Africa’s businesswomen – underfunded or underperforming?
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Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Springer
Abstract
Abstract While the recent success of Africa’s
‘Lionesses’ – successful female entrepreneurs – is
internationally celebrated, less is known about how
liquidity can fuel the success of the ‘Lionesses’ and
other businesswomen. Using information from a
panel of over 800 male- and female-owned businesses in Ghana (ISSER-IGC survey), we capture a
measure of underfunding, in addition to data on supplier credit, equity and other fnance sources. Our
regressions reveal a female-to-male productivity gap
of between−11 and−19 per cent, values similar to
estimates for other African countries. However, when
fnancial constraints are taken into account, the gender performance gap disappears. Accordingly, female
business owners who indicate that funding is not a
problem are associated with higher productivity than
males, all things equal. In a fnding new to the literature, our regressions reveal the importance of supplier
credit for Africa’s businesswomen.
Plain English Summary 300 African Businesswomen in Focus - Suppliers Key to Success.
Suppliers to Africa’s businesswomen (e.g. sellers of
cloth for garment manufacture) who ofer the possibility for delayed repayment, statistically boost the
survival of female-owned businesses. Africa’s ‘Lionesses’ – exceptional businesswomen – are a comparative rarity, a reason we explore the reasons behind
their success. Using data from over 800 Ghanaian
businesses from 2011 to 2015, we examine the role of
funding in explaining why the majority of businesswomen perform so poorly. Our fndings highlight an
unusual fact – suppliers to female-owned businesses
(e.g. sellers of cloth for manufacture into garments)
who ofer their female customers the possibility to
delay repayments are enormously benefcial in narrowing the gender gap. Targeting tax-cuts towards
such suppliers would boost the emergence of future
‘Lionesses’.
Description
Research Article
Keywords
Female-owned businesses, Productivity, Liquidity, Supplier credit, Africa, Ghana