By Rolake Akinkugbe-Filani
It may be Africa’s middle-class female professionals that need to hear about financial empowerment, not those at the bottom of the pyramid.
In the past year, there has been a tide of finance initiatives and funds set up for female entrepreneurs globally and across Africa. AFAWA (Affirmative Finance Action for Women in Africa) is a pan-African initiative of the African Development Bank (AfDB) seeking to bridge the $42 billion financing gap facing women in Africa, while African firm, Janngo Capital, led by Senegalese, Fatuomata Ba, has pledged a €60m Venture Capital fund targeting at least 50% of women-founded startups. The list goes on. The imperative is sound, and the trend is encouraging; financial empowerment for Africa’s female entrepreneurs helps to meet a key Sustainable Development Goal (SDG), SDG5, on Gender equality and women’s empowerment.
Beyond entrepreneurship, however, are Africa’s female employees, executives and professionals fully financially empowered? Statistics often point to the challenges women at the bottom of the economic pyramid face in creating financial sustainability for themselves in worst-case scenarios such as divorce, death of a spouse, retirement or redundancy. In recent years, Africa’s professional women in the middle-class (defined by the AfDB (2011) as people who spend the equivalent of $2-$20 a day or by Standard Bank (2014) as those with annual consumption of at least $5,000, who at least on the face of it, appear to be successful are also failing to fully take control of their finances; to save, invest and create wealth independently.
‘‘Some women confuse looking wealthy with being wealthy”, one of the panelists said to roaring applause from the audience last year, at the Annual Conference of WIMBIZ, Nigeria’s leading organization aimed at developing and empowering female leaders.
The speakers and experts painted a picture of how even Africa’s well-educated female executives, some with six-figure salaries (in dollar terms) were failing, to strategize to ensure future financial security. Above all, it was a wake-up call for many young and even older, African career women and entrepreneurs to be intentional about saving, spending, and investing for the long-term.
Not too long after that conference, an experienced senior banker told me that many of Nigeria’s financial services executives would struggle to make ends meet if they find themselves out of work for 3 months.
The reality is that at some point in all our lives as women, 90% of us will be solely responsible for our finances. The global consulting firm, Boston Consulting Group, has predicted that by the end of this year, women will hold 32% of global wealth, approximately $72 trillion. With men holding the remaining 68%, even avenues for wealth transfer are likely to be limited to specific gender-based networks that women may still face barriers in accessing. It is little wonder then that the financial planning industry is now specifically targeting women. Women ultimately have been found to make more value-based decisions for themselves and their dependents when it comes to money and wealth, but even such decisions can only be enabled where there is financial freedom.
There are many easy ways to get started on the road to financial security and independence. Women should be willing to get help in de-mystifying money, wealth and finances. If you can afford it, get an experienced wealth coach, and if you cannot, there is a plethora of information online, from webinars and podcasts to articles and books that can help you get started on the road to financial freedom and independence, regardless of your personal status. Women are often not known as avid risk-takers, and this can be a limitation in taking important decisions that may ultimately benefit us in the long-run. A 2017 survey by Bank of America Meryl Lynch (BAML) revealed that almost 45% cited their biggest financial regret as not investing more. However, simple steps such as saving a portion of income consistently, prioritizing debt clearance, building an emergency savings pot, budgeting, and investing in a fashion that matches your risk tolerance and meets your personal goals are a good place to start. More importantly, investing allows you to make decisions in a way that your income alone cannot.
We need to change our attitudes towards money; the ultimate goal is value-creation and sustainability, not accumulation. Wealth and money are instruments that give us choices; to make impact, create generational wealth, or do societal good. Being financially empowered is about how we take decisions with the income that we do make, big or small. Learning the art of financial independence is a skill that can be patiently developed over time. On average, across sub-Saharan Africa, life expectancy for women is about 5 years longer than for men. However, women will on average still spend fewer years in the workforce than men, even though the former will live longer. As such, it is about time Africa’s women stopped leaving financial security to chance.