The "she-cession"

Are we looking at another pandemic?

Retrenchments, business closures and increased short time, these are some of the realities that many South Africans experienced in the past year. More so the women who are reportedly the hardest hit by the effects that came with the Covid-19 pandemic.

he inadvertent exodus of women from the economy, due to the economic contraction, has brought to the spotlight the question of whether the she-cession is our next pandemic. Critically we have to ask ourselves why more is not being done to ensure women remain active in the economy when they contribute so much to the economy, and have more potential to jump start the economy and turn things around. According to female entrepreneurship expert and Citadel Advisory Partner, Kirsten Smit, South Africa needs to invest in its female entrepreneurs, because they have a critical role to play in the country’s socio-economic recovery. “South Africa boasts exceptional female entrepreneurs who are already playing a critical role in jumpstarting the economy and getting the country’s food security, job creation and financial stability back on track after a tumultuous year, therefore we need to support them and help them succeed” .

She reports that by endOctober 2020, South African business liquidations were up by 33.2% over the third quarter, representing a 20.8% year-onyear increase in liquidations, according to Statistics SA. In addition, Sub-Saharan women, according to the International Monetary Fund (IMF), were disproportionately affected by the pandemic. Yet according to research by

TDevelopment women-owned Economics, businesses established between 2018 and 2022 may generate an estimated R175 billion a year and create close to one million jobs. The World Bank also reports that women are critical for job creation. The global 2021 Mastercard Index of Women Entrepreneurs, which tracks across 58 economies, also found that a staggering 87% of female business owners globally felt adversely affected by the pandemic, and that in South Africa 59% of femaleowned businesses worked in sectors hardest hit by the economic downturn such as retail, restaurants, food shops and domestic services.

The IMF and World Bank reported similar findings. The Africa Report also recently reported on the so-called “shecession” , saying that three quarters of South Africa’s --

South Africa boasts exceptional female entrepreneurs who are already playing a critical role in jump starting the economy.

youth are now unemployed, with women making up two thirds of the job losses during the pandemic.

“Right now, women need more public and private sector support to close the gender gap in the economy and reverse the disproportionate effects of the recession on women, ” says Smit.

Male to female entrepreneurship ratios

While Africa is ranked the top continent in terms of female entrepreneurship by the World Bank, women are still in the minority in South Africa’s entrepreneurial landscape.

Although more than half of South Africa’s population is female, only 34% of small and medium enterprises are women-led, according to a Facebook, World Bank and OECD joint survey.

While gender equity varies from country to country, on average, men remain more likely to be entrepreneurs. In South Africa, the ratio of male to female entrepreneurial activity has changed from 1.52 (12.5 men to 8.2 women) in 2017 to 1.14 (10.9/9.6) in 2019, which means that female entrepreneurship is growing.

“Although this is encouraging, considering that women constitute more than half of the adult population, this ratio should ideally be more equal, ” says Smit.

Challenges present opportunities

The global Covid-led boom in e-commerce presents a massive, growing opportunity for female business owners. “But, for women to take full advantage of the rapid digitisation brought on by the pandemic, they need greater access to affordable internet and digital resources in this country. This will also contribute to closing the entrepreneurship gender gap, ” says Smit.

“Clearly one of the first places where we can make a difference to the face of female entrepreneurship is in the sphere of funding via South Africa’s multiple femalefocused government and private programmes and funds, including the Industrial Development Corporation’s Women Entrepreneurial Fund, the Business Partners Women in Business Fund, the Isivande Women’s Fund and the Enablis Acceleration Fund, ” says Smit.

Global research shows that women’s success is tied to the success of our communities and economies as a whole. With all the challenges facing South Africa right now, we need to invest more in women, not less.

Kirsten Smit