Doing Business Africa – Women at the frontline

By Emmanuel Allottey

Women are contributors to core of society and are increasingly demonstrating their contribution on the frontlines in Business. Women entrepreneurs in Africa are demonstrating resilience and creativity to circumvent the various obstacles pertaining to doing business in countries riddled with poverty. Entrepreneurship is seen as a good career choice in Africa and women are actively participating in their quest for economic independence.

Many women become entrepreneurs out of economic necessity and tend to operate businesses in more crowded industries with reduced opportunities for growth. Women in Africa are more likely to be working as entrepreneurs than women in other regions, and almost fifty percent of women in the non-agricultural labour force are entrepreneurs.

The third edition of the Mastercard Index of Women Entrepreneurs (MIWE) has listed Uganda, Ghana and Botswana as the top three African countries with the highest percentages of women-owned businesses across the 58 markets evaluated around the world. These results reaffirmed that women have a direct impact on economic growth and the wellbeing of society.

Unfortunately, COVID-19 has interrupted the momentum, as many governments have enacted travel restrictions, full or partial lockdowns, and border closures to curb the spread of the virus. These measures, while necessary to save lives, have adversely affected countless livelihoods and enterprises, putting the very survival of many small businesses at risk. These businesses including women owned, are struggling with a significant drop in revenues, as well as with liquidity and human capital issues.

While both male and female entrepreneurs face such constraints as a lack of capital, women are specifically impacted by a number of obstacles, such as discrimination and the shortage of collateral. As a result, female-owned enterprises post monthly profits that are on average 38 percent lower than those of male-owned enterprises. Three factors account in part for this underperformance: the lack of capital, the choice of business sector, and commercial practices.

Despite the presence of these barriers, there are various development initiatives set in different African countries aiming to alleviate the difficulties and promote female entrepreneurship. This includes minimizing the hurdles these businesses face when accessing financing (e.g.: eliminating rules around collateral requirements) and offering technical assistance facilities to provide women-led businesses with advisory services to help them make informed decisions and adjust their business models, enabling them to survive the pandemic while setting themselves up for post-crisis growth.

As the impact of COVID-19 rages on, women-led businesses will have to weather these challenges and continue to contribute to the long-term economic growth of the continent.

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