Making policies work

GREAT insights Magazine

Women and entrepreneurship in Africa

October 2016

Sakala, R. 2016. Women and entrepreneurship in Africa. GREAT Insights Magazine - Volume 5, Issue 5. October/November 2016.

Women entrepreneurship has the potential to transform Africa, reducing poverty and foster sustainable development. The author’s experience is that this requires active reforms and support mechanisms to overcome numerous hurdles and unleash this potential.

Entrepreneurship was once considered a man’s domain, but the tide has shifted: for example, more than 9 million US firms are now owned by women, employing nearly 8 million people and generating US$1.5 trillion in sales according to 2015 data from the National Association of Women Business Owners. Yet, women entrepreneurs often struggle with less access to funding for start-ups, although they are often able to do more with less.

Experts report that women in Africa contribute 70% of food production. They also account for nearly half of all farm labour, and 80-90% of food processing, storage and transport, as well as hoeing and weeding.

One major problem is that women do not own property, required as guarantee to access the sources of financing (loans) to start or invest in a business. Traditionally, women are denied inheritance and property in the name of male family members: husbands, brothers, so that owners of the property in the family are fathers in-law, husbands or brothers.


Current evidence


Such considerations are part of my everyday life as a young woman in Malawi. Locally, this is so evident in the Malawian setting where very few women have access to land or property. The majority of the women still do not have access to properties. Working with Save the Children (SC) has taught me a lot on the challenges women are facing. Most of these women targeted by SC are teenage mothers or in their twenties. Most of them tell you that they got pregnant not because it was a choice but they wanted to earn a living and in the course of this, had unprotected sex. Men refuse to pay women if they ask to use protection. The wage they risk their lives for is less than one dollar. Then there is another category of women who were either pushed into marriage or got married at a very young age. In Malawi, one out of every three girls gets pregnant before the age of 18; out of 60% of the girls who complete primary school, only 30% make it to secondary school. The question is: where does the remaining 70% of the girls go?

Most of them are marginalised, they are in extreme poverty, having more than three children and some are already married. Most times you see them malnourished, anaemic and prone to HIV and other sexually transmitted diseases.

This explains why 70% of the girls who eventually turn into women are illiterate in Malawi. This makes it difficult for them to know how to successfully operate their business. Most of them lack skills in business management, finance management, record keeping, making profits, gross margin analysis, breakeven yield and price, marketing and negotiating skills and information regarding markets where they could sell their goods. Because of this knowledge gap, women continue to do small business and still operate at losses.

When women get married, 70% of them are responsible for farming. Once the harvest is ready women are not the decision makers regarding whether to sell or not, where to sell or at what price, and worse still, how to use the money. This is done by men (their husbands) who were generally not even responsible for farming. This on its own is a big hindrance for women to grow economically and be independent.


Success story


Working with Save the Children, I was sent to be an Economic Development Facilitator at Neno district in Malawi in a project aimed at Improving Economic Opportunities for Women and Children in Malawi (INEW). The project has reached about 4,500 beneficiaries. Their main target has been to address the problems stated above – we have trained and educated the women in business and finance management, record keeping, profits/gross margin analysis, breakeven yield and price, marketing and negotiating skills and information regarding at which markets to sell their goods. Then we helped them to regroup and encouraged the village savings and loan component. Now they are able to borrow on their own at a fair interest rate of about 20%, based on what they have agreed as a group, and are able to start a business and re-invest in it. We have seen how they have been able to even build houses for themselves, roof with iron sheets, cement their floors, send their children to school and cover all the expenses. They have also marketed their own products, for example pigeon peas, and were able to set a price and not be a price taker as was always the case in the past.

In scaling up investments for women, we need to help women learn the skills in managing a business just like SC has done. We need to help women develop business initiatives and have access to loans (for instance through de-risking). This is what we did with the Luanar Students Entrepreneurship Lead Initiative (LUSELI), which aims at identifying youths that have potential business ideas contributing to food security, economic growth and reducing malnutrition, and help finance such business initiatives. LUSELI can be merged with Commercial Agriculture Support Services (CASS), which targets young commercial farmers and has impacted over 5,000 individuals in Malawi. The interest rate is at 43% in Malawi. By acting as a guarantor to women loans, we are taking the 23% risk premium rate so that women and graduates can get a loan at 20%. We need to help women have access to land for production and security. This can be done by lobbying with chiefs, husbands and other people in charge of land. Marketing and negotiation skills, access to markets and information regarding exchange rates will have to be key factors in making sure that women’s business can scale up. Value addition and processing will help them earn more money than selling just a raw product.

We will also need to promote other forms of business like partnerships rather than sole proprietorships, which is mostly preferred by many people who want to start a business or are already in business.

Listen to Rose Sakala interviewed by ECDPM and at the European Development Day 2016 panel and Young Leader. For further reading, see UNDP (2016), Africa Human Development Report 2016: Advancing Gender Equality and Women’s Empowerment in Africa, and Hunt, A. and E. Samman (2016), Women’s economic empowerment – Navigating enablers and constraints, ODI.

About the author

rose-sakala

Rose Sakala is a student of Bachelor of Science in Agribusiness Management at the Lilongwe University of Agriculture and Natural Resources (LUANAR), Malawi. She is the 2015 winner of the Future African Leaders Awards (FALA) as well as a recipient of the Woman of Distinction Awards 2016, and was invited to participate as a Young Leader to the European Development Days 2016 in Brussels.


Photo: Sewing bags of rice seed shut in Hara, Malawi. Courtesy: Swathi Sridharan (ICRISAT), Flickr.com.

This article was published in GREAT Insights Volume 5, Issue 5  (October/November 2016).

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Economic Transformation and TradeBusiness and DevelopmentAgricultureGender

External authors

Rose Sakala