The African investment climate is looking positive according to the African Development Bank’s 2024 outlook. While economic performance has been strong and resilient, it has been slower than anticipated, with GDP growth slipping in 2023. However, forecasts predict a climb in GDP growth for 2024 and 2025, positioning Africa as the second-fastest growing region in the world. To achieve this growth, African economies must diversify beyond traditional sectors like resources and low-skill services. Areas such as education, energy, technology, innovation, and infrastructure need to be prioritized to bridge the financing gap of $402 billion annually.
Women play a crucial role in Africa’s economy, with 58 percent of self-employed individuals being women and contributing significantly to the continent’s GDP. Despite this, female entrepreneurs face numerous challenges such as cultural, financial, and institutional barriers that hinder their economic participation. They are often perceived as high risk and face inequalities in access to funding compared to their male counterparts.
Research has shown that women-owned startups outperform male-dominated companies, yet they receive less funding on average. Gender bias and stereotypes persist in the investment landscape, impacting the growth potential of female entrepreneurs. Addressing these challenges is crucial for closing the funding gap for women entrepreneurs, which could boost Africa’s growth significantly.
Efforts are being made to support female entrepreneurs in Africa, such as the Mastercard Foundation Africa Growth Fund. This Fund-of-Funds works through African Investment Vehicles to support growth-oriented SMEs, particularly those led by young women. By investing in companies like Forna Health Foods, founded by Angella Nabweteme, the Fund is recognizing and supporting Africa’s hidden entrepreneurial assets.
In conclusion, empowering women entrepreneurs and changing the narrative around their perceived risk is essential for driving sustainable economic growth in Africa. Collaborative efforts like the Mastercard Foundation Africa Growth Fund are instrumental in supporting and scaling businesses led by women, ultimately creating meaningful employment opportunities and driving economic transformation on the continent.
