Educational attainment gaps have limited the success of women-owned businesses in Africa, according to a report published recently by the United Nations Economic Commission for Africa (UNECA). The report, titled Women’s Entrepreneurship Report: Education and Finance for Successful Entrepreneurship in Africa were released January 19, 2021, and is the first such commissioned for the region. It studies data from tens of thousands of African entrepreneurs and firms to establish links between education, access to finance and improved productivity.

First, the report reveals that education is a critical factor for productive female entrepreneurship in Africa. For instance, women with primary education or less are 27 times more likely to have started a business by necessity than those with higher attainment driven by opportunity. “Necessity-driven entrepreneurs lack productive and innovative activities which could transform their businesses. In comparison, opportunity-motivated entrepreneurs are more likely to operate in profitable sectors and are expected to add about 17 more jobs in the next five years,” the report states.

Education also plays an instrumental role in accessing finance. The report examined data from more than 44,000 adults in 40 African countries to measure the impact of education on women’s access to finance. According to the report, women with secondary and tertiary education were 51 per cent and 113 per cent more likely than individuals with primary education or less to have an account at a financial institution. Women with primary education or less were 21 per cent less likely to have accounts than men with primary education or less. The report recommended African countries to focus on increasing women’s education beyond primary schooling. It also proposed market-specific vocational education, soft and hard skills training.

The report identifies a critical need to bring insurance products to protect women-owned businesses in rural areas that are more vulnerable to climate and health crises. Finally, it encourages countries to enact legal provisions to prohibit creditors and cultural practices from discriminating against women in accessing credit, property or inheritance.