From Africa to the World: Unlocking Barriers for Women to Trade

By Philda Maiga (doctoral researcher & OpenAIR QES Fellow).  Reposted from OpenAIR (July 6, 2021)

Trade is considered an important engine for growth. Studies have shown that trade can dramatically improve women’s lives, create jobs, and increase women’s bargaining power in society. Owing to the potential of trade and, more so, international trade to transform women’s lives, there are a number of initiatives worldwide aimed at empowering women to engage in global trade. The changing global economy also offers new promise for women entrepreneurs. International trade is buoyed by a new era of intense use of ICTs. Digital technology and new online platforms are creating opportunities for women to bypass traditional trade barriers, expand their entrepreneurial skills and develop flexible careers that enable them to balance and/or manage both work and the household.

Women in International Trade

According to the World Economic Forum, women-owned and led businesses are underrepresented in international trade, are usually small, and most often operate in the informal sector. Only 15% of exporting firms are led by women. Compared to companies that only do business domestically, export-oriented companies tend to be more successful; they sell more products and services, generate more revenue, and are more profitable.

A survey analysis by the International Trade Center (ITC), conducted across 20 countries in five regions of the world, reveals that far fewer women owned/led businesses engage in international trade compared to those owned/led by men. This means that at least some of the potential of these women-owned/led businesses is being lost. Women entrepreneurs need to be fully integrated in the global economy in order for their businesses to grow faster and for improved development outcomes. By intensifying their use of ICTs, it is expected that women-owned/led enterprises will be on course to increase their current exports and expand their businesses.

The Case for Increasing the use of ICTs by Women Entrepreneurs

In Africa, a number of barriers affect women’s ability to reap the full rewards of international trade. Limited use of ICTs (which impacts access to information and markets), red tape, logistical, border, and administrative obstacles combine to hinder women’s effective participation in international trade. A number of studies have documented the trade barriers faced by female entrepreneurs in developing countries, noting these obstacles.

With these obstacles in mind, policymakers, businesses, and the development community must increase their focus on eliminating the challenges to trade in order to increase trade opportunities for women. Among the many ways to address these challenges is certainly intensifying capacity building efforts around the use of ICTs.

ICTs have become an indispensable economic growth lever. ICTs are the new gateway to expanding entrepreneurship and self-employment in societies. Mobile phones, the internet, and computers play an important role in accelerating business growth. ICTs are particularly suited to help in overcoming constraints that are unique to women entrepreneurs, or those that affect women to a greater extent than men. For example, by using ICTs, women can get access to skills training through YouTube channels on themes such as financial literacy or can learn more about making their businesses adaptive and responsive to today’s changing conditions. Apart from facilitating skills development, ICTs save on much needed time since women are able to get around mobility restrictions such as those caused by the double time burden of family duties and business. This is especially so because they may no longer have to leave their locations to find markets or travel to negotiate deals with prospective clients, saving time and logistical resources. In addition, ICTs provide benefits including greater access to information, markets, and finance. With e-banking services taking hold in most countries and markets being accessible online, it is important to assist women to harvest the benefits presented by ICTs. Without a doubt, ICTs are a strong asset for women to get accustomed to today.

What Role for Government and Sector Stakeholders?

As a development strategy, responsible governments must intentionally enable women entrepreneurs access to the use of ICTs in order to start and grow their businesses. ICTs provide new possibilities for women to enhance or create new businesses. Information and communication are probably the two most essential tools needed for contemporary entrepreneurial activity. With the increasing trend of Internet and cellular penetration in many countries, women have in their hands an important tool to increase business participation.  Campaigns, therefore, to raise awareness on ICTs as a business enabler must be created and widely available. A one-stop-shop website, with information and resources for women on market information, supply chains, and export related support would also be of great benefit. The development community and trade sector stakeholders need to ramp up their support for women entrepreneurs to access and leverage ICTs to propel economic progress.

Another important issue is for African countries to dismantle red tape and purposely implement the World Trade Organization Trade Facilitation Agreement, as trade costs are some of the biggest obstacles in international trade. If fully implemented, it is argued the agreement stands to reduce trade costs by more than 14% in low-income countries and more than 13% in upper-middle-income countries.

All in all, it is the responsibility of individual African states to ensure females are at the forefront of national and global economic development by putting in place the right conditions for them to thrive in their entrepreneurial activities. These include dismantling existing barriers to trade that affect women in more significant ways than men and providing opportunities for greater use of ICTs in their businesses. Without increasing the use of ICTs, efforts for women to trade more and transform their businesses will be stymied.