‘Investment in female founders is our collective responsibility’
So goes the old adage: The hand that rocks the cradle, rules the world. While some might find depth and truth in this saying, others might beg to differ based on realities that determine the social challenges women face the world over. So, as we move rapidly toward the middle of the 21st-century, how can we be effective allies in support of the cause to level the playing field and empower women, right here on the continent, with tangible opportunities for stepping into the leadership role proposed by this idiom?
The Balance defines economic power as the ability for countries, businesses or individuals to improve their standard of living. This increases their freedom to autonomously make decisions that benefit them, while reducing the ability of any outside force to impact their freedom. The key to dismantling the structural challenges women face, therefore, lies in strengthening their economic power.
These challenges are numerous and, according to the African Development Bank, they continue to drive gender inequality and even limit the continent’s progress in totality. In a similar vein, challenges identified, at the Africa Union Gender Pre-Summit on the 2016 African Year of Human Rights, as pressing for women included, but were not limited to, economic exclusion and discrimination from financial systems.
Despite these odds, however, African women repeatedly feature at the top of global surveys on entrepreneurship with the United Nations (UN) reporting that the 27 per cent female entrepreneurship rate in Africa is the highest in the world. The UN goes on to warn, however, that most female-led enterprises in Africa are small businesses with few growth opportunities while also citing that female entrepreneurs are not evenly spread across the continent.
The reality-check list on the continent’s state of female entrepreneurship is long and includes greatly uneven access to funding for female entrepreneurs, when compared with their male counterparts. For example: from January 2019 to April 2020, 13.4 per cent of the 276 disclosed deals went to companies with at least one female on the founding team and this was just 5.7 per cent of the total invested capital. Within the first 4 months of 2020, this declined to 3.2 per cent.
Moreover, while venture capital funding for startups across the continent in 2017 reached an all-time high of more than $500 million, representing a 53 per cent year-on-year increase, only $30 million (5.3 per cent) went to companies with female co-founders. Of the $725.6 million in funding that was invested across the African continent in 2018, only 2 per cent went to women-owned or women-led businesses. Meanwhile, the e-Conomy Africa 2020 report by the IFC and Google highlighted that women comprise 20 per cent of the total population of developers in Africa.
Even with the numbers noticeably low, African women constantly endeavor to push through, despite the structural hurdles they face – and it shows. The startup ecosystem has begun to create opportunities for women who code across the region.
Beyond the continent’s own economic growth, economic power afforded to women (through investments made in their entrepreneurial pursuits) will go a long way in reclaiming their social standing and in reclaiming their rights in areas such as education, safety and personal freedoms. Empowering female entrepreneurs is essential for both economic and social development on the continent.
Google.org recently partnered with the Tony Elumelu Foundation giving a $3M grant to provide rigorous entrepreneurship training, mentorship, coaching, access to networks and key markets to at least 5000 women. There will also be $5,000 in seed capital in the form of one-time cash grants to 500 African women informal business-owners in rural and low-income communities across Nigeria, South Africa, Kenya and select Francophone countries. This is part of the 2021 Tony Elumelu Foundation Entrepreneurship Programme, preparing women to navigate their businesses through the start-up and early growth phase. We are determined to help female entrepreneurs grow their businesses by creating initiatives that go beyond just allowing capital and by providing relevant training.
In most emerging economies, entrepreneurship is the path to job creation and income generation and it can be a solution to reducing inequalities among men and women. By tackling systemic barriers-to-entry, and facilitating meaningful participation in entrepreneurship, we hope to encourage women to become entrepreneurs. Through programmes that support women with funding, we will generate prosperity in Africa. We hope that the idiom, The hand that rocks the cradle, rules the world, will have real and unequivocal resonance.
Nitin Gajria is the MD, Google Africa
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