Does entrepreneurship equate empowerment for women in Africa?

As the Global Entrepreneurship Monitor reports in one edition after another that Sub-Saharan Africa is blazing a trail for women entrepreneurship across the world, it is worth taking time out on this International Women’s Day to look at whether these high rates of entrepreneurship are contributing to women empowerment – or simply lack of opportunities for women in other fields of work.

The latest edition of the Global Entrepreneurship Monitor (GEM) for 2018/19 highlights that Sub-Saharan Africa boasts the highest rate of entrepreneurial activity for women at 21.8%. Before we begin to celebrate what this finding means for the emancipation of women in the continent, it is worth looking at the broader context to understand the true implications of this otherwise laudable development. 

For a start, Sub-Saharan Africa is tailed closely by Latin America at 17.3%, leading GEM to conclude that these two regions taken together represent a larger number of low-income countries in which necessity demands women’s participation in income generation, even in contexts where conservative gender ideals place the breadwinning burden on men and relegate women to the household.

Why women become entrepreneurs: Necessity is the mother of invention

Caption: The wide prevalence of female entrepreneurs in agribusinesses in Africa evidences that women are often prompted by a necessity motive rather than driven by opportunity (Credit: African Business Communities)

When we consider that around the world, people are prompted to start businesses mainly for one of two reasons: (1) because they have no other means of economic support or employment; or (2) because they are pursuing a business opportunity; it becomes clear that necessity-driven entrepreneurship is clearly the less attractive of the two options. However, women are disproportionately more likely than men to report a necessity motive in most countries. 

Globally, 27% of women entrepreneurs reported starting a business out of necessity compared to 21.8% of men, while in Sub-Saharan Africa, a whopping 42% of women entrepreneurs – more than 50% over the global average – cited necessity motives. Indeed, a closer look at the startups created reveals that women mainly undertake a business in the informal sector. African women entrepreneurs are often mothers taking care of large families who start their projects in coun­tries with very little business-enabling infrastructure and extremely low education rates. Their entrepreneurial instinct is guided more by compulsion than desire as their situations do not offer any other opportunities. 

Most interestingly, and equally unexpectedly, a report authored by global consultancy Roland Berger together with the Women in Africa (WIA) Philanthropy notes that children do not hinder either women employment or entrepreneurship. “On the contrary, the African woman entrepreneur is most often the mother of several children: she needs to provide not only for herself but is in charge of the whole family,” the report soberingly highlights. Thus, women entrepreneurs face the burden of trudging along the road of entrepreneurship with the weight of family responsibility squarely on their fragile shoulders.

As another insight into the incentive behind turning to entrepreneurship, the report notes that low education levels actually promote higher rates of entrepreneurial activity among women. As countries develop and levels of education improve, women entrepreneurship tends to decrease, along with the necessity to turn into an entrepreneur – indicating that high entrepreneurship rates among women might actually translate to lower employability, with the latter prospects improving as education levels rise.

The Universal Female Inferiority Complex: Never good enough 

A classroom session is held for entrepreneurs from women-run businesses at the Women in Africa Summit 2019 (Credit: Women in Africa)

The Roland Berger and WIA report also noted that only half of the women surveyed by GEM stated they intend to launch their startup within the next three years (compared to 57% men), 61% perceive an opportunity to do so within the next three years (compared to 69% men), and 56% think they have the re­quired skills to start a business (compared to 64% men). 

Thus, despite these figures being encouraging in themselves and proving women's strong will and positive perceptions of both themselves and their opportunities, women remain reticent and less confident in their own competence compared to men. 

This reticence also translates into self-censorship, char­acterised by women showing less ambition than men. For example, only 28% of female entrepreneurs plan on recruiting more than five employees, and only 7% think they will eventually export more than 25% of their pro­duction (five points less than men on each count).

Thus, women remain fuelled by necessity to run their businesses as they lack the confidence to scale them up and take them to the next level. Ironically, the same reasons that prompt women to start a business – looking after their family – causes them to stay small as they fear failure too much to take the calculated risks needed to grow their business to a threshold where it will be self-sustaining.

The silver lining to this cloud: Women who are the pillars of family and society

Caption: Adwoa Farmer, Founder of FarmHer Ghana, marries technology and agriculture to bring cutting edge technologies and solutions to farmers that can help them increase productivity or improve on their processes (Credit: Platform Africa)

On the positive side, the report notes that the exis­tence of this necessity-based entrepreneurship could also be considered as a starting point towards a trend of more opportunity-driven forms of entrepreneurial ac­tivity. Empowered by their education and access to bet­ter infrastructure, women start undertaking business more and more often by opportunity, i.e. because they perceive it as an attractive work alternative and have the will to be independent and increase their income.

Further, when women entrepreneurs in Sub-Saharan Africa grow, they are most likely to take their family along with them. Globally, women (at 64.2%) are much more likely to invest in a family member than men (at 51.9%), with women in Sub-Saharan Africa being most likely to support family members (at 70%). 

Finally, the Roland Berger and WIA report hearteningly notes that African women create a deep impact in their communities with the specific schemes of entrepreneurship that they favour. Indeed, wom­en's business ideas often address the daily problems that populations around them encounter. While entrepreneurs may or may not do so consciously, but the trend is clear and the social impact undeniable. 

Thus, as a general theme, women entrepreneurship in Africa covers sectors such as agriculture, energy (such as rural electrifica­tion project and projects focused on improving access to water, among others), education and health. It is clear then that these women-powered companies have the potential to exercise an undeniably positive effect on societies, especially in the less privi­leged countries of the continent.

Weighing in on female entrepreneurship: For the greater good, but is it good for women themselves?

Caption: Women at work in South Africa celebrate International Women's Day under the #EachforEqual theme (Credit: The HR Director)

From the above analysis, it is manifestly clear that female entrepreneurship creates deep impact in the family and society of the African women entrepreneurs. However, is it good for the women themselves who are wearing the hat of an entrepreneur, given that in most cases such enterprises are formed out of necessity and impose great demands on their owners to balance family and work obligations in a low-income context?

As we celebrate International Women’s Day today, this issue merits a closer look more than ever before. We cannot celebrate women, on the one hand, and expect them to trudge along with unbearable burdens on the other.  It is high time that women are given greater access to education, infrastructure, work prospects and income avenues – such that entrepreneurship is a privileged choice in an equal opportunity context, rather than a forced decision in a double bind where women face family responsibilities on one side of the coin, and on the other, a survival-fuelled existence with a micro-business that lacks the opportunity to scale up.  

In this context, businesses such as FinTech firm Vesicash founded by Ehiaghe Aigiomawu, Women in Africa 54 2019 laureate for Nigeria (winner of the FinTech Award at the Women in Africa Summit), AgriTech firm FarmHer established by Adwoa Farmer, WIA 54 laureate for Ghana, and business incubator ideiaLab started by Sara Fakir, WIA 54 laureate from Mozambique, showcase important strides taken by women in Africa to empower female entrepreneurs and act as positive role models by making a mark in hitherto male dominated businesses in the technology space.

As #EachforEqual sets the tone for this Women’s Day, it is time for women entrepreneurs to come into their own and see themselves as equals of male entrepreneurs – because if they lack the confidence to go out and conquer the world, will the world ever become a better place where sustainability, community and family are placed before commerce, profits, and corporate greed?