and any external reviewers identified by AFI, submit a final draft taking account of comments and feedback received, and a comment tracker detailing how comments received have been responded to.
(h) Develop a summary version of the Special Report in a doc format and in a power point format for dissemination.
During the consultant’s work on this project, AFI Management Unit will support these deliverable by: providing information of the already implemented initiatives relevant for this study; facilitating contact with AFI’s members for arranging interviews, contributing to the development of interview scripts, and sharing desk research and literature review to support the Special Report preparation.

7. Consultant Experience

• 10+ years of professional experience in financial inclusion policies and programs for youth in the African region.
• Previous solid experience working with Central Banks and other financial regulatory entities.
• Solid experience on development process and post-crisis related issues, specially in the reactivation and development of sustainable livelihoods.
• Solid background providing technical assistance and guidance on financial inclusion for to policymakers focused on youth and women.
• Strong knowledge and understanding of legal and regulatory frameworks related to Digital Finance and Youth financial inclusion.

8. Timeline:

This work would be undertaken between 15th April 2021 to 1st June 2021. The total envisaged work of the consultant in undertaking these deliverables is envisaged as not more than 20 working days, with all deliverable to be complete by 14th May 2021.

9. Reporting

Throughout the contract period, the Consultant will report to the AFI Policy Analysis team.

10. Criteria for Evaluation

The proposals submitted will be evaluated based on the following criteria:
Technical Scoring

1. Academic Qualification; 10%
2. Experience and competence of the key staff for the assignment related; 50%
   • Adequacy for the assignment – 25%
   • Regional/Global experience – 25%
3. Adequacy of the proposed work plan and methodology in responding to the Terms of Reference ;30%
   • Technical approach and Methodology – 15%
   • Workplan – 15%
4. Sample work – Writing experience and English;10%