Africa's businesswomen - underfunded or underperforming?

Plain English Summary300 African Businesswomen in Focus - Suppliers Key to Success. Suppliers to Africa's businesswomen (e.g. sellers of cloth for garment manufacture) who offer the possibility for delayed repayment, statistically boost the survival of female-owned businesses. Africa's'Lionesses' - exceptional businesswomen - are a comparative rarity, a reason we explore the reasons behind their success. Using data from over 800 Ghanaian businesses from 2011 to 2015, we examine the role of funding in explaining why the majority of businesswomen perform so poorly. Our findings highlight an unusual fact - suppliers to female-owned businesses (e.g. sellers of cloth for manufacture into garments) who offer their female customers the possibility to delay repayments are enormously beneficial in narrowing the gender gap. Targeting tax-cuts towards such suppliers would boost the emergence of future 'Lionesses'. While the recent success of Africa's 'Lionesses' - successful female entrepreneurs - is internationally celebrated, less is known about how liquidity can fuel the success of the 'Lionesses' and other businesswomen. Using information from a panel of over 800 male- and female-owned businesses in Ghana (ISSER-IGC survey), we capture a measure of underfunding, in addition to data on supplier credit, equity and other finance sources. Our regressions reveal a female-to-male productivity gap of between - 11 and - 19 per cent, values similar to estimates for other African countries. However, when financial constraints are taken into account, the gender performance gap disappears. Accordingly, female business owners who indicate that funding is not a problem are associated with higher productivity than males, all things equal. In a finding new to the literature, our regressions reveal the importance of supplier credit for Africa's businesswomen.