To celebrate Women’s Month an online news agency, Ventureburn, did a quick calculation and concluded that about 4.5% of annual venture capital (VC) and angel investment in the last 18 months went to SA tech startups founded by women, from an estimated total of 1.7bnR. This may hide funding which has not been made public, however, SA is doing better than the USA – Fortune magazine reported in January that in 2018, companies in the US led by women or with an all-women team of founders netted only 2.2% of the US$130 bn recorded VC funding for that year.
And while we are on the subject of investment in women, the African Development Bank’s AFAWA initiative to support women entrepreneurs in Africa has been approved at the recent G7 summit. This is a total package of US$251 million in a risk-sharing mechanism used by AFAWA (Affirmative Finance Action for Women in Africa), which is recognised as a practical approach to international commitments. It is a direct response to the demand by women to ease access to financing, specifically on the need to establish a financing mechanism for women’s economic empowerment, which was a policy adopted during a summit of African heads of state way back in 2015 and assigned to the African Development Bank for implementation. The Bank notes that currently women operate over 40% of SMEs in Africa, but there is a financing gap of US$42 bn between male and female entrepreneurs. That gap needs to be closed quickly. AFAWA aims to raise up to $5 billion for African women entrepreneurs and the African Development Bank will provide $1 billion financing. The AFAWA initiative, backed by the G7 nations, is based on 3 fundamental principles. The first is to improve women’s access to financing through innovative and adapted financial instruments, including guarantee mechanisms to support women entrepreneurs.
Meanwhile, the African investor and philanthropist Tony O. Elumelu, challenged Japan to invest 5% of its US$50 bn commitment to Africa, in empowering African entrepreneurs. The Tony Elumelu Foundation has assisted over 7,500 African entrepreneurs across every African country in the last 5 years with seed capital, capacity building, mentorship and networking opportunities through its US$100 million Entrepreneurship Programme. Mr Elumelu points out that there are 3 key pillars: investment in infrastructure, partnership with the African private sector, and investment in Africa’s youth.