Empowering Africa by Investing in Women: Creating Inclusive Pathways for Women Fund Managers
As we kick-off this new year, MiDA Advisors is continuing our commitment to women economic empowerment globally. As evidenced by the women-focused fund manager initiatives pioneered by MiDA Advisors over the last two years, we are passionate about identifying and mobilizing more funding, resources, and support for women-owned businesses in Africa and in other emerging markets. The U.S. Government is also strengthening its focus on women economic empowerment globally in 2023. The U.S. Office of Global Women’s Issues recently launched the first ever U.S. Strategy on Global Women’s Economic Security on January 4, 2023. This directive is to mobilize U.S. foreign policy, international programming and development assistance, trade policy and promotion, private sector development, and partnerships to ensure women’s equitable participation in the global economy.
While women’s economic status have improved over the last 50 years, the World Economic Forum report of 2021 estimates that it will take 267 years to close the gender gap in economic participation and opportunity in the global economy. In the investment management industry, specifically, gender inequality remains pervasive at the investor and fund manager levels. According to data published by Citywire in 2022, only 12% of fund managers globally were women. The statistics in Africa similarly mirror this inequality – women represent only 6% of all African fund managers. Progress towards gender financial inclusion in the asset management industry, especially in emerging markets, is hampered by a lack of training and experience with business operations and systems, limited access to capital, limited opportunities to develop track records, and long-standing cultural stereotypes. Addressing these challenges are critical to creating inclusive pathways for women entrepreneurs and women fund managers to achieve sustainable and scalable success.
In the current market environment, more financial experts, investors, and international development institutions are seeking ways to increase investments in women fund managers. Studies have shown that women fund managers are more likely to invest in companies that are led by women. Simply put, women invest in women. In regions like Sub-Saharan Africa, the potential impact of increasing investments in women fund managers is measured in billions of dollars. Unfortunately, the growing interest among local and international investors in gender-lens investing has not yet translated into a material increase in capital allocated to women fund managers.
Over the last few years, MiDA Advisors has been at the forefront of implementing new financial solutions in Africa with a focus on gender financial inclusion. In June 2021, MiDA Advisors launched the inaugural Women Empowerment Mentoring and Incubation (WE>MI) Fund Manager Program of Southern Africa. The WE>MI Program was implemented locally in partnership with the Southern African Venture Capital and Private Equity Association (SAVCA). The 13-month WE>MI Program creates a hands-on skills-building model for increasing the number of investable women-owned and women-managed funds in Africa and other emerging markets. The WE>MI Program includes technical assistance and investment facility support with two-fold objectives to develop the skills and expertise of Southern African women fund managers and to mobilize local and international investments into these funds. The WE>MI Program was made possible with financial support from the United States Agency for International Development (USAID) and Prosper Africa. Since the conclusion of the first cohort of the WE>MI Program in July 2022, over $21 million USD has been committed to eligible participants. This is a 60 to 1 dollar impact multiplier from an approximately $350,000 initial budget. This type of scalable investment impact is critical for long-term and far-reaching transformation for women economic empowerment.
Investment vehicles dedicated to increase financial support of women-owned and women-managed fund managers in emerging markets remain few. Under the leadership of the United Nations Economic Commission for Africa (UNECA) and the African Women Leadership Network (AWLN), the African Women Impact Fund (AWIF) was created to advance the financial inclusion and economic empowerment of African women fund managers throughout the Continent with a goal of raising $1 billion USD over 10 years. MiDA Advisors brought the key implementors together, Including Standard Bank Group and RisCura, to UNECA to support the mobilization of AWIF. Currently, AWIF has secured $85 million USD in commitments to support the development of women fund managers and spur economic growth in Africa. AWIF is actively seeking investors to support its long-term objectives.
Women economic empowerment programs and initiatives like the WE>MI Program and AWIF are made possible by continuing to highlight gender equity and inclusivity at every level of engagement; from local forums and events to high-level conferences with global leaders. Most recently, MiDA Advisors worked with Standard Bank Group, UNECA, and AWLN to co-host a high-level roundtable discussion on the margins of the 2022 U.S.-Africa Leaders Summit. The roundtable discussion focused on the economic and societal impact of investing in women entrepreneurs in Africa. This dynamic discussion unpacked the funding gap that exists for African women entrepreneurs, positioned the business case for gender lens investing on the Continent, and provided insight for investing in African women-owned businesses.
Investment dollars are crucial to support initiatives like the WE>MI Program and AWIF that further economic development within Africa to create inclusive pathways for women economic empowerment. Africa will not reach its full potential so long as African women are under-capitalized. MiDA Advisors is actively seeking to work with more policymakers, development organizations and the private sector to collaborate on initiatives that invest in women and women-owned businesses to achieve sustainable change for gender financial inclusion.