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The Africa Competitiveness Report 2007 Part 5/6

The Africa Competitiveness Report 2007 Part 5/6

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Measures competitiveness of countries and economies in Africa.
Chapter 1.4: Gender, Entrepreneurship, and Competitiveness in Africa.
Measures competitiveness of countries and economies in Africa.
Chapter 1.4: Gender, Entrepreneurship, and Competitiveness in Africa.

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Published by: World Economic Forum on Oct 01, 2008
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CHAPTER 1.4
Gender, Entrepreneurship, andCompetitiveness in Africa
ELENA BARDASIC. MARK BLACKDENJUAN CARLOS GUZMAN
at the World Bank
An appreciation of gender issues is important whenconsidering strategies to improve Africa’s competitive-ness in the world and ways to promote private-sector development.There are three main reasons why gender matters.First,women are major players in the privatesector,particularly in agriculture and in informal busi-nesses.It is estimated that women-owned businessesaccount for over one-third of all firms,and they are themajority of businesses in the informal sector in Africancountries.Second,the ability of women to formalizeand grow their businesses,to create jobs,and to enhanceproductivity is hampered where legal and institutionalbarriers exist that affect men’s and women’s enterprisesdifferently.Third,there is evidence—especially at themicro level—to indicate that gender disparities not onlydisadvantage women but also reduce the growth poten-tial of the region as a whole.The existence of gender-related barriers can thwart the economic potential of women as entrepreneurs and workers,and such barriershave an adverse impact on enterprise development,pro-ductivity,and competitiveness in Africa.Consequently,addressing gender-specific barriers to entrepreneurshipand leveraging the full participation of both men andwomen in the development of Africa’s private sector together represent a significant opportunity to unleashAfrica’s productive potential and to strengthen econom-ic growth.This chapter aims to shed light on the nature of men’s and women’s enterprises in Africa,to assess theextent to which the constraints and obstacles faced bywomen and men entrepreneurs may differ,and to addresswhether the constraints and obstacles entrepreneurs faceaffect the productivity and performance of men’s andwomen’s businesses differently.We begin with a brief overview of gender in the economy,followed by a moredetailed analysis of available Enterprise Survey datawhere key characteristics of businesses can be disaggre-gated by the sex of the business owner.
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This allows usto look at various characteristics of men’s and women’sbusinesses,including perceptions of obstacles and con-straints,and to assess productivity differences.After briefly placing this analysis in a wider context,thechapter concludes with some recommended actions toaddress the gender dimensions of entrepreneurship moresystematically in policy and programs aimed at supportingprivate-sector development,along with suggestions fofurther data collection and analysis.
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    1 .    4   :    G   e   n    d   e   r ,    E   n   t   r   e   p   r   e   n   e   u   r   s    h    i   p ,   a   n    d    C   o   m   p   e   t    i   t    i   v   e   n   e   s   s    i   n    A    f   r    i   c   a
Gbemisola Oseni and Federica Saliola provided valuable assistance tothe authors in the preparation of this chapter. We thank TheodoreAhlers, Theresa Bradley, Mayra Buvinic, Constantine Chikosi, JozefinaCutura, Simeon Djankov, Amanda Ellis, Lucia Fort, Alan Gelb, OlaGranström, Mary Hallward-Driemeier, Giuseppe Iarossi, AndrewMorrison, Sudhir Shetty, Andrew Stone, Michaela Weber, and JulieWeeks, who provided useful comments on earlier drafts.
 
Gender in African economies
The study
Can Africa Claim the 21st Century?
madethe argument that Africa has enormous unexploitedpotential,especially the potential of women.Specifically,it pointed out that women comprise one of Africa’shidden growth reserves,providing most of the region’slabor,but their productivity is hampered by widespreadinequality in education as well as unequal access to landand productive inputs.The report concluded that gender equality can be a potent force for accelerated povertyreduction.
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The economic importance of women inAfrica was reinforced by the Africa CommissionReport,which noted that “all the evidence agrees that[women] make a greater contribution to economic lifethan their menfolk.”
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The World Bank’s Africa ActionPlan (AAP),developed in response to the G8 Summit in2005,also reiterates the central contribution of womento African economies (see Box 1).The AAP progressreport presented to the Bank’s Board of Directors inMarch 2007 included women’s economic empowermentas one of eight flagship areas for increased focus duringimplementation.Gender inequality plays a significant role inaccounting for Africa’s poor growth and poverty reduc-tion performance.A recent review of available evidenceindicates that gender inequality in education may limitgrowth;that inequalities in access to land and productiveinputs reduce agricultural productivity,investment,andmodernization;and that inequalities in time burdens,alongside high demographic growth rates,all contributeto reducing women’s ability to participate effectively in,and to benefit from,economic growth.
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The legal and regulatory environment is a coreelement of the investment climate,and is also criticalfor competitiveness.In particular,property rights,labor laws,personal security,the performance of the judiciary,and the time and cost required to register,license,andoperate a business all affect competitiveness and thedynamism of the private sector.This environment mayaffect men and women in quite different ways,as inmany African societies laws and customs impede womento a greater extent than men in obtaining credit,pro-ductive inputs,education,training,and informationneeded to start and operate a business.Although insome cases there may be gender-specific legal andadministrative barriers,for the most part the regulatoryenvironment will be “gender-neutral”in principle,butwith possibly gender-differentiated outcomes in practice —for example,women may be less able than men toafford long and expensive registration procedures.For these reasons,women may be more disadvantaged thanmen in starting-up and managing enterprises.
Characteristics of men’s and women’s enterprises
Enterprise Surveys allow us to identify certain charac-teristics of a business,such as the sector in which itoperates,the size of the enterprise,the number of yearsit has been in operation,whether it is an individual or family enterprise,and,in many cases,the sex of thebusiness owner.
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This chapter examines some of thesecharacteristics differentiated by the sex of the businessowner.Entrepreneurs,whether they are men or women,are a small,select sample of the population.Since theEnterprise Surveys necessarily focus on entrepreneursoperating businesses,it is important to bear in mind thatthese entrepreneurs have already overcome whatever barriers exist to entry into business,including anygender-based barriers.It is likely that gender differencesin
access
to entrepreneurship may well exist,but suchbarriers cannot be analyzed in these datasets.Moreover,and related to the previous point about selection,women and men entrepreneurs are likely to differ notonly with respect to observable characteristics but alsowith respect to unobservable characteristics that make agood entrepreneur,such as motivation,innate ability,persistence,and intuition.The Enterprise Survey data confirm that womenentrepreneurs are a minority compared with their malecounterparts.
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However,there is large variation acrosscountries.Including only manufacturing enterpriseswith at least 10 employees,women own fewer than 10percent of firms in Kenya,Morocco,Nigeria,Senegal,and Tanzania,but up to 40 percent or more in Botswana,Cameroon,Cape Verde,and Mozambique (Figure 1).
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These percentages are very similar if one looks at a sub-sample of enterprises run by a stakeholder with more
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    1 .    4   :    G   e   n    d   e   r ,    E   n   t   r   e   p   r   e   n   e   u   r   s    h    i   p ,   a   n    d    C   o   m   p   e   t    i   t    i   v   e   n   e   s   s    i   n    A    f   r    i   c   a
Pro-active measures to build the assets of women and toconnect women to markets are essential if Africa is to suc-ceed in meeting the challenges of shared growth. A distin-guishing characteristic of African economies is that genderdifferences lead to men and women playing substantially dif-ferent economic roles. Much of Africa’s economic activity isin the hands of women. Data from Uganda suggest both thatwomen contribute about 50 percent of the country’s GDP, and that women and men are not equally distributed across theproductive sectors. Time allocation studies throughout Africaconfirm women’s preponderant role in agriculture. Becausemen and women differ in their access to, and control over,productive and other assets, economic capacities and incen- tives are strongly gender-differentiated in ways that affectsupply response, resource allocation within the household,labor productivity, and welfare. These differences have impli-cations for the flexibility, responsiveness, and dynamism of the economy, and they directly limit economic growth.
Source: World Bank, 2005.
Box 1: Africa Action Plan: The key contributionof women
 
than 50 percent of the firm’s shares—the percentage of female-owned enterprises decreases in Cameroon andEgypt,and particularly in Mozambique and Cape Verde,but remains very similar in all the other countries.If it isreasonable to assume that a majority stakeholder alsoruns the business,these percentages can be interpreted asapproximately reflecting the share of female ownerswho manage their own enterprise.Research conducted in other regions indicates thatwomen are less likely than their male counterparts toown businesses.
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In the 40 countries included in thisstudy,the percentage of women entrepreneurs rangesfrom a low of 1.9 percent of adult women in Belgiumto 49.9 percent in the Philippines.While overall entre-preneurship rates for both men and women are higher in low/middle-income countries than in high-incomecountries,in all of the countries studied entrepreneurshiprates for men are higher than those for women.The data for African countries also distinguishbetween individual and family enterprises.The percentageof entrepreneurs in family enterprises (as distinct fromindividual enterprises) is higher—sometimes muchhigher—for female-owned enterprises than for male-owned enterprises in almost all countries.As shown inFigure 2,only in Kenya and Lesotho are men entrepre-neurs more likely than women entrepreneurs to be in afamily enterprise.Overall,women are more likely thanmen to own (and possibly manage) their enterprisetogether with other family members,rather than ontheir own.The predominance of women in familyenterprises is also significant in two other respects.First,it may be that family enterprises are a way for womento combine their business activities with their domesticor household tasks,which are disproportionatelywomen’s responsibility.Second,other factors affectingfamily members—such as their legal status and their marital and property rights—are likely to affect the typeof constraints that the firm may face and the performanceof the business as well.Unfortunately,the Enterprise Survey data do notinclude much information on the personal characteristicsof the entrepreneur.To build a profile of men andwomen entrepreneurs,we have therefore analyzedhousehold survey data
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that allow us to distinguishbetween several categories of workers,including“employers”(defined as self-employed people who hireemployees),whom we believe to be a reasonable proxyfor the category of “entrepreneurs”in the EnterpriseSurveys.The analysis of household survey data indicatesthat women entrepreneurs tend to be younger than men(by two to six years),an encouraging sign that accessinto entrepreneurship may be easier for younger cohortsof women.In almost all countries,a much lower shareof female than male entrepreneurs is married.This is aparticularly significant finding in that it suggests thatwomen may not find it easy to combine both familyand enterprise responsibilities.Case studies confirm thisfinding,as it is rare to find women entrepreneurs whosehusbands support their enterprises.
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Finally,these dataconfirm that women entrepreneurs are much more
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    1 .    4   :    G   e   n    d   e   r ,    E   n   t   r   e   p   r   e   n   e   u   r   s    h    i   p ,   a   n    d    C   o   m   p   e   t    i   t    i   v   e   n   e   s   s    i   n    A    f   r    i   c   a
010203040506070
Figure 1: Percentage of enterprises owned by women in selected African countries
Source: World Bank Enterprise Surveys, 2002–2006.Note: The sample is restricted to individual and family firms. Enterprises with fewer than 10 employees and enterprises operating in the service sector are excluded.
    M   o   r   o   c   c   o    N    i   g   e   r    i   a    K   e   n   y   a    S   o   u   t    h    A    f   r    i   c   a    S   e   n   e   g   a    l    B   e   n    i   n    M   a    l    i    N    i   g   e   r    T   a   n   z   a   n    i   a    M   a   u   r    i   t    i   u   s    C   o   n   g   o ,    D   e   m .    R   e   p .    G   u    i   n   e   a  -    B    i   s   s   a   u    Z   a   m    b    i   a    M   a   u   r    i   t   a   n    i   a    T    h   e    G   a   m    b    i   a    M   a    l   a   w    i    E   g   y   p   t    S   w   a   z    i    l   a   n    d    A   n   g   o    l   a    M   a    d   a   g   a   s   c   a   r    N   a   m    i    b    i   a    U   g   a   n    d   a    B   u   r    k    i   n   a    F   a   s   o    B   u   r   u   n    d    i    C   a   m   e   r   o   o   n    M   o   z   a   m    b    i   q   u   e    B   o   t   s   w   a   n   a    C   a   p   e    V   e   r    d   e
    P   e   r   c   e   n   t

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