The African Renaissance and The Place of Microfinance for Women’s Development

More than two decades ago, leaders from Africa and many opinion leaders across the globe called for an African renaissance.  President Nelson  Mandela, our revered icon, in a meeting with regional leaders in 1994 epitomized this call when he proclaimed with a loud voice:

“Africa cries out for a one birth.  We must, in action, say that there is no obstacle big enough to stop us from bringing about a new African renaissance”

Thabo Mbeki, who took over from Nelson Mandela in 1999, preached African renaissance at almost every opportunity.

Although the call for an Africa renaissance became intense in the 1990s after the collapse  of apartheid in South Africa, it has its roots Pan-Africanist movement in the nineteenth century (incidentally my current employer has a similar Pan-Africanist vision, of building a world class Pan-African Bank).  In 1905, Pixley Ka Isaka Seme, one of the founders of the African National Congress, coined the phrase “the regeneration of Africa.” Nnamdi Azikiwe, a Nigerian activist, in 1937 called for a “new Africa based on five pillars: spiritual balanced, social regeneration, economic determination, mental emancipation, and national self-determination.”  The Senegalese historian, Cheikh Anta Diop in a paper titled, “When can we talk of an African Renaissance” synthesized the need for African renaissance.  Leopold Sedar Senghor, who  later became president (1960-80), helped to establish negritude movement to proclaim African cultural renaissance.  In Ghana, Kwame Nkrumah called for “African personality.” During this time some Euro-American friends of African helped to propagate the ideals of an African renaissance.  A British Africanist historian, Basil Davidson, celebrated the emergence of African nationalism in 1955 in the African Awakening.  In 1961, Africa: The Lion Awakes, by Roger Woddis praised Africans for their new awakening.  By the beginning of the new decade, Leonard Barnes postulated that a new Africa was germinating.  Then in an electrifying message, Thabo Mbeki, predicted that the African renaissance will be achieved in the 21^st century.

The GDP  for the world, according to the World wealth Report published in 2011 is about US$75 trillion.  The GDP for the United States of American and the Euro Zone are approximately US$15 trillion and US$13 trillion respectively.  Of the 7 billion people on earth, 10.9 million are considered high net worth individuals.  This group represents just 0.2% of global population.  Together this small group of ultra-rich owns US$42.7 trillion (World Report, 2011).  The collective GDP for all African countries is a little over US$1.6 trillion.  According to the Economist Intelligence Unit (2011), 34 out of 49 countries I the world considered to be least developed are in Africa.

The story however is not all bad.  There is some good news. Life expectancy has risen from 42years in 1970s to 51 in 2000.  Adult literacy has almost doubted.  Enrolment of school children have gone up from 21 to 48 percent at the primary level and 12 to 23 percent at secondary level.  The percentage of women who can read and write has increased to 60%.

The United Nations in 2000 launched the Millennium Development Goal to reduce poverty by 50% in 2015.  According to the UNDP “microfinance is much more than simply an income generation tool.  By directly empowering poor people, particularly women, it has become one of the key driving mechanisms towards meeting the Millennium Development Goals…”  The United Nations Capital Development Fund also argued that microfinance is key to elevating people from poverty.

According to IFAD (2001), microfinance, a opposed to microcredit, covers a package of financial services including loans, savings, insurance, leasing, transfers and social intermediation provided by formal, semi-formal and informal institutions.  The microfinance institutions in Africa operate from two camps.  There is the financial sustainability camp and that of poverty alleviation camp.  Members of the financial sustainability camp include World Bank, UNDP, USAID, the German GTZ, the UK’s DFID and the Dutch SNV.  These institutions insist on profits and argue that it is one of the best sustainable means to continue to attract capital.  The UNDP estimates 3 to 7 years for operational  sustainability and 5 to 10 years for financial sustainability.  This they argue is the best way to reduce donor dependence.

The poverty alleviation camp approaches microfinance from a welfare and or charitable mindset.  In Africa members of this camp are Freedom from Hunger,  Women’s World Banking and many NGOs.  They argue that running microfinance with profit mindset leads to more poverty instead of alleviating poverty.

The debate on which of the two camps should be encouraged in Africa has been intense.  The issue was one of the main agendas the UN International Year of Microcredit in 2005 and the African Microcredit Summit in Kampala in 2007.  A review of the two approaches however, concluded that both charitable and sustainable with Grameen Bank of Bangladesh and BancoSol in Bolivia are necessary.  The recent crisis in the global market place which has led to a dwindling in donor support, is however pointing to sustainability scheme.  Of course there are those who think giving credit to people without entrepreneurial skills only lead them into more poverty.  There is a strong proposition that encouraging business development services, which  allows the poor to learn the basic skills required for undertaking viable and sustainable enterprises can help achieve sustainability and poverty alleviation.

Now let me shift form peer reviewed research to my own experience as a Country Head in Ecobank Liberia and Ecobank Gambia and an Executive Director in Ecobank Nigeria with responsibility for South South East.

With the equivalent of $100, Amina, a member of fish sellers association in one of the countries was able to build a capital base of $1000 in two years.  Now Amina who did not have any hope of breaking through poverty smiled to me the other day and said, “Madam,  Jolone, we thank EB –ACCION Microfinance Bank for supporting me.  I am doing well now”.  Obviously, women in Africa have been given support through various microfinance program s organized by Governments in collaboration with key stakeholders as a way of empowering the African Women.

Ecobank has also played a key role through it’s partnership with major stakeholders to launch one of the biggest microfinance banks in Africa through it’s strategic alliance with Accion a global leader in microfinance.  According to the Group Chief Executive Officer of the Ecobank Group, “Ecobank is committed to extending banking services to low income small and micro entrepreneurs across the African continent”.  Ecobank also supports women tremendously.  We have many women in Leadership roles in the Ecobank Group.  One of the two Deputy Group Chief Executive Officers of the Ecobank is a woman – Mme Evelyne Tall.  So the Group is one of the institutions that has put the Woman Empowerment topic at it’s front burner.

I therefore seize this opportunity, on behalf of all African women to salute all Governments, International Organizations, multilateral/Bilateral Organizations, Banks and Non-Bank Financial institutions for the support towards the empowerment of African women.

However, I would also like to say, African women in general need more support.  The African woman have proven that they deserve more.  As we all know, they play an active role in both the formal and in the informal sector.  They have proven that they can be trusted.  They have also proven that their desire is to see their children excel in life and so they would be put in the hard and serious work required to be successful at anything they do.

Consequently, I would like to seize this forum to call for more support to African women so they can take their rightful place at the fore of the development of the African Continent.  The continent needs more empowered women if it is to realize its dream of getting into the league of the OECD countries and the BRIC nations.  Women in the BRIC countries are getting a lot of support from their Governments.  African Governments and African leaders alike must make a deliberate effort therefore to support the cause the African Woman Empowerment.

I also use this forum as a wake-up to all who see a great future in our great continent to take action and not just rhetoric towards improving the lot of the African Women who toil day and night to contribute their quota towards the development of the African continent.

In conclusion, I would like to say that there is a new African renaissance, a movement of which I happen to be part of.  As a woman and a mother I understand what poverty means in Africa.  But most importantly I have seen and witnessed how a properly structured microfinance scheme can help alleviate poverty in African in a more sustainable way.  All microfinance efforts must therefore ensure equal representation of women if not more in their programs or schemes as these programs get implemented.