Rebuilding Youth Economic Pathways in Yemen: From Fragmentation to Opportunity

A country facing prolonged conflict, economic fragmentation and collapsing public services cannot afford to leave its younger generation trapped between interrupted education, weak labour demand and limited access to finance. Yet that is precisely where many young Yemenis remain today. The challenge is no longer simply one of youth unemployment in the narrow sense. It is a wider crisis of transition: from learning to earning, from informal survival to sustainable livelihoods, and from exclusion to economic participation.

The latest official picture is sobering. The World Bank says Yemen’s economic outlook for 2025 remains bleak, with real GDP projected to contract by 1.5% and approximately 75% of Yemenis living in poverty. It also notes that basic services have largely collapsed. In that kind of environment, the barriers facing young people do not come one at a time. They stack. Economic hardship, weak institutions, low investor confidence, disrupted schooling and financial exclusion all reinforce each other.

That makes youth economic opportunity in Yemen far more than a jobs issue. It is a stability issue, a resilience issue and, increasingly, a systems issue.

A generation caught between crises

The labour-market data underlines the urgency. According to the ILO’s Yemen employment factsheet, the unemployment rate was 17.1% in 2024, but youth unemployment was dramatically higher at 32.4%. The same factsheet shows that women face especially severe exclusion, with female unemployment at 29.5%. These figures matter not only because they describe labour-market weakness, but because they reveal who is being pushed furthest to the margins. In fragile economies, unemployment is rarely just about the absence of jobs. It is often about the absence of pathways: no reliable education-to-work transition, no affordable financing, no mentoring, no formalisation support, and no clear bridge from talent to income.

Education pressures only deepen the problem. UNICEF’s 2025 reporting on Yemen indicates that one in four children is out of school and that millions require education support. That matters for entrepreneurship just as much as it does for schooling. Young people cannot build enterprises on a weak foundation of interrupted learning, poor digital access and limited exposure to practical skills. By the time many Yemeni youth reach working age, they are not simply entering a difficult economy; they are entering it after years of constrained human-capital development.

The result is a large pool of young people at risk of drifting into long-term exclusion. UNICEF’s Team Tamkeen National Action Plan 2025–2030 notes that more than 20% of adolescents and youth in Yemen are not in education, employment or training. In a fragile setting, that is not a marginal statistic. It is a warning sign. A generation that cannot access meaningful work, training or finance is not just economically sidelined; it is structurally disconnected from recovery.

Entrepreneurship Without Financial Inclusion is not a Strategy

This is why youth entrepreneurship has to be taken seriously in Yemen, not as a fashionable add-on, but as a practical response to a constrained economy. In many parts of the country, large-scale formal job creation is unlikely to happen quickly enough to absorb young labour-market entrants. The public sector is under strain. Private investment remains weak. Many households depend on informal and micro-level income generation to survive. Under those conditions, entrepreneurship is not merely about start-up culture. It is about self-employment, micro-enterprise resilience, local value creation and survival with dignity.

But here is the crucial point: entrepreneurship without financial inclusion is not a strategy. It is a slogan.

Yemen remains one of the most financially excluded countries in the region. A recent World Bank document notes that the country’s economy remains heavily cash-based and that account ownership, while improving, was still only 12% in 2022, far below the Middle East regional average of 48% and the low-income-country average of 62%. That single statistic explains a great deal. Young people cannot grow businesses at scale if they cannot easily open accounts, access digital payments, build transaction histories, receive financing safely, or connect to formal financial services. Financial exclusion does not simply slow entrepreneurship; it confines it.

This is particularly damaging in Yemen because so many of the country’s potential entrepreneurs operate at the micro and small-enterprise level. Youth-led businesses are often born in difficult conditions, with minimal capital, no collateral, weak market access and little institutional support. For young women, the constraints can be even greater, combining social barriers, mobility limitations and unequal access to assets or networks. UNDP has repeatedly highlighted the role of youth and women entrepreneurs in strengthening resilient value chains and local livelihoods in Yemen. The lesson is clear: when young people gain access not only to skills but to finance and market systems, they do not simply earn income; they help local economies function.

Integrated models point in the right direction

That is why the most credible solutions in Yemen are integrated ones. The attached Yemen project briefs point in the right direction. One initiative, MUSTAQBALAK (Financial Inclusion and Economic Opportunity to Build Your Future in Yemen), is designed to strengthen the resilience of 25,200 young Yemeni entrepreneurs through interest-free electronic loans, online training in financial inclusion and e-financial services, and more advanced mentorship for selected entrepreneurs, with a wider economic-empowerment target of over 40,000 young women and men. Another, Support to Youth Entrepreneurship and Financial Inclusion (SYEFI II), co-funded by the European Union), aims to economically empower more than 50,000 young people aged 18–35 across several governorates through grants for youth-led MSMEs, capacity-building and non-financial support, while placing greater emphasis on women’s economic empowerment, digital solutions and the green economy. It also builds on an earlier phase that generated more than 38,000 employment and self-employment opportunities.

These examples matter not because one organisation or one programme can solve Yemen’s youth crisis, but because they reflect the right architecture for intervention. Yemen does not need isolated training workshops that end without financing. It does not need small grants without follow-on business support. And it does not need financial products that ignore the realities of young people operating in fragile and informal settings. What it needs is a connected model: skills, finance, digital access, mentoring, market linkage and business formalisation support working together.

What a serious policy response would look like

So what would a serious policy response look like?

First, financial inclusion should be treated as core economic infrastructure, not as a niche development theme. Expanding access to low-cost accounts, digital payments and youth-friendly financial products would help move young entrepreneurs from cash-based vulnerability to greater business visibility and resilience. The World Bank’s recent support for Yemen’s payments and digital finance ecosystem reflects the importance of this shift.

Second, entrepreneurship support should focus on business survival and growth, not only business launch. Yemen already has many young people trying to generate income through small trade, services, agriculture, repair work and digital freelancing. The policy question is how to help those activities become more stable, productive and scalable.

Third, programmes should be explicitly designed for those most likely to be excluded: young women, displaced youth, rural youth and young people whose education has been disrupted by conflict. In Yemen, inclusion is not a soft principle. It is the difference between broad-based recovery and another cycle of deepening inequality.

Fourth, digital capability has to become part of the economic-opportunity agenda. In a fragmented economy, digital tools can help young people reach customers, receive payments, access training and participate in wider markets. But this only works if digital readiness and financial inclusion advance together.

Yemen’s youth do not lack ambition. They lack an enabling environment. The evidence is clear enough: the country’s economic deterioration, weak labour-market absorption and low financial inclusion are combining to restrict opportunity at exactly the stage when young people most need it.

If Yemen is serious about resilience, then youth entrepreneurship and financial inclusion must be treated as part of the same policy conversation. Not because every young person should become an entrepreneur, but because in today’s Yemen, economic participation will remain out of reach for too many unless finance, skills and opportunity are finally connected.

By Mana Mohammed Al Ansari, the Chief of Economic Empowerment at Education Above All (EAA) Foundation