Doing Business Wome n Wome · 2019-11-26 · Doing Business is a series of annual reports investigating the regulations that enhance business activity and those that constrain it

DoingBusinessWomen

d Bank Group Gender Action Plan

rica

neemWoWWoW

DoingBusinessWomen inAfrica

Doing Business is a series of annualreports investigating the regulationsthat enhance business activity andthose that constrain it. DoingBusiness presents quantitativeindicators on business regulationsand the protection of property rightsthat can be compared across 178economies—from Afghanistan toZimbabwe—and over time.Regulations affecting 10 stagesof a business’s life are measured:starting a business, dealing withlicenses, employing workers,registering property, getting credit,protecting investors, paying taxes,trading across borders, enforcingcontracts and closing a business.

The World Bank Group GenderAction Plan is a four year initiative topromote women’s economicempowerment and gender equality assmart economics. Launched by theWorld Bank at a conference hostedby German Chancellor AngelaMerkel in February 2007, theGender Action Plan commits theWorld Bank Group to intensifygender equality work in theeconomic sectors over four years, inpartnership with client countries,donors, the private sector, and otherdevelopment agencies.To date some $36 million has beenpledged for implementation.

Vital Voices Global Partnership is aleading non-governmentalorganization (NGO) that identifies,trains, and empowers emergingwomen leaders and socialentrepreneurs around the globe,enabling them to create a betterworld for us all. We provide thesewomen with the capacity,connections and credibility they needto unlock their leadership potential.We enable women to become changeagents in their governments,advocates to remove legal barriers,and supporters of democracy and therule of law.

II DOING BUSINESS WOMEN IN AFRICA

DOING BUSINESS WOMEN IN AFRICA III

Table of Contents

iv) Messages from Project PartnersSimeon Djankov, Chief Economist, Indicators Group,Financial and Private Sector Vice Presidency, World Bank GroupMayra Buvinic, Sector Director, Gender and Development,World Bank GroupMelanne Verveer, Co-Founder & Chair, Board of Directors,Vital Voices Global Partnership

v) Message from Robert B. Zoellick, President, World Bank Group

vi) Doing Business: Women in AfricaCase studies of women entrepreneurs across Africawho have overcome legal and regulatory obstacles tocreate new business opportunities

1. Cameroon: STRATEGIES!Kah Walla, STRATEGIES!

7. Rwanda: Weaving Peace in RwandaJanet Nkubana, Gahaya Links

13. Senegal: Creating Jobs through ArtAissa Dionne, Aissa Dione Tissus

19. South Africa: Flying HighSibongile Sambo, SRS Aviation

25. Swaziland: Gone RuralZoë Dean-Smith, Gone Rural

31. Tanzania: A Lease on OpportunityDr. Victoria Kisyombe, Sero Lease and Finance

37. Uganda: A Red Dress and a WheelbarrowJulian Omalla, Delight Uganda

43. Doing Business Country Profiles

52. Acknowledgements

IV DOING BUSINESS WOMEN IN AFRICA

We rarely take time to celebratesuccess in developing countries.This is one such opportunity.

In 2007, the Doing Business teamstarted celebrating the success of topreformers, by launching the annualReformers’ Club. Awards are given tothe top-10 reformers in governmentsaround the world. This publication isa twin, of sorts: it recognizes topperformance by entrepreneurs. Westart with Africa, the region that canmost benefit from more and growingbusinesses. The women entrepreneurscited here show that success ispossible even in difficult conditions.And point to what reforms areneeded to make it easier for themand others.

This book is the first product of ajoint research project with the GenderAction Plan that will change the faceof gender economics in developingcountries.

Simeon DjankovChief Economist, Indicators GroupFinancial and Private Sector VicePresidency, World Bank Group

I am delighted the World BankGroup Gender Action Plan and theDoing Business project have joinedforces to reliably document anddeepen the research and analyticalunderpinnings of how the investmentclimate impacts women. Casestudies like these provide us withinsights into how womenentrepreneurs themselves experiencelegal and regulatory obstacles and themeans they find to overcome them;they also highlight the importance ofsupportive government policies.Leveling the playing field for womenand providing an enabling businessenvironment for both men andwomen makes sound economic sensefor women, their families and foreconomies overall.

Our thanks to Vital Voices GlobalPartnership for their role insupporting this initiative withwomen’s leadership training andadvocacy for reform. Many of thebusinesswomen you will read about inthis publication are now activelyengaged in advocacy efforts to supportgender-informed legal and regulatoryreforms in their own countries.

Mayra Buvinic, Sector Director,Gender and Development,World Bank Group

Vital Voices Global Partnership isproud to partner with the WorldBank Group Gender Action Plan todevelop “Leveling the Playing Fieldfor Women’s Social and EconomicProgress.” This program is part ofour African Women’s LeadershipInitiative made possible through thegenerous support of the ExxonMobilFoundation, the Bill and MelindaGates Foundation, IF HummingbirdFoundation, Standard CharteredBank, and the U.S. Department ofState among others.

This partnership will train women tobecome more effective advocates forthe removal of legislative barriersimpeding women’s economicprogress. To support their advocacy,an innovative database of genderrestrictive laws is being compiled.The case studies appearing in thispublication tell the stories of Africanwomen entrepreneurs who haveovercome such legal barriers toachieve economic success. They areindeed the Vital Voices of our time.

Melanne Verveer, Co-Founder &Chair, Board of DirectorsVital Voices Global Partnership

DOING BUSINESS WOMEN IN AFRICA V

“Gender and women’s empowerment

is at the core of what we need to do in

the field of development. Gender

equality is also smart economics.

Research demonstrates that progress

in the area of women’s economic

empowerment is still far, far too slow.

Whether it is the question of employ-

ment, opportunity, pay, or access to

finance, there is a tremendous amount

of work to do to level the playing field

for women.”

Robert B. Zoellick, President,

World Bank Group

Case studies of women entrepreneurs acrossAfrica who have overcome legal and regulatoryobstacles to create new business opportunities

VI DOING BUSINESS WOMEN IN AFRICA

DoingBusinessWomen inAfrica

DOING BUSINESS WOMEN IN AFRICA VII

Doing Business – Opportunities for WomenThe Doing Business project has joined forceswith the World Bank Group Gender Action Planto launch a two-year research program onreforms that improve business opportunities forwomen. The project is identifying legal andregulatory barriers facing businesswomen,compiling a data base of relevant laws for eachcountry, and determining reforms that are likelyto have the biggest benefits for women.

Doing Business: Women in Africa is the first in aseries of regional reports designed to showcasesuccessful women entrepreneurs and explore howthey overcame obstacles to business creation andgrowth. The seven women profiled here representcountries from across the continent. Theirgenerosity in sharing their stories, their successesand the obstacles they faced pave the way for moreopportunities for other women entrepreneurs.

VIII DOING BUSINESS WOMEN IN AFRICA

Every year procedures vary with new taxlaws, meaning that tax inspectors have

considerable arbitrary powers. This createsproblems for all businesses, but more so forwomen entrepreneurs, who are sometimessubjected to sexual harassment and intimidation.

A New Opportunity

Kah Walla returned home to her nativeCameroon in 1989 after completing graduatestudy in the United States, unsure if she wouldstay for long. The following year saw theenactment of laws granting women new rights,including to travel without male companions,open bank accounts and register businesses ontheir own, without their husbands’ consent.“You got a sense that women felt liberated in avery literal way,” says Kah. Women had beenfinding ways to get around discriminatoryregulation and now didn’t have to hide.

Seeing new opportunities for women in thebusiness world, along with great need in

Cameroon, wherehalf the popula-tion lives inpoverty, Kahdecided to stay.“I wanted tocontribute to mycountry,” she says.

After four years working at an establishedmanagement consultancy, Kah founded her ownfirm, STRATEGIES! Today she has a staff of 15serving both domestic and international clients,and averaging $500,000 in annual revenues.Along with its corporate work, Strategies! alsohas a development arm which works with localgovernments to promote women’sentrepreneurship in the country.

As a single woman with international experienceand contacts, Kah is conscious she has manyadvantages compared to the majority ofCameroonian women in business. As Vicepresident of the American Chamber ofCommerce, she is an energetic advocate forimprovement in the business environment,especially in relation to Cameroon’s cumbersometax system.

Her main advice on tax reform: reduce theeffective tax rate to encourage more firms tobecome formal; simplify the tax payment systemto reduce both the number of payments and the

DOING BUSINESS WOMEN IN AFRICA STRATEGIES! 1

STRATEGIES!Cameroonian businesses pay a hefty 52% of profits

in tax, make an average of 41 different payments to

the authorities and spend about 1,400 hours on tax

preparation, filing and payments.

Kah Walla

C O M P A N Y P R O F I L EBusiness Name: STRATEGIES!

Business Type:Management consulting

Annual Turnover: US$500,000

Employee Number: 15

Business Reach: Africa, Europe, US

CAMEROON

Population 16.7 million

GNI per capita $1080

Doing Business global ranking 154/178

Doing Business paying taxes ranking 166/178

★

hours spent in compliance; establish standard-ized tax rates and payment channels forregistered businesses, thereby removing taxinspectors’ arbitrary powers to elicit unwarrantedcash payments and other favors.

Starting out

Kah grew up in Cameroon, the Ivory Coast andthe United States. She spent her first four yearsback in Cameroon gaining experience in a localmanagement consultancy firm where she rose tothe role of Managing Director. “It was a steeplearning curve, but just the best training I couldhave had for starting my own business,” shereflects. When that consultancy closed its doorsKah seized the opportunity to start her ownventure, hiring seven of her former colleagues.Their track record and reputation in businessconsulting helped them to immediately securework.

To begin with, Kah and her employees workedfrom her family home to launch Strategies!. Forthe first few months the firm operated from herdining room, with everyone receiving the samesalary of US$200 per month.

Kah says she never stopped to consider howunusual – and how challenging – it was for awoman in her 20s to begin a business inCameroon, where the female literacy rate hoversaround 60%. “Looking back now, I wasn’t

conscious of my gender or my age,” she recalls.“I didn’t realize that the market would havedifficulty with me.”

Kah’s “powerhouse” grandmothers served as aninspiration, along with her mother who was astrong advocate for women’s rights. Importantly,her father supported her too. “I was his firstdaughter and he had absolutely no genderbarriers for me,” confides Kah. “He didn’t feelthere was anything I should not be allowed to door should do as a woman.” That message stayedwith her.

Being single has been a distinct advantage forKah in the business world. Although women arenow legally allowed to start a business withouttheir husband’s consent, under the Civil statusRegistration Ordinance of 1981 a husband maystill formally object to his wife’s exercise of atrade or profession if he judges it is not in theinterest of their marriage or children. Theconverse does not apply. These complaints canbe filed in the personal credit register and untilthe objection is lifted, the wife’s businessactivities are impeded. These objections canresult in business closure and/or cessation offormal employment.

Business law is harmonized under the OHADAtreaty with that in other countries in West andCentral Africa, and is at face value gender-neutral. But customary law and traditionalpractices mean women are often disadvantagedin business dealings. As a bilingual country,Cameroon has a bi-jural system with both civillaw (French) and common law (English)systems. Under the civil code governing theFrench-speaking parts of Cameroon, a husbandas head of household administers the marriedcouple’s joint property. He has the right to sell,dispose or mortgage his family’s land without his

2 STRATEGIES! DOING BUSINESS WOMEN IN AFRICA

WOMEN IN CAMEROON

Female literacy rate 59.8%

Percent of women in formal labor force 40%

Seats in parliament 8.9%

Gender Equity Index Ranking 137/154

★

wife’s consent, while the converse does not apply.A husband also has the right to administer hiswife’s personal property (but may dispose of itonly with her consent).

In areas where traditional practices dominate thesituation is even more difficult for women. Here,women and the children they bear are consideredthe husband’s “property.” This makes itpractically impossible for women to own landsince “property” cannot properly claim right toproperty. Although in theory Cameroonian lawopposes customary practices repugnant to“natural justice, equity and good conscience” inpractice few women are in a position tochallenge these customs.

Going for growth:obstacles and opportunities

Kah found lots of business opportunities in thelocal market for STRATEGIES!. Alongsidemultinational firms like Price WaterhouseCoopers, STRATEGIES! found its nichetraining firms in skills such as teambuilding andhelping with recruiting, offering “work ofinternational standard at local prices.” Shelaughs as she recalls comments from satisfiedclients remarking on the large number of women

in her team: “When there are three men on aconsulting job no-one ever remarks “why do youemploy only men?”

As more opportunities arose and Kah wanted tomove away from the kitchen table and intooffice premises, she needed to borrow to financethe expansion. The three banks she approachedwith her business plan, cash flow andmanagement track record all turned her down.“I had no collateral to offer – few women do.”To get around this road block, Kah raised capitalby selling US $20,000 equity in STRATEGIES!to friends and family over a two year period.

The biggest problem Kah faced, however, as herbusiness grew was the tax system in Cameroon,ranked 166 of 178 economies in the latestDoing Business report. Kah found registeringwith the tax office was a cumbersome andconfusing experience and once she did this, aretrospective tax bill was issued which seemedboth arbitrary and astronomical. “I just didn’tunderstand how they came up with the numberswhen no one had even looked at our books.When I visited the tax office there was a clearexpectation I would make a “facilitationpayment” to reduce the bill.”


Kah stood her ground. “They expected that as awoman I would be a particularly easy target, butI stood firm and refused to pay a bribe.”Eventually her accountant worked out areasonable settlement. Each year elements of thetax rules change and businesses are subsequentlyexpected to find out how the new rules affectthem. Kah points out, “There is no transparency.Well qualified tax consultants have a very hardtime telling you whether what is being asked ofyou by the taxation officer is right or wrong.There is an enormous amount of interpretationin the system and it really is extremely arbitrary.”The result is a large informal sector.

Kah’s firm has already won two judgmentsagainst tax inspectors and currently has anotherthree legal suits underway. “It’s time consumingand expensive but I refuse to pay a bribe.”

At the same time as she was trying to deal withthe administrative issues facing STRATEGIES!the firm was beginning to develop itsinternational clientele by facilitating workshopsand conferences, initially in Cameroon.Development organizations such as Germany’sGTZ and the World Bank contractedSTRATEGIES! for regional workshops inCameroon, exposing the firm to internationalclients. Subsequent recommendations prompted

new opportunities and the Foreign ServiceAcademy in Germany called on STRATEGIES!to teach young German diplomats aboutdevelopment cooperation with Africa. The ShellGroup invited STRATEGIES! to providefacilitators for its West and Central AfricaHuman Resources Managers.

Today, STRATEGIES! works all over Africa,Europe and in the US on both short and longterm contracts. Kah points out beingCameroonian - and therefore bilingual in Frenchand English - is a distinct advantage. She says,“STRATEGIES! has an amazing team of verytalented professionals, the majority of whom arewomen. At an international level, the fact that ourteams are all-African and frequently all-woman, iscause for both surprise and positive comment.”

Helping Others

As part of its development-related work.STRATEGIES! consults with local governmentsto support women entrepreneurs. Through thiswork Kah has learned just how vulnerablewomen are in the local marketplace, the majorityof whom operate in the informal sector. Alongwith bribes, demanding sexual favors is a notuncommon practice of local officials.

“Whenever you have complex, corrupt systems,women are always at a disadvantage,” says Kah.“One, because the average businesswoman inCameroon is also a mother and a wife, so shecannot afford four or five hours in a tax

4 STRATEGIES! DOING BUSINESS WOMEN IN AFRICA

The Ease of Paying Taxes

Source: Doing Business 2008.

0

50

100

150

200

“It was exciting to see new opportunities

arise as our reputation began to grow.

After a year of ad hoc conferences and

seminars for a range of different clients an

international market was born.”

inspectors office just waiting to get infor-mation.” And two, she says, “women make easiertargets and inspectors expect them to cave in.”

“It translates into constant fear,” says Kah. “Sheis trying to make ends meet every day, and shehas added to that the psychological pressure ofknowing, ‘they can come in, they can shut medown, they can stop me from doing business forone day, two days, two weeks.’ It translates into awhole different level of insecurity.”

The government does not benefit either. “A lotof these local tax officials are making the moneyon a personal basis and not bringing it back tothe local government,” says Kah. “A transparenttax and administrative system makes economicsense for both women entrepreneurs and thegovernment.”

As Vice president of the American Chamber ofCommerce in Cameroon, Kah continues towork with the business community to advocatefor a more friendly and transparent businessenvironment. “Cameroonian women aredynamic entrepreneurs,” says Kah. “Helpingthem do business better makes economic sense.”

Next steps

STRATEGIES! now has around 40% of itsbusiness activity in Cameroon, 40% Africa-wideand 20% international. Kah’s vision is to investin her team to be able to meet growing demand,and to use her business model to open branchesin neighboring countries.

Says Kah, “Top on my agenda for the future is ofcourse the growth of STRATEGIES!, but alsovery importantly, the reform of the businessenvironment in Cameroon and most especiallyopening the way for women to play theeconomic role they deserve to in Cameroon.”


BUSINESS CHALLENGE:PAYING TAXESOPPORTUNITIES FOR REFORM

• Reduce the effective tax rate to encourage morefirms to become formal

• Simplify the tax payment system to reduce boththe number of payments and the hours spent incompliance

• Establish standardized tax rates and paymentchannels for registered businesses, therebyremoving tax inspectors’ arbitrary powers to elicitunwarranted cash payments and other favors.

Footnotes and sourcesPopulation: World Development Indicators, 2007Gross National Income per capita: World Development Indicators. 2007Doing Business Rank: Doing Business 2008Female literacy rate: World Development Indicators, 2004Percent of women in formal labor force: World Development Indicators, 2004Seats in Parliament (% held by women): United Nations 2007/2008 ReportGender Equity Index: Social Watch Gender Equity Index 2007

6 DOING BUSINESS WOMEN IN AFRICA

How did this come about? Part of the answeris: through tragedy. Following the 1994

genocide 70% of Rwanda’s population wasfemale. Even today, over a third of householdsare headed by women. There is a brighter side tothe answer too: government reforms have helpedtremendously expand opportunities for women.Rwanda was the first African country to enterthe top-10 reformers’ list in the Doing Businessproject. This has opened more possibilities forwomen to benefit from business activity.

Here is one story. A basket weaving traditionfrom the landlocked nation of Rwanda is nowmaking its way from the department store Macy’sto American households, changing in the processthe lives of thousands of Rwandan women. In2005, American talk show icon OprahWinfreypromoted Rwanda’s “peace baskets” in hermagazine, causing a surge in demand. Proceedsfrom the export of peace baskets to the US haveimpacted more than 18,000 Rwandan children,who have better schooling and health as a result.

Much of thissuccess is due toGahaya Links, aKigali-basedbusiness run bythe sisters JanetNkubana and JoyNdungutse. In 2007, the business produced35,000 baskets with annual sales ofUS$300,000. From its beginnings just over adecade ago, with 27 weavers, it now employs3,200 women from across Rwanda. The basketweaving groups include both Hutu and Tutsiwomen, for whom working together helps healold grievances. Hence the name: peace baskets.Says Janet: “I have survivors, I have widows, Ihave women whose husbands are in prison. Tosee them sitting under one roof weaving anddoing business together is a hugeachievement…these women are now together,earning an income. It is amazing.”

Despite Janet and Joy’s international success,trading across borders from land-locked Rwandais still a major business challenge. Rwanda ranksonly 166 among the 178 economies in theDoing Business 2008 report on the Tradingacross Borders indicator. It takes, on average,47 days to fulfill the necessary requirements forexporting cargo. And a standard shipment costsnearly $3,000 in fees.

DOING BUSINESS WOMEN IN AFRICA WEAVING PEACE IN RWANDA 7

Weaving peace in RwandaRwanda has the third highest percentage of womenentrepreneurs of any country in Africa. Forty-onepercent of businesses are run by women. OnlyGhana, with 44%, and Cape Verde, at 43%, havemore women active in business.

Janet Nkubana

C O M P A N Y P R O F I L EBusiness Name: Gahaya Links

Business Type: Handicrafts


Employee Number: 3,000

Business Reach: Africa, USA

RWANDAPopulation 9.2 millionGNI per capita $250Doing Business global ranking 150/178Doing Business trading across borders

ranking 166/178★

Janet is now advising the Rwandan governmentto simplify export processes and lower transportcosts. Among the recommendations she wouldlike to see:• the extension of customs opening hours to10 p.m. as this would reduce the waiting timeat borders for truck drivers arriving late.• Faster reimbursements of duties paid on rawmaterial imports.• The creation of a joint border inspection postat the Ugandan border which would eliminaterepeat inspections that currently take place.• An advanced cargo information exchange andcargo tracking system amongst the customsauthorities in East Africa.

Starting out

Janet Nkubana returned home from exile inUganda in November 1994. She was nowrunning a hotel in Rwanda’s capital Kigali andkept running into women hawking baskets infront of her hotel. At first, Janet tried toconvince them to move their business elsewhereand not pester her clients. This didn’t work, ashotel guests were among the few people withmoney to spend. Then one day an inspirationcame: she set up a small shop in the hotel andwould also take their baskets to sell at fleamarkets when visiting her sister, Joy, who livedin the United States.

A long family tradition meant that weaving wasfamiliar territory for the sisters. “I grew up in aweaving home. My mother is a master weaver.She used to do all the bead work and basketweaving in the refugee camp {in Uganda},” saysJanet. “Weaving was a second nature to me.”Indeed, basket weaving is an old traditionamong women in Rwanda. Unique to Rwanda,the basket—now known as the “peace basket”—is on the national seal and currency.

These pagoda-shaped baskets were historicallymade as wedding gifts, and are hand-craftedfrom enzyme-washed papyrus and banana leaf.The traditional zigzag design tells an ancientstory of friends walking together, visitingneighboring villages along the way.

The baskets were a hit, and she realized that therewas a bigger business opportunity. The sistersstarted with 27 women weavers and used amixture of personal savings and funds fromwinning a World Bank business plan contest tobuy raw materials for their craftswomen. Thebusiness was formally registered in 2004 andproceeds from a property sale helped them opena showroom in Kigali.

While women returning from exile were morelikely to have funds to purchase land, it was notuntil 1999 that changes to Rwanda’s matrimonialand succession law gave women clear and equalproperty rights, including the right to inheritland. The law overrides traditional customsexcluding women from land and propertyownership. That Rwanda has the highestpercentage of women parliamentarians in theworld, at 45.3%, has resulted in laws promotingequal opportunity for women.

8 WEAVING PEACE IN RWANDA DOING BUSINESS WOMEN IN AFRICA

WOMEN IN RWANDA




Gender Equity Index Ranking 3/154★


In 2003, Marie Claire magazine published oneof the first stories about Rwanda’s peace basketsand even sold over 1,000 baskets through ordersplaced with the magazine. After that, thephotographer for that article, Willa Shalit, anartist and a producer of “The VaginaMonologues,” saw a chance to help the womenexpand their business making the sisal baskets,which are used to carry wedding gifts.

“What struck me,” she toldtheNew York Times, “wasthat these women who’dsuffered so horribly—who’d been raped,machete-hacked andwatched theirchildren get killed— had created thisobject that was soexquisite andelegant, with tiny,even stitches.” The factthat the weaving groupsincluded both Hutus andTutsis, heightened the appeal.“I thought, what an incredibleembodiment of reconciliation,” Ms.Shalit said.1

There was a hitch. The baskets were beautifullywoven, but thin and flimsy looking. Theyneeded a redesign. Enter Gahaya Links. Itsweavers made firmer baskets using banana barkand papyrus. These would sell well on the USmarket. Needed - only a retailer.

After a meeting at the U.S. Embassy in Kigali,Janet was linked with USAID, which sponsored

her participation in a New York trade show in2005.2 It was there that Janet made the link withMacy’s buyers and reconnected withWilla Shalit ofFair Winds Trading, Inc., a marketing and tradecompany importing African crafts, who hadpreviously visited her in Rwanda. This eventbrought about a transformation of her business,established FairWinds Trading as a partner, andmarked the birth of their joint venture RwandaPath to Peace. “Willa is now our exclusive importerof baskets to the United States. This helps us focus

on production,” says Janet.

The first Macy’s order waswidely covered by themedia and Rwanda’sPresident, PaulKagame, inauguratedthe event at Macy’sflagship store inNew York.Following theopening, Macy’s setup a window displayin its New York storein 2005, and a featureon the website. The

standard size is 12 by 7inches and costs $75. One-

third of the retail price of soldbaskets goes to the weavers.

Getting the baskets from the basket weavers to theMacy’s window display has not been easy. “We hadto go through a lot of redesign, a lot of trial anderror,” says Janet. Working with Joy who is thedesigner and oversees training to ensure qualitycontrol, Fair Winds Trading has helped develop theproducts to meet international standards. Initially,Gahaya Links had trouble meeting buyer demand,but managed to build its capacity over time byhiring and training more and more women.


In a building that used to be their mother’s house,Janet and Joy have set up a large company site,including a sleeping room for women trainees, arestaurant, a show room, and a packaging andstorage facility.

Gahaya Links has set up a rigorous trainingprogram, and prepares master weavers who inturn train other women. As the company grewrapidly, it had to recruit women from across thecountry, in churches, villages, and by word ofmouth. With each of their women weavers,Gahaya Links has formal contracts and issuespurchase orders to ensure commitment.

The government has helped too. It has organizedthe women weavers into cooperatives and builttraining centers for them. It also covers women’stravel and subsistence costs when they attendtraining in Kigali. Janet and Joy have seized thegovernment’s focus on increasing exports to the

benefit of their business. When Janet found outthat Rwanda had joined the African Growth andOpportunity Act, which allows Rwanda’s craftsduty-free entry into the U.S. market, she went tothe US embassy to find out about it. Baskets wovenby the Gahaya Links weavers are now are thenumber one export out of Rwanda under this Act.

Still, there are a number of challenges, which allexporters in Rwanda have to deal with. Shippingcosts have been high and it usually takes a longtime for the goods to reach the buyer.Inadequate infrastructure, and the fact that theshipments have to pass through the poor portservices at Mombassa, Kenya, has meant that ithas taken up to two months for goods to reachthe buyer. Gahaya Links has had to carefullymanage its order delivery times and initiateproduction well ahead of time.

Gahaya Links imports raw materials such asorganic dyes and packaging materials from otherEast African countries, including Mozambiqueand Tanzania. The time to import these goods hasbeen even longer than the export process. Janetnotes that the withholding tax on imports and theexcise duty on her raw materials are a burden.“We get refunded eventually, but it takes a longtime. In the meanwhile, we need those funds.”Gahaya was awarded a government trophy as oneof five top tax payers in the country in 2006.

Janet says she hasn’t experienced anydiscrimination when running thebusiness. Quite the contrary:government is supportive of the roleher business plays in employing otherwomen with traditional skills. “Therevenue authority has now evaluatedour performance and we have aspecial clearance through afacilitation program to boost exports.

10 WEAVING PEACE IN RWANDA DOING BUSINESS WOMEN IN AFRICA

The Ease of Trading Across Borders


0

50

100

150

200

Trading across borders: Rwanda vs Global Best Practice

Trading Across Borders Rwanda (166) Singapore (1)

Documents to export (number) 9 4

Time to export (days) 47 5

Cost to export (US$ per container) 2,975 416

Documents to import (number) 9 4

Time to import (days) 69 3

Cost to import (US $ per container) 4,970 367

Source: World Bank. 2007. Doing Business in 2008.

Their officials have even come to teach us here atour offices how to benefit from their services.”

Following Gahaya’s success, other basket weavinggroups have sprung up across Rwanda.Promoted by the Rwanda government, womenare being organized into basket weavingcooperatives. Yet while some have managed tofind buyers, no others have found as big of asuccess as Gahaya Links, and they are strugglingwith adopting the traditional basket weavingskill into a product that will meet the tastes andstandards of international consumers. Limitedability to differentiate their product posesconstraints for many of the new businesses.

Next steps

Janet’s aim is for Gahaya Links to change the waypeople live. The group has set up a communalbank, and she says the increased income inwomen’s hands seems to have diminished domesticviolence for her employees. “Women weavers tellme that, because of their weaving and the incomethey now bring in, their husbands treat them withmore respect.” There is probably some envy too.

Gahaya Links’ exclusive contract with Macy’s hasassured it a steady stream of orders, for now.Janet notes that Macy’s is willing to buy as manyas they can produce. The company realizes thatit needs to diversify its product offering to satisfy

changing consumer tastes. “We are looking toexpand to other products, such as textiles. Weare also experimenting with jewelry,” says Janet,holding up a black and white hand-wovenearring. New export markets, too, are targeted,such as Europe and Canada.

Rwanda’s peace baskets have traveled far, from thehomes of Rwanda’s basket weavers, to the windowsof Macy’s store displays, and from there to thehomes of U.S. consumers. The baskets are not onlycreating an income for the local women, comingfrom a country deeply marked by a devastatinggenocide, but they also spread a message of hope asJanet’s employees weave peace at home in Rwanda.


BUSINESS CHALLENGE:TRADING ACROSS BORDERSOPPORTUNITIES FOR REFORM

• The extension of customs opening hours to 10 p.m.as this would reduce the waiting time at bordersfor truck drivers arriving late

• Faster reimbursements of duties paid on rawmaterial imports would also reduce the amount ofworking capital tied-up

• The creation of a joint border inspection post atthe Ugandan border would eliminate repeatinspections that currently take place

• An advanced cargo information exchange andcargo tracking system amongst the customsauthorities in East Africa would also allow forfaster cargo clearance since there would be lesspaperwork and bureaucracy.

Footnotes and sources1. The article can be read at

http://www.nytimes.com/2007/10/11/garden/11rwanda.html?fta=y.2. This was done through USAID’s East and Central Africa Trade Hub project. Fourteen

other companies were sponsored: from Ethiopia, Kenya, Madagascar, Tanzania andRwanda.http://www1.macys.com/campaign/rwanda/index.jsp.

Population: World Development Indicators, 2007Gross National Income per capita: World Development Indicators. 2007Doing Business Rank: Doing Business 2008Female literacy rate: World Development Indicators, 2004Percent of women in formal labor force: World Development Indicators, 2004Seats in Parliament (% held by women): United Nations 2007/2008 ReportGender Equity Index Ranking: Social Watch Gender Equity Index 2007


Aissa Dionne didn’t confront this reality asa child. Born to a French mother and a

Senegalese father who was at one time theEuropean boxing champion, she grew up inFrance before moving to live in Senegal in her20s to work as an artist. When a client in Dakartold Aissa he couldn’t buy one of her paintingsbefore his office was redecorated, she offered todo the redecorating for him. Aissa did so by usingonly local materials, tools and employees – eventhough she had to create a new weaving loom toprepare the fabrics. The local press picked up onher innovative work. After a prominent Europeandesigner saw photographs of her fabrics she beganreceiving international orders.

As a graduate of fine arts studies, Aissa combinedher own artistic knowledge with traditional localtechniques, such as Mandjaque weaving, to fashionbands of linen used in home interiors and furniture

coverings. Twentyyears after shestarted up inSenegal, Aissa’sbusiness exports traditional hand-woven fabrics toluxury brand names like Hermes and ChristianLacroix, showcasing Senegal’s cultural heritage.

Aissa is passionate about her work and clientdemand is strong, but the business challenges shefaces in Senegal frustrate her nearly every week.Aissa estimates she could more than quadrupleproduction to meet existing demand. But shewould need to employ more than her current 100workers and Senegal’s restrictive labor laws, alongwith the difficulties she has accessing finance,make such an expansion too risky.

Aissa would like to see regulations governingwork hours and overtime made more flexible.She wouldn’t need to be so wary of hiring newstaff if administrative constraints on dismissalsfor economic reasons, such as priority rules fordismissals, were removed. The onerousrequirements for notifications, writtensubmissions and meetings with third partiesprior to dismissals are an additional burden.Aissa says a lot more could be achieved forworkers’ rights if basic worker protections were

DOING BUSINESS WOMEN IN AFRICA CREATING JOBS THROUGH ART 13

Creating Jobs through ArtSenegalese labor regulations are so restrictive,

they have a perverse effect: instead of protecting

jobs, few new workers get hired. As a result,

many workers – especially women and youth –

remain stuck in the informal sector without legal

protections or benefits.

Aissa Dionne

C O M P A N Y P R O F I L EBusiness Name: Aissa Dione Tissus

Business Type: Interior Design


Employee Number: 100

Business Reach: Africa, Europe,North America

SENEGAL


GNI per capita $750


Doing Business employing workers ranking 160/178

★

preserved by means other than simply makingfiring procedures administratively burdensomeand expensive for employers to undertake.

Starting out

Aissa transitioned into interior design after yearsof working as an artist in the capital of Dakar.She was determined to bring the work of thecountry’s local artisans to an upscale internationalclientele. After all, she thought, Senegalesecotton was among the world’s finest, and hercountry’s weavers could create fabrics and colorsof quality rivaling those coming from Italy.

The skill of traditional weaving, such asMandjaque, has been passed down from father toson for generations, and Aissa was stepping into adecidedly male-dominated industry. But she sawher business foray as preserving the country’scultural heritage by showcasing traditional skills.“This is both good for my business and for the

region,” she says, “because Africa can do morethan simply send its raw goods overseas.” Senegalis known for its exports of raw cotton but verylittle textiles or apparel is exported. The sector asa whole incurs a sizeable trade deficit. Aissa says,“no one had used weaving for interior designbecause people did not think interior design wassomething that could be done in Africa.”

Though she believed strongly in the quality of herwork, Aissa’s business skills were nascent when shestarted out. “At that time I didn’t even know howto do an invoice,” she says. “I was asking friendsfor advice.” She also struggled with unreliablelocal suppliers, whom she needed to dye thread forher weavers. Aissa devoted considerable time tohelping improve their quality.

The local press picked up on the novelty of Aissa’swork, and photographs of her fabrics were soonfeatured in an airline magazine. A prominentEuropean designer spotted the photos andapproached her, placing an order. From there, theattention grew fast. With all this attention fromthe press, Aissa decided to formally register herbusiness Aissa Dione Tissus in 1992.

The textiles sector is very small in Senegal. Thereare a few large producers, most of which complainabout high factor costs and labor market rigidities,and depend on government assistance. Once Aissa’sbusiness was registered she realized she was in anuncomfortable position: large enough to face thesame labor and fiscal regime but not large enoughto warrant significant government help like the bigtextile firms. And she was now in a difficultcompetitive position compared with the majorityof other artisanal businesses in Senegal, most ofwhich operate informally.

Restrictive labor regulations encourage thisinformality. Almost half of Senegal’s economic

14 CREATING JOBS THROUGH ART DOING BUSINESS WOMEN IN AFRICA

The Ease of Employing Workers


0

50

100

150

200

WOMEN IN SENEGAL





★

activity is carried out in the informal sector whilein other developing countries it is smaller, arounda third on average.1

Despite government efforts to ensure workerprotection, social protection measures in Senegalcover less than 8% percent of the population. A2007 study of workers in Dakar found women ata distinct disadvantage in the informal labormarket, too. Women comprise one-third ofwage earners in informal businesses, yet theaverage monthly income of women is half that ofmen.2 Labor market reform could therefore bothbenefit business and address gender inequalitiesin Senegal’s economy.

The high level of labor regulation has made itthat much harder for Aissa to compete, both withbusinesses in other countries and those operatinginformally in Senegal. Aissa pays the salariesrequired by law and agreed to by the unionrepresentatives, while competitors who operateinformally are not bound to pay the same rates.Nor do they provide benefits like paid leave.

In Senegal, the ratio of mandated minimumwage to the average value added per worker ishigher than that of many of the country’sneighbors including Guinea, Guinea-Bissau,Mali and Sierra Leone. Non-wage labor coststotal 21 percent of an average worker’s salary. Inaddition, the union delegates on Aissa’s staff arepermitted to be out of the office for 20 hours permonth on union business. With two unions

representing her 100 workers, this arrangementdrains her resources.

Moreover, hiring and firing workers is bothtime-consuming and expensive. The DoingBusiness figures reflect this difficult situation:For the past three years the country has scored61 out of 100 on the rigidity of employmentindex, which measures hiring, firing and workhour regulations—at least twenty points worsethan neighbors such as Guinea and Mali.Senegal’s overall score on the Doing Businessease of employing workers indicator is a low 160out of 178 economies.

Aissa is therefore conservative about hiring newworkers, because it is difficult and costly todismiss an employee when business slows. Firinga worker ends up costing an average of 38 weeksof wages. “It is very difficult to fire becausepeople can sue you and say you have fired themillegally,” she says. “You have to give them aletter and then a very long process begins.”

She would have to start by consulting withworkers’ representatives to try and developalternative solutions, send a written reportdetailing the meeting’s results to the laborinspector, and wait for a formal response. Next,she would need to submit a list to the workers’representatives naming the people to be dismissedand the specific reasons for choosing each one.By law, Aissa would have to give priority toworkers with higher skill, greater seniority and


family responsibilities, regardless of her businessneeds or the worker’s competence. Then, Aissawould have to meet with the workers’representatives a second time to hear their viewsabout the employee(s) she would like to dismiss.After this, she would have to submit a secondwritten report to the labor inspector detailing theresults of the meeting. Finally, if after all this aworker were to sue Aissa, charging that the reasonfor dismissal was not economic, it would be up toAissa to prove that it was. The proof wouldconsist of showing evidence for the industry’sslowdown, data that Aissa cannot easily collectsince there are no reliable industry-wide statisticson the textile sector. Besides, there is notransparent criterion by the labor inspectorate onwhat constitutes an industry slowdown. It is upto the labor inspector’s discretion.

And if Aissa were to hire anyone else within twoyears after the dismissal, the dismissed workerwould have priority, even if Aissa were to find abetter, more qualified candidate.


Despite the administrative obstacles, Aissa’spassion for her product continued to grow. Shehad found a market niche for unique andculturally significant luxury fabrics and she beganto focus on the Paris market, where she feels athome. Aissa first won orders from leading homedesign stores in Paris specializing in the highestquality made-to-measure fabrics. The passage ofthe U.S. Africa Growth and Opportunity Act,which provides duty-free access of Africanapparel and textiles to the American market, gaveAfrican businesses such as Aissa’s an incentive toexport to the United States.

After her textiles were featured in designexpositions in Paris, New York and JohannesburgAissa’s business became increasingly well knowninternationally. Although a significant investment,these design expos helped show her product tobuyers looking for a luxury product with a twist.

Aissa now counts as clients Hermes, ChristianLiaigre, Fendi, the New York department storeTakashimaya, and Jacques Grange. Among thoseshe has worked with are perfumer Serge Lutensand architect Peter Marino. There is no shortageof new demand.

But in Aissa’s experience there is a shortage of goodregulations in Senegal. Given the labor intensivenature of her product, the most important of theseis regulation governing employing workers. Aissasays she has more work than she currently canmanage, but rigid overtime regulations, restrictionson work hours and the high costs of hiring andfiring workers are a barrier to further expansion.

Lack of flexibility means meeting the fluctuatingdemands of international clients is a realchallenge. If Aissa needs her weavers to workbeyond the 40-hours workweek to fill a largeorder, the process is complex and involvesapplying to the labor inspectorate forpermission. If the application is approved and

16 CREATING JOBS THROUGH ART DOING BUSINESS WOMEN IN AFRICA

workers agree, Aissa pays overtime salaries – 15to 40 percent higher on weekdays or Saturdaysand more than 50 percent on Sundays orholidays. The regulations are complicated by thedifferent types of overtime regimes with differentsets of rules and limitations. “The way aroundthis is to hire additional workers on staff and paythem for not working much of the time. I willgladly do so, but it only works in countries withdeveloped banks where you can get credit whenyou show a big order flow. This doesn’t happenin Senegal yet.”

Access to capital is a real challenge for Aissa.“We could do at least four times the business weare doing now if we had better ability toborrow,” she says. Yet even with purchase ordersas large as several hundred thousand dollars fromclients in Paris and New York, she is unable toaccess bank loans. Recently Aissa was forced toturn away a large order from a leading Californiahome design firm because she could not raise thefunds needed to fulfill it.

One source of support she has been able toaccess is a government fund aimed at womenentrepreneurs. Senegal has a Ministry ofWomen’s Entrepreneurship. Aissa received asmall amount of capital, about $40,000, fromthe fund at an interest rate of only 5 percent.This helped ease an emergency facing herbusiness – another, longer term solution wouldbe for commercial banks to provide moreinnovative financing suited to businesses likeAissa’s, such as factoring.

“We have the whole world in front of us andwe have the local market, too,” she says of herbusiness’s potential. “We desperately need tobuy new looms and new tools – we have anemergency because we cannot meet the needsof large-scale customers.”

Next steps

While client demand continues to significantlysurpass Aissa’s production abilities, her dreams ofexpansion remain just that. The rigidity of laborregulations and the limited access to capital inSenegal mean that even meeting her current ordersremains a challenge.

According to Aissa, “Worker protections areimportant, but if they are not designed to take intoaccount employer needs ironically many morewould-be employees suffer. They remain stuck inthe informal sector with no protection or reliablebenefits. Women and youth - who are more likelyto be excluded from the formal sector – sufferdisproportionately, and businesses like mine can’texpand.” In Aissa’s case, it is the combination ofunderdeveloped small business banking and rigidlabor regulation that pulls her back.


BUSINESS CHALLENGE:EMPLOYING WORKERSOPPORTUNITIES FOR REFORM

• Simplify regulations governing work hours andovertime and make them more flexible

• Reduce administrative constraints on dismissals foreconomic reasons by removing priority rules fordismissals and streamlining requirements fornotifications, written submissions and meetingswith third parties prior to dismissals

• Preserve basic worker protections by sanctioning unfairdismissals on the basis of discrimination due to gender,age or ethnicity, rather than by simply making firingprocedures administratively burdensome overall.

Footnotes and sources1. Schneider, F. July 2007. Shadow economies and corruptions all over the world: new

estimates for 145 countries)2. IMF. 2007. “Senegal Poverty Reduction Strategy Paper.” IMF Country Report No.

07/316. Washington, DC.Population: World Development Indicators, 2007Gross National Income per capita: World Development Indicators. 2007Doing Business Rank: Doing Business 2008Female literacy rate: World Development Indicators, 2004Percent of women in formal labor force: World Development Indicators, 2004Seats in Parliament (% held by women): United Nations 2007/2008 ReportGender Equity Index: Social Watch Gender Equity Index 2007


Sibongile Sambo was meant to fly. “I grewup near an Air Force base and always had alove of planes,” she says, remembering achildhood spent waving to jets at South Africa’sHoedspruit base.

After a successful seven-year career in HumanResources with two large corporations, Sibongileseized the opportunity presented by the passageof the South Africa’s Black EconomicEmpowerment Act in 2003 to start her ownbusiness. The Act promotes affirmative actionfor previously disadvantaged groups, includingtargets for government procurementopportunities. In 2004 Sibongile founded SRSAviation Ltd, the first 100% black female ownedaviation company in South Africa.

Success was swift, but so were the challenges thatfollowed. Many of the clients in her businesscontinued to prefer working with her white,male employees rather than with Sibongileherself. Most importantly, access to finance hasproved incredibly difficult for a young womanrunning a capital intensive business. Rising oil

prices since 2005have made it evenmore difficult tomaintaincompetitiveprices.

Sibongile is notalone. Since theend of apartheid the South African governmenthas promoted affirmative action on the basis ofboth race and gender. However, access to creditremains especially difficult for black women:only 38% are banked, compared to 44% ofblack men, 91% of white women, and 94% ofwhite men. Black women reflect a home loanusage of only 2%, compared to a rate of 26% forwhite women. This affects the ability to accessbank finance.

Sibongile has soldiered on and in 2006 SRSAviation was named South Africa’s “TopEmerging Gender Empowered Company.”The track record to date includes brokeringseven planes, with annual revenues nearing$5 million.

Sibongile would like to see the South AfricanFinancial Sector Charter revised to includefinancing outreach on the basis of genderas well as race. She suggests banks could paymore attention to training loan staff in betterunderstanding the challenges of women inbusiness.

DOING BUSINESS WOMEN IN AFRICA FLYING HIGH 19

Flying High“I remember waiting for days at the airport for

the plane to arrive, panicking that after paying so

much money the plane may not show up.”

Sibongile Sambo

C O M P A N Y P R O F I L EBusiness Name: SRS Aviation Ltd.

Business Type: Aviation Services

Annual Turnover: US$5m

Employee Number: 9

Business Reach: Global

SOUTH AFRICA



DB global ranking 35/178

Doing Business getting credit ranking 26/178★

Starting out

One of five children born to a mother whostruggled to support her family during the yearsof apartheid, Sibongile was sent to live with heraunt when only a young child. Her name,Sibongile, means “we are thankful.”

As a child playing not far from the neighboringAir Force base, airplanes occupied Sibongile’simagination. “I didn’t have any nice toys so wewere always out in the streets. We used to stopeverything we were doing when an aircraft flewby so we could wave.” she says. “I knew one dayI would be flying too.”

In 1986 when Sibongile’s father died, thingsbecame even more difficult for her mother, whoworked as a nurse. Together her mother and heraunt supported the eight children the twowidows had between them. Their efforts furtherpushed Sibongile to work hard, dream big and

excel in school. “I felt I owed the entire familybecause the sacrifices made for me were so big,”Sibongile says. “I could see my mom and myaunt really wanted me to succeed.”

After finishing high school, Sibongile workedher way through night study at university tograduate with a bachelor of administrationdegree in industrial psychology and politicalscience from the University of Zululand. Toopetite for flight attendant jobs with South AfricaAirways, Sibongile pursued human resourcesroles, and worked for Teledcom SA and thediamond firm DeBeers.

Sibongile realized how lucky she was to have aformal sector job. While black women have ahigher rate of participation in economic activitythan white women (73% vs 59%) in SouthAfrica, they are only 14% of the formallyemployed in South Africa. Unemployment ratesfor black women are over 40%, compared to21% for black men and 5% for white women.

While working at DeBeers, Sibongile’s passionfor aviation was sparked again. “Being at DeBeersand having access to their private jets actuallygave me the boost to go ahead,” Sibongile says.She spent her spare time attending airshows andresearching aviation-related business plans.

Finally, in 2003 Sibongile left the security of acorporate job to pursue her entrepreneurial dream.She recalls “People thought I was crazy. They said,‘How could you think about aviation where thereare not a lot of women, let alone people of color?’”

Yet Sibongile spotted opportunity where otherssaw obstacles. Before resigning her post, she hadalready submitted a tender for her first govern-ment contract, spurred on by the enactment ofthe Black Economic Empowerment Act. The

20 FLYING HIGH DOING BUSINESS WOMEN IN AFRICA

WOMEN IN SOUTH AFRICA


Percent women in formal labor force 38%



The Ease of Getting Credit


0

50

100

150

200

legislation is designed to promote economictransformation by enabling “meaningful partici-pation of black people in the economy,” including“increasing the extent to which black womenown and manage existing and new enterprises.”

The measure made the difference in convincingSibongile to take the risk of going out on her own.“The empowerment act played a vital role for mebecause it is a policy that is enabling people ofpreviously disadvantaged backgrounds to parti-cipate in South Africa’s economic activity,” she says.Under the new act, a firm owned by previouslydisadvantaged groups such as women receivespreferential points when tendering for contracts.

“That gave me an edge,” she says of thelegislation. “I said, ‘Let me take advantage of thispolicy and let me be the entrepreneur I havealways wanted to be.’”


Sibongile approached a number of existingaviation companies for support and partnership.“Those doors never opened until one day I took agovernment tender with me to one of thecompanies and asked to form a joint venture with

them for the aircraft charter business. Theyagreed!” The plan incorporated skills transfer overa 2 year period while my company’s responsibilitieswere administration and client management.

Sibongile was able to benefit from governmenttraining programs, too, like Umsobomvu, whichassigned a consultant to help her with herbusiness plan.

Sibongile notes “Historically, women in SouthAfrica, particularly black women, have not beenafforded the opportunities of starting andrunning their own enterprises and making a fullcontribution to our economy. At SRS Aviationwe are taking advantage of the new politicalfreedom to create economic freedom. It is anopportunity that my mother and aunt did nothave. But I do, and intend to grab it.”

Sibongile sums up her main obstacles to businessgrowth as “being young and female in the aviationindustry, accessing business opportunities,


Self-employment percentage of eachrace/gender segment – adults 20+

Source: Labor Force Survey 2005.

Only 6% of the more than onemillion black women in SouthAfrica who are self-employedoperate in the formal sector.

0

20

40

60

80

100

Indian/AsianMen

ColouredMen

WhiteMen

BlackMen

Indian/Asian

Women

ColouredWomen

WhiteWomen

BlackWomen

accessing aircraft, attracting and retaining keytalent, and most of all access to finance.

Though government contracts came quickly, thestart of SRS was anything but easy. Only daysbefore her first scheduled flight, her joint venturepartner pulled out, leaving Sibongile scramblingfor the funds needed to secure a plane and pur-chase fuel. “We had to lease the aircraft from Russiaand we needed 800,000Rand to bring the plane,300,000R to fuel it, as well as funds to pay for lan-ding permits and so on. We learnt how to run theoperation the hard way, very fast. In track and fieldthis is called a running start. I call it a flying start.”

We took the government tender to the bankersand showed them our order,” says Sibongile.“We were told to forget it” she says, “because theamount of money requested was too large andthe collateral posted was too small.”

After being turned down by banks, Sibongileended up using her family and friends’ savings,along with her mother and her aunt’s retirementfunds, to finance that first deal. “I rememberwaiting for days at the airport for the plane toarrive, panicking that after paying so muchmoney and risking people’s lifelong savings theplane may not arrive.” All went well in the end,

and that first flight was the start of many morecontracts as the business gained momentumfunded entirely by reinvested profits.

Other women entrepreneurs in South Africa areless fortunate. A comprehensive household surveyundertaken by South African company FinScopein 2005 revealed that overall 55% of SouthAfrican adults have access to financial products,while 37% have none at all. The remaining 8%lie in what is termed the “development frontier,”serviced by informal products such as savingsclubs, burial societies and other informal sourcesof credit. Black women are both the least likelyto be formally banked and, along with blackmen, the most likely to be financially excluded.

In 2005, SRS Aviation Ltd.’s first full year of busi-ness, the firm generated revenues of $5 million,with three-quarters of the business coming fromthe government. “We make sure we keep reve-nues coming in as much as we can in the companyand keep our overhead low,” says Sibongile, butwith competition growing and margins alreadyhovering around 10 percent or even lower, shesees little room for improvement. Sibongileemploys 9 fulltime staff and 10 part time pilots.

“If we get a $1 million order and need to commis-sion flights within 2-to-3 days, we can’tfind someone to help us with that money,”Sibongile says. “Some flights we have toforfeit to our competitors. We can getthe work — the work is not theproblem — but getting the workwithout the financing is a challenge.”

Yet even as her business endures growingpains, Sibongile remains excited about itsprospects. “I see this baby is going to growso much and it is just in the teethingstage,” she says of her fledgling business.

22 FLYING HIGH DOING BUSINESS WOMEN IN AFRICA

Self-employment percentage of eachrace/gender segment – adults 20+

Source: FinScope™ 2005.(Note: In this chart, Black denotes black African only)

0 20 40 60 80 100

Blackmale

Blackfemale

Whitemale

Whitefemale

From being purely a broker, SRS Aviation nowholds government licenses in helicopter operationsand air transport for both small and large aircraft.

In 2006, Sibongile’s efforts were recognizedinternationally when she was a winner at theBlack Women in Business Awards held annuallyin the United Kingdom. In 2007, Sibongile wasamong a small group of businesswomen selectedfor the prestigious FORTUNE mentoringprogram for women in the United States. Thisexperience not only provided valuable businesstraining, but also helped her to develop arelationship with the Women of Color inAviation and Aerospace group in the UnitedStates. “Sharing our experiences and helpingpush each other on makes such a big differencein those difficult days,” she says. Now she is partof a team establishing the South African chapterof Women in Aviation International toencourage other women to enter the industry.

Beyond her own industry, Sibongile is a keen advo-cate for other women in business, bringing thisperspective to her role as a member of the NationalSmall Business Council that advises the Ministerof Trade and Industry. Among her recommenda-tions: make the process of exporting easier andwith fewer administrative burdens, so more ship-ments are sent out of South Africa. This benefitsthe producers, but also the logistics companies, theport operators and air cargo operators like SRSaviation. “Few economies have grown withoutrobust exports. A lot more can be done in mycountry so it becomes an exporting giant.” Indeed,South Africa ranks 134 of 178 economies in DoingBusiness 2008 on the ease of trading across borders.

Next steps

Sibongile is studying for a Masters degree inaviation management and her goal is to take her

company Africa wide. South Africa is thetransport hub for many goods coming intoAfrica or being exported to Asia or the Americas.SRS Aviation can also take part in internationalcontracts for supplying food and other productsto emergency areas across southern Africa.

Each week Sibongile receives calls from aspiringentrepreneurs who have seen her story andfound inspiration in the accomplishments ofsomeone who is like them. Men as well aswomen. “More than anything, our key success isindirect, because it has given so many peoplehope that it is possible,” she says. “Theopportunities the empowerment act provides,determination, education and sheer hard workhave taken us to where we are – flying high!”


BUSINESS CHALLENGE:GETTING CREDITOPPORTUNITIES FOR REFORM

Access to credit remains a particular challenge forblack women in South Africa. They are the leastlikely group to have access to financial products andservices at only 38 percent.

• South Africa’s Financial Sector Charter should bereformed to include targets in outreach to clientson the basis of both race and gender. At presentsuch targets are included only for employment infinancial institutions

• Financial institutions could pay more attention tounderstanding the opportunities in emergingmarkets and train loan staff to understand thechallenges of women in business.

Footnotes and sources1. Naidoo, Sharda, and Hilton, Anne. 2006. “Access to finance for women

entrepreneurs in South Africa.” World Bank, Washington, DC.2. ibid3. Labor Force Survey 20054. FinScope Survey of Financial Services Usage in South Africa 2005Population: World Development Indicators, 2007Gross National Income per capita: World Development Indicators. 2007Doing Business Rank: Doing Business 2008Female literacy rate: World Development Indicators, 2004Percent of women in formal labor force: World Development Indicators, 2004Seats in Parliament (% held by women): United Nations 2007/2008 ReportGender Equity Index: Social Watch Gender Equity Index 2007


Swazi-born and based, Zoë Dean-Smithadvises artisans on how to grow and managesuccessful handicraft enterprises for internationalmarkets. “My international work has made merealize that Swaziland is one of the mostdifficult environments for women entrepreneursin the world.” Zoë’s dreams of establishing aninternational training center on her own plot ofland were dashed when she realized that even asa single woman in her mid-40s, with her father’sexpress consent, the Deeds Registry Act prohibitedher as a woman from registering property.

As the former managing director and currentshareholder of successful Swazi handcraftcompany Gone Rural – whose motto “sukumanibomake” means “rise up women” – Zoë beat theodds to a certain extent. She became a partnerin Gone Rural in 1999.

Her goal was totransform asocially responsibleoperation with an emphasis on humanitariansupport to rural women into a profitablecompany with a separate charitable structure.

Today Gone Rural products are distributedinternationally to 35 countries through over1,000 retail outlets,with annual sales ofUS$600,000 and growing. But when thefounding partner passed away in 2003 Zoëalmost had to close shop, due to the minoritystatus of married women under Swazi law.Thanks to the largesse of her former businesspartner’s husband Zoë was able to maintain thebusiness so the rural Swazi families dependanton Gone Rural continued to have the means toearn an income.

Gone Rural now employs 731 rural Swaziwomen artisans. Many are grandmotherssupporting an average of 8 dependants.Zoë reflects, “I hate to think what would havehappened if we hadn’t been able to continuethe business because indirectly approximately6,000 Swazis depend on the income generatedby Gone Rural. Things are not only unfair

DOING BUSINESS WOMEN IN AFRICA GONE RURAL 25

Gone RuralAs a monarchy whose recently deceased king leftmore than 70 wives behind, Swaziland’s businessenvironment poses particular challenges for women.Men may legally marry as many wives as they are ableto support, and the former king took this challengeseriously. Women require the permission of husbandsor fathers to open a bank account or a business, obtaina passport or enforce a contract.

Zoë Dean-Smith

C O M P A N Y P R O F I L EBusiness Name: Gone Rural Pty Ltd

Business Type: Homewares


Employee Number: 731

Business Reach: Africa, Europe, US

SWAZILAND




Doing Business registering property ranking 142/178★

for women, but they make no business sense insuch a poor country.”

Zoë is working with “Women and Law inSouthern Africa” to advocate for reform. Theyargue that the new Constitution should takeclear precedence over general and customarylaw; and laws like the Administration of EstatesAct, the Industrial Relations Act, and the DeedsRegistry Act need amendments to reflect theconstitutional principles of equality and non-discrimination.

The minority status for women in Swazilandcodified in the Marriage Act of 1964 should beabolished and the Convention for theElimination of Discrimination Against Women,which Swaziland has ratified, fullydomesticated. In addition, Zoë would like tosee enforcement and support mechanisms topromote women’s access to justice, such astraining for judges and legal aid.

Starting out

The desire to help poor rural women was themain reason original Gone Rural companyfounder, Jenny Thorne, started the smallhandicraft business in Swaziland in 1992.Employing 30 women to harvest and weavelutindzi mountain grass, which is a perennialand therefore sustainable, Jenny designedhandcrafted tableware and homeware productsfor export.

In 1999, Zoë Dean-Smith joined Gone Ruraland together Jenny and Zoë as partners foundedthe legal corporation Gone Rural (Pty) Limitedin November 2000, concluding a shareholders’agreement at the same time. Zoë laughs as sherecalls, “I began my career in handcrafts bydefault. Jenny approached me after seeing mymanagement strengths as producer of a localtheater production.” Zoë had previously workedpredominantly in human resources andoperational management in South Africa andEngland as well as Swaziland. Zoë was put incharge of business operations and Jenny createdthe designs. “With our complementary skillsand personalities, it turned out to be a perfectpartnership,” recalls Zoë.

Gone Rural Ltd is formally committed toempowering rural women in Swaziland,alleviating poverty and supporting HIV/AIDSorphans by creating a socially responsibleenterprise. The core focus of the business is toprovide home-based work using traditionalhand-skills and locally available materials.

The first phase involves the harvest of lutindzigrass, which is then taken to Gone Ruralheadquarters for dying to ensure a consistentproduct. The grass is then returned to theartisans who work from home to develop,

26 GONE RURAL DOING BUSINESS WOMEN IN AFRICA

WOMEN IN SWAZILAND





The Ease of Registering Property


0

50

100

150

200

design, and produce crafts. The businessstructure operates regionally throughout theKingdom with 13 geographical groups that meetevery three weeks to receive compensation forfinished products.

Recruitment of artisans happens in an informalway, with Gone Rural staff approachinghomesteads in areas where the lutindzi grassgrows and then teaching weaving skills. Artisansare paid per piece.

Under Swazi law and custom, which applies toall indigenous Swazi women, women are legalminors, with a father, husband or male relativeremaining as a guardian throughout their lives.Consent of this male guardian is required for allactivities, including opening a bank account,earning an income, opening a business. Henceincome earned by women does not actuallybelong to them.

Worries Zoë, “While it is clear how muchfamilies need the income women earn for basicnecessities, you can’t always stop men spending

the money their wives earn in a way they decide.If women had the right to have their own bankaccounts and manage their own money we couldbe sure more funds would go directly onnecessities like food and school fees.”

Many of the artisans are grandmothers, somesupporting up to as many as 15 children.“Education isn’t free and these women arehaving to protect, feed, clothe and educate theirgrowing numbers of dependants. There are70,000 orphans in Swaziland now, due to thehigh incidence of HIV-AIDS. Grandmothersbear the burden,” Zoë reflects.


Given the limitations of the local market, GoneRural began to export internationally as early as1994. Trade shows in neighbouring SouthAfrica provided the first opportunities. It wasclear exporting was the only way the businesscould make enough money to maintainoperations and continue to expand outreachto a greater number of rural women.

There were a number of challenges, includingthe time and cost of getting goods to market aswell as the complexities of the paperwork. In2008 it still costs almost $2,000 to export acontainer and takes around three weeks, withnine different documents required. (Swazilandranks a low 146 of 178 economies on theTrading Across Borders indicator in DoingBusiness 2008). As Zoë points out, pricing


The Ease of Registering Property: Swaziland vs Global Best Practice

Registering Property Swaziland (142/178) New Zealand (1)

Procedures (number) 11 2

Time (days) 46 2

Cost (% of property value) 7.1 .1

then becomes a key issue. Often the retail pricefor an exported product from Gone Rural canquadruple after taking into account shippingand other export costs. “Africa is definitely at adisadvantage when it comes to shipping costs.We lose out on many export opportunitiesbecause it is impossible to compete with thelower-priced but similar products being made inAsia and the cheaper freight costs in other partsof the world” she says.

From a design perspective, the focus is on consist-ent product quality and relevant design forinternational markets, along with sourcingsufficient product from artisans to meet buyers’timelines. Soon after Zoë joined the business sheand Jenny decided to invest in recruiting experi-enced staff designers to ensure a varied productrange. It is a competitive business, though, and onmore than one occasion Gone Rural was asked todesign and provide an “exclusive” product sampleto potentially high-volume international clients –only to be met with resounding silence when theyfollowed up. Subsequently at trade shows theywould see a competitor selling that design.Zoë explains “the issue of copyright andpatenting is really complex. The product needs

to be copyrighted in every color, every size andevery country which can end up being far tooexpensive an exercise for the average handcraftbusiness. We’ve addressed this issue by trying toconstantly develop new designs and products,keeping ahead of the market, but it’s a precariousbusiness.”

Once orders are secured from internationalbuyers set numbers of pieces of a specific designare often required by a certain date. This canpose challenges from two perspectives – that ofthe rural women struggling to produce withinrequirements given their difficult circumstances,and that of Gone Rural Ltd, needing to fill theorder on time and at consistent quality levels tomaintain client relationships and contractualobligations.

The additional burdens on rural women’s timein Swaziland – like spending an average of 4hours a day collecting water – means time islimited for income generating activities. Thethree week collection cycle for product in ruralareas is often difficult for women to fulfill whenthey are caring for sick relatives or ill themselves.Since Gone Rural started, in 1992, the HIV


AIDS prevalence rate has soared. From under4% in 1992 to 39.2% today, it is the highest inthe world.1

Product quality is of paramount importance forinternational markets, and especially for highend retail clients like Liberty’s of London,Anthropologie and the Conran stores. To ensureprofitability for the company product has to passminimum quality standards so shipments won’tbe rejected and returned. That means GoneRural can only accept and purchase thoseproducts that meet specifications. “There’s alsothe emotional issue attached to the rejection ofpoor quality – being able to look a woman in theeye and tell her that her finished product isn’tgood enough can be heart-breaking, especially ifyou know her husband is lying at home dying, sheis also sick and has perhaps ten mouths to feed.”

On the administrative side, it was clear to Zoëthat automated systems needed to be put inplace as the business expanded. In late 2004 theInternational Finance Corporation providedGone Rural with both financial and technicalsupport to help build a managementinformation system and develop a viable exportpricing strategy.

In 2006 Gone Rural became a Fair Traderegistered company, which Zoë says helpsdevelops new markets, like Ten ThousandVillages in Canada. Gone Rural now exports to35 countries through over 1,000 retails outlets.While the largest single export market is NorthAmerica, the business also exports to Canada,Europe and a number of African countries.Internet and trade fair sales continue to grow.In 2008, sales growth fueled artisans’ highestearnings ever.

Gone Rural has grown to a full time core staff of24 staff, and 731 artisans. Most staff have beenwith the business since 1992 and new staff areoften recruited within the same family groups.

Gone Rural BoMake

In 2007, Zoë launched Gone Rural BoMake(Women), a charitable foundation to assist GoneRural’s rural Swazi families in a more structuredway with access to clean water, food security,HIV/AIDS training, support and familyplanning, women’s rights and literacy, andscholarships for orphans.

But all this almost wasn’t. Zoë was devastatedwhen her business partner Jenny passed awayfrom cancer in 2003. What had seemed to be alegitimate shareholders agreement between thetwo became null and void – because Jenny hadmarried in community of property in Swaziland.She was therefore a legal minor with no right toown a business or property without her husband’sconsent. “I was so lucky Jenny’s husband choseto retrospectively give his consent so we couldcontinue the business,” Zoë comments.

Two years after Jenny’s death, in 2005, KingMwsati III approved a new constitution thatprovides for equality between the sexes. But theConstitution, Swazi general law (Roman-Dutchcommon law and statute) and Swazi law andcustom (oral tradition) are at odds. In practice,Swazi law and custom prevails. Reports showbanks still refuse bank accounts and loans forwomen without male guarantors because the1964 Marriage Act vests marital powerexclusively in husbands.

The constitution now also protects women’srights as property owners. Registering propertyin Swaziland is a cumbersome and costly


launched a new venture promoting strategicdevelopment for handicraft businesses. Workingwith NGO Vital Voices Global Partnership Zoëis now supporting the development of artisanalskills across Africa. Zoë is passionate about thisnew venture. “I see such tremendous need forpractioners in the handcraft sector to share theirskills and knowledge with grassroots entre-preneurs. Africa has the resources to create realwealth at the bottom of the pyramid. Butwomen need a level playing field for this tobecome a reality.”

Zoë is also working with the Women and LawSociety of Southern Africa to support legalreform. She sees this as both an issue of socialjustice and economic development for Swaziland:“If women in Swaziland had equal opportunitiesto access finance and own land, imagine howmuch better off the country would be.”

business by international standards. In 2008Swaziland ranked 142 out of 178 economies onthis Doing Business indicator.But in practiceonly men have the opportunity to buy and sellproperty. Under the Kukhonta system of landdistribution for Swazi property owners the malehead of household pledges allegiance to one ofthe 350 palace-appointed chiefs. They canapportion a plot of land for his use. This dashedZoë’s hopes of buying a plot of land to build aninternational handcrafts training center for artisans.

Zoë explains: “While as a white Swazi somelawyers say I can claim to be under thejurisdiction of Swazi general law and as I amsingle, claim majority status as an adult woman,rather than be considered forever a legal minorunder Swazi law and custom. Others say thatbecause I am Swazi born traditional law shouldapply to me, too. In any case, I realized it was amoot point.” A woman it is not permitted toregister property in her own name – the DeedsRegistry Act expressly prohibits it. Zoë says,“I could get around that by asking a malerelative to purchase for me, but the landwouldn’t actually be legally mine so it is toomuch of a business risk.”

Next steps

Almost a decade after joining Gone Rural as afirst-time entrepreneur, Zoë remains involved inthe business as a shareholder. In 2008 she


BUSINESS CHALLENGE:REGISTERING PROPERTYOPPORTUNITIES FOR REFORM

• Amend laws like the Administration of Estates Act,the Industrial Relations Act, and the DeedsRegistry Act to reflect Constitutional principles ofequality and non-discrimination

• Abolish minority status for women codified in theMarriage Act of 1964

• Create enforcement and support mechanisms topromote women’s access to justice, such astraining for judges and legal aid.

Footnotes and sources1. Data from Swaziland Ministry of Health and Social Welfare “Signs of hope amidst

times of challenge,” 2004.Population: World Development Indicators, 2007Gross National Income per capita: World Development Indicators. 2007Doing Business Rank: Doing Business 2008Female literacy rate: World Development Indicators, 2004Percent of women in formal labor force: World Development Indicators, 2004Seats in Parliament (% held by women): United Nations 2007/2008 ReportGender Equity Index: Social Watch Gender Equity Index 2007

DOING BUSINESS WOMEN IN AFRICA A LEASE ON OPPORTUNITY 31

A Lease on OpportunityWhen Victoria Kisyombe’s husband passed away in

1991 he did something very unusual for a Maasai.

He left her a cow named Sero.

InTanzania discriminatory customary lawmeans few women have land to use ascollateral for business loans, so accessing formalfinance is a huge problem. Victoria Kisyombeadvocates leasing as a practical solution. “I’veproved it can work well for both my 10,000women clients – who in turn support another51,000 Tanzanians – as well as for Sero LeaseLtd as a business.”

When Victoria Kisyombe’s husband passed awayin 1991 he did something very unusual for aMaasai. He left her a cow named Sero, whichmeans “leader” in Maasai. Most widows inTanzania inherit nothing under traditionalcustomary law, often leaving them without themeans to survive. Although life was hard,Victoria realized how lucky she was: she had aproductive asset to help feed her family.

Other widows had many challenges in makingends meet, including the rapidly spreadingscourge of HIV AIDS, and Victoria feltcompelled to help. In 1992 she started the Sero

Women’s BusinessAssociation withfive other widowsto tackle theseproblems head on.Training in HIVAIDS preventionand women’s legalrights was des-perately needed, along with business skills andmanagement training.

But business training alone didn’t help womenaccess the finance they needed to develop smallbusiness ventures. Given women’s lack ofcollateral, Victoria began piloting microleasing as asolution. The ability to generate cash flow, ratherthan collateral, determines whether an applicant issuccessful. Demand was significant and in 2002Sero Lease Ltd was formally registered. Sero LeaseLtd has developed into a sustainable, for-profitoperation providing microleasing to over 10,000women clients in Tanzania in 2008, with a clientpay-back rate of 99%. Its non-profit armcontinues training in HIV AIDS awareness andwomen’s legal rights as well as business skills. Todate over 17,000 women have been trained.

Starting out

Having done well at school in sciences, Victoriatrained to become a veterinarian, working in theregion of Mbeya on the border with Zambia and

TANZANIA


GNI per capita $350


Doing Business getting credit ranking 115/178★

Dr. Victoria Kisyombe

C O M P A N Y P R O F I L EBusiness Name:Sero Lease and Finance Ltd.

Business Type: Financial Services

Annual Turnover: $6m

Employee Number: 60

Business Reach:12 branches across Tanzania

32 A LEASE ON OPPORTUNITY DOING BUSINESS WOMEN IN AFRICA

Malawi. Victoria’s life changed drastically whenher husband died in 1991 and under customarylaw his family reclaimed all their maritalpossessions. The legal framework in Tanzaniaexplicitly protects women – a Constitutionalamendment passed in 2000 prohibitsdiscrimination on the basis of gender andwomen’s rights to own land are expresslyprotected. But in practice customary lawprevails. Victoria’s case was no different, withthe exception of Sero the cow. “And Sero madeall the difference – I was able to both feed themilk to my one year old and sell some tosubsidize our income and help me pay schoolfees. It was very hard. I saw other widows muchless privileged, with no assets, no education,little means of earning a living and I said tomyself: if I am finding things so hard, just howare they managing?”

Victoria and five other widows decided to createa Women’s Business Association in 1992 to helpprovide women training to learn more aboutHIV AIDS and its prevention, inheritance rightsand land rights, as well as business skills andtraining. They called it Sero, as a reminderof how Sero the cow had helped Victoria and asymbol of how they could help lead positivechange for other women. “We realized that ifthere was going to be a change for women, ithad to come from us.”

Each widow contributed 3,000 Tanzanian shillingsto set up the association. They charged 1,000 TSh($US 0.8) per day for business training courses.Demand was brisk and Victoria and a colleaguesoon began to work full time in the association.They moved to the capital city of Daressalam in1993, and registered the association in 1994.

Business training wasn’t enough to help womenaccess credit, however. Without collateral theyweren’t able to access funds and without funds theycouldn’t access a productive asset. It was a viciouscircle. Across the population only 5% of womenand 11% of men are banked inTanzania, andwomen owned businesses are only a third as likelyas their male counterparts to have bank finance.

WOMEN IN TANZANIA





Who is banked in Tanzania

Total Men Women

Currentlybanked(2006)

PreviouslyBanked

Source: Financial Sector Deepening Trust, Tanzania 2007.

0

2

4

6

8

10

12

8

3

11

45

2

OBJECTIVES OF SERO LEASE

• To empower women economically through financialintermediation

• To develop women’s capacity to assertively andcompetitively participate in business

• To facilitate growth of the beneficiaries as business-women through sharing best practices with otherwomen

• Overall, take part in poverty alleviation initiatives forwomen.

Business Owners in Tanzania

Perc

ent

Bank

ed


By 1997 Sero Women’s Business Association had2,000 members and with training and grantsupport from UK Development agency DFIDVictoria began piloting financial leasing. Heraim was to give women the chance to purchaseproperty in their own names and thereby buildup a track record for subsequent financing.Slowly Victoria and her friends saved to buyassets themselves. They started with animals,bicycles, sewing machines, refrigerators, waterpumps and leased them to other widows. Asfunds grew, they began to also purchase propertywomen already owned, like beds, tables, chairsand provide a lease back so the funds could befreed up for business activities.

Over the next five years the micro-leasing pilotprogram returned good results. It was clear toVictoria that leasing was a good financial productto support women in business in Tanzania and toexpand outreach they needed to formalize. In2002, Sero Lease and Finance Ltd was formallyregistered by the Business Registration andLicensing Agency. This was straightforward butobtaining a license was more complicated. It wasconfusing working out how to register thebusiness: “I went all over Dar and each Ministrywould send me to another, unsure how to deal

with us. We knew we needed a license so we werepersistent! Finally the Ministry of Trade,Industry and Marketing provided our license.Then it took another week to process the TaxPayer registration.” A “one stop shop” where allthe requirements can be fulfilled in one placewould certainly make all this quicker and easier.

To mitigate the main risks women are facing,training on HIV AIDS and business skillsremains a compulsory prerequisite to processing aleasing request. Every Monday for a half dayprospective clients must complete this training tobe able to become eligible to borrow. Twoguarantors are required with proof of regularincome, such as salary slip, and if possiblecollateral such as a car or a freezer. New clientsmust provide a guarantee from an existing Seroborrower with a good credit history. The localadministrative office is also required to sign arecommendation of good character.

All these protective measures have ensured aconsistent 99% payback rate – in fact, while there

FINANCIAL LEASING

• Cash flow rather than collateral is the focus in deter-mining whether a lease applicant is successful

• The lessee owns the asset once it has been paid off,creating a form of collateral for other loans

• Working capital is not tied up

• Repayment patterns can be custom designed to matchthe lessee’s cash flow

• The firm’s broader finances are not put at risk byleasing, in contrast to debt.

34 A LEASE ON OPPORTUNITY DOING BUSINESS WOMEN IN AFRICA

have been payment delays Victoria says there hasnever been a loan write off.

Strict controls are maintained on the business.Branch managers are the key to the on-goingsuccess of Sero Lease, and they have weeklychecks by telephone with management, send incopies of all receipts by mail and send theirportfolios for cross checking by email each week.All cheques are written centrally from Dar.

Victoria’s aim is for women to own a productiveasset of their own, but she’d like them to be ableto use those assets to secure further financing.Tanzania does have a Chattels Transfer Actwhich provides for non-land securities to be usedas collateral for loans. But it is in practice of littleuse in its current form - there are two separateuncoordinated registries, both of which aremanual and administered by two differentauthorities. Financial institutions need a single,comprehensive system of registering non-landsecurities they can rely on.


As Victoria built the business she became eligibleto borrow US$10,000 from a government fund,the Small Enterprise Loan Facility. After justthree months 50% of the loan was repaid, so Serobecame eligible for larger loans, but continues toface constraints due to lack of collateral. This hasbeen a constant challenge in growing the business.

In February 2007, Sero Lease had 3,000 clientsand huge pent-up demand. There was adesperate need for additional financing tosupport business expansion. Victoria had thesame problem her clients faced – lack of collateralto secure a bank loan. Banking laws constrainthe provision of microfinance services in Tanzaniaas unsecured loans may not exceed 5% of alicensed bank’s capital. That meant Sero Leasehad to borrow from a range of institutions. In2007 EXIM Bank, the only bank with a womanCEO in Tanzania, started a women’s bankingprogram with support from the InternationalFinance Corporation and in turn provided SeroLease with a line of credit for $1million.

Says Victoria “This really helped us expand. Itwas the first time Sero Lease had accessed a longterm loan with a one year grace period. Withadditional loan funds from the government SELF

The Ease of Getting Credit


0

50

100

150

200

In Tanzania, pledging a movableproperty like a car takes 297days, while in Zanzibar it is notpossible at all.1


project in just a year we have more than tripledour client outreach and opened four new branchesin rural areas.”

The partnership between Sero Lease and EximBank provides, on a limited basis, the benefits acredit reference bureau could provide womenborrowers. As Sero Lease clients expand theirbusinesses and become eligible for formal bankfinancing, which allows them to borrow largeramounts at lower interest rates, they are able tomove to Exim Bank’s Women EntrepreneursFinance Program.

Sero Lease now has 60 full time staff, of whom12 are men, although the client base remains100% female. The recruitment pool is drawnmostly from students who come for two monthinternships and the best qualify for jobs. WhileVictoria says formal employment contracts canbe onerous in Tanzania the internship works as atrial period to screen applicants on the job.

Next steps

Demand continues to outstrip capacity andword of mouth is the only form of advertising.Sero Lease has grown quickly, from its firstbranch in Dar to 12 branches across Tanzania

today. So far more than US $8m has beenloaned out to 10,600 clients. “As long as I cancontinue to find the funds, I predict we will have30,000 women clients in Tanzania in the nextfour years.”

Having been invited to Rwanda in 2007 to shareSero Lease’s successes, Victoria’s goal is nowexpansion beyond Tanzania to other East Africancountries. “Women and especially widows facethe same problems of discriminatory custom lawall through East Africa, and I know leasing is aviable solution that can really change lives.”

Footnotes and sources1. Institute for Liberty and Democracy. 2005. “Program to Formalize the Assets of the

Poor of Tanzania and Strengthen the Rule of Law: (MKURABITA) FinalDiagnosis Re-port.” Institute for Liberty and Democracy, Lima.

2. Ellis, Amanda et al. 2007. Gender and Economic Growth in Tanzania: CreatingOpportunities for Women. World Bank, Directions in Development, Washington DC

Graph source Financial Sector Deepening Trust, Tanzania 2007Population: World Development Indicators, 2007Gross National Income per capita: World Development Indicators. 2007Doing Business Rank: Doing Business 2008Female literacy rate: World Development Indicators, 2004Percent of women in formal labor force: World Development Indicators, 2004Seats in Parliament (% held by women): United Nations 2007/2008 ReportGender Equity Index: Social Watch Gender Equity Index 2007

In 2003 amendments to the Bank of Tanzania

Act facilitated creation of a credit reference

database and collection of information on the

payment records of clients of all banks,

financial institutions, savings and credit

schemes, and other entities engaged in the

extension of credit. The Central Bank has

engaged consultants to work on this and to

investigate the feasibility of incorporating

microfinance institutions.2

BUSINESS CHALLENGE:GETTING CREDITOPPORTUNITIES FOR REFORM

Due to discriminatory customary law women areunlikely to have land to use as collateral to securebusiness loans. Hence they benefit disproportion-ately from the reforms recommended to developcredit information systems and provide ways of usingnon-land collateral to secure loans:

• Actively encourage development of creditinformation systems so good repayment recordsare captured. Ensure microfinance institutions’data are included

• Reform the Chattels Transfer Act and relevant partsof the Companies Act so a single comprehensivesystem of registering non-land securities can berelied upon by financial institutions

• Pass draft leasing legislation into law.


Sheer determination to succeed kept Juliangoing and she gradually traded her way backinto the black, saving her profits to invest in anew business venture.

Today Juliana is the owner of Uganda’s largestjuice processing factory, Delight Ltd, with anannual turn over of US$4m and 45% of thelocal market. She’s known affectionately as“Mama Cheers” after her popular fruit drinkbrand, Cheers. In 2004 she won the UgandaWoman Entrepreneur of the Year Award.

Julian now has diversified into a range of otherbusiness activities, too, including poultry, a flourmill and bakery, a student hostel for 400, as wellas coordinating women’s farmer cooperativesthat provide food aid into Sudan. She nowemploys some 450 Ugandans.

Success didn’t come easily, not least because ofthe obstacles she faced in the business

environment.Julian recallsbusinessregistration andlicensing was socomplex andexpensive she almost gave up hope. Today Julianis part of the Uganda Gender and GrowthCoalition, a group of seven women’s groupsadvocating for improvements in business regul-ation. The more complex and costly businessregistration requirements, the more likely womenbusiness owners are to remain marginalized in theinformal sector. Women are less likely to be asmobile as men, or have as much time, cash or asmany contacts to facilitate ways around complexrequirements. And women ar more likely thanmen to be seen as ‘soft targets’ for bribes.

The Gender Coalition is advocating for• A “One Stop Center” for business registrationfor all types of companies and a business guideclarifying all start up requirements.• Reforms to eliminate bureaucraticrequirements for business start up, such asallowing registration without the mandatoryinvolvement of notaries and lawyers throughstandardizing incorporation documents,simplifying tax and licensing procedures, andremoving the requirement for a company seal.

DOING BUSINESS WOMEN IN AFRICA A RED DRESS AND A WHEELBARROW 37

A Red Dressand a WheelbarrowTwelve years ago Ugandan Julian Omalla lost every-thing when her business partner absconded with cashshe advanced to purchase stock. “The only things leftwere a wheelbarrow to take fruit to sell at the marketand a red dress I would wash out every night. Julian Omalla

C O M P A N Y P R O F I L EBusiness Name: Delight Ltd

Business Type: Manufacturing

Annual Turnover: $3.9m

Employee Number: 450Uganda,Sudan

UGANDA


GNI Per Capita $ 300


Doing Business starting a business ranking 114/178

★

Starting out

Julian began her working life as an employee ofher brothers, while she saved to start her ownbusiness as a small trader. “As a woman I wantedto show I could have my own business, too.I was doing well until I became too trusting…I transferred all my funds to my business partnerto purchase stock and he just disappeared fromhis place of business. I was back to square zero.”Julian was devastated, but says she learnt not toput all her eggs in one basket – a strategy thatbecame her philosophy for business expansionand diversification.

So Julian began again as a trader, wheeling fruitin her wheelbarrow to market and saving theproceeds. Soon she had enough for travel toneighboring Kenya to buy other goods. “I wouldtake the overnight bus and stand up the wholeway to get a 50% fare discount,” she recalls. “Myaim was to start a juice processing business, notjust small scale like the market vendors, but areal factory. My mother had taught us to processlocal fruit and I’d done a certificate course infood science, so I had the technical background.I could see there was a gap in the market.”

Once she had saved enough from her tradingactivities for an initial capital investment ofUS$100, Julian began production. She had totake her products for testing to the governmentchemist by foot because she couldn’t afford

transport. She smiles now remembering theimage of herself in her one red dress: “My onlymeans of transport was my wheelbarrow, and Iwas the whole company.” But the local marketresponded positively to Julian’s products and shecould see her dream being realized.

Once bitten, twice shy and Julian wanted toensure she was in full control, and that herbusiness was formally registered and licensed.She recalls how cumbersome and complex thiswas, with numerous offices to visit and unclearrequirements. “There was so much to do and somany different places I had to go – for businessregistration and tax payer identificationnumbers, different licenses and requirementsfrom a range of different authorities, adeclaration that had to be made before aCommissioner for Oaths, a company seal to get,inspections of my premises from differentauthorities– it all seemed so complex. Iremember paying a lawyer what seemed to methe gigantic fee of USh500,000 (US$279).”

Gender roles in Uganda added to the burden.Julian found being a wife and mother made thecomplexities of business registration even moredifficult. Men have so much more time thanwomen and they’re more likely to be able totravel to the different agencies – and have thecontacts often needed to actually get things done.

38 A RED DRESS AND A WHEELBARROW DOING BUSINESS WOMEN IN AFRICA

WOMEN IN UGANDA



Seats in Parliament 29.8%


★

So the more complex, cumbersome and costlybusiness registration requirements are, the morelikely women business owners remainmarginalized in the informal sector.

Women are more likely to face additionalchallenges too, such as being seen as “softtargets” by officials seeking facilitation paymentsto expedite complex bureaucratic procedures(see graphs).

The Uganda Regulatory Cost Survey Report2004, covering 241 enterprises in four regions,measured the compliance cost of businessregistration and licensing requirements. It foundthat more than a quarter of all enterprisessurveyed reported that government officials had“interfered” with their business—by asking forbribes, for example. Among enterprises headed bywomen, the figure was a much higher 43 percent.

Trade licenses were identified as the single mostburdensome regulation. A little more than 30percent of men and more than 40 percent ofwomen cited trade license procedures as an obsta-cle to the growth of their business. The currentUgandan Trade Licensing Law mandates annualapplications to keep business registration valid.

Just as women reported being more likely to behindered by cumbersome registration andlicensing procedures, they proved more likely tocomply with regulations once requirements weresimplified. In Entebbe Municipality a pilot projectstreamlined licensing procedures and reducedthe number of approvals required to launch abusiness. It reduced the time spent by 90 percentand compliance costs by 75 percent, whilerevenue collection increased by 40 percent.The Impact Assessment of the first pilotsuggested that the reforms encouraged womento formalize: the increase in first-time business -owners registering was 33% higher for womenthan men.


Once Julian felt her juice operation was runningsmoothly, she wanted to expand Delight UgandaLtd’s operations and product range. Capital forexpansion became a major obstacle. The banksalways want collateral which so few women havein Uganda – women don’t inherit under customlaw so we are at a big disadvantage. Savings andretained earnings were Julian’s two mainmethods of financing business expansion.


Enterprises that Responded GovernmentOfficials Have “Interfered” with Their Businesses

Source: Kirkpatrick and Lawson, (2004).

0

25

50

75

100

Enterprises that Responded Trade LicenseProcedures Are Obstacles To Their Business Growth

Source: Kirkpatrick and Lawson, (2004).

0

25

50

75

100

Commercial farming beyond fruit for the Delightfactory seemed a good business prospect and byengaging others to use their land to grow cropsJulian avoided the need for a big capital outlay.Julian has always been a strong advocate for otherwomen and looked for ways of helping ruralwomen form farmer cooperatives. Over 100women now belong to the Bunyoro Grain FarmerAssociation through membership of women’scooperatives like “Till and Feed the Nation.”

Julian started by coordinating grain sales for thewomen’s groups and then saw the opportunityof creating her own processing and packingoperation. Called Global Food Securities, flouris packaged under the brand name “Mummy’sChoice.”

In addition to catering to growing local demand,Julian was among the first Ugandan business-people to take advantage of the SouthernSudanese market after the war, and now around50% of her exports go there.

Julian reiterates that it hasn’t been easy. Whilewomen are the majority of those working theland, under customary law they have only user –as opposed to ownership - rights. Their husbandsmust give permission for them to join a farmergroup and then they have the rights to the cashearned from their wives’ work. “I am suffering alot for some of these women,” Julian admits.“Often their husbands take their hard earnedmoney to drink or to buy another wife. It painsme so much. We try to organize village meetingsto confront these issues but change isn’t easy.”

When Julian won the Uganda WomanEntrepreneur of the Year Award in 2004 she felteven more compelled to help other women getahead economically. Active membership in theUganda Women Entrepreneurs Network meantJulian became part of a “Gender Coalition” ofseven women’s groups advocating for betterregulations for businesswomen. The GenderCoalition has been successful in creating awomen’s tax desk at the Uganda RevenueAuthority and the commitment for a “one stopcenter” for business registration and licensing,where all steps can be completed at the sameplace, at the Uganda Investment Authority.

The Authority’s director Dr Maggie Kigozi isoptimistic about the positive impact the “onestop center” will have: “It helps encourage smallbusinesses – and especially the women who aremore time poor and more likely to be intimi-dated by bureaucracy - to formalize. They can

40 A RED DRESS AND A WHEELBARROW DOING BUSINESS WOMEN IN AFRICA

The Succession Act specifies thatwhen a husband dies intestate hiswife is entitled to 15% of the mat-rimonial property, but in practicecustomary law most often prevailsand women inherit nothing.

The Ease of Starting a Business: Uganda vs Global Best Practice

The Ease of Starting a Business Uganda (114/178)Australia (1)

(Global Best Practice)

Procedures (number) 18 2

Time (days) 28 2

Cost (% of income per capita) 92.0 0.8

Minimum capital (% of income per capita) 0.0 0.0

do everything in one place rather than physicallyhaving to go to numerous government offices.Once they formalize they can enforce contracts,borrow from the banks and claim back VAT thatthey wouldn’t be able to in the informal sector.”

Dr Kigozi notes that without a tax number andaudited books of accounts businesses are subjectto surprise inspections where a tax inspector isable to make an estimate of taxes owed. TheGender Coalition has many anecdotes of womenwith informal businesses who were seen as “softtargets” for zealous tax inspectors demandingregular cash payments.

The Uganda Revenue Authority has now estab-lished a women’s tax desk so businesswomen havea single point of contact to check on tax require-ments without feeling intimidated or harassed.

The “one stop center” will have the mandate toconnect both foreign and domestic investors withsome 50 agencies for the secondary licenses abusiness might require for the sector they operatein. Dr Kigozi says these agencies, known as “TeamUganda” now all have a client charter visible tothe public that sets out the cost of the serviceand the time it is expected to take for delivery.

Julian is proud she has been able to be part of aneffort working for better business conditions forall Ugandans. Because of the additionalconstraints women face this will be even morebeneficial for businesswomen.

Julian’s business empire now includes a grainprocessing and packing plant, bakery andconfectionary line, a poultry farm with 30,000commercial laying hens and a student hostelunder construction.

As she reflects back on her successes, Julian saysthe thing that gives her most satisfaction is beingable to create jobs for other Ugandans, especiallywomen. Ironically, she says losing everythingturned out to be her best lesson. Her advice toother women who want to succeed in business?Don’t put all your eggs in one basket.


BUSINESS CHALLENGE:STARTING A BUSINESSOPPORTUNITIES FOR REFORM

• A “One Stop Center” for business registration forall types of companies and a business guideclarifying all requirements should make it mucheasier for businesses to formalize once fullyimplemented

• Further reforms to eliminate bureaucraticrequirements could improve the situation –allowing registration without involvement ofnotaries and lawyers through standardizingincorporation documents, simplifying tax andlicensing procedures and removing therequirement for a company seal.

Footnotes and sources1. Kirkpatrick, Colin, and David Lawson. 2004. “Uganda Regulatory Cost Survey

Report.” Center on Regulation and Competition, University of Manchester, UnitedKingdom.

2. UMACIS (Uganda Manufacturing Association Consultancy and Information). 2003.“An Impact Assessment of the Pilot Streamlined Trade Licensing Process in EntebbeMunicipality (May 2002-July 2003.).” Report prepared for the Uganda DeregulationProject, Kampala, Uganda. cited in Ellis, Amanda, Mark Blackden, and Clare Manuel.2006. Gender and Economic Growth in Uganda. Unleashing the Power of Women.World Bank. Directions in Development. Washington, DC.

Population: World Development Indicators, 2007Gross National Income per capita: World Development Indicators. 2007Doing Business Rank: Doing Business 2008Female literacy rate: World Development Indicators, 2004Percent of women in formal labor force: World Development Indicators, 2004Seats in Parliament (% held by women): United Nations 2007/2008 ReportGender Equity Index: Social Watch Gender Equity Index 2007


DOING BUSINESS WOMEN IN AFRICA 43

CountryProfiles


Positive reform in 2006/07

Negative reform in 2006/07

CAMEROON Ease of doing business (rank) 154

Sub-Saharan Africa GNI per capita (US$) 1,080

Lower middle income Population (millions) 16.7

Starting a business (rank) 160 Protecting investors (rank) 107

Procedures (number) 13 Extent of disclosure index (0-10) 6

Time (days) 37 Extent of director liability index (0-10) 1

Cost (% of income per capita) 129.2 Ease of shareholder suits index (0-10) 6

Minimum capital (% of income per capita) 177.1 Strength of investor protection index (0-10) 4.3

Dealing with licenses (rank) 154 Paying taxes (rank) 166

Procedures (number) 15 Payments (number per year) 41

Time (days) 426 Time (hours per year) 1,400

Cost (% of income per capita) 1,202.9 Total tax rate (% of profit) 51.9

Employing workers (rank) 120 Trading across borders (rank) 132

Difficulty of hiring index (0-100) 28 Documents to export (number) 9

Rigidity of hours index (0-100) 40 Time to export (days) 27

Difficulty of firing index (0-100) 70 Cost to export (US$ per container) 907

Rigidity of employment index (0-100) 46 Documents to import (number) 8

Nonwage labor cost (% of salary) 16 Time to import (days) 33

Firing cost (weeks of salary) 33 Cost to import (US$ per container) 1,529

Registering property (rank) 134 Enforcing contracts (rank) 172

Procedures (number) 5 Procedures (number) 43

Time (days) 93 Time (days) 800

Cost (% of property value) 17.8 Cost (% of claim) 46.6

Getting credit (rank) 115 Closing a business (rank) 92

Strength of legal rights index (0-10) 3 Time (years) 3.2

Depth of credit information index (0-6) 2 Cost (% of estate) 15

Public registry coverage (% of adults) 1 Recovery rate (cents on the dollar) 25.5

Private bureau coverage (% of adults) 0




RWANDA Ease of doing business (rank) 150

Sub-Saharan Africa GNI per capita (US$) 250

Low income Population (millions) 9.2





Minimum capital (% of income per capita) 0 Strength of investor protection index (0-10) 2.7



Time (days) 227 Time (hours per year) 168

Cost (% of income per capita) 822.1 Total tax rate (% of profit) 33.8




Difficulty of firing index (0-100) 30 Cost to export (US$ per container) 2,975









Strength of legal rights index (0-10) 1 Time (years) No practice

Depth of credit information index (0-6) 2 Cost (% of estate) No practice

Public registry coverage (% of adults) 0.2 Recovery rate (cents on the dollar) 0





SENEGAL Ease of doing business (rank) 162






Cost (% of income per capita) 107 Ease of shareholder suits index (0-10) 2

Minimum capital (% of income per capita) 255 Strength of investor protection index (0-10) 3




Cost (% of income per capita) 176.9 Total tax rate (% of profit) 46




Difficulty of firing index (0-100) 50 Cost to export (US$ per container) 828









Strength of legal rights index (0-10) 3 Time (years) 3







SOUTH AFRICA Ease of doing business (rank) 35


Upper middle income Population (millions) 47.4

























Private bureau coverage (% of adults) 52.1




SWAZILAND Ease of doing business (rank) 95


Lower middle income Population (millions) 1.1





Minimum capital (% of income per capita) 0.6 Strength of investor protection index (0-10) 2




Cost (% of income per capita) 94 Total tax rate (% of profit) 36.6















Public registry coverage (% of adults) 0 Recovery rate (cents on the dollar) 36

Private bureau coverage (% of adults) 37.6




TANZANIA Ease of doing business (rank) 130











Cost (% of income per capita) 2,365.5 Total tax rate (% of profit) 44.3




















UGANDA Ease of doing business (rank) 118






Cost (% of income per capita) 92 Ease of shareholder suits index (0-10) 5


















Strength of legal rights index (0-10) 3 Time (years) 2.2


Public registry coverage (% of adults) 0 Recovery rate (cents on the dollar) 41




Acknowledgements

Doing Business Women in Africa was prepared by a team ledby Amanda Ellis under the overall guidance of SimeonDjankov. Jozefina Cutura, Amanda Ellis, Melysa Sperberand Gayle Tzemach prepared the case studies.

Lawyers Locembo Dlamini, Sarah Lubega, FionaMacCulloch, Jane Magigta, Katia Manirakiza, ClareManuel, Comfort Ayuk Mbuagbaw, Justine Mirembe andJanet Morris provided advice on the gender dimensions ofthe legal and regulatory framework in the countriesreviewed. Elena Bardasi, Mary Hallward-Driemeier, DahliaKhalifa, Andrew Morrison and Pierella Paci made valuablecomments and suggestions as peer reviewers.

Sushmitha Narsiah collated the data and graphs and ThuanLe provided background research. Studio Grafik designedthe report and Aaron Kisner took the portrait photographs.

Special thanks to the seven women entrepreneurs who sofreely gave of their time to share their stories, theirsuccesses and their frustrations, and their commitment tocreating a more level playing field for other womenentrepreneurs.

This series of case studies was made possible by generousassistance from the World Bank Group Gender ActionPlan donors Australia, Canada, Denmark, Germany,Iceland, Norway, Sweden, United Kingdom, United States,acting as advisors and supporters of the Doing Businessgender project, and by Vital Voices Global Partnership.