Fighting Poverty In Africa Starts With Female Economic Empowerment

Written by Antonio Coutinho, Regional CE for Standard Bank: Southern Africa and Sasha Vieira, Head of Standard Bank Mozambique: Incubator

There is an African proverb that goes, “Mosadi o tshwara thipa ka bogaleng,” which loosely translates to “A woman holds the knife at the sharp end.” This sentiment goes to the heart of the challenges that women on our continent face during their lifetime— higher levels of unemployment, gender-based violence, unpaid care work, lack of educational opportunities, and single motherhood.

Despite facing these everyday challenges, the women of Africa are strong and resilient. One simply needs to look at self-employment and female-led start-up statistics. Women make up 58% of the continent’s self-employed population and contribute around 13% of Africa’s GDP. This equates to between $250 billion and $300 billion, making sub-Saharan Africa the world’s highest rate of women involved in entrepreneurial activity.

Regrettably, this African female entrepreneurial spirit is not well supported when we compare to the support provided to women entrepreneurs from the developed world. A Mastercard Index of Women Entrepreneurs Index report shows that countries such as the United States, New Zealand, and Canada far outrank our continent’s highest scoring country (South Africa) for providing women with supportive entrepreneurial conditions. The significant gap between the high self-employment numbers but low index scoring shows a clear lack of resources and enabling environment for women entrepreneurs.

Adding to these challenging entrepreneurial conditions is the fact that, according to the World Bank, sub-Saharan Africa’s women entrepreneurs earn up to 34% lower profits than men. The reasons for this are gender discrimination, limited access to capital and assets, lack of a support network and other social and self-limiting factors.

There is an urgent need to provide supportive platforms to Africa’s entrepreneurial women. Not only are they important economic drivers and job creators for their countries but undisputedly deserve the same opportunities as their male counterparts.

Supporting Mozambique’s MSMEs

As Africa’s largest financial institution by assets, driving the growth of our continent is an ambition that Standard Bank passionately pursues. As a 160-year-old start-up, we understand the challenges and burdens entrepreneurs face every day to run successful businesses, regardless of their size. With 5 out of every 7 African businesses failing within their first year, it is imperative for the bank to guide and support micro, small and medium enterprises (MSMEs) to ensure their long-term sustainability. This is the reason why we have formed key partnerships and launched several innovation initiatives to provide our continent’s businesswomen with the tools and access to financial instruments and that will give them the ability to survive, grow, and thrive.

Born from this shared entrepreneurial spirit, Standard Bank identified the urgent need within our Southern Africa footprint to drive female economic empowerment in Mozambique’s entrepreneurial landscape.

After facing an economic crisis in 2016, the COVID-19 pandemic, and growing political instability, Mozambique’s GDP growth has slowed to 2 – 3%. This has placed the country among the bottom ten on the Human Development Index, as many Mozambicans’ livelihoods are simply focused on day-to-day survival. This is because out of the 30 million strong population and a labour force of 12,5 million people, only 1,75 million have access to formal sector employment (14%)

The consequence is that almost 90% of its population have turned to self-employment. However, regardless of this high percentage and the potential of entrepreneurship to be a powerful agent of change for Mozambique’s youth, entrepreneurship is not seen as a viable career. For Mozambican women, this rings even more true.

To counter this, the aim is to provide women entrepreneurs with the needed business skills to properly manage their businesses, which will ultimately increase their incomes.

Incubating entrepreneurial potential

Stemming from our journey to drive Mozambique’s growth, Standard Bank embarked on a strategic journey in 2015 to understand what Mozambican MSME’s needed to survive and thrive.

From the insights gained through this research, an important entrepreneurial initiative was born: the establishment of the Standard Bank Mozambique Incubator in 2017, which was the first Standard Bank incubator launched outside of South Africa. Its purpose was to reimagine the way start-ups and entrepreneurs are supported throughout their growth cycle and sustainability journey. Following the significant impact and positive results it has achieved, the Group has rolled out Incubators and Incubator capabilities in Uganda, Ghana, Zimbabwe, Botswana, Angola and Nigeria with other countries in the process of implementation such as Kenya, Lesotho and Malawi.

In 2021, the ‘Incubation4Empowerment’ programme was launched in partnership with GIZ and its Employment and Skills for Development in Africa (E4D) programme, financed by the German Federal Ministry for Economic Cooperation and Development (BMZ) and co-funded by the European Union (EU), the Norwegian Agency for Development Cooperation (Norad) and others.

The aim is to boost the number of women employed, improve job conditions and income, enhance capacity and competitiveness of female MSMEs, and promote the scale-up of successful development projects and models. Developed with a strong transversal gender lens, the programme is applied to project design and implementation, which has led to many women securing jobs, self-employment, and increased overall income for themselves and families, including in male-dominated sectors such as energy and infrastructure.

In addition to the programme GIZ has with Standard Bank in Mozambique, there are equally successful partnerships between GIZ and Standard Bank in Uganda and Kenya with an investment of over €500 000, resulting in more than 5 000 women led MSMEs being supported through the bank’s Incubators.

More recently, the Stanbic Kenya Foundation entered into a partnership with GIZ and its Go Blue Project, co-funded by the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ). The objective is to support MSMEs in the Blue Economy in coastal Kenya. The partnership with Stanbic Kenya Foundation is aimed at the improving of competitiveness and enhancing business capacities of 200 Blue Economy MSMEs. This shall be achieved through 3 main activities: providing access to finance, facilitating access to new markets and value chains, and enhancing digitalization through digital literacy training. Other beneficiaries of the programme include vocational training centres and support hubs, which will receive improved digital infrastructure such as computers and e-learning platforms.

If entrepreneurs are the lifeblood of a country’s economy, then female-led businesses are its heartbeat. Through these initiatives, we a hope that citizens, businesses, and governments alike will see the powerful potential that is unlocked when female economic empowerment is a priority. “Alone we can go fast, but together we can go far”, this is the power of collaborative efforts.

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