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Women in African business take two steps forward, one step back

Women in Africa are leading the way when it comes to establishing their own businesses. A quarter of all businesses on the continent are started or run by women, in contrast to Europe where the share of entrepreneurial activity by women is a lowly 5.7%.

“Africa does stand out in the global landscape when it comes to entrepreneurship,” according to Toni Weis, a financial specialist at the World Bank’s Gender Innovation Lab. “Of all the regions, Africa is the one that has gender parity in self-employment and entrepreneurship, which is really quite remarkable especially if you look at a neighbouring region like the Middle East and North Africa.”

Women’s strong participation in business in Africa is linked to a number of factors, including survival – formal job prospects can be limited, necessitating innovation and self-employment by women. Conversely, it is also likely that strong economic growth in many countries, widespread urbanisation and changing laws around women’s rights across the continent have enabled much greater female participation in businesses in recent years. There are also now far more initiatives that encourage women’s participation, including specific calls for female applicants for roles.

“This is really important,” says Honorine Kadio, a networks and telecoms engineer for Orange in Côte d’Ivoire.

“Often women don’t dare apply for roles, or feel that they are out of their comfort zone.”

Actively calling for female applicants goes some way to overcoming this problem. Perhaps as a result of these kinds of initiatives, the gender imbalance in a lot of sectors is breaking down. Priya Chetty, who leads a tech policy and regulation practice in South Africa, notes that “the gender makeup has changed significantly in the tech policy world. There is now a much greater prominence of women leaders.”

All that glitters is not gold

Despite this considerable progress, a number of structural, social and infrastructure challenges persist. Whereas more and more women are participating in the private sector, this participation is not always sustained higher up the career ladder. For instance, banking tends to be a very popular sector for women to go into globally – yet the number of women in the upper echelons of financial institutions remains limited.

At the board and CEO level, “women almost become a rarity,” according to Weis. “One of our recent studies in Ethiopia found that there is a funnelling effect, with a large intake of women initially and very few who end up in the C-suite.”

Climbing the career ladder seems to be more challenging for women, possibly because women tend to stay at one institution longer than men do, says Weis; and this can cause their salaries to stagnate and reduce opportunities for promotion. There is also an educational barrier when it comes to women taking on more senior roles in organisations.

“It makes sense that there are more men than women in senior roles,” says Orange’s Kadio; “there are more men than women who go to school, so educational levels are higher for men.” “The battle needs to begin at school,” she says. “Otherwise, even when jobs exist for women, they don’t have the right level to apply for them.”

There is also a question, according to Caroline Boudergue, co-founder of the Women in Africa initiative, over whether women even want to be promoted to these positions, given the numerous other demands on their time. African women, she says, “are less equipped than women in Europe for formal childcare” and there are social norms that undermine women’s progress.

“If you don’t cook a meal for your husband, you are often not perceived as a good mother,” she adds. Internalised feelings that women have about their own roles do seem to undermine women’s advances in the workplace.

“Even among ourselves we don’t see ourselves as equal to men,” says Chido Matewa, founder of FACHS, an initiative designed to help female smallholder farmers in Zimbabwe. “Society treats us as second-class citizens and we struggle to be able to stand up for ourselves.”

Weis notes that for many women there is a question of “What should I be doing as a woman?… What have I seen others around me do?” Role models can be critical in this respect, both in breaking down social norms but also showing women what is possible.

Mind the funding gap

Financing presents another major challenge for women. This can be linked to women’s own confidence in their ability to acquire funds. Boudergue argues that “women need to be supported in soft skills so that they can look for finance… mostly they dream little when they can achieve big.” She points out that some programmes offering financing to women are undersubscribed because women do not seem to believe that they can apply for the funding or that it is within their reach to do so. But the problem is bigger than self-belief. “Women don’t necessarily invest less in their business because they believe less in their business – rather it’s because they have less access to capital,” according to Weis.

“Women tend to have a much harder time raising funds from their networks, from financial institutions and from equity investors,” he adds. “Looking at startup financing data from across Africa, we found that entirely-male founding teams raise about $25 for every dollar raised by all-female founding teams.”

Nonnie Wanjihia Burbidge, a venture capital investor for Zephyr Acorn in Kenya, has lived experience of this challenge. She previously established her own food-tech start up, and explains that “female founders get the tiniest share of venture capital.”

Sometimes this is linked to the networks that women have access to. Wanjihia Burbidge explains that women often don’t have enough venture capital contacts – and that when establishing a start-up this is a crucial missing link. The process for acquiring capital can also be painful. Wanjihia Burbidge notes that the hurdles for women founders seem to be much harder to jump than those for men. “Sometimes questions are being asked that make you want to bash your head against a wall,” she says. She relates this to underlying assumptions and prejudices around women doing business. “I wonder if there is a level of ‘I don’t know if I trust this woman with my capital’,” she says, adding that there is clearly a need for more female investors to rebalance this dynamic.

To a certain extent funding challenges are related to structural difficulties with banking in a lot of African countries, where access to credit can be challenging irrespective of who you are. Finding col – lateral that can be used when applying for a loan, for instance, can be extremely challenging. Matewa says this is one of the greatest obstacles she has faced. She notes that often women are reluctant to use their homes as collateral because of the risk that this poses if the business goes awry.

Access to financing is not problematic for women everywhere, however. Mediatrice Kagaba, a lecturer in political science at the University of Rwanda, says that in Rwanda the government has taken care to help women to access funding opportunities.

“Most banks in Rwanda have women’s accounts,” she says. “When you have this account, you have access to a series of loans.” The Rwandan government is also seeking to use companies to train women to access loans better. As a result, “it is getting much easier to access finance for women,” according to Kagaba.

Funding assistance is clearly invaluable in enabling women to get their businesses off the ground. A randomised control trial conducted in Ethiopia showed that where lending facilities were made available to women, this significantly improved women’s business success. Weis says, “The scaling up of lending to women works in the sense that there’s a strong demand for it, and there’s a very healthy repayment of those loans… It works for the banks, and it works for the women.” Women who were able to get a loan as part of the World Bank’s Women Entrepreneurship Development Project in Ethiopia “increased their profits 40% and employment by more than 50% compared to the control group,” he adds.

A man’s world

Aside from financing, one of the major challenges women continue to face in advancing their careers is men. In Rwanda, Kagaba highlights the resentment some men feel around women’s success, noting that “they are not always involved and therefore feel excluded… men can resist negatively because they feel their manhood is lost.”

Male resistance to female advancement can create toxic working environments that undermine women. Matewa explains that “People don’t take women seriously. You have to work harder so that men will take you more seriously.” Chetty points out that this is true for women in the fast-paced tech sector too. “Women often compare work in the tech sector to being on a continuous treadmill,” she says. “It can feel like you are working twice as hard and constantly having to earn the position you are in.”

“Mansplaining” – a sign of male condescension towards female colleagues – can also be frustrating. “Women are patronised constantly,” explains Wanjihia Burbidge. “You are treated like you don’t understand what you’re talking about and are often made to doubt yourself… You have to just see it for what it is and realise it has nothing to do with you or with your intelligence.”

When being realistic is punished

The existing, overwhelming male expectation of business growth can also be problematic. Whereas men typically present overly confident forecasts for their businesses, women are often a lot more realistic, says Wanjihia Burbidge. “This is a good thing,” she says, “but it translates as ‘you don’t seem to believe in your business’.”

The male-dominated business world can also have more sinister ramifications. Matewa cites pervasive corruption in Zimbabwe as a real challenge for women to navigate when establishing a business. “This is a very big problem for women. We want to operate in a straightforward way but in an environment where corruption is very high, you pay a price when you want to stick to your principles.”

Sometimes, a male-dominated working environment also forces women to consider their workplace set-up much more deeply and what measures are in place to protect them.

“On a personal level, I have always prioritised safety,” says Chetty. “When I interview for work, I am also interviewing the institution to understand the type of environment they are providing… Feeling that an environment is safe is a crucial feature for me.”

Efforts to break down some of these barriers and improve male approaches to women in the workplace are underway in some countries on the continent. For instance, programmes aimed at building positive masculinity are being developed in Rwanda, Kagaba says. These initiatives teach men how to behave when their wife is successful and how to remain confident in this situation.

Social norms are changing in some countries already. Kadio says the relationship between men and women in her office is good. “My team are nice,” she says, “there is no resentment from men, rather they are predisposed to help out when there are problems.” In Côte d’Ivoire, men have largely understood the benefits of women’s economic empowerment, says Kadio. “Men want to be with women who have their own source of revenue, otherwise life is very challenging.” This seems to be increasingly a trend in Rwanda too, where Kagaba highlights that young couples are thriving because of women’s economic empowerment.

Unhelpful help

While initiatives designed to ensure that women participate more fully in businesses and that men accept their involvement are numerous and growing, not all initiatives actually help. For instance, training, which is popular with donors and widely offered to women in Africa, has often been misplaced or over-generalised, leaning towards broad topics such as “business management” and “entrepreneurship” without focusing on skills women really need. Training is “a pretty mixed bag when it comes to results,” according to Weis. Often women will “end up going home and nothing will change in their business… this really raises the question of better targeting. Mindset-focused trainings tend to work better than purely content-focused training.”

Yet some female entrepreneurs suggest that training and skills are exactly what they need. Matewa notes that one of her greatest challenges is a lack of information and skills. In Zimbabwe, Matewa explains, the “monetary system is extremely complex and as an entrepreneur you are always learning as you go, which poses a lot of risks… constant changes to global regulations also mean that you are always in need of new information.” She adds that the information she does receive around regulations is rarely in a format that is easy to understand. Even in the most challenging circumstances, however, she remains hopeful that positive change is coming.

“We don’t have any power to change policy, but we must not concentrate on the negative,” says Matewa. “In every policy there is an opportunity and finding these is how we can survive.”

This post first appeared on African Business

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