THE BLOG

It's Time Africa Elevated New Shero Role Models In Entrepreneurship

Africa is beginning to foster the growth of more black-women-led businesses, but much more needs to be done yet.

08/03/2017 04:59 SAST
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Graça Machel Trust chief executive officer Nomsa Daniels

If you Google the words "famous African women in business" you will find a very short list. Oprah Winfrey tops the list, joined by Ellen Johnson Sirleaf, the first African female President, a reserve bank governor, a famous female author and then finally, a handful of successful female entrepreneurs. This celebrity-driven short list is troubling. Behind the 20 well-known names and faces that appear on the list, thousands of women entrepreneurs stand in the shadows – rendered small and insignificant when in fact their accomplishments are heroic and bold.

In Africa, a notable trend is beginning to emerge that could yet yield many more "sheroes" in business – from government quotas, or "set-asides" for women. Kenya is one of few countries that requires that 30 percent of all government tenders be reserved for women. South Africa is another, passing the Broad Based Black Economic Empowerment Act (BBBEE Act) in 2003 and the BBEE Codes of Good Practice in 2007. The first generation of this BEE legislation, however, was mainly concerned with the transfer of shares or ownership from white shareholders to black shareholders. The result was that women, and black female entrepreneurs in particular, hardly benefited from these schemes.

Amendments to the BBBEE Act and the Codes of Good Practice in 2013, however, have made women's economic empowerment a priority. Draft regulations to the Preferential Procurement Policy Framework Act of 2000 now include provisions that favour black women-owned companies. Coupled with a stronger emphasis on growing black industrialists in South Africa's manufacturing sector these changes are a potential game-changer for women-led businesses that are looking for opportunities to grow in non-traditional sectors.

Wonderful as this all seems, the reality is that across Africa many large corporations and parastatals struggle to find women-led businesses who can take a sizeable chunk of their procurement spend. South Africa's largest transport and logistics company, Transnet, spends approximately R400 billion a year on procurement but only 10 percent goes to women-owned businesses, which they want to improve. Transnet struggles to find women who can participate in bigger projects and bid for large tenders, particularly in areas calling for more technical and operational expertise. This represents a huge opportunity to change how women-led businesses are perceived and how they can grow – but how do we equip and connect women-owned businesses with these important new sectors like clean technology and energy, chemicals and pharmaceuticals?

Findings of a recently-released survey conducted by the Graça Machel Trust's Women in Finance Network illustrate the paradoxes at work in making these opportunities a reality for women-owned businesses. The survey interviewed more than 600 women-owned businesses to better understand the barriers that hinder the growth of their businesses from small scale to medium and large enterprises. The report found that many women-owned businesses are indeed small with turnovers that are lower than expected and many are self-financed mainly because the entrepreneurs are unable to attract external finance. Although the mix of sectors was quite diverse, they tended to be concentrated in retail, agriculture and consulting with few in manufacturing or highly specialised sectors.

Although one cannot generalise across an entire continent, this profile of female entrepreneurs largely depicts the reality on the ground in most African countries. By introducing preferential procurement policies, governments can change the incentives to support, partner with and grow women-owned businesses but it can't do this alone. One year after preferential procurement had been introduced in Kenya, women were taking advantage of only 5 percent of the available opportunities. One constraint was found to be lack of access to information on how to complete the tender process. Women's business organisations responded by training women en masse in how to do this, yielding positive results throughout the country.

The private sector is also beginning to do its part. Big companies are starting supplier development programs that teach women entrepreneurs how to apply for tenders, where to get financing and business development support, and how to qualify as their preferred suppliers. This recognises the fact that women-owned businesses can contribute to critical job creation, skills development and growth, if they receive necessary support and the playing field is levelled.

Preferential procurement policies work and more African governments need to adopt them and be held accountable for their promised targets. Initiatives like these change the economic trajectory of women-owned businesses and open doors for the next generation of female entrepreneurs, empowering them to take their rightful place in advancing Africa's development agenda. As much as we love Oprah, it's time to elevate new African role models who can inspire more business sheroes to start and grow successful enterprises across Africa.