Harnessing the Economic Potential of Women in Africa Through Healthy Entrepreneurial Ecosystems

Today, more than one billion women are left out of the global financial system, yet we know that societies that empower women to participate fully in civic and economic life are more stable, secure and prosperous. 

So it is encouraging to note that the Global Entrepreneurship Monitor reports that Sub-Saharan Africa has the highest rate of female entrepreneurship globally, with approximately 26% of female adults engaged in entrepreneurial activity. Women-led businesses are gaining traction across the continent and countries that have cultivated healthy entrepreneurial environments like Botswana, Uganda, and Ghana have embraced entrepreneurship so much that they’ve emerged as the top three economies with the most female entrepreneurs in the world. 

Sadly, this is not the case for the continent as a whole, as some countries in other regions like central Africa remain severely impacted by fragility, economic stagnation, and instability due to socio-political crises and institutional fragility, war and famine. All of these factors hinder growth and socioeconomic development. Lack of entrepreneurship in a country results in very limited innovation, productivity, and employment opportunities. Women in Africa are a core force for growth, hence the need to implement policies that resolve constraints in their entrepreneurial efforts and bridge gender equity gaps.

The Importance of Healthy Entrepreneurial Environments 

Cultivating and promoting an environment of ongoing support fosters a woman’s ability to be economically independent. There is a need to establish inclusive communities that encourage women's advancement, concentrate more on equitable and sustainable hiring intentions, income performance, education levels, and funding from investors as socioeconomic milestones.

Undeniably, thriving entrepreneurship activities lead to sustainable development through job creation, improving social conditions, and driving innovation and economic growth. An article by Sustainable Development News notes that due to the resilience and adaptability of African women, the continent leads in the number of women business owners, with 58% of the self-employed population being women. However, because of the continent's poor and inequitable entrepreneurial ecosystems, women earn 34% fewer profits than their male counterparts.

Productive entrepreneurship communities are hotbeds for further empowerment through capital sourcing. Malawi facilitated the registration of women-owned firms in conjunction with accessible banking services and, by doing so, increased women-led business profits by 20%. Moreover, championing asset control, like land and business ownership among women in a country like Rwanda, resulted in higher access to capital for productive entrepreneurial activities. According to an insight report by Endeavor, African entrepreneurs have, in the last decade, attracted more input and engagement from policymakers, corporate executives, and philanthropic organizations to help increase their productivity. The involvement of these players has reshaped the entrepreneurial ecosystem within which the African business founders operate. Within that time—with a number of people leaving behind traditional livelihoods in favor of self-employment through entrepreneurship—Africa has begun to see an unprecedented influx of venture capital, angel investors, and other forms of investment.

Cultivating Healthy Entrepreneurial Ecosystems 

Creating collaborative networks and partnerships for women entrepreneurs is a great way to provide a firm foundation for them to seek assistance from both public and private organizations, non-governmental organizations and international development partners. It is encouraging to note that organizations like Mastercard Foundation have made a global commitment to support 25 million women entrepreneurs by connecting them to the digital economy by the year 2025. 

The support of the nuclear family also goes a long way in contributing to healthy entrepreneurial environments. When women feel they have the backing of their loved ones, partners, friends, and community, they are motivated to strive for success in their businesses regardless of their obstacles. The beauty about women succeeding in businesses is that the benefits extend to their families and the wider community.

Decision makers in each African country can also play a positive role in creating healthy environments that foster economic growth. This is possible through empowering leaders and women entrepreneurs with unique entrepreneurial skills, knowledge, opportunities and experiences that will help influence upcoming women entrepreneurs to take up their space and manage their responsibilities boldly. Moreover, women entrepreneurs can utilize existing local resources to increase their productivity and grow their businesses.

Public and private stakeholders like Women in Management, Business and Public Service (WIMBZ), Ecobank’s Ellevate, and The African Women’s Development Fund are also contributing to healthy ecosystems by creating partnerships that offer support programs and initiatives.

Nurturing the Entrepreneurial Spirit

Traditional sources of income in Africa have often proved insufficient, and entrepreneurship has stood out as an increasingly sustainable key to economic growth. Entrepreneurship has yielded enormous returns for African women; however, there still remains the need to embed innovative culture and entrepreneurial efforts within local societies.

The path to success for women business owners is often an arduous one, so recognizing and celebrating their contribution to entrepreneurship is one way we can all contribute to cultivating an entrepreneurial spirit within our communities. Women entrepreneurs are more likely to achieve their goals when they operate in a safe space that nurtures creativity and celebrates uniqueness - a space where they can learn from others, share best practices, build invaluable relationships, and acquire new business skills.

To learn more about how you can get involved in AWEC’s mission to build and propel an impact-driven environment for African women entrepreneurs, please send us a message describing your interest and a member of our team will be in touch.