Women’s Entrepreneurship for Economic Empowerment in Africa

Graduate Women International (GWI)
Posted April 29, 2015 from Switzerland

Women’s economic empowerment is an essential condition for sustainable development, social change and fiscal growth. However, the realisation of gender equality in the economy is far from the global reality. Women account for 40% of the global workforce, half of whom are employed in vulnerable employment, often unprotected by labour legislation (Guardian Women’s right and gender equality in focus, 2014). The gender gap within professional leadership is stark; only 18.3% of top-level management are women, despite studies showing that boards with greater female participation yield higher returns to shareholders (UN Women, 2015). Male-owned businesses are still significantly ahead in terms of growth and financial return. As of 2008, average revenues of majority women-owned businesses were only 27% of the average of majority men-owned businesses. This is influenced by factors such as more conservative professional goals and less access to capital, markets and networks (Wall Street Journal, 2015).

Women’s participation in science, technology, engineering and mathematics (STEM) industries – sectors crucial to innovation and development – is of equal concern; globally, only 12% of the engineering workforce is female, while fewer than one in three science researchers are women (UNESCO, Institute for Statistics). Marginalised women are particularly at risk of financial hardship as they are often discriminated against in accessing economic opportunity and frequently are exploited through grave working conditions. According to UN Women, 128 countries have at least on legal difference restricting women’s economic opportunities. This includes economies where women are not afforded equal pay with men for work of comparable worth. The widespread and persistent gender pay gap is in fact increasing in some countries. There are 15 economies where husbands can object to their wives working and prevent them from accepting jobs.

States and societies can realise significant socio-economic return by enabling women to access the economy. If women farmers had the same access to tools and credit as men, according to the Food and Agriculture Organisation, there would be 150 million fewer hungry people in the world. If women’s paid employment rates were raised to the same level as men’s, the United States’ GDP would be an estimated 9% higher, the Euro zone’s 13% and Japan’s 16% (UN Women, 2015). By prioritising financial literacy and business acumen in the education system and through vocational and training programmes, women learn to manage personal and household budgets and are equipped with the know-how and self-belief to become entrepreneurs. These professional skill sets should be fostered from an early age as part of school curricula and supported throughout the life course of women to empower them to take charge of their own economic independence.

Africa is a prime region to realise the full potential of a substantial educated and skilled workforce. In the period between 2001 and 2010, six African economies were identified as among the 10 fastest growing economies in the world. High population growth rates, compared with the rest of the world, contribute to an expanding labour force, which is projected to reach 1.1 billion people in 2020. 40% of the population is under 15 years old and thus strong education infrastructure must be prioritised in regional and country policies. Women account for more than 50% of Africa’s population, and the region also boasts the highest rate of women’s entrepreneurship in the world. Despite these promising indications, a substantial portion of African women entrepreneurs are concentrated in the informal, micro, low-growth, low-profit areas (World Education Forum, 2011). About 12% of women in Africa are self-employed though only about 1% of women actually employ others. African women are still vastly over-represented in the informal economy, with studies putting female participation at 70%. The International Labour Organization (ILO) estimates that while 22% of men’s productive potential is underutilised, women’s is as high as 50%. According to the UN Economic Commission for Africa, “Enhancing women’s participation in the information economy would produce a range of benefits, including increased creativity, expertise and competitiveness in the technology sector of a country, and hence facilitate the development of an information economy leading to increased productivity and economic growth.” In one study, 88% of women indicated that mobile phones enabled them to increase their economic participation.

All signs point to a huge potential to harness and promote the skills and innovation of African women to be significant players in the region’s economy. Yet several barriers persist that jeopardise African girls and women in accessing and pursuing education and entrepreneurship:

Barriers for girls and women to access education and entrepreneurs in Africa;

  • Literacy and education rates: Sub-Saharan Africa has some of the world’s lowest literacy rates, making financial knowledge and business acumen virtual impossible. In Nigeria, the literacy rate amongst female youth (15 -24 years) is just 58%, compared with 75.6% for male youths. In Somalia, 95% of the poorest females aged 7 – 16 have never attended school.
  • Socio-economic considerations: Girls and women are still the primary contributors to working in the home. Women undertake nearly 100% of food processing activities, in addition to child care and other responsibilities in households. In addition, the lost income/costs associated with enrolling in education is a large disincentive for financially weaker girls and women to attend school.
  • Cultural prejudices are still prevalent in many countries in the region, which act as a disincentive to encourage girls and women to complete secondary education and to start their own business. The empowerment that education and entrepreneurship provides threatens male-dominated societal constructs, and thus girls and women are often discouraged or otherwise inhibited in pursuing independence.
  • The threat of violence - physically and sexually, both at home and at school - significantly affects the impetus and ability for girls to access education.
  • Education for females belonging to minority groups, especially indigenous and rural women is also a large issue in many countries. These groups face discrimination and marginalisation on account of gender, societal prejudice and economic disadvantage.
  • Brain drain: A significant proportion of degreed African women, nearly a third at 28%, migrate out of Africa in search of suitable job opportunities. This is in contrast with only 17% of educated men.
  • Accessing credit: In many African countries, women cannot access lending facilities to the same extent as men. Statistics in South Africa reveal significant bias in terms of both gender and race: only 38% of black women are formally banked against 44% of black men and 94% and 91% respectively of white men and women. While 88% of banked white women are able to reach their bank within 10 minutes, the corresponding percentage for banked black women is only 22%.

Regional and institutional frameworks can better support the transition of women entrepreneurs into more profitable and larger-scale markets. To encourage more women to pursue business entrepreneurship, there needs to be concerted multistakeholder, multisector support. This should include policy makers, institutions of learning and private sector industry promoting financial literacy and business acumen in school curricula as well as vocational and professional training. Financial institutions should also provide women with access to credit on equal terms as men so that women entrepreneurs can grow their businesses and increase profits and productivity. Finally, African women and men must work together to tackle gender stereotyping in order to re-calibrate the balance and promote equality in domestic and professional roles. African women are poised to become role models for aspiring women entrepreneurs worldwide – it is high time we enable them to untap and accelerate their significant business potential.

Lorraine Mangwiro

Graduate Women International (formerly, IFUW)

Comments 2

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Alyssa Rust
Apr 29, 2015
Apr 29, 2015

Dear IFUW,

Thank you so much for sharing this really informative post. I really enjoyed reading everything about women’s empowerment and some of the really enlightening information that you included. The information about how if women were able to have the same access to farming tools there would be 150 million fewer hungry people in world was really eye opening about how access to tools and resources not only affects individual women human rights but a massive amount of people throughout the world. Other things that I found really interesting were how mobile phones has enabled so many women to be able to increase their economic participation. Your post was really impactful by giving facts and figures but also explaining the repercussions. I would encourage you to also sharing this on the No Ceilings Path to Participation Campaign that is currently going on right now on World Pulse. You can submit your story here. https://www.worldpulse.com/en/get-involved/take-action/path-to-participa... Thank you so much for sharing this.   

Sincerely, Alyssa Rust 

Graduate Women International (GWI)
Apr 30, 2015
Apr 30, 2015

Hello Alyssa,

Thank you very much for your kind comments. I am glad to hear you found the article helpful :-).

Thank you for sharing the link, we will submit a story to the No Ceilings Path to Particaption Campaign.

Best wishes,

Lorraine, GWI

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