March 8th marked the celebrations of International Women’s day under the theme ‘choose to challenge’. As women across the world choose to challenge societal norms and the traditional disregard of women, African women are steering the growth of the continent as pivotal players.
A commonly shared African proverb says, ‘when you educate a boy, you train a man; if you educate a girl, you train a village.’ This proverb simply highlights the impact women have on the community when given a chance and a voice. In the economic history of the African community, women were sidelined and viewed as lesser than their male counterparts.
It being a predominantly patriarchal society, there was a lot of discrimination in business involving the female. However, there has been a shift in the business domain in recent years, with women taking center stage at the helm of various companies and organizations and thriving in those roles.
A paradigm shift
Statistically, women constitute 58% of Africa’s self-employed population, and they are more likely to start businesses of their own than men. Worldwide, Africa records more female entrepreneurs than any other continent, with one in every four women in Sub-Saharan Africa having started or managing a business. However, with such encouraging statistics, it is unfortunate to acknowledge that women-led businesses record lower profit levels and annual turnover than those of their male counterparts. This can be attributed to various factors, which, if rectified, will lead to significant economic growth on the continent.
Necessity, the mother of invention
The increased number of female entrepreneurs in Africa is not solely credited to a passion for business but resilience. This stance has emanated from a long history of lack of better opportunities through discrimination, lack of formal education, and homemaking responsibility. Therefore, the majority of women-led businesses are small-scale home-based ventures that have been born out of a need to create extra income for the family.
This means that there is a lot of untapped potential that can result in Africa’s economic growth. With more empowerment and investment in the African woman, the continent will steadily become an economic powerhouse to reckon with.
Increased involvement in key economic sectors
The predominant sectors in Africa poised for remarkable growth are wholesale and retail, food and agriculture, mining and mineral extraction, health care, financial services, manufacturing, and construction. Previously, these sectors were viewed as a man’s world. With the change in the economic outlook and policy changes, more women have taken an active role in engaging in these domains and have successfully done so. It is encouraging to note that many governments across the continent have made policy changes that support and encourage female participation in these key economic drivers.
Improved access to finance and training
One of the major limiting factors to female businesses thus far has been financing. The primary reason why most businesses have remained in the small-scale dimension is that most women were discriminated against in accessing business loans and would rely on self-funding to finance their businesses.
However, having realized the potential and impact that female-led businesses have, some institutions and organizations have enabled more accessible financing for the African female entrepreneur. The African Development Bank is one such institution that has established financing programs for women entrepreneurship development while also reinforcing business support through access to networks, skills development, and enhanced use of information communication technology.
With such forward-thinking, the impact of the female entrepreneur in the business arena will spur definitive results.
The need for formalization
Although female-led businesses on the African continent constitute the majority, most remain in the small to medium scale zone. In order to fully realize the potential for women in business, there needs to be growth into the formalization of their businesses. This can only be achieved through registering their business institutions and creating internal record management and accountability. If Africa is to truly grow as an economic hub, formalization will be essential. It would be encouraging for female-owned or female-led companies to be listed on the stock exchange or even achieving a place in the fortune 500 rankings.
Many business people will attest to the positive impact that mentorship has on their ventures’ growth and success. Having access to and information from someone who has run the same course can differentiate between success and failure. In line with this, a growing number of business leaders and people of influence have assumed the role of mentorship in empowering women entrepreneurs. In this technological era, there are many virtual mentorship programs available at the click of a button.
If you want to fast, go alone. If you want to go far, go together. The crowdfunding phenomenon is a disruptive innovation concept that has become popular in raising funds for business investment. A recent article by Price Waterhouse Cooper South Africa reports that an analysis of 450,000 seed crowdfunding campaigns from nine of the largest global crowdfunding platforms shows that female-led campaigns were 32% more successful at reaching their funding target than male-led campaigns.
In all this, the African woman is not left behind. Statistically, 11% of African women successfully reached their targets. One such successful testimonial is of the Kenyan SACCO women’s group that pooled its resources and built student housing apartments, becoming outliers and landowners in their community. The initiative includes a group of about 25,000 women who patiently contributed financially for five years. Having identified a gap in the availability of student accommodation, they invested in this real estate venture, defying societal bias and discouragement. With such disruptive thinking, the African woman has the potential to soar to greater heights in not only achieving personal economic freedom but also the development of the community through commercial growth.
Africa enjoys the advantage of an abundance of natural resources, a young and growing population, is estimated to have a larger workforce than either China or India by 2034, and is fast catching up with the current technological advancements. As highlighted in the Sustainable Development Goals, women empowerment positively impacts the economy and reduces poverty. Women are proving to not only excel in homemaking, as has been their principal role for several generations but also becoming movers and shakers in business and leadership and substantial economic drivers. For Africa to realize its full potential, investment in women and women-led businesses needs to be at the pith of the continent’s economic policies.