By: Moipone Malefane
Women entrepreneurs play a significant role in economic development and growth both here and abroad. Despite a multitude of challenges faced by women, various studies and surveys show that women’s entrepreneurship contributes to socio-economic development through job creation, poverty reduction, innovation and creating a gender-inclusive entrepreneurial landscape.
This month South Africa is observing Women’s Month under the theme “Celebrating 30 Years of Democracy Towards Women’s Development”. It is as good a time as any to take stock of what the country has achieved when it comes to building and supporting women-owned businesses, and what challenges need urgent attention.
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It is undeniable that the country has made strides in changing the face of business over the last three decades. In his address to mark Women’s Day, President Cyril Ramaphosa highlighted some key interventions adopted by the government to help empower women.
These include the launch of the Women’s Economic Assembly in 2021 which aims to secure procurement opportunities for women-owned businesses in different industries, and the Women’s Economic Empowerment Programme which has trained around 8000 women to establish and manage businesses. The state has also increased its support to women-owned enterprises through development finance institutions and is working to ensure that more women own land so that they can farm and have assets.
While there has been progressing, for women to take their rightful place in the economy a number of obstacles must be overcome, including limited access to funding, profitable markets and business, training and education programmes.
A report recently published by the Global Entrepreneurship Monitor titled: “Women Entrepreneurship in South Africa: What does the future hold?” makes for sober reading. “In South Africa, as in the rest of the world, women are at the forefront of change as they establish and run successful businesses in different economic sectors. However, they are over-represented in the small business sector, where they operate in highly competitive, low-profit margin industries, with a significant proportion participating in the informal sector with little or no support,” it says.
“Only a few women are advancing into male-dominated fields where they are pushing the boundaries of creativity and innovation.” The data shows that women in South Africa have a higher percentage of discontinued businesses compared to men (5.1% compared to 4.8%). The number one reason for a women-owned enterprise not succeeding is that they do not make a profit (34.5%), followed by family or personal reasons and getting financing, both of which are at 21.5%.
Despite their potential, women entrepreneurs in South Africa face significant barriers and often allocate more resources to health, education and community welfare. The report notes: “It is concerning to see that the business exit rate was higher than the new and established business rates, suggesting that more women disengaged in business activities than own and manage businesses. These findings suggest that women need more support in managing and developing their new businesses into established ones.”
While women entrepreneurs come from diverse backgrounds in the country and may require different assistance to build sustainable businesses, support from the government, private sector and women themselves needs to be ramped up.
This ranges from empowering women entrepreneurs through improved regulations, and laws and increasing access to digital financial services, to women developing local business networks to promote entrepreneurship, and mentorship and drive gender equality. With South Africa struggling to rebuild its economy and create jobs, it makes business sense to empower women entrepreneurs. Women make up more than half of the country’s population, and greater economic participation by women stimulates the economy and reduces poverty and inequality.
