Why Africa’s women en­trepreneurs strug­gle to grow — and how to help

The Herald (Zimbabwe) - - Feature & National News - Michael Z Ngoa­song Cor­re­spon­dent

Growthori­ented women en­trepreneurs have been found to be among the hap­pi­est work­ers in any econ­omy. More broadly, it has ram­i­fi­ca­tions for the coun­try’s econ­omy.

AFRICA has seen the high­est growth among busi­nesses run by women in re­cent years. This would ap­pear to be good news: en­trepreneur­ship is ar­guably cru­cial for job creation and eco­nomic growth. But the flip side of this data is that busi­nesses run by women are less likely than those run by men to grow be­cause of a higher fear of busi­ness fail­ure.

This is not be­cause women are bad en­trepreneurs.

In­stead, it’s be­cause they of­ten start from a lower base.

They have less start-up and in­vest­ment cap­i­tal, and pos­sess lit­tle or no col­lat­eral se­cu­rity.

This lim­its ac­cess to loans and credit. They are also af­fected by ex­clu­sion from cer­tain sec­tors, as well as in­suf­fi­cient staff num­bers. All these fac­tors af­fect the growth and sur­vival of their busi­nesses.

This low base means that when it comes to sales, num­ber of em­ploy­ees, rev­enue and pro­duc­tiv­ity, women-owned busi­nesses in de­vel­op­ing coun­tries tend to be smaller in size and grow more slowly than those run by men.

Yet, re­search shows that those busi­nesses are equally ef­fi­cient and growth ori­ented as male-owned busi­nesses.

This dis­crep­ancy led us to won­der whether there are tar­geted poli­cies African gov­ern­ments can use to pro­mote high-growth women’s en­trepreneur­ship.

So we con­ducted a study that eval­u­ated why high-growth women-owned busi­nesses are rel­a­tively rare in Cameroon.

The West African na­tion’s le­gal and com­mer­cial in­fra­struc­ture, as well as its gov­ern­ment sup­port pro­grammes re­lated to some sec­tors’ en­tre­pre­neur­ial ac­tiv­i­ties, are — on pa­per — more de­vel­oped when com­pared to those else­where in the re­gion, like Nige­ria and Ghana.

But con­versely, it has one of the high­est busi­ness dis­con­tin­u­a­tion rates and the low­est rates of op­por­tu­nity-ori­ented early stage en­tre­pre­neur­ial ac­tiv­ity in Africa.

Our find­ings re­veal how be­ing em­bed­ded in for­mal and in­for­mal net­works en­abled women to ac­cess and act on re­sources; this al­lowed them to re­alise slow and con­tin­u­ous busi­ness growth. But it cre­ates a para­dox. Women be­come locked into com­plex ad­min­is­tra­tive, eth­nic and pa­tri­ar­chal struc­tures.

These cre­ate re­cip­ro­cal obli­ga­tions that are dif­fi­cult to ful­fil, and limit women’s room for high growth.

A strug­gle to grow

In 2017, women con­sti­tuted 49.96per­cent of Cameroon’s pop­u­la­tion of 24 mil­lion.Pre­vi­ous re­search has found that 41.9per­cent of Cameroo­nian women are in­ter­ested in be­com­ing en­trepreneurs.

And, of those who are already en­trepreneurs, 56per­cent are do­ing so be­cause they see a real op­por­tu­nity; 36.6per­cent, mean­while, say they are run­ning their own busi­nesses merely to sur­vive.

An­other study has found that about 70per­cent of Cameroon’s women en­trepreneurs are in­volved in the ter­tiary and ser­vices sec­tors.

These in­clude whole­sale and re­tail trade, ed­u­ca­tion, health and so­cial ser­vices, arts and crafts, events man­age­ment, food and bev­er­age, hos­pi­tal­ity and tourism.

This trend car­ries into other African coun­tries, too.

But their busi­nesses face se­ri­ous re­source con­straints. This is partly be­cause of so­cio-cul­tural and struc­tural in­equal­i­ties that favour men. Women en­trepreneurs strug­gle to ob­tain credit, and to ac­cess en­trepreneur­ship ed­u­ca­tion.

They also bat­tle to deal with gov­ern­ment of­fi­cials, and cul­tural norms make it dif­fi­cult for them to cul­ti­vate busi­ness net­works.

All of this, along with the re­al­ity of start­ing from a lower base than their male coun­ter­parts, makes it tough for women en­trepreneurs to start big. They then bat­tle to cre­ate growth-ori­ented busi­nesses. This is a blow for women en­trepreneurs, and can have a real ef­fect on their lives.

Growth-ori­ented women en­trepreneurs have been found to be among the hap­pi­est work­ers in any econ­omy. More broadly, it has ram­i­fi­ca­tions for the coun­try’s econ­omy.

Les­sons and solutions

These con­cerns and ex­pe­ri­ences were all borne out in our study. We an­a­lysed ques­tion­naires, fo­cus groups and in­ter­view data col­lected be­tween 2014 and 2016 in Cameroon. The data also of­fered some po­ten­tial solutions.

For in­stance, it is clear that coun­tries need to cre­ate net­works or re­gional clus­ters that specif­i­cally tar­get women en­trepreneurs who dis­play growth as­pi­ra­tions.

One ap­proach would be to ex­tend ex­ist­ing gov­ern­ment poli­cies on tra­di­tional man­u­fac­tur­ing in­dus­try clus­ters to the women-dom­i­nated ser­vice in­dus­tries.

An­other would be to re­vise or ex­pand a coun­try’s national em­ploy­ment fund and tax in­cen­tives to de­lib­er­ately tar­get women en­trepreneurs with growth in­ten­tions.

This ap­proach could be tai­lored to women who are already in the busi­ness sys­tem, and would be de­signed to help pay for train­ing op­por­tu­ni­ties and to en­able mar­ket ac­cess.

Women en­trepreneurs also need to be aware of ex­ist­ing gov­ern­ment ini­tia­tives and net­work­ing op­por­tu­ni­ties.

Ex­am­ples of for­mal net­works pro­vid­ing sup­port to women en­trepreneurs in Cameroon in­clude the As­so­ci­a­tion of Cameroo­nian Busi­ness Women, Cameroon Women En­trepreneurs Net­work and Cameroon Em­ploy­ers As­so­ci­a­tion?

These or­gan­i­sa­tions act not only as knowl­edge ex­change and net­work­ing plat­forms but, im­por­tantly, serve as bridges be­tween women en­trepreneurs and their or­gan­i­sa­tions, and var­i­ous gov­ern­ment de­part­ments and in­ter­na­tional NGOs.

Membership would en­able growth ori­ented mem­bers to be aware of and ac­cess ex­ist­ing op­por­tu­ni­ties.

Fi­nally, it would be very valu­able for women who are in­ter­ested in high­growth en­trepreneur­ship to learn about those who have come be­fore them. There are women who have over­come the odds to be­come high-growth en­trepreneurs in dif­fer­ent African coun­tries.

Their les­sons may be use­ful in ed­u­cat­ing oth­ers, and in in­form­ing poli­cies to in­crease the num­ber of high-growth women en­trepreneurs in Africa. — The Con­ver­sa­tion.

Sev­eral ap­proaches can be taken to help women en­trepreneurs achieve high growth.

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