In African cultures, women play a nurturing role, they are the backbone of the continent. Yet, they face a $42 billion-dollar financing gap with over 3/4 of them being financially excluded.
As a result of this systemic discrimination against women, access to financial services disproportionately favours men. For instance, in Africa men have 50% more global wealth than women and run more than 86% of businesses. Local barriers are also erected in front of African women: most of them at the continental level operate in informal sectors or very rural areas with limited banking facilities, making easy access to finance almost unheard of. This is a market failure that must be addressed to ensure equal access to banking and ultimately equal rights.
The capital lost because of the financial exclusion of women is deeply affecting our economy and most importantly, deeply impacting our societies. When you are struggling to make ends meet, to put a meal on the table, to raise your kids, why wouldn't you try to go to Europe, despite the risks and the thousands of lives lost at sea?
The Affirmative Finance Action for Women in Africa (AFAWA) initiative is a direct response to the challenges faced by women in Africa, and the need to unlock access to finance. It is a major step in the right direction for women all over Africa, but it is certainly not the end of the battle. AFAWA's primary end beneficiaries are African women's enterprises across the continent, often neglected by the traditional banking system. A more equal – and gender equal – Africa is not just a political ideal. It will have a ripple effect on Africa's development and human capital. It will lay the foundations for a resilient, prosperous and forward-looking Africa.
The goal here is to work towards eliminating these structural and cultural barriers, creating wealth, generating growth, and supporting female entrepreuneurship. It is surely the first of many steps towards women's empowerment, which will ultimately lead to economic growth across the entire continent. But banks and governments need to act, and act now, for women to be empowered, for these inequalities to be resolved, and for the economy to grow.
Women in Africa are the heartbeat of the continent, they are the agents of long lasting change. If we want to invest in the future, we need to empower women by investing in them.
Of course, we know that the AFAWA initiative alone will not by itself tear down the many hurdles inhibiting women's abilities and opportunities. However, I believe that this initiative can significantly shape the future of Africa.
Affirmative Finance Action for Women in Africa
The AFAWA is a pan-African initiative aiming to bridge this financing gap between men and women.
- It is a direct response to African women's demand to ease access to financing, to establish a mechanism for their economic empowerment, and ultimately to drive inclusive growth on the continent.
- To propel this initiative across the continent, the African Development Bank and the G7 have developed a $300 million risk sharing instrument to encourage lending to women and unlock $3 billion in credit for women entrepreneurs and women-owned micro, small and medium businesses in Africa.
- Because women entrepreneurs face multiple challenges to access banking and finance, with an estimated $42 billion financing gap for African women across business value chains, including $15.6 billion in agriculture alone.
- Because women are the backbone of the African economy. The African continent has the highest percentage of women entrepreneurs in the world. According to the Global Entrepreneurship Monitor (GEM) 2016/17 Women's Report, the female entrepreneurship rate in sub-Saharan Africa is 25.9% of the female adult population, meaning that one in four women manages a business.
Because women typically reinvest up to 90% of their income in the education, health and nutrition of their family and community - compared to up to 40% for men. This means that investing in women's businesses could be transformative and positively alter societies across the continent.
Angelique Kidjo is a three-time Grammy-winning musician and singer from Benin. She is an advocate for development, including girls' education, a Unicef Goodwill Ambassador and author of the book Spirit Rising.