Despite the gender gap and the impact of the Covid-19 pandemic, women in SA are making progress as entrepreneurs, indicating a strong will and determination for their businesses to survive in a challenging economic environment.

That’s according to the latest Mastercard Index of Women Entrepreneurs (MIWE) report, the results of which were announced at the annual 2022 Forbes Woman Africa Leading Women Summit presented by Mastercard.

Now in its fifth year, the MIWE highlights the vast socioeconomic contributions of women entrepreneurs across the world, provides insight on the factors driving and inhibiting their advancement, and makes a compelling case for building on targeted gender-specific policy best practices internationally.

The report, which draws on data from leading international organisations such as the Organisation for Economic Co-operation & Development and International Labour Organization, includes a global ranking of the advancement of women in business across 65 economies.

An economy’s overall rank is based on its score across several indicators and benchmarks that feed into three main components: women’s advancement outcomes, knowledge assets and financial access, and supporting entrepreneurial conditions.

How SA ranked

While SA moved up one place from 2020 to number 37 on MIWE 2021’s overall global ranking with a score of 54.9, women’s advancement still remains hampered by less supportive entrepreneurial conditions compared with other global economies such as the US (rank 1; score 69.9), New Zealand (rank 2; score 69.8), and Canada (rank 3; score 68.6).

Despite this, SA moved up two places on the “women business owner” benchmark to rank 44th, with 21.9% of all businesses owned by women in 2021 vs 21.1% in 2020. Botswana (38.5%) ranks first in the world with the highest percentage of women business owners, followed by Uganda (38.4%) and Ghana (37.2%). 

SA performed relatively well in the “women’s advancement outcome” component (rank 21), which measures women’s progress and degree of marginalisation as business leaders, professionals, entrepreneurs and labour force participants.

Though the “women’s entrepreneurial activity rate” declined in most economies during the pandemic, SA is one of only 12 economies where this rate increased, with 11.1% of working-age women engaged in early-stage entrepreneurial activities (up from 10.2% in 2020), compared with 11.7% for men (up from 11.4% in 2020).

This growth in female entrepreneurism is likely spurred by various factors, including:

• A significant increase in “female necessity-driven entrepreneurship” (up from 62.8% in 2020 to 91.2% in 2021);
• “Perceived opportunities to start a business” (up from 51.8% in 2020 to 60.4% in 2021);
• “Self-perceived business capabilities” (up from 50.2% in 2020 to 60.4% in 2021);
• Improvements in “internal market openness” (from 41.7% in 2020 to 45.2% in 2021);
• “Higher education entrepreneurial training” (from 47.4% in 2020 to 50.6% in 2021); and
• The “availability of SME venture capital” (from 42.6% in 2020 to 43.6% in 2021).

“The 2021 MIWE reflects the challenges of a persistently uncertain global entrepreneurial landscape, as well as a marked rise in both female and male necessity-driven entrepreneurship as many had lost their jobs arising from lockdown and restriction measures,” says Gabriel Swanepoel, country manager of Mastercard, Southern Africa.

“The fact that women entrepreneurial activity rates in SA grew in a year when many other economies did not, together with the fact that female necessity-driven entrepreneurship surpassed that of males, indicates their strong will, resilience and determination to survive.”

Room for improvement

SA ranked 55th on the 2021 MIWE as far as “knowledge assets and financial access” is concerned; this is an area where the country has room for improvement. Women are constrained by poor “access to finance” (down 4 places, rank 40) and “government SME support” (stable, rank 54).

While the female tertiary education enrolment rate in SA is higher than men — with 26.5% females enrolled vs 18.5% of men — it remains quite low on a global scale (stable, rank 57).

From a “financial inclusion” perspective, SA dropped five places to rank 36th on the index, possibly worsening the impact of the pandemic on women. 

SA ranks 37th in the “supporting entrepreneurial conditions” component of the index, which benchmarks how such conditions can be enablers or constraints when it comes to women business ownership.

While SA dropped two places for its “entrepreneurial framework indicator” (rank 54) — which includes access to infrastructure, perceived extent of intellectual and property rights, and ease of access to skilled employees — its 2021 score was boosted by a positive change in “cultural perceptions of women entrepreneurs” (up 9 places to rank 37th) and “competitiveness” (up 3 places to rank 25th).  

“While women entrepreneurs are playing an increasingly larger role in the SA economy, there is need to address the structural challenges of social and gender equalities that still hinder their progress. Continuing to create the right social, political and financial understanding and conditions for women to thrive is of tremendous importance for future economic growth,” says Swanepoel.  

As part of Mastercard’s commitment to creating a world where women entrepreneurs are equally represented and supported, the company made a global commitment to connect 25-million women entrepreneurs to the digital economy by 2025.  Mastercard’s philosophy is that not only will empowering women’s entrepreneurship act as a catalyst for growth and innovation, but it will raise up the communities around successful women and fuel a global recovery that is more equitable and sustainable for everyone.

Download the 2021 MIWE report here. 

This article was paid for by Mastercard.