Gender-Lens Investing: Accelerating Africa's Long-Term Growth

Despite the growing number of women entrepreneurs, it's shocking that less than 3% of the venture financing in Africa has been invested in women-founded teams. This year's International Women’s Month theme, "Invest in?Women: Accelerate Progress", encapsulated the necessity of collective commitment to advancing gender equality and inclusion across all sectors globally.

Gender-lens investing was coined in 2009 and defined as 'the incorporation of gender analysis into financial analysis to make better investment decisions’ and at its core, it seeks to generate positive social impact by supporting women’s engagement in business and the economy. However, women founders continue to be underfunded with only a fraction (22%) of the most well-funded women-led ventures in Africa having successfully raised more than $8 million. Women-led enterprises are significantly less likely to raise funding compared to their male counterparts. Yet, data highlighted by Forbes shows that female founders overwhelmingly outperform their male counterparts with a 35% greater return on investment and organisations they lead perform 63% better.

This data is a strong indication that investing in women directly correlates to accelerated progress and a high return on investment both financially and in terms of impact. At AVPA, we firmly believe that investing in women is not only the right thing to do but also the smart thing to do. Research indicates that improving gender equality can significantly boost Africa's GDP by at least $360 billion over the next few years. This statistic underscores the immense potential and economic benefits of empowering women and closing gender gaps.

A lack of adequate female representation amongst decision makers in African funds is a significant hindrance to funding flows to women-led businesses;?only 11%?of senior investment professionals in PE/VC in emerging markets are women according?to IFC.

To contribute to this transformative agenda, we advocate for increased support of female fund managers, promote gender-lens investing as a strategy, and actively create positive social impact and generate returns. At AVPA, 58% of the cohorts for our capacity-building programmes have been women. By prioritising investments that benefit women and girls, we aim to foster sustainable development and drive positive change in our communities.

As we close off International Women's Month, let us reaffirm our commitment to investing in women's empowerment and accelerating progress towards a more gender-equal world. We encourage investors to honour the SDG Decade for Action and contribute to fostering inclusion, leveraging the gender ecosystem for collective social impact and returns.

Let's prioritise commitment over mere compliance in gender lens investing!

Article Co-Authors: Matebe Chisiza , Regional Director - Southern Africa and Aby Mokua , Strategic Assistant to the CEO

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