March has evolved as a very important month globally because it is the month designated for celebrating women.
Precisely, tomorrow the 8th of March is International Women’s Day 2021, a global day celebrating the social, economic, cultural, and political achievements of women.
Women-owned ventures are strong catalysts for economic development, and when female enterprises thrive, this reflects positively on the economy and the society is happy- a win-win situation for everybody.
Today, more and more audacious women are taking the lead in the entrepreneurship space across the globe.
In Africa, the 2020 Mastercard Index of Women Entrepreneurs (MIWE) report ranked Uganda (39.6 per cent), Botswana (38.5 per cent), and Ghana (36.5 per cent) as the world’s three leading economies with the most female business owners.
Since the Index’s benchmark indicator is calculated as a percentage of total business owners, what this translates into is the welcome reality that women make up the majority of entrepreneurs. A recent World Bank report also lends credence to this fact.
Ironically, however, women entrepreneurs across sub-Saharan Africa continue to earn lower profits than men – 34 per cent less on average.
In addition, numerous female-led ventures are micro and small businesses with little or no opportunity to grow and scale.
“Most of these businesses tend to have no employees and have low growth expectations: they are, for the most part, one-woman enterprises oriented to consumers,” a CNN report stated as far back as 2015.
However disheartening the situation might be, female founders, refuse to give in or break even in the face of economic and other social challenges peculiar to them.
Instead, they are flexible enough, increasingly demonstrating a low fear of business failure, innovativeness, creativity, and a zealous commitment to contribute to their communities.
We live in an era where, to a large extent, representation matters, yet a significant underrepresentation of women still exists in the tech sector as well as other male-dominated industries.
Eunice Baguma Ball, founder of the London-based Africa Technology Business Network (ATBN) argued that if given the right incentives, African women can unleash their potential in the continent’s growing tech sector.
The gender gap in the tech sector is nowhere near closed. As such, it needs to be given more attention, especially in Africa where gender inequality is high.
For this reason, we need an all-hands-on-deck approach to change the present narrative. Basically, everyone has a part to play ranging from investors, decision-makers in tech-driven organizations to the governments.
Why is there so much attention around women-owned ventures? There are excellent reasons some of which include the social and economic benefits they add to their communities in accord with the UN’s SDG Goal 5.
That said, consider the following as measures to enable women to forge ahead in this period of global digital transformation.
Bridging the funding gap
Although the tech sector is slowly shifting to accommodate more female-owned startups, the investment landscape is still heavily skewed towards established male-led tech companies and digital unicorns.
Interestingly, study upon study reveals that not only do female-led ventures perform better than males; they generate higher investment returns than their male counterparts.
If that’s the case, supporting thriving and high-potential female-owned startups should be a piece of cake, right? The stats tell the opposite.
In 2019, less than five per cent of VC funding for African startups went to companies with women co-founders.
In 2020, Crunchbase data reveals that global venture funding to female-founded companies dropped significantly.
Considering that more than 800 female-founded startups globally received about $4.9bn in venture funding in 2020, through mid-December, the report discloses that compared to the same period in 2019, there’s a 27 per cent decrease.
Unsurprisingly, one of the reasons attributed to the decline in female funding is the COVID-19 pandemic.
The reality is this: female founders get less funding compared to their male counterparts. To curb this trend, more and more organizations, accelerator programmes, and investment funds that provide women with access to funding are sprouting up, giving female-owned startups the needed boost to scale.
While this is laudable, consistent and intentional efforts must be put forward to close the existing funding gap.
Implementing gender-focused economic policies
In Africa, lawmakers must recognize that by implementing the right policies and interventions, there will be a huge opportunity for women entrepreneurs to innovate and unleash their potentials.
This is especially important because, in many African countries, women face discrimination against their gender which, more often than not, deprives them of owning or getting access to some assets.
Although, when it comes to business law, African governments are making progress in reducing gender bias, what about family law which gives husbands total control over assets- land, monies, and other sources of collateral?
Through gender-focused policies such as Gender Responsive Budgeting (GRB), policymakers can also improve access to funding for women-led businesses.
Also, legislators can carry out gender smart initiatives designed and dispensed from a gender lens perspective to ensure that women-led businesses can and do benefit.
For example, they could enforce that external collateral requirements can be relaxed or no longer be required by financial institutions for women-led businesses; African governments could also consider tax breaks for organizations that invest in women-led businesses.
Rolling out female empowerment initiatives
Many organizations are working to raise awareness of the perspectives and skill sets that women entrepreneurs bring to startups.
To that end, initiatives such as online contests, innovation boot camps, and accelerators are hosted to provide training, leadership, and business skills to women entrepreneurs in technology-related ventures.
In conclusion, enterprise development is a pivotal engine driving economic growth and job creation. In the absence of entrepreneurship, there would be little or no innovation, little productivity growth, and few new jobs.
Female founders are a key component in Africa’s growth. Thus, governments and other stakeholders in the continent’s tech ecosystems should identify and execute policies that can surmount the barriers they face.
This column joins the world in celebrating International Women’s Day 2021.
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