An estimated $42bn (R678bn) financing gap exists for African women across business value chains – $15.6bn in agriculture alone. If we cannot empower African women entrepreneurs and get them involved in supply chains, we will be doing the continent a disservice.
One of the key challenges is moving women into the mainstream economy. Currently, 70% of economically active women are in the informal sector, with limited access to financial services. In recent years, this trend has started to shift and we are encouraged to see an increase in women-owned businesses in fields such as aviation, fashion, farming, IT, mining, manufacturing and natural resources.
It is critical that this funding gap is closed and there are a number of levers which can be pulled to tackle this. Visibility and access to market opportunities in corporate supply chains for women entrepreneurs is an important departure point. Large corporates should do more to educate women in Africa on supply chain opportunities and how they can access them.
SA businesses are familiar with the preferential procurement elements of their BBBEE scorecards but similar initiatives are being introduced in the rest of Africa. The Access to Government Procurement Opportunities (AGPO) programme as founded on the constitution of Kenya espouses fair, equitable, transparent and cost-effective public procurement of goods and services.
Under this policy, women, youth and people with disabilities are required to access 30% of government procurement opportunities. It is time that more countries follow in Kenya’s footsteps by implementing policies supporting preferential procurement practices that include women-owned businesses in government procurement practices.
Many multinationals operating in Africa have committed themselves to the UN Sustainable Development Goals (SDGs). These goals aim to have achieved a variety of key metrics by 2030, including SDG5 (gender equality) and SDG10 (reduced inequalities). Larger businesses looking to comply with these SDGs have the opportunity to open up their supply chains specifically to women-owned businesses. Safaricom is a listed Kenyan mobile network operator that has picked up the baton to do just that.
Safaricom is empowering women by allowing more women-owned businesses to be involved in their sourcing activities, capacity development training, mentorship and coaching among other measures. In line with its mission to ‘transform lives’, Safaricom has taken strategic actions to reduce inequality and has made a commitment to progressively increase the procurement spend to women-owned businesses to 10% of the total procurement spend.
Affirmative Finance Action for Women in Africa (Afawa) is a pan-African initiative by the African Development Bank Group, to bridge the $42bn financing gap facing women in Africa. Afawa adopts a holistic approach through three pillars: finance, technical assistance, and an enabling environment. Afawa has entered a partnership with the African Guarantee Fund to unlock $1.3bn in loans to women-owned SMEs in Africa by working with financial institutions to enhance their ability to lend to women. Alitheia IDF is a pioneering gender-lens fund investing in scalable businesses to leverage the power of gender diversity as a factor for superior performance.
Alitheia is a $100m private equity fund that drives growth in African SMEs by leveraging gender-balanced businesses to generate high financial returns and social impact. It invests in sectors that engage a significant percentage of women, either as entrepreneurs, producers, distributors or consumers.
Our data suggests that women entrepreneurs are lower risk with better repayment profiles than their male counterparts and backing women business owners makes sense on many levels. We look forward to funding more of these businesses in 2022 and partnering on projects that will change the continent.
• Mparutsa is head of enterprise and supplier development at Absa
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