Africa, the world’s second-most populous continent after Asia, is known for its entrepreneurial prowess. Given that women make up about half of the population, entrepreneurship is becoming increasingly common among African women.
In most African countries, the proportion of women entrepreneurs to all business owners falls between 25% and 35% (MIWE, 2017). For example, the top three economies in the world with the highest percentage of female entrepreneurs are Uganda (39.6%), Botswana (38.5%), and Ghana (34%).
These rankings come from the 2020 MasterCard Index of Women Entrepreneurs (MIWE). In Sub-Saharan Africa, female participation in business ownership averages around 25%, according to the World Bank Enterprise Study (WBES, 2013).
The greatest difficulty facing Africa continues to be the necessity of entrepreneurship, even with the rise in the number of women participating in the continent.
As opposed to growth entrepreneurship, which concentrates on large production and employment creation rates, many entrepreneurs are driven by necessity, emphasising small-scale production (WBG Women Entrepreneurship Program, 2018). Total factor productivity has decreased due to the emphasis on necessity entrepreneurship in terms of profits and sales revenues.
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Like all of Africa, Tanzania is happy with the rise in the number of female entrepreneurs across the continent. As of 2019, 56 million people are living in the nation (National Bureau of Statistics, 2019). Women make up 48.2% of the population; therefore, they have a lot of potential if they are given the tools to comprehend the need for growing entrepreneurship.
Social standards, inaccessibility to capital, and reduced funding for female entrepreneurs are preference-driven issues that prevent women from transitioning to growth entrepreneurship. There are also preference-driven variables that prevent women from becoming growth entrepreneurs, such as fear of failure, self-doubt, and perception of prospects. For example, according to data from the Global Entrepreneurial Monitor (GEM), women are less confident in their ability to succeed as entrepreneurs and are more afraid of failing.
The leadership knowledge gap that affects African women entrepreneurs is another significant aspect that has contributed to the gradual transition from necessity entrepreneurship to growth entrepreneurship.
While the current leadership style has increased profit and company management practices among growth entrepreneurs, the conventional leadership model, which is frequently utilized by necessity entrepreneurs, has contributed to decreased productivity and poor management of women-driven enterprises.
The goal of the modern leadership strategy, which incorporates entrepreneurial leadership, is to raise the business’s management level and profit margin by combining the concepts of growing entrepreneurship and leadership.
To manage their business and turn a profit, entrepreneurs of both genders must possess the necessary technical abilities. The degree to which men and women employ social skills in managing their enterprises has a significant impact on the performance of such businesses.
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The power of entrepreneurship and leadership to maximize employee satisfaction at work and turn a profit are connected by entrepreneurial leadership. Technical proficiency alone does not ensure success in the corporate world if leadership is not accounted for.
The personal attributes of a business leader who is also an entrepreneur can determine how much the firm grows in terms of sales, productivity, customer and employee satisfaction, and brand loyalty. To support the growth of entrepreneurship in women-led enterprises in Africa, entrepreneurs must build a bridge between leadership and entrepreneurship while concentrating on profit.
As we consider the future of women-led enterprises in Africa, it is essential to reflect on the leadership styles and entrepreneurial approaches that can foster sustainable growth. How can African women entrepreneurs effectively bridge the gap between necessity and growth entrepreneurship to ensure long-term success and development?
