close

Apply for a Global Education Scholarship, and get 50% off the MBA! Only 1 scholarship spot is left in May. Read More.

Analysis of Women Contribution to Business Creation in Francophone Central Africa

3. 2. 2022
Štítky

In all regions of the world, women are recognized as high potential vectors to business creation and entrepreneurship. Yet, this fact, although corroborated by public opinions and politics in French-speaking Central Africa, seems not to reflect the reality when it comes to analyzing the real contribution of women in this peculiar region of the African continent. Our executive survey conducted in Cameroon, the most representative country of the sub-region, among fifty SMEs in the last trimester of 2021, revealed that only five out of fifty formal sector businesses and SME’s owners are female in gender, which represents only a 10% share or contribution of women to business and value creation in this sub-region; a proportion that clearly lags that of other countries of the continent. Reasons for this observation are of diverse natures: historical, financial, academical, socio-cultural, anthropological, and even sanitary.

Introduction

Women are the backbone of the African economy (Women in Africa Philanthropy, 2020). The annual report of the International Financial Corporation (2007) further states that, worldwide, between one quarter and one third of all formal sector businesses are owned by women. The same organization sustains that, if the informal sector is also taken into consideration, the share of women as business creator will be even greater. The foundation Women in Africa Philanthropy (2020) even goes further by stating that globally, African women are by far the most entrepreneuring.

Yet, in many African countries, this proportion, especially when it comes to run legally registered businesses, drastically decreases although some authors as being entrepreneurial in nature (Egbo & Onwume, 2009) consider women. Other authors like Leke, A., Chironga M., & Desvaux G. (2018) even report higher business productivity observed when women take the lead in various business, thereby extolling the inborn business virtues and acumen of African women.

Although McKenson (2021) mentions a positive trend in the past decade as far as the overall proportion of female owned SMEs in sub-Saharan Africa in general in concerned, with Uganda (39,6%), Botswana (38,5%), and Ghana (36,5%) dominating the trend (MasterCard Incorporated, 2020), the author observes however, that English-speaking African countries register the best scores, while French-speaking countries of the continent tend to distinguishly lag. Plus, no clear statistics reporting women's contribution to business creation in French-speaking Central African countries could be found.

However, to date, no publication was found that questions the impact of the linguistic difference on the likeliness and readiness to business creation between these two groups of countries of the same continent that sometimes even belong to the same continental sub-region.

The objective of this study is to comprehend why the percentage of female formal sector business creators in French-speaking Africa is so low, and whether there might be any addressable cause hidden behind the linguistic difference between women of this sub-region and their counterparts living in Anglophones countries of the same region.

The significance of this study lies in the fact that, by understanding the underlying patterns and problems causing women in French-speaking Central African countries to be poorly participative to business creation, clear solutions can be worked out that will potentially improve this state of things significantly, thereby boosting up the African macroeconomics even stronger and ultimately contributing to a much wealthier and much more respected continent.

Literature Review

Current State of female Entrepreneurship in French-Speaking Central Africa

According to the MasterCard Index (2020), the percentage of women-owned formal sector businesses is significantly augmenting in Africa generally. If taken into consideration women owning smaller, informal businesses, Africa is the continent with the highest number of female entrepreneurs in the world, making up to 58% of all self-employed people on the continent (Delavelle & Roaunet, 2021).

Women contribution

However, the authors reckon to consider that, especially in francophone Central African countries, such a hype for entrepreneurship among women is not backed by passion or by any willingness to thrive the national economy. Rather, it is mostly because wage employment opportunities are scarce, especially for women who often have lower levels of education and who face discriminatory hiring practices. Women also tend to bear the brunt of domestic responsibilities, such as caring for children. Running a small, informal home-based or close-to-home business is often one of the few ways left for them to contribute to the family budget.

Only few women in francophone Central Africa countries make it to the top. Yet, they are sometimes still subjected to a certain “sectoral segregation” that confines them to sectors of activity with low profitability compared to high profitability business sectors that are more easily accessible by their male counterparts.

More recently, the evolution of morals and the progression of laws aiming at establishing equality between men and women, coupled with an increased awareness of family planning, are gradually helping to change this trend and helping more and more women creating legally registered business in francophone Central Africa, not just out of necessity as described by Tessier-Dargent (2014), but also out of passion and a real desire to move the economic lines of these countries. Yet, female formal sector business creation readiness and likelihood is still strongly influenced by a number of factors that keep the rate of female legally registered business creation quite low in this sub-region.

Factors Influencing Female Business Creation in French-Speaking Central Africa

Many factors tend to have a great, yet sometimes imperceptible influence on the likelihood of a woman to launch a (formal sector) business in French-speaking Central Africa. These are typically historical, financial, academical, socio-cultural, anthropological, and even sanitary in nature.

The Historical Factors

The 2019’s BCEAO annual report indicates that the rate of women with a business (formal or informal) was 48% in the sub-region, and only 20% of them had a bank account. In addition, not less than 80% of African women work in rural areas in agriculture and petty trade (Egbo & Onwume, 2009). Since they do not have inheritance rights (on for example: land rights, home properties, companies…), it is difficult for them to access bank loans to start a business, given that these loans in the sub-region are usually conditional on such guarantees. Men inherit more easily from their parents and are therefore favored by banks when it comes to issuing loans. Further, our executive survey of 2021 demonstrated that only one out of fifty SME in Cameroon was launched using solely a bank loan. In addition, most of the founder used personal savings from formal employment or businesses to start their SMEs. Given that women culturally have lower access to well-waged jobs (Delavelle & Roaunet, 2021), that they have 1.8 fold more vulnerable jobs than men (Toku-Appiah, 2021), and therefore that they have lower saving possibilities, they end up having even fewer financial means left for any formal sector venture velleity. All these create a significant gap between women and men regarding formal sector business creation capabilities and contribute to an even lower percentage of women willing or financially able at all to launch a company

The Academical Factors 

Our executive survey conducted in the last quartile of 2021 in Cameroon showed that approximately half of all formal sector business creators in the country have a Master/engineer degree or a higher level of education. However, according to Sakho (2017), nine of the ten lowest-rated countries in the world in terms of girls' enrolment rates are African. Five of these nine countries belong to the francophone Central African sub-region. Likewise, Toku-Appiah (2021) reports that African women also receive muss less business training than men and are therefore much less well-prepared to run a (formal sector) business. This proves a clear gender-based correlation between access to education and incentives of formal sector business creation, and this correlation is not in favor of francophone women in Central Africa.  

The Socio-Cultural Factors

Ever since the pre-colonial era, the African subregion that are English-speaking nowadays were powerful kingdoms with a long history of trade and business making. Kanem-Borno (actual Nigeria), the great empire of Ghana, Ethiopia and surrounding countries, all these were subregions that had great experience with the trade of diverse commodities (Usman-Janguza, 2015). This long and profound trade culture seems to still influence the way of thinking of people in these today’s English-speaking countries, which makes them, when put together, displayed in 2012 an average of 5.4% GDP growth rate compared to the only 3.4% per annum common GDP growth rate displayed by all sub-Saharan French-speaking countries put all together, as reported by Faujas (2012).

Furthermore, English-speakers in Central Africa seems to be much more open-minded regarding diverse business, including those based on computers and internet, than their French-speaking counterparts. For example, Nigeria is the country where cryptocurrencies are the most used in the world, while its French-speaking neighbor, although leader of the Central African economic subregion, hardly understand what cryptocurrencies are for. Consequently, Bouthelier Anthony, deputy chairman of the French Council of Investors in Africa, claims that Countries with the Anglo-Saxon culture are more business- and entrepreneurship-oriented, which makes people in those countries less inclined to yearn to become civil servants than their counterparts with the French culture. Obviously, women in francophone Central-African countries tend to be the first and most significantly affected by this poor business-culture.

Additionally, setting up and running a formal sector business like an SME can be very time consuming and costly. In most Central African countries, the typical woman is culturally expected to get married, make and raise children, while managing her household on a daily basis, while her husband is out for business or work. Women who derogate from this rule are sometimes perceived as rebel and society’s dregs. Francophone women in Central African countries put high value on getting married and would therefor easily give up on anything that reduces her chances to find a husband, including starting a legally registered business. The most reckless are satisfied with small one- or two-employees businesses without real added value for the country.

The Anthropological Factors

Laureen Kouassi-Olsson, founder and CEO of the investment fund “Birimian Venture” specialized in financing projects related to creative and cultural industries, when comparing male and female entrepreneurial profiles, realized that men tend to take more risks, to go for it without asking too many questions. Their projects are often ambitious, with a strong growth potential, but with many uncontrolled risk areas. On the other hand, women's projects are more carefully thought out, more prepared, with just as many potential obstacles to their implementation, but with a limited risk of execution. In this sense, as every venture is affected with a risk and the latter is a very important factor to take into consideration and to control through genuine risk management as advocated by Lawal Aliyu (2021), men and women differ anthropologically in the sense that men would embrace the risk and therefore be likely to much easier create a business than women who tend to harbor a much more conservative behavior. 

This behavioral difference is demonstrated at a more instinctive and evolutionary level by White (2018). The author explains that ever since his evolutionary stage of the Australopithecus and the Homo Erectus, male humans have always been the risk-takers that go out of the house for hunting, an activity that is per se probably the most primitive form of venture, in order to feed up wife and progeny stayed home and living at much lower risk. In the sense of the author, women have therefore always cultured a lower risk behavior than men. Readiness of business creation seems to still be regulated by the same primitive rule, thousands of years later.

The Sanitary Factors

Although their live expectancy is four years longer than that of men, African women are exposed to more diseases than men (World Health Organization, 2021). They are also much more vulnerable with psychological disasters like sexual abuse, which potentially makes them less fit than men to consistently run a formal sector business. Furthermore, MasterCard Index (2020) and Toku-Appiah (2021) comment that the average number of women-owned legally registered business in Africa has significantly and disproportionately reduced due to the COVID-19 pandemic, thus selectively pushing women-owned businesses into bankruptcy than their men-owned counterparts.

Methodology

Research Design

This research work was based on a basic correlational design to study the correlation between male and female ownership of formal sector businesses in francophone Central Africa on the example of Cameroon.

On the first hand, a questionnaire was designed and distributed to business executives of randomly selected formal sector business, without differentiating between the different legal forms or the business sectors of the surveyed businesses. On the base of these questionnaires, data were collected and constituted the primary data source for this research. A second source of data was from diverse literature sources from the internet, journals and relevant business magazines.

Method of Data Collection

The surveyed executives were randomly selected in order to avoid any influencing factors that would mitigate the representativity of the samples selected among the studied population. This was also to get the highest possible accuracy of data. 

Data Analysis And Presentation

Data Analysis

The research data feature responses obtained from an executive survey of 50 SMEs, 25 of which were already bankrupt and the other half still in exercise. Among the 50 interviewed closed and still active companies, 11 did not deliver valid response and were therefore referred to as “no information” in the table of results.

Data Presentation

The collected data are presented in form of a table by using the simple percentage method, and the values were subsequently plotted in a chart.

Table 4.1: Questionnaire Responses of the Randomly Selected SMEs’ Executives.

SME activity status

Gender of the owner (and percentage of total interviewed in the category)

Male

Female 

No information

Closed / Bankrupt

14 (56%)

2 (8%)

9 (36%)

Still active

20 (80%)

3 (12%)

2 (8%)

lot of the Questionnaire Responses of the Randomly Selected Cameroonian SME’s Executives

Figure 4.1: Plot of the Questionnaire Responses of the Randomly Selected Cameroonian SME’s Executives

Interpretation of Data

The processed data revealed that, in both considered SMEs categories cumulated, only 10% of company’s owners were female, whilst male represented 68%. By excluding the invalid responses, these proportions become 13% and 87% respectively, thereby proving the numerical superiority of male business creators over their female counterparts in francophone Central Africa.

Testing Hypothesis

Both table 4.1. and figure 4.1 illustrate that there are far more male formal sector business owners in the sub-region of interest than female owners. Thus, the author’s hypothesis that the historical, anthropological, social-cultural, and academical environment in francophone Central Africa favors the emergence of more men SMEs owners than female SMEs owners is accepted.

Conclusion

Effective and consequent female contribution to business creation in French-speaking Central Africa faces many hurdles. This is truly a missed opportunity. Given that the African continent is now a world leader in women's entrepreneurship, the full realization of their economic potential could make a massive contribution to the continent's growth and prosperity. If local governments and policies succeed in putting women-owned businesses on an equal footing with men's and fostering their growth equally, African economies will significantly grow in the upcoming decade

Author: Hermann Kana

References:

Delavelle, F. and Roaunet, L. (2021), “L’entreprenariat des Femmes, Clé de la Croissance Africaine”, retrieved 15.01.2022 from https://ideas4development.org/

Egbo, O. P. and Onwume, J. U. J. (2009), “Women and Entrepreneurship Development in Africa”, Africa Journal of Entrepreneurship, Vol. 2, Nr. 1, April 2009

Faujas (2012), “Africa: Why Francophones are Lagging Behind Anglophones”, retrieved 15.01.2022 from https://www.theafricareport.com/7810

International Financial Corporation (2007), “IFC Annual Report 2007: Creating Opportunity”, retrieved 15.01.2022 from https://openknowledge.worldbank.org/ 

Lawal Aliyu, U. (2021), “Classification of Risk in a Company”, European Journal of Business & Social Science, Volume 9, Issue 11

Leke, A., Chironga M., and Desvaux G. (2018), “Africa’s Business Revolution: How to succeed in the World’s next big growth market”, Harvard Business Review Press, Boston, Massachusetts, Identifiers: LCCN 2018017711

Mastercard Index (2020), “Mastercard Index of Women Entrepreneurs 2020 report”

McKenson, H. (2021), “Femmes Entrepreneurs en Afrique : Opportunités, Enjeux et Défis”, retrieved 15.01.2022 from https://www.ceoafrique.com/post/femmes-entrepreneures-afrique

Nubukpo, K. (2019), “Profit, Travail, Salaire, Profit – Épisode 6 - ARTE”, retrieved 07.08.2021 from https://youtu.de/otMYq9xI7P0

Rapport annuel de la BCEAO (2019), retrieved 15.01.2022 from https://www.bceao.int/fr/publications/rapport-annuel-de-la-bceao-2019

Sahko, K. (2021), “Accès des Filles à l’Éducation : Sur les Dix Pays les Moins 

Bien Notés Dans le Monde, Neuf sont Africains”, retrieved 15.01.2022 from https://www.jeuneafrique.com/482447

Tessier-Dargent, C. (2014), “Les paradoxes de l'entrepreneuriat de nécessité : Strapontin ou tremplin ?”, Entreprendre & Innover, 2014/I (Nr. 20), 24 – 38

Toku-Appiah, R. (2021), “How Covid-19 Disproportionately Affected 

Women-led Businesses”, retrieved 16.01.2022 from https://www.theafricareport.com/102008

Usman-Janguza, M. (2015), “Why Nigeria Should Think of itself as Central African”, retrieved 02.08.2021 from https://africanarguments.org/2015/07

White, A. (2018), “Art et Psychologie de l’Amour et du Sexe”, ePubli, ISBN 9783746782294

Women in Africa Philanthropy (2020), “Accélérer la Dynamique Entrepreneuriale des Femmes en Afrique ; Améliorer l’Accès au Financement pour Soutenir la Dynamique Entrepreneuriale.”