It's a (WO)Men's Business World

In the past week, I had the privilege of meeting Mrs Michelle Obama, the First Lady of the United Stated of America, and some 75 extraordinary young women leaders from across Africa, in Johannesburg. While I could go on and on about our discussions, I will focus on some of my thoughts provoked by the discussion on women in business and economic development.

All over Africa, the majority of women owned businesses are in the informal sector. In Botswana, a 2007 study estimated around 67% of informal businesses to be owned by women. Further, we know that formal businesses sprout from the informal and thus those in the informal sector are drivers of the economy; an IMF report on Women and Men in the Informal Sector indicates that there are estimates of the contribution of the informal economy as a whole to GDP and that the average (un-weighted) share of informal sector in non-agricultural GDP varies from a low of 27% in Northern Africa, 29% for Latin America, and 31% for Asia to a high of 41% for sub-Saharan Africa. While some economists say that people are in the informal sector because of choice, most (me included) acknowledge that sometimes it’s by necessity. There is a significant, but not complete overlap, between working informally and being poor; especially in the lowest-return activities where the link is stronger for women than for men.

Although the informal economy is good for start-ups, there is need to encourage these setups to legalise and make their operations formal. Growth of the formal sector not only reflects growth of output in the economy but taxes which fund public services and improves the standard of living of the nations. Many of the self-employed would welcome efforts to reduce barriers to registration and related transaction costs especially if they were to receive the benefits of formalizing, such as written and enforceable commercial contracts as well as access to financial resources and market information.

There are some questions that keep coming up in my discussions; ‘what do we need to do to ensure that those in the informal sector grow to join the formal sector? For example; how do we transform the woman’s hair dressing business from under a tree to a fully fledged salon? How do we transform that one salon to a chain business?’ when one starts, the hope is to grow big and in most times, the business environment is not welcoming; the regulatory environment is a main hindrance, paper work is dubious and entry just becomes very difficult. As a precursor to attract informal sector to formalise, we need to see an increase in incentives to legalize business; lower costs and lessened hassles in business start-up, provide service and let there be equitable distribution of resources. But till then, maybe there is more to learn from the Kiosk economy in Kenya; the art of vicious negotiation, high aggression to business pursuits and the spirit of team building.

 In order for our country to reach new heights of equitable and sustained development, the ingenuity and energies of both men and women must be fully harnessed in social and economic development. I hope for more participation of women in the formal business sector, and development initiatives that fully embrace the role of women in economic and business activities and that in Botswana and worldwide, governments will start or strengthen their policies to ensure that women attain their full measure as equal partners in nation building.