Entrepreneurship is a vital cog in the wheel of economic growth and jobs creation. Without entrepreneurship, there would be no room for innovation, productivity growth and new jobs. Advancing gender equality in entrepreneurship is a much-needed developmental policy as it provides equal opportunity to both women and men to shape their own lives and contribute to their society.
Countries in Africa have already made significant strides in nurturing the economic empowerment of women and children. According to a report published by World Bank, almost 50% of the women in non-agricultural labour force in Africa are entrepreneurs. Africa is said to be the only region in the world where women are more likely to be entrepreneurs than men. But most of these businesses underperform when compared to men-owned businesses.
According to the World Bank’s report, women are obliged to make decisions that differ from those men make because women are constrained by gender-specific factors.
Why do female-owned businesses underperform?
According to the World Bank, opportunities for salaried jobs are very limited in Africa. This drives both men and women to entrepreneurship out of sheer economic necessity. According to the Global Entrepreneurship Monitor published by World Bank, Africa has the world’s lowest share of entrepreneurs who started doing business in order to pursue an opportunity.
According to a recent study conducted by World Bank, “in Malawi, 14% of the female entrepreneurs have been subjected to physical or emotional violence by their partner; 32% say their husband insists on knowing where they are at all times; and 7% say their husbands force them to have sexual intercourse.”
African women, in general, start businesses to earn a living and support their family. However, many women entrepreneurs lack the skill to build large sustainable business organisation. In addition to lack of skills, women are disproportionately burdened with child and family care.
The main reason for the underperformance of women-led businesses is social. According to the World Bank’s report, women are obliged to make decisions that differ from those men make because women are constrained by gender-specific factors. These constraints, which are related to the contexts in which the women operate, influence their strategic decisions, leading to less productive outcomes.
The following are some of the reasons female-owned businesses underperform in Africa.
Legal discrimination
Women entrepreneurs also face discrimination from customary laws. They encounter more legal barriers compared to men in registering businesses, signing contracts, opening bank accounts, or owning and inheriting properties. Though many African countries have made significant progress in removing such legal barriers, only three countries have formal laws that prohibit gender discrimination.
Enacting laws to ensure equal opportunities is not enough. Even when the laws are gender neutral, this does not mean that they are applied equally.
Social norms
Social norms are informal rules about behaviours that are desirable and accepted within social groups. There are no formal sanction systems to support or enforce these rules. Yet, people tend to oblige as such norms become a part of a community’s system of values. Gender norms define what behaviours are appropriate and common for men and women.
The business decisions made by women entrepreneurs tend to be influenced by these social norms. Such norms constrain woman entrepreneurs’ ability to develop their businesses. In addition, those who fight against such norms run the risk of getting isolated.
Gender-based violations
Mental wellbeing and physical wellbeing are essential in running a business successfully. Gender-based violations, which are widespread in many African countries, hinder a woman’s ability to run a business effectively.
Working outside home also puts the safety of women at risk. Some women take up entrepreneurship as a way to avoid sexual harassment at workplaces.
According to a recent study conducted by World Bank, “in Malawi, 14% of the female entrepreneurs have been subjected to physical or emotional violence by their partner; 32% say their husband insists on knowing where they are at all times; and 7% say their husbands force them to have sexual intercourse.”
Widespread gender-based violations take a toll on the managerial capacities of women, and this is one of the main reasons for the underperformance of women-led businesses.
Education and skills gaps
Though African countries have achieved gender parity in primary education, there is a wide and persistent education and skills gap between the women entrepreneurs and their male counterparts. The gap is evident on three fronts – formal education, management skills, and socio-emotional skills. A study by World Bank suggests male entrepreneurs often have higher technical skills and financial literacy than women. These differences have an impact on the quality of business decisions made.
Time constraints
Women in Africa typically spend more time than men on household chores. This has a significant impact on their businesses as they are constrained by household chores at times of the day that are best for doing business.
A study conducted by World Bank has found that women in Uganda, Togo, and Malawi are much more likely than men to be taking care of others while running businesses. This task can take up to twice as much of their time. This fact was further corroborated in another research which suggests that men spend, on an average, 10% more time a week on their business than women.
The way forward
It is high time that gender bias against the women entrepreneurs is eliminated. Implementing gender-neutral policies seeking to reduce this gap will not be sufficient to address this problem. In addition to gender-neutral policies, the design and implementation of training programmes to develop socio-emotional skills as well as business and managerial skills are important.
The following are some of the ways to reduce the gender gaps in entrepreneurship:
1. Removing legal constraints to gender equality
2. Providing cash grants
3. Facilitating access to childcare facilities
4. Giving women land-tenure rights
5. Providing a better supportive environment to female entrepreneurs
6. Expanding linkages to new business networks.
7. Building gender-sensitive policies and programmes.
Now put on your thinking hats and think about the following questions for a couple of minutes.
Can you think of the reasons for the underperformance of woman-owned businesses in your immediate community?
In your opinion, do you think implementing gender-neutral policies will help in bridging the gap between male and female entrepreneurs?
Can you think of the ways in which we can reduce the gender gaps in entrepreneurship?
Write down your thoughts and discuss them with your students, children and your colleagues. Listen to their views and compare them with your own. As you listen to others, note how similar or different your views are to others’.
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Happy Teaching!
Equality, fraternity, entrepreneurship: Africa’s future is in the hands of women