Africa’s business environment is witnessing a remarkable surge in women business leaders. Women comprise 58% of the continent’s self-employed population and contribute approximately 13% to its Gross Domestic Product (GDP). Despite this progress, African women in business encounter significant obstacles hindering their growth and success. The earnings disparity between women and men entrepreneurs persists, with women earning 34% less on average.
Bridging this gap is crucial for unlocking Africa’s full economic potential. By addressing the multifaceted challenges faced by women in business, policymakers and stakeholders can foster a more inclusive and vibrant business environment. This, in turn, can drive sustainable growth, job creation, and poverty reduction.
This article explores seven critical problems female founders encounter in the African market, highlighting the need for targeted policies and support systems to enhance women-led startups.
1#. Limited access to funding
Securing funding is a significant hurdle for female-led businesses in Africa. Research reveals a stark disparity in venture capital allocation, with women-led startups receiving disproportionately less funding. Key statistics highlight the severity of this issue: only 11% of seed-funding capital in emerging markets goes to companies with a woman on their founding team, and the funding gap for women entrepreneurs in Sub-Saharan Africa stands at $42 billion.
This disparity is further aggravated by investor bias and limited access to networks. Even accelerators, meant to support entrepreneurs, inadvertently widen the funding gap between male and female-led startups. This creates a challenging environment for women business owners to secure the necessary resources to grow and scale their businesses. Alternative financing options and bias-training programs for investors are crucial to address this issue.
Governments and policymakers also have a critical role to play. By implementing gender-responsive budgeting and utilising the African Continental Free Trade Agreement, they can create a more supportive business environment for women-led businesses.
2#. Social and cultural bias
African women have long played multifaceted societal roles, from household management to community organisation and socio-political activism. Despite their significant contributions, entrenched power dynamics relegate female entrepreneurs to subordinate positions, limiting their potential. Societal prejudices, such as the “angry Black woman” trope, perpetuate hostility and undermine businesswomen’s authority. These biases devalue their performance, denying credit for successes and penalising them for violating traditional norms. This prejudice is pervasive, affecting businesswomen across various industries and sectors. For instance, in the business sector, women face biased performance appraisals, hindering career advancement.
3#. Lack of mentorship and networking
Female business owners in Africa face a critical gap in mentorship and networking support, a vital component of entrepreneurial success. With only 32% having access to a mentor, compared to 44% of men, women miss out on valuable guidance, advice, and opportunities that can propel their businesses forward. This disparity has far-reaching consequences, hindering women’s growth and development. Limited access to mentorship restricts their ability to tap into business development services, market information, and technology. As a result, women business leaders need help navigating the complex business landscape, further marginalising them.
4#. Regulatory and policy challenges
Female-led businesses face complex regulatory environments and bureaucratic hurdles, hindering their growth and success. For instance, the East African Community Treaty promotes equality but lacks clear guidelines for enforcement, leaving women without adequate protection.
Moreover, language barriers and legal jargon in regulatory documents further hinder academically disadvantaged women, particularly in the informal sector, exacerbating literacy disparities. Female adult literacy rates range from 52% in Burundi to 70% in Kenya, compared to better-educated men. This inequality restricts women’s ability to understand and articulate regulatory requirements.
5#. Work-life balance and family responsibilities
Women business leaders in Africa face significant challenges in balancing business and domestic duties, stemming from entrenched societal expectations and cultural norms. These expectations often prioritise household chores over entrepreneurial pursuits, limiting the time and energy women can devote to their businesses. Family responsibilities influence the type of businesses women engage in, with many opting for smaller, more flexible ventures. Husbands, families, and societal pressures frequently influence women’s decisions on entrepreneurship.
Managing this delicate balance requires effective time management, setting clear boundaries between work and personal life, and delegating household responsibilities. Women business owners can also leverage technology to enhance productivity and flexibility. Building support networks and prioritising self-care are essential for maintaining mental well-being.
Ultimately, the impact of family responsibilities on women’s entrepreneurship must be balanced. Women are often forced to choose between domestic and business duties, hindering their ability to focus on business growth and scalability.
6#. Limited access to technology and digital tools
Africa’s technology gap severely hampers women business owners’ access to online platforms and digital tools, stifling business growth, innovation, and economic empowerment. With only 39% of the population connected to the internet, compared to a global average of nearly 60%, over 600 million African people remain offline. This exclusion from the digital economy has far-reaching consequences for female-led businesses.
Women founders need help accessing critical business tools, connecting with customers and partners and developing essential digital skills. Infrastructure limitations, such as inadequate submarine cables, terrestrial fibre optic networks, and mobile towers exacerbate the issue. High operating costs due to vast geography, low population density, and regulatory hurdles further compound the problem. Targeted initiatives like digital skills training programs and affordable internet access are crucial to bridge this digital divide.
7#. Self-doubt and confidence gap
Many African female founders face significant self-doubt and confidence barriers, hindering business success. Low self-confidence affects business start-up decisions and sustainability, often causing women to hesitate or abandon their entrepreneurial aspirations. Societal stereotypes and biases further worsen this issue, perpetuating internalised negative messages and limiting access to networks and resources.
Gendered expectations also influence how women perceive themselves as entrepreneurs. Capacity-building initiatives can bridge this confidence gap. Thus, effective programs should be initiated to provide training and skill acquisition, creating a supportive learning environment that encourages women to take risks and advocate for their businesses. Explicit encouragement from trainers, peers, and mentors fosters confidence.
By addressing the self-confidence gaps, African women can unlock their potential, drive business growth, and contribute to economic development. Empowering women entrepreneurs requires a multifaceted approach that addresses the root causes of self-doubt and promotes inclusive, supportive ecosystems.
Governments, investors, and organisations must take actionable steps. Governments can implement gender-responsive budgeting and policies, streamline registration processes, and simplify tax compliance. Enhancing access to credit and markets and leveraging the African Continental Free Trade Agreement (AfCFTA) can create opportunities for women-led businesses.
Investors can also provide targeted funding opportunities and implement bias-training programs to bridge the funding gap. Organisations can offer mentorship and networking programs tailored to African women-led business needs, providing training and capacity-building initiatives to enhance business skills and confidence. Promoting women’s leadership and representation within their organisations fosters a supportive ecosystem.
