Minister Essop Pahad
Address: Conference on Gender and Women’s Economic Empowerment in Women’s Month
3 August 2006
The backbone of the Second Economy
Thank you very much for inviting me to address this very important conference. I am here today less than a week before one of the most significant dates in the history of our struggle for freedom and emancipation – the 50th anniversary of the Women's March.
We have to recognise the role played by Minister Lindiwe Hendricks in the struggle to empower women entrepreneurs, more particularly her inspiration and leadership in setting up South African Women Entrepreneurs Network (SAWEN).
Our government has many policies on the empowerment of women, however, these policies need to be implemented. Deputy Minister Elizabeth Thabethe has since her appointment, just over a year ago, as Deputy Minister of the dti worked tirelessly towards the implementation of these policies to empower women and in particular women entrepreneurs.
The 1956 march signalled to all of us that the struggle against apartheid was also a struggle against patriarchy, gender oppression and discrimination in our country. So it is no surprise that freedom and democracy in our country, has opened the doors for the assertion of the rights of women, has entrenched the equality of women in our Constitution and has made it illegal to discriminate against women. In the very first year of our young democracy Thabo Mbeki who was then Deputy President said "The progress we make towards the attainment of a democratic society can only have full and deeper meaning if it is accompanied by significant progress in the struggle for the emancipation of women" (The Emancipation of women: Paper delivered at the National Conference on Women Abuse and Domestic Violence, Cape Town 23 November 1995).
As a country we are committed to the creation of a non-racial, non sexist democratic and prosperous South Africa. In this context, two of the most important issues facing our government and our society are the challenges facing women entrepreneurs and the integration of the First and the Second economies in our country. Therefore encouraging women as entrepreneurs is:
- An indispensable adjunct to narrowing the gap between the first and the second economies
- Important in ensuring that the fruits of economic growth and development, of our massive infrastructure development initiatives and of our 2010 investments are more equitably shared among all sectors of our society and is
- Essential to meeting our national socio-economic objectives of halving poverty and unemployment by 2014.
One important caveat requires mention – we must be careful not to confine women entrepreneurs only to the Second Economy, for in doing so we will be reinforcing male domination of the First Economy. Part of our transformation project requires us to close the gap between the two economies and to increase the participation of women as entrepreneurs and as decision makers in the First Economy as well.
Evidence from around the world suggests that creating an enabling environment for small, medium and micro enterprises (SMMEs) to survive and thrive has enormous positive effects on the economy as a whole. Through SMMEs historically disadvantaged communities can become actives agents in the economic transformation process in a sector that is labour intensive and creates gainful employment. Evidence also suggests that empowering women as entrepreneurs in both the urban and rural environments, in the retail, industrial, service and agricultural spheres is an important strategy in the fight against poverty and unemployment.
For these reasons and because of our commitment to social justice, we as a society and as a government cannot rest until we have eradicated discrimination against women, the stereotyping of women, gendered poverty, gendered unemployment, violence against women, the exclusion of women as entrepreneurs from the economy from the labour market and from the political and economic decision making centres in our society. We know that the majority of people living in poverty globally and in South Africa are women and children particularly those who find themselves in rural areas.
Women in South Africa have gained enormously from national liberation and the dismantling of apartheid. For the first time the overwhelming majority of women in South Africa were politically emancipated and they exercised their democratic rights. Women in South Africa have strategically advanced their rights and interests in society. They have utilised their organisational skills and devoted considerable time, energy and resources to ensuring their political inclusion and to ensuring that the policy frameworks and the policies adopted by our government in the First Decade of Democracy were gender sensitive and inclusive.
We all recognise that these gains have been substantial but that women in South Africa still face enormous barriers and are still discriminated against and still face stereotyping precisely because they are women. As a result we need to work ever harder to ensure that women entrepreneurs are encouraged, empowered, are afforded the opportunities and are provided with the tools and resources necessary to be successful as entrepreneurs in both the First and the Second economies.
So as we assess the new political reality two years into our Second Decade of Democracy, we note that now more than ever there must be a sustained commitment to gender equality at the very top and there must be commitment and participation in the realisation of that commitment throughout the economy.
Our government's commitment to gender equality in governance and administration has made us one of the global leaders in women's representation. We recognise that pursuing strategies to economically empower the historically disadvantaged communities is fundamental to dealing with the evils of unemployment, underdevelopment, poverty and economic marginalization.
Transformation, undertaking measures to improve equality of opportunity for all and particularly for those from historically disadvantaged communities requires, vision, commitment, passion and a willingness to take risks.
When it comes to women entrepreneurs the risks are often exaggerated and the benefits are underplayed. Let us take a look at the situation of women entrepreneurs in our country. A number of recent studies on women entrepreneurs indicate that data is hard to come by, however of the women surveyed:
- 70% indicated that financial support was more important than organisational support
- 42% were unaware of organisations that supported businesses in South Africa
- 71% of women entrepreneurs were African, 11% were Indian and 8% were Coloured
- 15% of women owned businesses were in rural areas
- 31% were in information and communications technology (ICT) and services
- 65,5% of the women who disclosed their turnovers generated revenues of over R100 000 and
- 69% were in operation for less than five years.
This 2003 Annual Review of SMMEs by dti notes that in the informal sector there are 570 000 males who are employers and self-employed and there are 664 000 females who are employers and self employed. However, in the formal sector there are 378 000 males who are employers and self employed and 128 000 females who are employers and self employed. In terms of percentages, about 28% of formal businesses are female owned whereas 62% of informal (non-VAT registered) is female owned.
The conclusion is inescapable, whereas women form the majority of small business owners they are significantly outnumbered by men in the formal sector. In addition, women owned businesses although more numerous than male owned businesses, remain weaker because they are usually smaller, less formal and operate in more vulnerable sectors, especially in trade, catering and accommodation.
Thus to ensure that women are the backbone of the Second Economy what is required of is for us to implement our policies and strategic approach, which includes the following:
- Micro financing arrangements where the major financial institutions are provided with incentives to provide loans to women entrepreneurs
- A legislative environment focusing on the service industry that encourages meaningful partnerships between economic actors in the first and the second economies
- Skills development and training directed at potential women entrepreneurs in both the urban and rural areas
- Providing mentorship and learnership opportunities for women seeking to become entrepreneurs
- Encouraging young female learners to take business courses in high school and in tertiary education
- Undertaking a communications campaign to champion and profile successful women entrepreneurs in both the first and the second economies
- Ensuring that women entrepreneurs have access to the incredible wealth of data that government has accumulated with respect to future growth points in the South African economy
- Encouraging the private sector to direct and target their spending on social investments at women entrepreneurs.
A recently published book by Jeffrey Sachs Special Advisor to the United Nations (UN) Secretary-General and a leading economist titled “The End of Poverty: How We Can Make it Happen in Our Lifetime” points to the role of women in sustainable development and in the fight against poverty and underdevelopment. In his book Sachs asks a very important question: “how is it that some very poor countries escaped the ravages of a poverty trap, while others did not?”
After comparing those countries that made it with those that did not, he concluded that “the most important determination, it seems, is food productivity” (p. 69). Sachs noted that the so called poverty trap is predominantly a rural phenomenon of rural small farmers and peasants caught in a vicious cycle of increasing population and falling food production (p. 70). We in South Africa see that African women entrepreneurs in the Second Economy, largely as a result of our land reform and restitution initiatives are engaging in cash crop farming and they need our support.
Jeffrey Sachs also notes that one other possible reason for the persistence of poverty especially in the rural areas is that in many countries, women face discrimination. Our mission has to be to address this discrimination and to ensure the economic empowerment of women through the creation of business opportunities.
We must be moved to end poverty in our lifetime. We must be moved to provide food for all in our lifetime. Empowering women in the sphere of food production is one nail in the coffin of poverty and hunger. But we need more such nails. The active encouragement of women to enter agriculture as entrepreneurs not simply as subsistence producers is essential. But it must be done with sincerity and with a keen strategic sense of the future. If the findings of the Sachs report are correct then encouraging and empowering women is an essential ingredient in the fight against poverty and underdevelopment.
In providing support to women entrepreneurs we will be realising one of the goals of the UN Millennium Development Summit, which resolved: “To promote gender equality and the empowerment of women as effective ways to combat poverty, hunger and disease and to stimulate development that is truly sustainable”.
Much as we are here to discuss the role of women entrepreneurs as the backbone of the Second Economy, we must be ever mindful of the data, which suggests that the representation of women in the First Economy is woefully inadequate. In addition, we must be conscious of not reproducing the unequal ownership and decision making patterns which currently characterise the First Economy. Consider the following:
The South African Women in Corporate Leadership Census 2004, commissioned by the Businesswomen's Association (BWA) found that despite women constituting 52% of the population, only 41% of women were employed. And out of a total of 5 011 executive managers in the country, only 739 or 14,7% were women. Of the 3 125 directors, only 221 or 7,1% were women. Only 11 women were chairpersons of boards and a mere seven were Chief Executive Officers (CEOs).
Of the 364 Johannesburg Stock Exchange (JSE) listed companies and 17 state-owned enterprises (SOEs) that were surveyed, only seven have female CEOs and 60% have no female faces on their boards at all. The JSE-listed companies lagged far behind state-owned enterprises, which prove to be better employers for women – SOEs have a high level of both female directors (35%) and executive managers (31%). Only 17,6% of SOEs had no female directors.
The second such census conducted recently found that in 2005 there were only marginal increases in these figures. In the public sector we are clearly making strides towards gender parity in government and at the executive levels. There is greater participation of women in policy decisions, implementation and monitoring. Currently 42,8% of our Ministers are women. 47,6% of Deputy Ministers are women. 32,7% of Members of the National Assembly and 35% of the National Council of Provinces (NCOP) are women. This outcome is due in large measure to the political commitment of our President Thabo Mbeki and his Government, which is committed to an equitable system of political representation.
Recently Cabinet took a decision to reach gender parity in senior decision making positions in the public sector by 2009. Clearly where there is leadership and commitment from the top the process of transformation is much more rapid.
In conclusion allow me to say that if we want women entrepreneurs to be the backbone of the second economy and if we want them to be equally represented in the First Economy, then we need to be bold and decisive. There must be purposeful partnerships between the public and the private sectors. The challenges we face continue to revolve around the structural transformation of the first economy, eradicating poverty, unemployment and underdevelopment and closing the gaps between the first and second economies. And in meeting these challenges the empowerment of women is absolutely critical.
Thank you.
Issued by: The Presidency
3 August 2006
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