Investing In Africa? Invest In Women – Forbes

The focus on gender balance as a strategic economic opportunity has risen around the world over the past two decades – now it is accompanying Africa’s rise. As research of the benefits of gender balance has steadily grown, companies and countries have pushed to balance boards and leadership teams. More recently, investors have added pressure on the issue. Large funds have declared they won’t invest in companies that don’t balance. Women-led venture funds have started to emerge, and just this week a women-led bank announced its opening in the US.

Yet in the developing world, where the financing gap is most stark, women-led investments are rare, and women on listed company boards still a tiny minority. But efforts pushing for progress are emerging and deserve visibility.

Top Down: Focus on Corporate Boards

Back in 2002, as President of the European Professional Women’s Network (now PWNGlobal.net), I remember doing one of the first surveys of Women on Boards in Europe, in partnership with Egon Zehnder. These and other efforts led to the introduction of board quotas across the continent a few years later, and a substantial increase in board balance, now averaging 33% female/ 67% male across the Stoxx Europe 600 companies.

It is heartening to see this kind of effort and focus emerging in Africa with TBR Africa. The steps for change are all on the agenda: measure today’s reality, educate and prepare women, and educate and lobby companies and governments. They are getting the measure of the current situation by mapping and publishing the imbalances on listed Boards across the continent. Then working with a range of actors (development finance institutions, private equity investors and companies in and outside Africa) to accelerate the appointment of women on boards and build a growing pipeline of board-ready women. While also educating the business community on the power of balanced leadership. 

Launched in 2016, TBR Africa now has a network of over 1500+ senior executive women from over 55 countries. Since 2018, they have placed more than 35 women on boards, and trained over 120 women through their board training programme, Open Doors, developed in partnership with the UK’s Institute of Directors. They recently got a £1.6 million injection from the UK’s CDC which should help reach their target of doubling the number of women on African Boards by 2028.

• EXPATS COMING HOME: As women rise in the corporate world, they push for balance. Like Beatrice Hamza Bassey, a lawyer who grew up in Northern Nigeria in a family with a long line of women each breaking the mould of their conservative societies. After attending Harvard Law School and spending 20 years as a lawyer in the US, she returned to her home country in 2015. She was recruited there by Bob Diamond, the former CEO of Barclays, to build an African banking platform. The goal was to acquire banks that would reach top 3 status in every country. She made nine acquisitions within two years. In every company, she sat on the Board as General Counsel. And made gender balancing Boards part of her strategy to improve corporate governance and transparency. The project was reshaped by the Covid crisis, but Hamza Bassey remains Chair of Union Bank of Nigeria’s Board, now over 40% female. “We have become a leader in gender balance and sustainability. They are related, as balance is part of the reason attention has been paid to these issues.”

Bottom Up: Invest in Entrepreneurs

Women run 40% of Africa’s SMEs but receive only  1% of funding from VCs. “In 2021 so far, male single founders & all-male founding teams have raised 84% ($2.2bn+) of all funding raised by startups in Africa,” says Maxime Bayen, who runs Africa: The Big Deal website. This gaping chasm hurts the region’s future. The region could capitalise on having the highest rates of female entrepreneurship in the world if access to capital wasn’t such an obstacle to achieving full potential. An additional challenge is that much of the VC funding in Africa does end up with local founders. “A good chunk of the funding that goes to female-led startups in Africa (especially in Kenya) goes to non-local founders,” adds Bayen. There are only a handful of women-led investment initiatives in Africa’s formal financial markets – and are, for the moment, limited to the continent’s two biggest economies. South Africa has the Kenya Women Investment Company and the Women’s Investment Portfolio Holdings Limited while Nigeria has Alitheia and the Women Investors Fund.

In Francophone West Africa, informal savings and credit groups called ‘tontines’ are commonplace. Some estimates suggest over 80% of the adult female population are members in urban areas, with amounts loaned ranging from a few dollars to thousands. But these systems don’t lead to scale and limit women’s potential economic impact. 44% of women entrepreneurs in Senegal, for example, finance their businesses by borrowing money from relatives. Only 3.5% of Senegalese women entrepreneurs borrow from banks and micro-finance institutions. The Covid crisis has hit Africa’s women-led, informal-economy businesses hard as investors prioritise existing relationships. Even government-led relief measures often have not reached them. Resilience depends on women having easy access to capital and business support. That’s what moved a group of West African women to create a fund by women for women.

WIC Capital is the first fund dedicated to women-led businesses in West Africa. It aims to connect female entrepreneurs to modern financial instruments, promote women’s leadership and skills (through its WIC Academy), and position women as full economic players rather than spectators. Led by Thiaba Camara Sy, the founder of Deloitte Senegal, WIC Senegal brings together 90+ women who invested over US$1m of their own money and raised over US$1m in grants from local and international partners. This has been invested in the Regional Stock Exchange (BRVM) and is being distributed to local entrepreneurs.

• THE GENERATIONAL RETURNERS: Some women are born abroad of African parentage and move to Africa as adults, bridging global educations with African roots. They too will shape the gender balance of Africa’s future. This includes Maya Horgan Famodu, a rare female founder of a VC fund, Ingressive Capital, launched in 2017 to invest in African tech. Even rarer that she is young, half-Nigerian, half-American, and focuses on start-ups in Sub-Saharan Africa. With US$10 million assets under management, she was named one of the 10 women reshaping Nigeria’s tech ecosystem, and is pushing to combine progress and innovation. “Not only do I have an obligation to generate economic activity on the continent,” she said in an earlier FORBES interview, “but I have an obligation to use my access to empower the next generation of African innovators.”

The thirst for better tools and education about financing – especially for women – is widespread. The United Nations Economic Commission for Africa (UNECA) and the African Institute for Economic Development and Planning (IDEP) has responded with a dedicated training program for African Women Investors. to build a pipeline of women investment leaders in Africa.

Invest in Women, Everywhere

Even in the US, less than 5% of VC partners are female. But over the past five years, the number of women-led funds has multiplied by four. This has led to a surge in female entrepreneurship (73% of women-led firms were founded in the last five years).

The research shows not only that large companies with better gender balance in leadership outperform, so do companies founded by female entrepreneurs. Imagine when more funds, more investors and more governments get their strategies and their money aligned with the data. It’s starting, but there is a long way to go.

Africa, with its exceptionally entrepreneurial women and its huge gender gap in corporate business, has the most to gain from closing the gap. The region’s enormous potential has been hard hit by the Covid crisis. Investing in the continent’s women is a sure fire accelerator to recovery, and beyond.

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