Historically, women-led firms are more vulnerable to crises such as COVID-19 because of fewer support options. According to the International Trade Centre (ITC)’s SME Competitiveness Outlook 2020, women are generally burdened with 75% reduced sales and about 54% more difficulty accessing inputs. As bad as that may sound, statistics that will trail the Coronavirus pandemic will present worse figures, given the unprecedented nature of the situation.
That business outfits in Africa and beyond will feel the impact of the global pandemic is no more in doubt; what we cannot tell yet is how much such an effect will devastate these enterprises. It is certain, however, that the resounding positive impacts felt by micro, small, medium and big businesses in Southern Africa (thanks to the support of various entities like ‘SADC Women in Business’) will slow down in the year 2020 – and possibly a bit longer, due to COVID-19.
Women in Business are most vulnerable to the crisis, especially in developing countries in regions like Southern Africa. Relatedly, the various measures put in place by national governments to mitigate the spread has not only disrupted lives and impoverished families, but it has also overwhelmed businesses of all sizes.
At the tip of the receiving end are MSMEs run by women, many of whom have been inundated with losses (in profit and capital). The result is as clear as day: these business owners will run into debt – if they do not lose their enterprise altogether. According to the International Trade Center, Africa risks losing over $2.4 billion worth of exports owing to the shutdown of various factories overseas.
The 2020 pandemic has deepened pre-existing inequalities in all sectors of the economy, with women bearing the brunt of the impact. Apart from having to put their businesses on hold, they are saddled with the responsibilities of holding the home-front together by ensuring every member of the family is safe from the virus. This combination eventually wears them down psychologically and emotionally.
Is any sector free from the impact of COVID-19?
The devastating impact of COVID-19 is felt across all spheres ranging from Water, Mining, Energy, Transport and Logistics, Agriculture, Manufacturing, and Processing, as well as information and Communications Technology, among others.
Considering that most of these businesses are funded with loans from corporate financial institutions, a disruption in the production and delivery of goods and services as a result of the extended lockdown and its resultant effects has invariably led to the accumulation of interests on short, medium, and long-term loans.
Beyond the corporate firms operating in these sectors that have been adversely affected, many other small scale informal businesses in the value chain have also scaled back operations or completely shut down altogether, resulting in further layoffs or drastic pay-cuts. In other words, women in the formal and informal sectors have been hit severely just as women in corporate enterprises and road-side spazas have felt the downward spiral in their means of livelihood.
These all make matters worse, given that many families are single-parent households or taken care of by a female. Combined, the stress on the female gender has inadvertently become a gradual roll-back of the success achieved in increasing the participation of women in the labour force, defeating the purpose of affirmative action and other social mechanisms to lift Southern African women out of poverty and obscurity.
What is the impact of COVID-19 on women in business in the SADC region?
Without inclusive, equal, and sustainable economic interventions from national and regional governments, women will continue to bear the brunt of the fallout of the pandemic in all areas, setting progress many years – if not decades – back.
Women are already facing challenges ranging from a lack of mentors, networks, and access to finance to resuscitate their businesses. These concerns will aggravate further. In other words, the impending economic slowdown will be exacerbated by the effects of the pandemic, rapidly expanding the chasm of pre-existing barriers faced by African women in business.
Very crucially too, national and regional governments are not paying the right attention to resuscitate or support women-owned businesses at this critical juncture, considering that women play a limited role in policy-making and governance. As such, the female gender’s impact on the COVID-19 economic fallout decision-making process is gravely inadequate.
The doomsday scenario sounded by Affirmative Action and Civil Rights Activists for decades has suddenly become our reality. Centuries of relegating women to the background and decades of deliberate unwillingness to close the gender gap in terms of access to business financing, literacy and the use of technology have not only affected the women but vigorously shaken the social fabric of society, given the multi-faceted roles women play in maintaining a balance.
Such decades-long neglect means women can hardly participate in economic activities that can be supported remotely, using advanced digital and telecommunication gadgets and apps. While there are many software programmes and mobile apps readily available to MSMEs to help their businesses survive and thrive amidst the challenges, most of the female entrepreneurs do not even have a clue of their existence. Some with an idea about these tools have never been encouraged or supported to use them. Alas, the cookie has finally crumbled.
It gets worse!
The extended restriction of movement has negatively impacted the productive and economic lives of women engaged in informal trade, especially those not covered by a social safety net. The situation is a double whammy for women-led MSMEs: they hardly have insurance to cover their loss and cannot access emergency social grants to help sustain their businesses. In effect, they are unable to cushion these kinds of economic shocks because of the informal nature of their enterprises.
Women-owned big business outfits are not spared either.
Due to the cancellation of pre-planned programmes for expansion, partnership, and growth, these corporates have experienced real losses in potential income; yet at the same time, they continue to service debt and settle overhead costs. Furthermore, the uncertainty of the next few months has inundated them with more worry about how to manage their stocks – including raw materials and finished products that cannot be preserved for long.
The impact is real and frightful!
Women in business are facing a bleak and uncertain future, one where the fear of foreclosure is imminent due to the inability to fulfil banks/lenders’ commitments (or even keep their businesses afloat, in the first place).
Perhaps beyond the service sector, the mining, manufacturing, and processing sectors are worse hit. National lockdown and restriction of movement automatically translate into a disruption of their supply chain. Even when they manage to keep their supply lines flowing, a severely reduced demand for goods means enterprises will reduce their supply too, resulting in layoffs and salary-cuts.
And then the circle repeats in a sustained and excruciatingly loop, over and over!
What can be done to reduce the impact of the pandemic on women in business in the SADC region?
Will this be the very last social disruption the world will ever see? Certainly not!
With the pandemic triggering a massive wave of economic uncertainty never witnessed in the Industrial Age, national and regional governments must develop workable action plans to prevent a reoccurrence of this magnitude in the future.
The government must work with existing platforms to understand the needs of MSMEs and then put in place emergency measures to support them in times of crises. This is no time for politicking; national governments in the Southern African Development Community region must band together to support one another as they strive to mitigate the economic fallout. Failure to do so will aggravate cross-border crimes and then overwhelm immigration procedures, officials, and facilities in the region.
To do this might be challenging, but with a committed government that is willing to sustain the social fabric (woven together by the female gender), anything is possible. Beyond going after MSMEs for tax purposes, the government must begin collecting useful data from these businesses to understand them better and be at a better position to ameliorate the impact of these kinds of shocks in the future.
For the moment, though, local, national, and regional governments should invest more in providing such business owners with skills development training, access to single-digit interest loans, lines of credit, economic grants, and conditional cash transfers to sustain or revive their ailing businesses. On the back of such interventions, women-led companies will survive and thrive again if the government begins to deliberately introduce temporary tax relief and waivers for an extended time to help these enterprises get back on their feet.
Furthermore, national and regional governments should encourage telecom giants (by giving them tax holidays) to provide these MSMEs with more affordable access to technology and related tools. Such digital technologies and applications will promote efficient and profitable business interactions, even in a lockdown or restricted movement situation.
Recent studies also show that only 27% of African women have access to the internet and far fewer from that number are able to afford the cost or even utilise such technologies to their advantage. It is, therefore, vital to increase the training of women on the use of ICT and as well leverage internet connectivity so they can remain in business and thrive.
The Digital Age, coupled with the Coronavirus pandemic, has changed the game. Women must follow suit!
Ultimately, every public policy should, as a matter of urgency, be seen to be equal, inclusive, and sustainable. Such progressive policies will help to cushion the effects of the crisis on women folk. On the other hand, both the public and private business environment should actively encourage self-employment by promoting the involvement of women in economic activities. In summary, the agitation for (and implementation of) equal opportunities and pay, as well as social welfare schemes, have never been more urgent than now.
Potential opportunities post-COVID-19 for women doing business in the SADC region
With preparation for the ‘new normal’ in top gear across all sectors in response to the lifting of COVID-19-induced lockdown, women in business must work towards adapting and moving their business forward. Like every other demographic, women doing business in the region must also learn along the way, since there is no manual or guide to help anyone navigate through these trying times. In other words, this is a period to rethink the traditional way of doing things, if African women desire to remain relevant and keep afloat.
Post-COVID-19 is the time for women to scale their business through digitisation, utilising technology to promote sustainable growth as well as mitigate economic disruption in the future. The greater emphasis should be on the use of digital tools, supply chain reliability, broadened networking, and new learning.
Adopting a flexible approach to doing business in the ‘new normal’. Firms need to make swift changes to business approaches and face new business realities through the creation of backup products or new products that suits current trends.
Every woman-led organisation must become a creative and innovative machine, going forward!
In effect, the pandemic is not all about woe; it is also an opportunity to open up new businesses and aggressively scale up older ones. For example, budding enterprises have sprung up all over the region to provide Personal Protective Equipment (PPE), sanitisers, and other requirements to help keep society running.
Similarly, many businesses have ramped up effort to use digital media to promote and sell their products and services. Women in the region should focus on taking advantage of technology by investing in online tools and services to boost sales and simultaneously encourage remote work. This approach will, in turn, increase productivity.
Women can easily connect with their peers, suppliers, consumers, and more, using digital networking tools, thus accessing new opportunities by sharing resources and knowledge, as well as creating economies of scale. Such interventions to leverage digital business support will help reduce cost drastically.
Very crucially too, women-led MSMEs should refine every aspect of their operation, taking advantage of New-Age technology which will help scale up their enterprise quickly and efficiently. From sourcing raw materials to manufacturing/production, distribution, marketing and sales, investing in improving their (and employees’) skills and technological know-how, 4IR digitisation will promote innovation, proactiveness, and adaptation.
Specifically, also, new opportunities abound, thanks to the pandemic. Now women can move into gender-responsive social infrastructure businesses like sanitation, energy, water, care services, transportation, online shopping, among others. These are social needs people require at all times, pandemic or not.
While participation in heavy-industry sectors like mining and agriculture is also encouraged, the pandemic provides an unprecedented opportunity for women to pursue service-provision, a sub-sector where they can compete favourably. Such a focus will serve as a means to close the gender gap and take their rightful place on the economic ladder.
In these uncertain times, women in business in the SADC region must prepare to use purposeful initiative, proactiveness and perseverance to survive and scale up their business to the level that can withstand economic shocks.
On the other hand, however, national and regional governments, as well as inter-regional agencies, must provide the necessary support to women in MSMEs – as well as the entire informal sector too.
By providing financial support, providing loan moratorium, tax holidays, and availing them of revenue incentives, productivity will be enhanced, more people will be employed instead of the current layoffs and salary-cuts, and the economy will be better off. In essence, offering short-term financial bailouts and exemptions to as many women-owned categories of MSMEs will undoubtedly help improve the economy as more companies will be encouraged to restart (and even expand) production.
In any case, the most critical variable in achieving sustainable results will be seen when policy-makers make more effort to close the gender gap by deliberately designing programmes and projects to help keep businesses owned and run by women afloat post-COVID-19.
Such non-recognition of women in the scheme of things is a key factor that fuels gender-based violence (GBV) in Southern Africa. To curb such mistreatment of women, state policies should not only criminalise GBV, but also provide useful and easily-accessible economic vehicles that will empower women, increase their self-worth, and transform them into key stakeholders towards national and regional economic development.
In conclusion, all efforts must be made to remove every constraint to women’s economic empowerment. Such efforts will subsequently promote an inclusive economic recovery that will improve the GDP of the SADC region, create more employment opportunities, and promote a balanced and happy society.
Shiphra Chisha | President African Women in Business