Young refugees and Ethiopians turn skills into thriving businesses with ILO support

Addis Ababa, ETHIOPIA (ILO News) – Petros Hagos, 35, a refugee from Eritrea, has lived in Ethiopia for the past nine years. For years, stable employment remained out of reach. That changed when he joined an entrepreneurship programme supported by the International Labour Organization (ILO) through the Youth-to-Youth fund (Y2YF) which is part of the Netherlands-supported Partnership for improving prospects for forcibly displaced persons and host communities (PROSPECTS) programme. With the Y2YF, implemented in partnership with the Edukans Foundation and ten youth-led organizations, refugee and host community youth in Ethiopia are accessing the tools, finance and mentorship needed to create employment aligned with decent work principles, including rights at work and pathways towards formalization.

After completing four days of intensive group-based Start and Improve Your Business (SIYB) entrepreneurship training delivered by the Alliance for Integrated Development and Relief Organization (AIDRO), one of the ten local partner youth-led organizations, Petros and fellow refugee participants received financial and technical support to launch a cooperative business in Addis Ababa. The approach integrates elements of enterprise development support, strengthening access to both wage employment and self-employment.

© ILO/Zelalem Alemenew Desta

© ILO/Zelalem Alemenew Desta

The group accessed a grant of ETB 199,000 (around US$1,300) and contributed ETB 51,000 (around US$330) of their own savings to establish a fully equipped barbershop, including professional chairs, shelves, clippers, towels, mirrors and other tools.

Today, the business is thriving with a good customer base, particularly on weekends and holiday seasons. Group members divide roles: barbers provide services, while others manage accounting, cleaning and overall operations. Members without prior barbering skills are now enrolled in short-term vocational training, while the group temporarily employs professional barbers to meet the current demand, already demonstrating employment creation beyond the founding team.

Hawi Abebe and her friends’ journey to self-employment

For 22-year-old Hawi Abebe, the path to decent work was blocked by structural barriers. Alongside Serkalem and Keneni, she worked at a garment factory in Addis Ababa, earning ETB 2,500 (around US$16) per month while studying hairdressing and beautification. Despite completing their training, access to employment in beauty salons remained constrained.

“Private salon owners mostly hire relatives and friends,” Hawi explains. “We had the skills, but not the connections. That closed every door for us.”
Their turning point came through AIDRO’s call for youth entrepreneurs. After being selected, the three women completed ten days of intensive training in entrepreneurship, business planning, and financial management. With technical support, they developed a business plan and accessed start-up grants from the Y2YF, enabling them to establish a new hairdressing business in Nefas Silk Lafto Sub City. The initiative supports women’s access to self-employment under conditions aligned with decent work, including improved earnings and safer working environments.

The grant—worth approximately ETB 175,000 (aroundUS$1,130)—covered professional equipment, consumables, cosmetics and one month rent for the hair salon. Their salon now offers both traditional and modern hairdressing services and is especially busy on weekends and during holidays, bringing more stable and fairly remunerated self-employment for them.

“Our income today is far better than what we earned in the factory,” Hawi says. “Before, we depended on our families to survive. Now we live independently, support ourselves, and run our own business with confidence.”

Mentorship from AIDRO continues, supporting business sustainability, compliance with labour standards and progressive formalization.

Creating decent jobs through Y2YF

The ten youth led organizations provided vocational and business training to 1,037 young people. Through this initiative, 287 new businesses were launched and 116 existing businesses expanded, creating 319 additional new jobs using the financial grants, training, Business to Business (B2B) and market linkage and mentorship services. Additionally, 321 youths have been linked with financial institutions to access financial services. Notably, female-led businesses represented 71% of all new enterprises. Participation was balanced between the Host Community (55%) and Refugees (45%).

AIDRO, one of the ten youth-led organizations, in partnership with Edukans Foundation and the ILO, supported 98 young people (65 of them women) to complete comprehensive entrepreneurship training. From this group:

• 42 youth launched new businesses, primarily engaging in retail, beauty services, tailoring, juice bars, and barbershops, creating self-employment aligned with decent work principles. 75% of the supported enterprises were led by women. 36 of the newly launched businesses obtained business licenses through formal registration, making them part of the formal tax system.
• 35 youth expanded or improved their existing businesses’ productivity and working conditions.
• A total of 43 new jobs were created through the newly established and expanded businesses.
• 40 youth received a total of ETB 993,500 (around US$ 6,400) seed grants to cover start-up costs such as equipment, inventory and workspace rental.

Financial support, mentorship, business development services and access to formal systems transformed training into tangible economic outcomes, advancing rights at work, fair remuneration and safer working conditions. The approach contributes to labour market inclusion and the transition from informal to formal employment.

Implemented under the PROSPECTS programme—a partnership between the Government of the Netherlands, ILO, UNICEF, UNHCR, the World Bank and IFC—the initiative strengthens livelihoods and labour market systems for refugee and host communities, promoting social cohesion and inclusive local economic development.

The Y2YF intervention approach of the ILO plays a critical role by strengthening the capacity of national actors to directly finance youth-led enterprises, ensuring young people move beyond training into sustainable wage employment and self-employment aligned with the Decent Work Agenda.