Women entrepreneurship and the week of economics in Africa

We see a lot of women in the region running businesses such as shops selling beauty and fashion items, or the ladies attending to us at their stalls in the market.

We, however, don’t tend to see as many female entrepreneurs in most other business sectors.

This is despite Sub-Saharan Africa having the highest rate of entrepreneurship in the world, according to the World Bank.

The Bank finds that approximately 42 per cent of the entrepreneurship consists of non-agricultural labour force classified as self-employed or employers.

It also finds the entrepreneurship mired in limitations. Most entrepreneurs are unable to grow their businesses beyond small-scale subsistence operations, hindering their contribution to poverty reduction and shared prosperity.

Women entrepreneurs are the most affected, lagging behind the men in terms of their business performance.

Monthly profits and sales from female-owned firms are on average 34 per cent and 38 per cent lower respectively than those from male-owned businesses.

That is a huge gap between the two genders’ performance. It is mainly due to universal challenges that women have to contend with that they should so lag behind.

These are well known and include work-life balance especially as it relates to childcare forcing many mothers to stay home. Other challenges include difficulties securing funding, sexism, fear of failure and lack of mentors to forge successful enterprises.

These are acknowledged with efforts ongoing to address them. The training held for 50 women entrepreneurs in Kigali in November 2018 by the Sustainable Development Goals Centre for Africa is one such effort to strengthen women’s entrepreneurial capacity. Rwanda was the first country in Africa to benefit from the training that was set to be conducted in other countries around the continent.

The efforts should be up-scaled. It is important that gender gaps are bridged if we are to address the dual challenge of economic growth and job creation, particularly in the face of widespread unemployment and growing youth populations.

Speaking of youth populations who include young women, there are 200 million youth (15-24 year-olds) in Sub-Saharan Africa. The vast majority are unemployed, and their population is projected to reach 275 million by 2030 and 325 million by 2050.

Youth unemployment has many issues including threatening social instability, but they are a separate problem. Few women in entrepreneurship constitute another problem.

The women’s problem may be summed in what is lost: Earning women, like educated women, often tend to better care for their families catering for their needs. This is against the fact that, for example, female-headed households often are at greatest risk for poverty.

Having mentioned poverty, I cannot pass the opportunity to note the Nobel Prize for Economics and the three international days observed this week.

Last Thursday was the International Day for the Eradication of Poverty, coming a day after the World Food Day on Wednesday, and the International Day for Rural Women last Tuesday.

The three days deeply resonate with the woman’s plight in Africa. I take it that their falling in the same week a coincidence, but it’s a good thing the better to drive the point home.

Preceding the international days, and perhaps more significantly, was the Prize for Economics on Monday this week that went to three economists, one of them a woman (the second ever to win the prize), for their experimental work to alleviate global poverty.

Peter Fredriksson, who chaired the Nobel Committee for the Prize lauded the trio’s experimental approach as having "reshaped development economics, had a clear impact on policy and improved our ability to fight global poverty."

Institutions reshaping global development economics are the likes of the World Bank which looked at factors impeding women’s entrepreneurship in the recent analysis, Profiting from Parity: Unlocking the Potential of Women’s Businesses in Africa.

The analysis affirms the main factors that influence the success of female entrepreneurs and calls for African governments to target key policy areas which will help empower female entrepreneurs.

These include supporting women with secure savings mechanisms, implementing training programs that apply lessons from psychology to encourage women to act with an entrepreneurial mindset.

Other areas include sharing relevant information as well as providing apprenticeships and role models to encourage women to “crossover” into male-dominated industries where they tend to earn more money than in traditionally female sectors.

The views expressed in this article are of the author.

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