Women in Sub-Saharan Africa’s Services Trade: An Overview of Participation and Business Ownership
Services trade in Sub-Saharan Africa plays a significant role in the region’s economy, yet the participation of women in this sector is limited. Despite comprising 50.2% of the total population in the region (World Bank, 2022), females in Sub-Saharan Africa are underrepresented in formal employment and ownership of firms. The labour force participation rate for females in Sub-Saharan Africa is higher than the world average at 70.3%, but the rate of labour underutilisation at 20.4% for females above 25 years old is 8 percentage points higher than the world average for females. This can be attributed to underemployment given tenuous informal sector employment, with a high proportion of females employed in this sector ranging from 43.9% in South Africa to over 80% in Lesotho (ILO, 2022).
Trade in services has the potential to mitigate such underutilisation and create opportunities for women to fully realise their potential within the regional economies. Women in Sub-Saharan Africa are disproportionately focused in low- and middle-skilled occupations with lower wages, status, and growth opportunities. Further, female employment in Sub-Saharan Africa within services is concentrated in the least traded sectors including education, health, and social services, although they comprise a majority in the wholesale and retail trade sectors.
Services trade in Sub-Saharan Africa has seen substantial growth in recent years, with the sector accounting for over half of the region’s GDP. The services sector is increasingly seen as a key driver of economic growth and job creation in the region, but despite its growth, female participation and ownership of firms in this sector remains low.
According to the World Bank, women in Sub-Saharan Africa are underrepresented in entrepreneurship and the formal economy. This is largely due to cultural, legal and institutional barriers that prevent women from accessing the resources and opportunities needed to start and grow businesses. Other factors include: include lack of access to education, cultural norms, and limited economic activity diversity. Despite these barriers, women in the region are starting to make inroads into the services sector, but progress is slow and there is still a long way to go.
In many Sub-Saharan African countries, women face significant challenges when it comes to accessing finance. This makes it difficult for women to start and grow businesses, and also makes it harder for them to take advantage of the opportunities available in the services sector. To address this issue, governments and international organisations are working to provide financial support and training to women entrepreneurs, with a focus on the services trade.
In terms of ownership of service export firms, women are greatly underrepresented with only 16.3% of firms in Sub-Saharan Africa having a female top manager and even fewer with a majority of female ownership. Firms with female top managers in Sub-Saharan Africa also face greater challenges in terms of business constraints compared to the world average, with access to finance being a major constraint. Over 23.6% of firms with female top managers in Sub-Saharan Africa report access to finance as a constraint, while electricity is also reported as a major business constraint (ILO, 2022). Despite these challenges, a vast majority of female-managed firms have introduced a product or service that was new to the main market, highlighting the great potential for innovation and growth within the sector.
Moreover, women’s entrepreneurship in Sub-Saharan Africa is also hindered by unequal access to credit and financial services, limited access to markets, and a lack of business development services. These factors, combined with societal attitudes and gender norms, lead to a lower number of women-owned businesses, which contributes to the gender gap in economic opportunity.
To address this issue, various initiatives and programs have been implemented to support women in the workforce and business ownership. These include:
Access to finance: Access to capital and financial services is crucial for women’s entrepreneurship and is the first step towards financial inclusion. Microfinance programs and grants have been created to provide women with the necessary financial resources to start and grow their businesses.
Capacity building: Women need access to information and resources to build their business skills and knowledge. This can include training in financial management, market research, and negotiation skills.
Networking opportunities: Women’s entrepreneurship can be enhanced through access to a supportive network of peers and mentors. This can include business incubators and accelerators that bring together female entrepreneurs and provide them with the resources and support they need to succeed.
Legal framework: The implementation of laws and policies that support women’s entrepreneurship and address gender discrimination is crucial for creating an enabling environment for women’s entrepreneurship.
Marketing and promotion: Women entrepreneurs often face challenges in accessing markets and promoting their products and services. Marketing and promotion efforts can help to increase their visibility and connect them with potential customers.
By implementing these initiatives, the gap in economic opportunity for women in Sub-Saharan Africa can be reduced, leading to greater economic growth and development for the region. However, it is important to note that systemic change and sustained efforts are needed to create a lasting impact and ensure equal economic opportunities for women in the region.
Despite these challenges, there are some encouraging signs of progress. In some countries, women are starting to make inroads into the services sector, and there are a number of successful female entrepreneurs who are leading the way. For example, in Kenya, women are starting to take advantage of the opportunities available in the ICT sector, and are setting up businesses that provide services such as web design, software development and data analysis.
In conclusion, while the services sector in Sub-Saharan Africa is growing, female participation and ownership of firms remain low. However, there are many initiatives underway to support women entrepreneurs in the region, and there are some encouraging signs of progress. With the right support and investment, women in the region can play a key role in driving the growth of services trade and helping to build a more inclusive and sustainable economy.
See a related infographic:Women’s economic participation: A Sub-Saharan Africa focus
ILO. (2022). World Employment and Social Outlook: Trends 2022. International Labour Office. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_834081.pdf
World Bank. (2022). Population. World Development Indicators. https://data.worldbank.org/indicator/SP.POP.TOTL.FE.ZS?locations=ZG
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