Business unusual for East Africa's businesswomen

But the 2019 International Women's Day theme "Think equal, build smart, innovate for change" invites us to think of new approaches to the challenges faced by women entrepreneurs. 

 

At the 3rd UN World Conference on Women in 1985, delegates assessing gender equality achievements during the "UN Decade for Women" noted that for their greater participation (in trade and commerce), women needed increased access to finances, technology and various forms of know-how. 

 

Fast forward more than three decades to the present day and the challenges faced by East African women entrepreneurs - -such as peanut butter manufacturer Santa Laker, egg cross border trader Mariam Babu and garment manufacturer Nellie Ssali - still fall into the same categories. They all find it difficult to obtain affordable credit. Other challenges include affording and obtaining the specific technological solutions, innovative ideas, information, training and market linkages they need. 

 

A 2014 Vital Voices Eco Systems report on East Africa once again identified access to finance, technology, markets and business management support as among the key problems businesswomen face in the region. 

 

The 2017 Graca Machel Trust survey on the growth barriers faced by female entrepreneurs in East Africa reinforced these findings, adding that access to finance (31 percent of respondents) and markets (23 percent) are ongoing challenges. Even if a woman entrepreneur overcomes them, she can expect to face them again in the future.

 

Of course, there are several success stories such as those featured in the London Stock Exchange Group "Companies to inspire Africa". They include Flora Mutahi's Melvin Tea brands which are Kenya's first flavored teas; Julian Omalla's Delight Ltd. which produces Uganda's most popular fruit drink and employs over 1,000 people and Dr. Victoria Kisyombe's SELFINA, a Tanzanian, micro-leasing company which has created over 150,000 jobs. 

 

Most women-owned businesses however, are still small and make up an estimated 70 percent of informal businesses in Rwanda, Tanzania and Uganda. 

 

Additionally, women-owned businesses are concentrated in the less profitable economic sectors with low levels of capital investment and low value added per unit of labor. This results in lower profitability. These sectors include light agro-processing, catering, tailoring and trade in fresh produce. The businesses are linked to women's traditional gender roles and typically require a low level of entry skills.

 

But this multitude of small businesses has a big impact. The informal sector accounts for over 55 percent of sub-Saharan Africa's GDP and 80 percent of the labor force. Effective support for informal businesses will therefore create more jobs and potentially bring these businesses into the formal sector where they will qualify for growth opportunities currently restricted to registered businesses. These opportunities extend beyond training but also to access to government tenders and banking. Furthermore, their contribution to the tax base will become visible.

 

It is time for a new approach - particularly by governments, civil society groups, and international donors who support women entrepreneurs.

 

They can start by investing in better primary research to deepen understanding of women entrepreneurship in general and then target businesses in particular.

 

It cannot be business as usual with a one-size-fits-all approach. It is time to develop a suite of relevant solutions.

 

For example, unregistered versus registered businesses have different needs with the former more likely to require additional business skills, coaching and support in the long run. We know that women in the region are more likely to have unregistered businesses as entry barriers are low.

 

Needs differ by economic sector. For example, light agro processors like Santa Laker are interested in innovation, obtaining machinery and meeting quality standards; cross border traders like Mariam Babu are interested in trading profitably within the regional trading rules and garment manufacturers like Nellie Ssali would like to export internationally.

 

Finally, needs also differ by business size. Micro businesses might seek customer base growth while small and medium sized businesses, for example, look for affordable credit. 

 

Arguably, limited resources sometimes mean limited specialization. However, spending $1,000 on one business and equipping it to grow should be preferable to spending $1 each on 1,000 businesses with little impact. 

 

Indeed, while spending US$1 each on 1,000 businesses may look good in terms of reach, the investment itself yields little benefits. 

 

We know targeted evidence-based interventions work. In 2016, a well-researched program by Traidlinks strengthened the export capacity of over 20 small and medium sized Rwandan enterprises in reaching US$ 1 million in exports.   

 

During 2015 to 2017, the Tony Elumelu Foundation, Nigeria supported 1,472 start-up young African entrepreneurs to create about 8,000 new jobs. 

 

Fifteen participating start-ups generated over US$ 50,000 in annual revenue. The well-researched seven pillar program includes a business skills tool-kit, mentorship and $5,000 in seed capital; all of which address business obstacles on the 1985 UN list. 

 

It is time for business unusual. We must support women entrepreneurship by investing in well-researched, integrated and accessible enterprise support programs that are designed for growth and lasting change. 

 

When we speak to East Africa's women entrepreneurs ten years for now, they should not have the same challenges Santa, Mariam and Nelly do.