by Melanie Hawken, founder & ceo, Lionesses of Africa
Women entrepreneurs are an incredible force for economic and social change in Africa. And why do we believe this? It’s simple: women entrepreneurs are powerful change agents.
Consider the facts: Africa has the highest female entrepreneurship rates in the world, and Sub-Saharan Africa leads the way, with female entrepreneurship rates around 26 percent of the female adult population. According to the World Bank, women entrepreneurs in developing economies typically reinvest 90% of what they make back into their communities. That means women entrepreneurs are not only excellent engines for economic growth but also the most potent engine for distributing that growth. These factors make women entrepreneurs an impactful solution for driving economic growth and addressing inequality on the African continent. So, what’s the problem in getting women entrepreneurs to fulfill their potential? Access to growth capital and access to markets.
If we are to unlock the full societal impact of Africa’s women entrepreneurs, then investing in the growth of their businesses is not only the right thing to do, but it also makes economic sense. Numerous studies and economic data support the notion that backing women-led businesses is a strategic move that yields numerous benefits for the African economy. Firstly, women entrepreneurs have consistently demonstrated their capacity to generate economic growth and create much-needed jobs for their communities and business sectors. When investment capital is directed towards these businesses, it unlocks an extensive reservoir of untapped potential, helping to reduce unemployment rates and enhance overall economic stability.
An example of this impact can be found in the findings of a research study undertaken by Lioness Data, the ‘South African Women Entrepreneurs Job Creators Report 2022’. The resulting data shows that women entrepreneurs with varying characteristics are creating jobs across a range of business demographics. Women, young and more mature, leading both small and large businesses, are shown to be motivated and proactive at creating jobs. They represent a clear opportunity for investment and access to market support. By supporting women entrepreneurs more effectively, with access to funding, markets, resources, and technical know-how, they can help countries like South Africa meet their significant job growth needs.
In addition to job creation, women-led businesses tend to be more financially profitable and resilient. Research consistently indicates that these enterprises present a higher return on investment than their male-led counterparts, and they are better at paying their loans back on time. Moreover, these women-led businesses are often more adept at weathering economic downturns, changing market conditions, and other disruptive factors, safeguarding jobs as a priority.
Beyond the economic benefits, investing in women-owned businesses has wider societal implications. When they succeed, they become valuable role models for generations of young, aspiring women business and brand builders following in their footsteps. This ripple effect motivates more women to enter the entrepreneurial space, creating a cycle of empowerment and economic progress for the African continent. Furthermore, investing in women also helps to address gender disparities and promote a fair and inclusive society.
So, by unlocking the full economic and societal impact of Africa’s women entrepreneurs and making access to growth funding and access to new markets a reality, they will become an incredible force for economic and social change on the continent. We all have a role to play in making that happen!