A growing body of evidence points to the recognition that empowering women economically is essential not only for women to realise the full range of their rights and freedoms, but also for economic growth and poverty reduction in society as a whole. Indeed, as the argument goes, empowering women is smart business—or to be specific it is ‘smart economics’. It spurs economic growth, leading to an increase in a country’s GDP. This rhetoric has led to the rise of women’s economic empowerment programmes and policies the world over that aim to promote women’s participation in the labour market as well as their ability to make and act on decisions and control resources such as income.
Women’s economic empowerment is so high on the global socio-economic agenda that in 2016, the UN Secretary-General announced the first ever High-Level Panel (HLP) on women’s economic empowerment in order to “provide thought leadership and mobilise concrete actions aimed at closing economic gender gaps that persist around the world.” In September of 2016, the UN HLP launched its first report on women’s economic empowerment outlining key drivers—seven to be exact—needed to advance gender equality.
The African continent has not been left behind in these discussions around the economic sense behind empowering women. The incidence of gender gaps in the labour market is estimated to have cost Niger’s economy 23 per cent of its GDP, Burkina Faso 13 per cent of its GDP and Côte d’Ivoire, Mali and Senegal nearly 10 per cent of their respective national incomes. Many African women—like their counterparts in other parts of the world—also experience gender discrimination in a number of areas, thereby limiting their opportunities to be economically empowered. This includes a lack of access to land, educational opportunities, credit coupled with restrictive formal and informal laws that hinder female labour force participation, highly segmented labour markers and gender wage gaps, and women’s disproportionate responsibility for unpaid work and care in their homes and communities.
Recognising the need to address gender gaps in women’s access to economic opportunities, markets, goods and services, the African Union (AU) launched, in 2010, the African Women’s Decade (2010-2020) and the Fund for African Women to accelerate the implementation of all commitments on gender equality and women’s empowerment on the continent. This was followed with the AU’s declaration in 2015 that it was the “Year of Women’s Empowerment and Development towards Africa’s Agenda 2063.” 2015 also saw the development of the African Development Bank’s (AfDB) first-ever Gender Equality Index for Africa. The index, ‘Empowering African Women: An Agenda for Action’, covers 52 of Africa’s 54 countries and discusses three dimensions of gender equality: economic empowerment, human development, and laws and institutions.
With the growing interest in women’s economic empowerment, there has also been increasing support for women’s entrepreneurship—particularly in developing countries—as a way to ensure women are economically empowered. Yet, there are obstacles that both women-owned enterprises (WOEs) and women entrepreneurs face. Recognising, reducing and redistributing women’s unpaid work and care are but some of the areas that can play a transformative role in addressing these barriers.
The Numbers and Obstacles
Female labour force participation is increasing globally. In Africa, women make up two-thirds of the agricultural labour force. Outside agriculture, female labour force participation rates are as high as 85-90 per cent in countries such as Burundi, Tanzania and Rwanda. However, there are still gender differences—only one in two women aged 15 and over are in paid work compared with about three in four men. At the same time, women undertake the majority of unpaid work and care. Additionally, women workers tend to be found in jobs that are low-paid, with poor working conditions and little to no social or labour protection. Furthermore, women are often paid less than men—even when doing the same job.
Women are over-represented in the informal sector worldwide, but they are also far more likely to be self-employed in the informal economy than to earn a regular wage through formal employment. In other words, women are more likely to work as own-account workers or unpaid workers in family enterprises. Additionally, fewer women workers in informal employment are employers.
Within the formal economy, women hold 4 of every 10 jobs and earn on average two-thirds the salary of their male colleagues. In Nigeria, women are significantly underrepresented in formal waged employment in both the private and public sectors—in 2007, only 32.5% of women were employed in the (non-agricultural) private sector and less than 30 per cent were in the public sector with only 17 per cent found in senior positions.
When it comes to entrepreneurship, the 2016 UN HLP Report on Women’s Economic Empowerment highlights that women are less likely than men to own small- or medium-sized enterprises, with only 20 per cent of firms in the poorest countries having female owners. Data from the IFC suggests that in the Global South, women own about one-third of micro firms (fewer than 10 employees), one-third of all small firms (10–49 employees) and one-fifth of medium-size firms (50–250 employees). Within the formal economy, ILO data for 134 countries indicates that WOEs range from none in countries such as Qatar and Saudi Arabia, to as high as 66 per cent in Namibia. Looking specifically at Nigeria, in 2014, there were 16.2% of small firms with female participation in ownership and 13.9% with majority female ownership.
Women-owned enterprises (WOEs) tend to be smaller, are more likely to be informal and/or home-based, and often lack access to credit, resources and assets. Such enterprises are more likely to be found in low-profit and low-economic growth sectors, such as retail, beauty and food service. In addition to WOEs being smaller in number, they also often do not perform as well as male-owned firms. In Sub-Saharan Africa, women-owned businesses tend to fail at a higher rate than those owned by men.
There are a number of reasons for these different outcomes including firm size and access to capital, as well WOEs being concentrated in sectors characterised by fewer barriers to entry, lower profit margins and lower returns on capital. Genders gaps are also as a result of women’s lack of information, confidence, role models, access to networks and connections markets and women’s higher unpaid care responsibilities. A major constraint, however, is access to finance. In Nigeria, for example, there are gender differences when it comes to access to resources for business start-ups and expansion, difficulties in getting credit and loans. When coupled with the fact that as well as women’s businesses have fewer employees and shorter business longevity than their male counterparts, the gap becomes even wider.
Furthermore, women’s unpaid work and care limit the types of activities and amount of time they can spend on their paid business activities. Writing on women’s economic status in the early 2000s, Naomi Cassirer and Laura Addati noted that women entrepreneurs tended to be concentrated in less dynamic activities within the informal economy which build on traditional domestic skills and which can be performed at home while carrying out domestic duties. In Zimbabwe, for example, family responsibilities limited the ability of women entrepreneurs to search for new markets for their products. In Tunisia and Zimbabwe, women entrepreneurs were more likely than their male counterparts to work at time intervals throughout the day or to work only mornings, afternoons or evenings, given their unpaid domestic duties. While women in Zambia and in Tanzania reported that the time involved in registering a business was burdensome and directly conflicted with their family responsibilities.
Addressing the Barriers
There are numerous initiatives and areas that can address the barriers women entrepreneurs face, promote female entrepreneurship and foster the success of WOEs, many of which have been captured in the UN HLP Report. One notable program is the International Trade Centre (ITC) and its #SheTrades initiative, an app that helps buyers across the globe to connect with WOEs in sectors ranging from agriculture to information technology services. Other actions include facilitating access to credit, reducing the costs of opening and maintaining a savings account, as well as promoting greater transparency of simplified regulations and processes to the business environment, training and support in meeting quality standards, assistance in accessing information regarding customs, tax and other regulatory issues, and support for packaging and shipping.
There are also innovative approaches to developing entrepreneurial capacities of female-led businesses in Nigeria. As part of the Educating Nigerian Girls in New Enterprises initiative, the UK Department for International Development (DFID) offers training to more than 5,000 schoolgirls in entrepreneurial skills and more than 12,000 young women to advance their employment skills and opportunities. There is also the World Bank’s Women’s Leadership in Small and Medium Enterprises (WLSME) programme, launched in 2011 and supported by the U.S. Agency for International Development (USAID). This programme aims to promote a better understanding of the key determinants of successful women-led SMEs in 12 developing countries—including Nigeria—in terms of both entry and profitability.
In Nigeria, the approach has, by and large, been to promote productivity and start-ups of women and young lead enterprises through start-up grants, business and technical training coupled with training and mentoring. This is best exemplified in the nationwide YouWiN! (Youth Enterprise with Innovation in Nigeria) programme –a collaboration between the Ministry of Finance, the Ministry for Information and Communication Technology, and the Ministry of Youth Development.
Launched in 2011, YouWiN! aimed to help young men and women develop and execute their business ideas and overcome common challenges to running a successful business, such as access to finance and skills. The programme attracted almost 24,000 applicants, with 1,200 young men and women selected to receive a YouWiN! award—of which about 18 per cent were women—and a little more than half had existing businesses. The awardees received grants ranging from 1 to 10 million Naira ($32,000-$64,000) with an average grant amount of $50,000.
An evaluation in 2015—following surveys tracking applicants over three years—indicated the following:
“… winning a business plan competition leads to greater firm entry, higher survival of existing businesses, higher profits and sales, and higher employment, including an increased likelihood of a firm having 10 or more workers.”
Male and female-owned business that had an average of four years of business experience were both likely to experience these results. Being awarded a YouWiN! grant was especially beneficial to female entrepreneurs, as it helped reduce gender gaps in the amount of time it took to start a firm and get it running. However, it had no impact on the gaps with regard to profits, sales, and the ability to expand the business’ workforce to more than 10 workers.
Finally, investments in infrastructure—both physical (e.g. clean and efficient energy sources) and social (e.g. providing subsidised child care)—can also facilitate women’s entrepreneurship and, in turn, their economic empowerment. As raised earlier, women undertake the bulk of unpaid housework and childcare, which can impact women’s ability to work productively. Specifically, it limits women’s ability to engage in productive, income-earning activities—among other things (women also have less time for educational opportunities or even leisure or rest). Unless this time poverty is addressed, other measures to boost women’s economic empowerment are unlikely to succeed.
The time women spend carrying out unpaid work and care work is significant, and leads to persistent gaps in women’s employment opportunities, including their ability to set up or engage in WOEs or even participate in the labour market more broadly. Across sub-Saharan Africa very few households have access to modern fuels for cooking, so women and girls spend long hours each day collecting fuel and firewood. Without electricity, other household tasks such as food processing are far more laborious.
Therefore, the economic empowerment of women entrepreneurs requires dealing with women’s poverty caused by the time spent on unpaid work and care. This can be addressed through greater investment in electricity, water and sanitation, transportation and other infrastructure. Micro-electricity grids, for example, could save African women hundreds of hours of unpaid work each year. One study on the impact of rural electrification in KwaZulu-Natal province in South Africa found that household electricity connections sufficient to run small kitchen appliances increased women’s employment by 13.5% by reducing the time women had to devote to household chores.
Yet, while investment in infrastructure is crucial for women’s economic empowerment, African countries are still facing an infrastructure gap. Although there has been significant investment in infrastructure in recent years, much of it from China—examples include the Greater Ibadan-Lagos-Accra urban corridor and the Maputo Development Corridor—access to water, road transport and electricity are particularly limited. It is estimated that around $93 billion per year would be needed for Africa to close its infrastructure gap.
Women-owned enterprises can also be supported through the provision of and better access to comprehensive, affordable, and high-quality childcare services, with flexible opening times that enable women to balance their paid work with their unpaid work and care—making it easier for women workers to participate fully and productively in their enterprises. This is especially crucial for women in the informal economy who are usually outside the realm of social protection, labour laws and trade unions.
While economic empowerment, particularly through women’s entrepreneurship, is prioritized as critical for economic growth, there are still very small numbers of WOEs operating. These are mainly in the informal sector, and WOEs face significant economic barriers, from access to markets and credit to time poverty and discrimination in both formal laws and customary practices. At the same time, WOEs play a dominant role in the household economy, taking on the largest share of household tasks. Thus they are uniquely affected by the poor state of local infrastructure, as they bear the burden of collecting water and fuel. Although important progress has been made in recent years, there are still many challenges to ensure women are empowered. But all hope is not lost. In additional to existing local, national, and international initiatives, opportunities remain to advance women’s economic station—and by extension, the economic standing of their communities—through access to affordable childcare services and large-scale investment in infrastructure⎈