- Development & Aid
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Wednesday, October 7, 2015
- The international financial crash of the late 2000s created more than a global economic recession: it accentuated popular doubts about the paradigms on which our economies are built and prompted a closer look at two crucial drivers of economic growth: women and entrepreneurship.
At the recently concluded Women’s Forum held in France earlier this month, a pivotal point on the agenda was how to promote sustainable economic and social development in the world’s second fastest growing region: Africa.
Recent research from the McKinsey Global Institute (MGI) shows that natural resources account for only about a third of Africa’s growth. The rest is the result of internal structural changes that have stimulated domestic economies: telecommunications, banking and retail are flourishing and construction is booming.
Trade between Africa and the rest of the world has increased by 200 percent since 2000 and the continent is also gaining increased access to international capital, with the annual flow of foreign direct investment (FDI) into Africa increasing from nine billion dollars in 2000 to 62 billion dollars in 2008.
With a population that is set to more than double from one to two billion by 2050, Africa’s potential is enormous – if it can create the conditions for women-led, sustainable development by opening up the formal economy to female entrepreneurs.
Turning the spotlight on human capital and innovation
Members of the 40-strong African delegation attending the meeting agreed on one thing: Africa must learn to take better advantage of its human potential to boost the kind of economic development that benefits a broader expanse of society.
In particular, attitudes toward entrepreneurship need to undergo a radical change.
“Many Africans today still aspire to become doctors or lawyers, but entrepreneurs only if they can’t find jobs. There has to be a rapid change in this mind-set. Young people don’t know what it means to become entrepreneurial. We need to show that it is a real option,” according to Anne Amuzu, a businesswoman from Ghana.
Inspirational role models of successful African entrepreneurs are important.
Women such as Bethlehem Tilahun – founder of SoleRebels, one of Africa’s best-known shoe brands – who was counted among the top ‘100 women to watch in 2012’ by Forbes magazine, are examples of the impact women can make in the global landscape.African women also represent a vast pool of potential that could drive broad, sustainable growth in Africa.
An estimated two-thirds of African women participate in the labour force and, according to the World Bank, the rate of female entrepreneurship is higher in Africa than in any other region of the world.
Many of these women are active entrepreneurs in their countries’ informal economies.
The message that women can make a real difference to the continent’s future has made its way beyond Africa’s shores.
“Women in the private sector represent a powerful source of economic growth and opportunity,” said Marcelo Giugale, the World Bank’s director for poverty reduction and economic management for Africa.
The European Commission too has recognised that women are powerful drivers of sustainable development.
As part of achieving its commitments to the Millennium Development Goals, the EU has supported the enrolment of roughly 85,000 female students in secondary education, in 10 sub-Saharan African countries over the past five years.
“(Encouraging) women entrepreneurs can fuel growth. But this will depend on having appropriate training and opportunities for young people. Education can help achieve this, but we also need to inspire with role models,” Nigest Haile of the Centre for African Women Economic Empowerment told participants at the conference.
Better access to financial markets can help bring more women entrepreneurs into the formal sector and enable them to expand their businesses.
Training and other forms of education with an emphasis on improving business and financial skills will also help spur growth.
Many leaders firmly believe entrepreneurial training should start in schools if young people are to become financially literate and seriously consider starting their own businesses as a viable option for building a solid future.
A recent report by Ernst & Young suggests that dedicated training dramatically improves student perceptions of a career as an entrepreneur.
Africa’s recent growth spurt has already made life more rewarding for many of its inhabitants. Business opportunities abound and governments are showing an increasing willingness to get out of their way.
According to the World Bank’s annual ranking of commercial practices, 36 out of 46 African governments made things easier for business in the past year.