AfDB’s AFAWA: Pledging $5 billion for Women-Led African Ventures by 2026

Affirmative Finance Action for Women in Africa (AFAWA), a continental initiative led by the African Development Bank, is resolutely committed to a transformative mission. Its vision is to harness financial resources, empower women, and catalyze economic growth across the African continent.

At the core of AFAWA’s ambition lies the aspiration to mobilize a staggering $5 billion in funding for businesses led by African women by the year 2026. This monumental goal was eloquently expressed by Lamin Barrow, Director General of the African Development Bank Nigeria Country Department, during the recent AFAWA Finance Series held in Lagos. The event was specifically designed to unlock critical financing opportunities for women entrepreneurs in Africa.

Barrow’s remarks underscored the urgency and significance of AFAWA’s mission. The initiative is driven by a profound commitment to narrowing the colossal $42 billion financing gap that currently obstructs women-led small and medium enterprises across the continent. He passionately articulated AFAWA’s objectives, declaring, “Our goal is to mobilize $5 billion in financing for African women-led businesses by 2026. Since we launched AFAWA a little over two years ago, the initiative has approved $1.2 billion for on-lending to women-led enterprises in 32 countries across Africa.”

The commitment to these objectives extends beyond grand declarations. AFAWA recognizes the need for holistic support, going beyond just financial assistance. As part of the initiative, AFAWA organized a 2-day training program aimed at enabling financial institutions to evaluate and refine their product and service offerings from a gender-sensitive perspective. This approach ensures that the unique needs of women entrepreneurs are thoughtfully addressed in financial services and products.

The AFAWA Finance Series serves as a crucial platform for achieving these aims. This event is an integral part of the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative. It unites government representatives, policymakers, and financial institution leaders, offering them an introduction to AFAWA’s partnership services for the Nigerian market. The event’s importance was underlined by Grace Ogbonna, the Acting Permanent Secretary/Director of the Economic Research and Policy Management Department at the Federal Ministry of Finance, who spoke on behalf of the Honourable Minister of Finance. She emphasized that women’s empowerment is a paramount concern that demands collective attention and commitment.

Ogbonna stated, “The topic of women’s empowerment demands our attention, our commitment, and our collective efforts to ensure that women have equal opportunities to fully participate in our nation’s economic growth. Women constitute a substantial portion of our population, and their full and equal participation in the economy is not just a matter of social justice but is also one of economic parity.”

One of the pivotal elements of the AFAWA Finance Series is the AFAWA Guarantee for Growth program, which introduces a risk-sharing mechanism along with capacity development support to encourage financial institutions to increase their willingness to lend to women-led small and medium enterprises. Research has shown that women tend to be more reliable in loan repayment, and they often reinvest up to 90% of their income in areas such as education, healthcare, and nutrition for their families and communities. This approach aligns with AFAWA’s broader strategy to create a more equitable economic landscape.

Jules Ngankam, the Group Chief Executive Officer of the African Guarantee Fund (AGF), emphasized the dire need for change, stating, “In Africa, 70% of women are excluded financially, including in the areas of access to credit, land ownership, job opportunities, leadership positions, and wealth creation. These imbalances have been one of the factors limiting Africa from reaching its full potential.” Ngankam lauded the Nigerian government’s efforts in promoting women-led small and medium enterprises and expressed the AGF’s eagerness to collaborate with the government and policymakers to further enhance the environment for women entrepreneurs.

The Lagos event is just one stop on the AFAWA Finance Series’ continental journey, having previously been held in Tanzania, the Democratic Republic of the Congo, Ghana, and Angola. Dr. Beth Dunford, Vice President for Agriculture, Human, and Social Development at the African Development Bank, highlighted the immense potential for growth in Nigeria. She noted, “In Nigeria, there is a real opportunity for scale. Micro, small, and medium-sized enterprises make up more than three-quarters of Nigeria’s workforce. With the right support, they have the potential to accelerate the country’s progress towards its economic development goals.” The sentiment expressed by Dr. Dunford echoes the broader vision of AFAWA, which is dedicated to fostering economic growth and development through the empowerment of women-led businesses.

In conclusion, the AFAWA Finance Series, driven by the African Development Bank’s AFAWA initiative, is a powerful force for change in Africa. It is committed to bridging the financing gap for women-led businesses, with the ambition of mobilizing $5 billion in funding by 2026. By uniting government representatives, policymakers, and financial leaders, AFAWA is creating an ecosystem that supports women entrepreneurs, empowers them with the necessary tools and resources, and contributes to economic growth and development across the continent. AFAWA stands as a testament to the transformative potential of dedicated initiatives aimed at achieving gender equality and economic parity in Africa.