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Africa's women entrepreneurs take the lead

Wednesday - 6/11/2014, 6:20am  ET

In this photo taken Monday, June 9, 2014, 34-year-old single mother Madinah Nalukenge serves dishes to customers at her food stall, frequented by transport operators, that she owns on the edge of a bus terminal in the capital Kampala, Uganda. About 63 percent of women in the non-agricultural labor force are self-employed in the informal sector in Africa, more than twice the worldwide rate according to World Bank data, which also shows that necessity, not opportunity, is the main driving force behind female entrepreneurship in poor countries. (AP Photo/Rebecca Vassie)

RODNEY MUHUMUZA
Associated Press

KAMPALA, Uganda (AP) -- Madinah Nalukenge recalls the day she set out to sell food on the filthy edges of a bus terminal in the Ugandan capital in 2004. She had just $10 left over from a failed attempt to sell bed sheets.

Now she runs a catering business that makes a monthly profit of up to $3,000, a source of pride for the 34-year-old single mother who spends her days offering plates of mashed plantain and greasy meats to transport operators in downtown Kampala.

"There is a lot of money to be made here," she said recently, her apron bulging with cash. "I need to stay focused."

Her competition: More than a dozen other women operating food stalls next to hers.

Nalukenge, who did not study beyond grade school, is part of a growing trend in Africa where more women are running businesses on a scale that was unthinkable a generation ago. Africa now has the highest growth rate of female-run enterprises across the world, according to the World Bank.

About 63 percent of women in the non-agricultural labor force are self-employed in the informal sector in Africa, more than twice the worldwide rate, according to World Bank data, which also shows that necessity -- not opportunity -- is the main driving force behind female entrepreneurship in poor countries. Women often start by running informal retail or service businesses, but those who are more ambitious have created thousands of jobs in projects that break stereotypes about what women can do, physically and socially, in societies that are still largely conservative.

"Traditionally women would sit at home and wait for the man to return home with a bag of groceries, but this has been changing over time as women's dependence gradually reduces," said Thomas Bwire, an economist with Uganda's central bank. In a sign of the times, he said, Ugandan women now even work at road construction sites.

There are more women than men working in the informal sector in all of sub-Saharan Africa, according to the International Labor Organization. The U.N. agency's most recent survey, released last year, noted that this is unlike other regions, including South and East Asia, where informal employment for women tends to be concentrated in home-based, domestic work.

Some of the food vendors in downtown Kampala have remarkably similar accounts of what sparked their entry into private business: Hungry children, unpaid rent and some violent partners. Most of them have long been single or were recently in failed relationships, an important detail because many insist their businesses are succeeding in part because of their independence on the home front. Many of the vendors have also enrolled their children in boarding school to make more time for work.

"They don't help and they never want to help," Nalukenge said of her former partners. "Yet even the little you get they want to take away from you. I was alone when I started this business."

Development economists note that if more women are helped to join the labor force, especially through access to credit, they can be a powerful force for global economic growth.

A report released earlier this year by the investment bank Goldman Sachs urged what it called "giving credit where it is due," noting that women's "increased bargaining power has the potential to create a virtuous cycle as female spending supports the development of human capital, which in turn will fuel economic growth in the years ahead."

An estimated $300 billion credit gap exists for female-owned enterprises, according to the International Finance Corp. of the World Bank, which in March launched a $600 million fund to finance women-owned businesses in the developing world. The venture -- dubbed the Women Entrepreneurs Opportunity Facility -- aims to work with local banks in sharing risks and extending credit to 100,000 women entrepreneurs.

Across sub-Saharan Africa, where poverty remains extreme in many parts, stories of successful women entrepreneurs are accumulating. A Kenyan woman, Mary Okello, is feted for starting a school inside a three-bedroom house that has since become a prestigious group of private schools. In Rwanda, Janet Nkubana has been recognized abroad for running a handicrafts company that employs more than 3,000 women whose baskets can be purchased at Macy's. The Nigerian Adenike Ogunlesi is famous for her "Ruff 'n' Tumble" clothing line for children, a business that she first operated out of a car trunk.

In Uganda, where most of the food is grown locally, many women have been drawn to catering, and their food stalls are ubiquitous at transport terminals and open markets. Unable to get credit from banks, often the women start "cooperative" groups in which they pool savings. Then they take turns getting loans.

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