Bridging the Gender Divide

Helping Africa’s female entrepreneurs grow

Africa has taken great strides in closing its gender gap over the past few years.

The World Economic Forum’s Global Gender Gap Report 2020 placed Rwanda in the top 10 of the Global Gender Gap Index Rating. Meanwhile, new initiatives have been developed to celebrate businesswomen in Africa – Reset Global People and Pulse recently announced a list of the Top 100 Women CEOs in Africa. Topping the bill is the inspiring Abimbola Alale, CEO of Nigerian Communication Satellite Limited, who boasts a PhD in Peace, Security and Strategic Studies, a degree in Space Studies and an

MBA from the International Space University.

On the African continent, an increasing number of women are choosing to start their own businesses. In fact, Sub-Saharan Africa is the only region in the world where women entrepreneurs are in the majority.

But it’s not all good news. According to a report jointly produced by

World Bank’s Africa Region Gender Innovation Lab and the FCI Global Practice, women’s businesses are consistently outperformed by men’s, with fewer employees, lower average sales, and less value-added. So what explains this underperformance?

THE PROBLEM

According to the report, data obtained from 14 impact datasets across 10 African countries shows that the typical male-owned firm has six times the capital investment of female-owned enterprises.

This is because women commonly have less access to assets, which consequently affects their ability to secure loans. Furthermore, women are less likely to have control over household resources and are sometimes pressured to share their profits within the family, instead of reinvesting them in their businesses.

Gender-biased beliefs also hamper women’s prospects in the sphere of business, with some women experiencing discrimination for attempting to pursue an entrepreneurial career.

A lack of formal education and training leads to lower levels of confidence, and subsequently reduces risk-taking and ambition. It also means that many women tend to cluster in female-dominated sectors such as retail and hospitality, rather than crossing over to male-dominated sectors like construction and finance, which offer higher financial yields.

THE SOLUTION

The problems faced by women entrepreneurs sound almost insurmountable. But the good news is that many governments, NGOs and businesses are taking targeted steps to solve them, enabling women to realise their potential.

Training programmes that are specifically targeted towards women can address skills gaps and lead to increased confidence. Personal initiative training in Togo has had positive effects on profits of female-owned micro-enterprises and generated a 91 percent ROI. An entrepreneurship training programme in Ethiopia has improved the business performance of women-owned firms.

Meanwhile, improving women’s access to finance will increase their ability to build businesses. There are plenty of grassroots organisations helping to facilitate this, including the Women’s Microfinance Initiative, which is establishing women- administered village-level loan hubs across East Africa. These hubs offer capital, training and support services to enable women to engage in sustainable, income-producing activities.

Diariétou Gaye, World Bank Director of Strategy and Operations for the Africa Region, believes more can be done to enable women to access bank loans by eliminating the need for collateral.

“In Ethiopia, psychometric testing measuring honesty and willingness to repay loans offers a promising solution, as demonstrated by a World Bank initiative involving a partnership with one of the country’s financial institutions,” he explains.

More and more is being done to help women advance in business across Africa. To do so is integral both to women’s wellbeing and the economic advancement of society. When women and men have equal opportunities in business, it leads to a more productive society and better- performing institutions.