Empowering African female entrepreneurs through continental free trade area

Across Africa, the percentage of female entrepreneurs remains low, highlighting a critical gap in the continent’s entrepreneurship landscape. A 2024 global gender gap report by the World Economic Forum revealed that economies in Sub-Saharan Africa have just a 9.4 per cent gender parity score, as opposed to countries like Iceland and Finland, which have 93.5 per cent and 87.5 per cent, respectively. African women entrepreneurs operate at a staggeringly low level of 25.9 per cent and earn less than their male counterparts. 

A significant factor contributing to women’s low participation in entrepreneurship compared to men is their lack of access to contemporary business tools and resources. These tools and resources include digital technologies, human resources, and intellectual resources. The availability of these tools will facilitate a larger business landscape across Africa among female entrepreneurs.

The Africa Continental Free Trade Area could be an avenue to address the limited access to business tools and resources. Under the AfCFTA, member states would subscribe to removing these systemic barriers that limit women’s access to technology and resources. Member States can collaborate with local technology companies to facilitate the disbursement of basic technological equipment to female entrepreneurs. Furthermore, African leaders can ensure full use of these resources by providing training to women on the use of the resources for business management and expansion.

The United Nations 2023 Gender Pay Gap report revealed that women earn 21 per cent less than men in the East and Southern Africa region. Poor income levels can be attributed to the high percentage of informal workers against formal workers in African countries. According to the International Labour Organisation, an informal business refers to unregistered businesses that are not covered by formal arrangements. They are often unregulated and untaxed businesses and managed mainly by petty traders. In contrast, formal businesses refer to taxed, registered, and regulated businesses. 

According to a report by the Nigerian National Salaries Incomes and Wages Commission, businesses in the formal sector have more significant growth potential than businesses in the informal sector. Likewise, the wage gap between formal and informal workers is higher at a lower skill level. Increasing the number of women entrepreneurs, albeit in the informal business sector, will not improve the entrepreneurial landscape of the continent.

The AfCFTA agreement can be leveraged to tackle this. Under the agreement, women can be encouraged and empowered to formalise their businesses. Such empowerment for business formalisation can include access to finance, implementing simplified registration processes, and providing legal support and education. African leaders can collaborate with civil societies for capacity-building training and provision of policy and regulatory support for the seamless formalisation of these informal businesses.

Therefore, African governments must work together to ensure full implementation of the AfCFTA’s reduced tariff system. They can speed up this process by providing local women entrepreneurs the training and information they need to utilise the reduced tariff systems for cross-border trading. 

Gender parity in the business sector is pertinent to developing Africa’s economy. African women face numerous challenges that limit their capacity to realise their full potential in the entrepreneurial landscape. The AfCFTA is a great resource for bridging the voluminous gender gap in the continent’s entrepreneurial space. However, African governments must work together to utilise and implement this tool for a more developed regional economy. 

Adeboye is a writing fellow at African Liberty.