Targeted support of women entrepreneurs was critical to South Africa’s economic recovery, according to the 2023 Women’s Report.
The report co-authored by Stellenbosch Business School Lecturer in Strategic Management Thobile Radebe and Professor Mark Smith, a director of Stellenbosch Business School, which was released this week, concluded that it was clear that women entrepreneurs, both current and future, faced a complex web of barriers and restrictions in their attempts to engage in entrepreneurial activities.
“All these issues require attention if South Africa (SA) is to realise women’s potential and reap the economic and social benefits of women’s inclusion,” the report said.
According to the 2023 Women’s Report, South African women face specific challenges of higher unemployment and a lower entrepreneurship rate than men, along with lower educational levels, cultural barriers to women working, and having to shoulder the greater burden of household and caregiving responsibilities even when they do work outside the home.
In Africa, while women make up 58% of self-employment and contribute about 13% of the continent’s gross domestic product, there is a gender funding gap in sub-Saharan Africa of $42 billion (roughly R781bn), highlighting the gender imbalance in support for women entrepreneurs.
Locally, some 21.9% of South African businesses are owned by women, but the country’s ranking for women’s access to business finance has declined four places to 40th place out of 65 countries, and government support for SMEs ranks 54th in last year’s Mastercard Index of Women Entrepreneurs (MIWE).
While South Africa’s MIWE score for women’s entrepreneurship declined slightly from 2020 to 2021, the country moved up one place in the rankings, to 37th.
The report noted that South Africa performed relatively well in the ‘Women’s Advancement Outcome’ component (rank 21), which measures women’s progress and degree of marginalisation as business leaders, professionals, entrepreneurs, and labour force participants.
Although ‘Women’s Entrepreneurial Activity Rate’ declined in most economies during the pandemic, South Africa was one of only 12 economies where women’s entrepreneurial activity rates increased, with 11.1% of working-age women engaged in early-stage entrepreneurial activities (up from 10.2% in 2020), compared to 11.7% for men (up from 11.4% in 2020).
According to the report, while it was encouraging to see South Africa at the forefront of some positive developments in the women entrepreneurship arena, more needed to be done for them to realise the agenda of stimulating women entrepreneurship and increasing the number of sustainable women-owned businesses in SA within the next few years and support would need to come from several fronts.
“We need to pull together as a national collective in business, finance and civil society to support and finance women in their entrepreneurial endeavours and not only ‘buy local’ but make a conscious decision to support local, women-led businesses in particular,” it said.
Research has shown that women’s entrepreneurship has wide-reaching, long-term positive impacts on social well-being and development, education and health – more so than for men.The United Nations reported that women reinvest 90% of their income in the health and education of their children and wider community, compared to only 35% reinvested by men.
The report suggested that fostering an entrepreneurial mindset, enhancing entrepreneurship education, addressing traditional gender roles, creating an entrepreneurial ecosystem and providing access to financing was vital.
Radebe said entrepreneurship could be a more effective route to empowering women and broadening economic participation if the supporting entrepreneurship ecosystem was more effective at addressing the unique barriers that women faced.
Enhancing women’s entrepreneurship has a great capability to transform society and empower not only women, but everyone in the country.
“Effective entrepreneurship ecosystems thus need to be developed that take account of the specific barriers that women face, so that women entrepreneurs can flourish on an equal footing and create a stronger and more balanced economy,” she said.
BUSINESS REPORT