Bulls n Bears Entrepreneurship Zone :: Women-led tech startups on the rise in Africa

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On the surface, sub-Saharan Africa boasts the world’s highest rate of women
entrepreneurs, at 27%. The MasterCard Index of Women Entrepreneurs 2017
listed two African countries, Uganda (34.8%) and Botswana (34.6%), as having
the highest percentage of women entrepreneurs globally.

But dig a little deeper and you’ll find that in many countries in Africa,
most female-led enterprises are small businesses with little opportunity for
growth. Also, female entrepreneurs are not evenly spread across the
continent. Botswana, Ghana, Nigeria, Kenya, Uganda and Zambia have
disproportionately high numbers.

“Most of these businesses tend to have no employees and have low growth
expectations: they are, for the most part, one-woman enterprises oriented to
consumers,” CNN reported in 2015. In the technology industry particularly,
few women attempt start-ups. But with the right incentives, African women
can unleash their potential in the continent’s burgeoning tech sector,
according to Eunice Baguma Ball, founder of the London-based Africa
Technology Business Network (ATBN), which promotes access to resources that
can create a gender-inclusive “innovation ecosystem” in Africa.


A man’s world


“African women entrepreneurs who face financing challenges when setting up
their businesses need support,” says Ball whose organisation supports
African innovators through access to its global network of investors and
tech leaders. Globally, men account for 92% of partners in the top 100
venture capital firms, and female-founded start-ups receive only 2% of total
investments by venture capitalists. These disparities underscore the need
for more women at all levels of start-ups.

And in Africa, only 9% of start-ups have women leaders, according to a 2016
study by Venture Capital for Africa, a Netherlands-based organisation that
connects start-ups to opportunities.

There is no single explanation for the limited number of women in tech
start-ups, says Odunayo Eweniyi, cofounder and chief operating officer of
Piggybank.ng, a Lagos-based online savings platform. One major factor, she
says, is cultural.

“The premise of a start-up is to venture into something that is unsafe,
risky and more difficult than usual. From a young age, culturally, women are
groomed to believe that the kind of behaviour, work or endeavours that fit
these descriptions are bad for them. Many times, women are not allowed to
aspire ‘too high.’ As a result, they tend to participate in the least risky
ventures.”

Writing for business.com, a digital media company, Rosemary Egbo, a writer
and an entrepreneur, said that financial institutions “weren’t as quick to
grant loans to female entrepreneurs as they were to male entrepreneurs,
since men were seen as better risk takers and more likely to succeed.”

But Egypt’s Minister of Investment and International Cooperation Sahar Nasr
describes as “misguided a perception that women are high-risk customers to
lend.” She recommends “affirmative action in the area of legal and
regulatory framework because African tradition stands in the way of most
women to own property, which limits their access to finance efforts as they
don’t have collateral.”

Where women are seen as child bearers and home managers, business tips do
not address these unique cultural situations  and are unlikely to resonate
with women on the continent.

To overcome cultural barriers, African women entrepreneurs need basic
knowledge about health, education, financial security and safety, Ball says.

Another key factor is that the tech industry in Africa does not provide
many female role models. Role models can inspire the next generation of
women leaders, according to Eweniyi. Nevertheless, Forbes includes several
women in its 30 Most Promising Young Entrepreneurs in Africa list for 2018,
including Nthabiseng Mosia of South Africa, Rahma Bajun of Tanzania and
Ronke Bamisedun of Nigeria.


Networking is key


“In many ways, the fact that there are so few women in leadership roles
means there’s far less understanding, empathy or proper behaviour exhibited
towards women. If there were more women in leadership, there would be far
less discrimination against them, because these women leaders would use
their influence to fight against such discrimination,” notes Eweniyi.

She further maintains that old boys’ networks still hold a great deal of
power in Africa, and recommends the creation of more female business
networks in which women can share their expertise and experiences. With many
business deals being negotiated informally, in male-oriented settings like
bars and social clubs, business networks composed of women may help level
the playing field.

There is a financial argument to be made for supporting women in tech
start-ups, experts say. First, the spending power of women continues to
increase on the continent, putting pressure on tech companies to make
efforts to understand women consumers’ needs and expectations. Women leaders
are best positioned to introduce products that cater to female consumers’
preferences.

Technology firms led by women experience a 35% higher return on investment
than those led by men, according to a paper by the venture capitalist firm
Illuminate Ventures. That means investors and other venture capitalists lose
out by not providing financial support for women-led businesses.

“Economically empowering women leads to better outcomes for society, as
women typically invest 90% of their earnings back into their families and
communities, compared to 30 to 40% for men,” says Ball. African women deeply
understand Africa’s socioeconomic challenges, she notes.

While many are working to raise awareness of the perspectives and skill
sets that women entrepreneurs bring to start-ups, initiatives are being
launched to bridge the gender gap.


Bridging the gap


The ATBN, for example, founded the #HerFutureAfrica project to create
online content, host innovation boot camps and provide mentorship—all to
support women entrepreneurs in technology-related ventures.

The #HerFutureAfrica project is a response to widespread criticism that
most online business tips for women entrepreneurs focus on Western
audiences, disregarding the unique obstacles that African women face in
business.

Ball says that support for African women in the tech industry should be
tailored “to enable them to navigate some of these unique barriers so that
they can successfully compete in what is still a male-dominated business.”
She is also donating all proceeds from her book, Founding Women: African
Women Who Are Defying the Odds to Build Successful Businesses in Tech, to
support young women entrepreneurs in Africa.

Female representation in the African tech start-up ecosystem is very
important, she adds. By “start-up ecosystem” she means venture capital
firms, funding organisations, mentoring networks and the start-ups
themselves.

Some countries in North Africa are already developing such start-up
ecosystems that support women, rivalling those in Kenya, Nigeria and South
Africa. Morocco is home to dozens of ambitious female-led tech start-ups,
including WaystoCap, the Casablanca-based cross-border commerce platform.

The business incubator Womenpreneur Initiative, based in Brussels,
identifies female-led enterprises across the Middle East and North Africa
and helps them gain the skills to scale up. Business incubators support
young businesses with financing and technical services.

In sum, insists Ball, “There is a need to build a pipeline of female talent
with the skills and ambition to build successful tech start-ups, and this
requires changing the old mind-set that technology or big business is for
men.”

This article was originally published in the August – November 2018 edition
of Africa Renewal, a magazine produced by the Africa Section of the United
Nations Department of Public Information. It has been shortened here for
re-publication.—Howwemadeitinafrica



Odunayo Eweniyi, cofounder and chief operating officer of Piggybank.ng.

 

 

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