Lionesses Business Confidence Index Measuring the business confidenceof Africa’s leading women entrepreneurs Q12022
Across the African continent, women entrepreneursarepivotingandreinventing themselves to address the multiple ongoing crisis including the COVID-19 PandemicandtheUkrainianfoodcrisis.As part of the reinvention process, they have and areadapting to new working models includingremotework,e-commerceandall types of digital technologies and tools to make them moreefficient, visible, and competitive.
AsAfricanWomenSMEspivotinthisnew era, access to financial services is critical tohelpthemgrowandreachscale.
Even beforethe pandemic, women-led businesses faced significant challenges accessingfinancing,astheyoftenlackthe financial track recordand collateral requiredtosecurebusinessloans;causing financial institutions to perceive them as being a risky segment. The African DevelopmentBank,throughitsAffirmative Finance Action for Women in Africa
Initiative (AFAWA), is committed to accelerating women entrepreneurs’ ability to access finance and the required knowledge to grow their businesses and create jobs. AFAWAaims to unlock up to $5 billion by 2026, in collaboration with financial institutions and women entrepreneurs.
The Bank is also committed to working with African governments to ensurethat inclusive policies arein place to enhance women entrepreneurs’ ability to access financingandtrade.
The second edition of the Lionesses Business Confidence Report and Index comesatacriticalmoment,allowingusto benchmark last year’sdata and evaluate African women-owned business performance,accesstofinance,anddigital transformation. Furthermore,itallowsusto learn how Africa’stop women business leaders assess the state of their businessescomparedtooneyearagoand whatopportunitiestheyseeforthemselves intheupcomingyear.
TheBank,throughtheAFAWAInitiative,is pleased to collaborate with Lionesses of Africa on the latest Lionesses Business Confidence Report and Index. Wehope women entrepreneurs, financial institutions,andgovernmentsusetherich data provided to make strong business andpolicydecisionstounlockthepotential of women-owned businesses across the continent.
EstherDassanou Manager
Affirmative Finance Action for Women in Africa(AFAWA)Initiative AfricanDevelopmentBank
FOREWORD
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INTRODUCTIONTO THE LBCI
The Lionesses BusinessConfidence Index (LBCI)isa surveyofAfrica’sleading women entrepreneurs togauge their businessconfidence.LBCIleverages Lionesses ofAfrica’sestablished 100 Lionesses network,a special project thatidentifies and celebrates100 leading African businesswomen whose examplesmotivateand inspire other women topursueand realize theirdreamsoffoundingand growing successful businesses. These highlyexperienced women entrepreneurs havebuilt successful businessesatscale,acrossindustrysectors,and represent the footprintofthe LionessesofAfricanetworkacrossthecontinent.TheLBCIprovidesaforward-looking viewofthe African economy fromthe perspective ofthese leading businesswomen, based onsurveys oftheir confidence intheeconomicoutlook oftheir national economies and their businesses, confidence inaccessing financing, capital spending, hiring,andsales.
LBCIreports monitor the growthtrajectoryand businessconfidence ofwomen-led businessesand anticipateturningpointsineconomicactivityacrossAfrica, froma women-entrepreneurs perspective.Businessconfidence iskey togrowthfor women entrepreneurs inAfrica. The LBCIsheds light onthe factors thatstimulate that confidence and how itisshiftinginthe current (andpost) COVID-19business environmentandmonitorshowbusinessconfidenceischangingovertime.
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The
BusinessConfidence Index isbased ona surveyofwomen business leaders ina variety ofindustriesacrossAfrica. Theyare asked toreflectontheir confidence inthe overall state oftheir nationaleconomies aswellastheir own businessesoverthenextsixmonths.
The Six Componentsofthe LBCI
A sub-index isreportedfor eachcomponent. Tocalculate sub-indices,valuesare assignedtoresponseoptions,ranging from0 (forextreme negative outlook)to 100 (forextremepositiveoutlook).Thesub-indexvalueistheaverageofthesenumerical assignments.TheLBCIisderivedasacompositeindex,whichassignsequalweight toeachsub-index.Anindex value close to0 would indicate anextremelynegative outlook;valuescloseto25,amoderatelynegativeoutlook;50,aneutraloutlook;75, amoderatelypositiveoutlook;andcloseto100,anextremelypositiveoutlook.
The LBCIsurveys alsoincorporate additionalquestionsasnecessary to reflect eventswithmajor businessand economicconsequences, suchasCOVID-19 businessimpact.
• Confidenceintheircountries’economicoutlookinthenextsixmonths • Confidenceintheirowncompanies’businessprospectsinthenextsixmonths • Confidenceintheirabilitytosecurefinancinginthenextsixmonths,ifneeded • Expectationsfortheircompanies’salesrevenuesinthenextsixmonths • Expectationsfortheircompanies’capitalexpendituresinthenextsixmonths • Expectationsfortheircompanies’employmentinthenextsixmonths
ABOUT THEINDEX Economic Outlook Own Business Prospects Sales Revenue Outlook Capital Expenditure Outlook Employment Outlook Securing Financing Lionesses Business Confidence Index
Lionesses
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1. ECONOMIC OUTLOOK
The 100 Lionesses reporteda mixed level ofconfidence intheir countries’ economy. Whenaskedabouttheirconfidenceintheircountries’economicoutlookinthenextsix months, 29% wereoptimistic(7% reportedbeing “very confident” and 22% reported being “confident”),justovera thirdwereneutral (35%), and 36% werepessimistic (30%reportedbeing“unconfident”and6%reportedbeing“veryunconfident”).
The sub-index score for the six-month economicoutlook is48.5, a value close to neutral.Thissuggeststhe 100 Lionesses are neither bullish nor bearish ontheir nationaleconomies.The 2022sub-index isdownfromits value of53.5in2021, suggestingthe 100 Lionesses are slightlymorepessimistic thisyear, comparedwith 2021.
The economicoutlook sub-index variesbyregion.¹Lionesses in Southern Africaand EastAfricahad a moreoptimisticoutlook for their nationaleconomies,comparedwith Lionessesintheotherregions.LionessesinCentralAfricawerethemostpessimisitc.
¹The LCBIcovers all regions inAfrica—North Africa,West Africa, EastAfrica, Central Africa and SouthernAfrica—as categorized bythe African Development BankGroup. See https://www.afdb.org/en/countries
HowConfidentDoYouFeelinYourCountry’sEconomicOutlookintheNext SixMonths? 7% 22% 35% 30% 6% 40% 30% 20% 10% 0% Very Confident Confident Neutral Unconfident Very Unconfident Sub-IndexValue 48.5 0 100
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2.OWN BUSINESSPROSPECTS
The 100 Lionesses remainconfidentintheirown businessprospects.Whenasked about their confidence intheir own companies’businessprospects inthenextsix months,84%reportedconfidencelookingahead(57%reportedbeing“confident”and 27% “very confident”), 11% wereneutral,and only5%werepessimistic (3% reported being“unconfident”and2%“veryunconfident”).
The sub-index score for the respondents’confidence intheir own companies’ businessprospects inthe nextsix monthsis75.7(similartothe 2021sub-index of 75.4).Thissuggeststhatthe100Lionessesarebullish.
The own businessprospects sub-index showedmodestconfidence thatbusiness prospects willimprove overthe nextsix monthsacrossthe continent. Lionesses in SouthernAfricaandEastAfricahadthemostoptimisticoutlooks.
HowConfidentDoYouFeelinYourOwnCompany’sBusinessProspectsin theNextSixMonths? 27% 57% 11% 3% 2% 60% 40% 20% 0% Very Confident Confident Neutral Unconfident Very Unconfident Sub-Index Value 75.7 0 100 5
3.SECURING FINANCING
The 100 Lionesses are moderatelyconfidentintheir ability to secure financing. When asked about their confidence intheir companies’ability to get financinginthe nextsix months, ifneeded, justovera halfreportedconfidence (32% reportedbeing “confident”and 21% “very confident”), 28% wereneutral,and only19% were pessimistic(16%reportedbeing“unconfident”and3%“veryunconfident”).
Thesub-indexscorefortherespondents’confidenceintheirabilitytosecurefinancing inthe nextsix monthsis63.0(aslightdecreasefrom64.6in2021).Thissub-index indicates thatthe 100 Lionesses are morebullish thanbearish,but implies onlya modestlevelofconfidence.
Modestconfidence insecuring financingwas reportedacrossregions,but Lionesses inNorthAfricareportedgreaterconfidencethantheircounterpartsinotherregions.
IfYourCompanyNeedsFinancingintheNextSixMonths,HowConfidentAre YouThatYouWillBeAbletoGetIt? 21% 32% 28% 16% 3% 50% 40% 30% 20% 10% 0% Very Confident Confident Neutral Unconfident Very Unconfident Sub-Index Value 63.0 0 100 6
4.SALESREVENUE OUTLOOK
The 100 Lionesses are forecasting improvementsinsales revenues. Whenasked about their sales-revenue expectationsinthe nextsix months, 92% reportedan expectedincrease(54%expecting sales revenuesto“increase a little” and 38% expecting“alot”),4%“nochange,”andonly4%anticipatedadecrease(2%reported theyexpectsalesrevenuesto“decreasealittle”and2%“alot”).
The sub-index score for the respondents’expectationsfor their companies’sales revenuesinthe nextsix monthsis81.1(similarto the Q22021sub-index score of 80.2).Asthissub-indexisabove75,itsuggeststhatthe100Lionessesarebullish. Thisoptimismextendedacrossthe
HowDoYouExpectYourCompany’sSalesRevenuetoChangeintheNext SixMonths,ComparedWiththePreviousSixMonths? 38% 54% 4% 2% 2% 60% 40% 20% 0% Increasea Lot Increasea Little NoChange Decreasea Little Decreasea Lot Sub-Index Value 81.1 0 100 7
continent.Lionesses inNorth Africareportedless optimismintheirsales-revenueprojectionsthandidLionessesinotherregions.
5. CAPITAL EXPENDITURE OUTLOOK
The 100 Lionesses are forecasting increases incapital expenditures. Whenasked about their capital-expenditure expectationsinthe nextsix months, 65% expectedan increase(41%expectedcapital expendituresto“increase a little” and 24% “alot”), 22% expected“no change,”and 13% expecteda decrease(11%reportedthey expectcapitalexpendituresto“decreasealittle”and2%“alot”).
The sub-index score for the respondents’expectationsfor their companies’capital expendituresinthe nextsix monthsis67.0(slightly downfromthe score of71.3 reportedinQ22021).Thesub-indexsuggeststhatthe100Lionessesaremorebullish thanbearish,buttheyanticipateonlyamodestincreaseincapitalexpenditures.
Lionesses inall regions anticipatemodestincreases incapital expendituresoverthe nextsix months. Witha regionalsub-index of59.7, Lionesses inWestAfricahad the mostmutedexpectationsforcapitalexpenditures.
HowDoYouExpectYourCompany’sCapitalExpenditurestoChangeinthe NextSixMonths,ComparedWiththePreviousSixMonths? 24% 41% 22% 11% 2% 60% 40% 20% 0% Increasea Lot Increasea Little NoChange Decreasea Little Decreasea Lot Sub-Index Value 67.0 0 100 8
6.EMPLOYMENTOUTLOOK
The100Lionessesareforecastingincreasedhiring.Whenaskedhowtheyexpecttheir companies’employmenttochangeinthenextsix months, 68% reportedtheyexpect hiringtoincrease(55%expectedhiringto“increase a little” and 13% “alot”),25% expected“no change,”and only7%expecteda decrease(4% reportedtheyexpect hiringto“decreasealittle”and3%“alot”).
The sub-index score for the respondents’expectationsfor theircompanies’ employmentinthe nextsix monthsis67.7(similar tothe Q22021sub-index of69.5). Thissub-index suggeststhatthe 100 Lionesses are morebullish thanbearish,but theyanticipateonlymodeststaffingincreases.
LionessesinCentralAfricahadthemostoptimistichiringexpectations. HowDoYouExpectYourCompany’sEmploymenttoChangeintheNextSix Months,ComparedWiththePreviousSixMonths? 13% 55% 25% 4% 3% 60% 40% 20% 0% Increasea Lot Increasea Little NoChange Decreasea Little Decreasea Lot Sub-IndexValue 67.7 0 100 9
THE LBCI
sub-indices
businesswomen
The overall LBCIscore,anequally weightedaggregation acrossthe sub-indices,is
bullish thanbearish
the upcomingsix months.
confidencewassimilaracrossregions. 49 76 63 81 67 68 EconomicOutlook OwnBusinessProspects AccesstoFinancing SalesRevenueOutlook CapitalExpenditureOutlook EmploymentOutook 100 80 60 40 20 0 Overall Lionesses Business Confidence Index 67.2 0 100 10
A lookacrossthe
providesinsightsintothefactors driving business confidence among leading
inAfrica. Lionesses are the most confidentinastrongsales-revenueoutlookandtheirownbusinessprospectsforthe nextsixmonthsandaremoremutedintheirexpectationsoftheirnationaleconomies andtheirabilitytosecurefinancing.Sub-indexvaluesweresimilarin2022compared with2021. The largest differencewas incapital-expenditure outlook,which ismore mutedin2022.
67.2(slightlydownfrom69.1reportedin2021).ThissuggeststhatLionessesaremore
about
Overall LBCIbusiness
CONCLUSION
ThisisthesecondintheLionessesBusinessConfidenceIndexseries. Similartothe responses underlyingthe firstindex,the data underlyingthisindexwerecollected while countries continued tomanagetheir COVID-19responses,and many businesseswerestill adjusting tothe disruptions resulting fromthe pandemic. The overall index value of67.2indicates thatAfrica’sleading businesswomen have modestbusinessconfidence for the six monthsahead.The index value isslightly lower thanthe overall business-confidenceindex reportedinQ2of2021. Subsequentindices willallow for continued monitoringofbusinessconfidence and the factors thatcontributetoordetract fromit, among Africa’sleading women entrepreneursduringandafterCOVID-19.
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ABOUT THE COLLABORATORS
NewYorkUniversity
The Marron Institute of Urban Management at New York Universityisaprovostialinstitute thatoperatesasathink-dotank. The lnstitute’smandate is impact.Itinvestsinfacultyand practice scholars who conduct on-the-ground research and programming,workingalongside practitioners and the publics they serve to gain insights and test new approaches with the potentialtodramaticallyimprove thequalityoflifeincitiesacross theglobe.TheInstitutebringsa multidisciplinary approach, with expertise in the natural and socialsciences,engineering,and governance.Throughinnovation, experimentation, and data analysis, the Institute promotes responsivedecision-makinginall sectors.TheInstituteaddresses critical challenges in developmentandpublicservicesacross sixcontinents.
Forfurtherinformationaboutthe Marron Institute, visit www.marroninstitute.nyu.edu
LionessesofAfrica
LionessDataistheresearchand insights unit of Lionesses of Africa Public Benefit Corporation, a social enterprise advancing Africa’swomen entrepreneurs.LionessDatataps into a growing network of over 1.5millionwomenentrepreneurs across Africa for actionable insights that help investors, policymakers, and development agenciesmakefasterandbetter data-drivendecisions.Lionesses of Africa builds and delivers development programmes, business tools, community platforms, digital media, networking events and information resources that women entrepreneurs need—connecting themwithkeyglobalmarketsfor growth. Lionesses of Africa’s community stretches across 54 Africancountriesandthousands of users in the Diaspora in EuropeandNorthAmerica.
AfricanDevelopmentBank
African Development Bank’s AFAWAProgramme is a panAfrican initiative to bridge the $42 billion financing gap facing womeninAfrica.AFAWAfinance leverages the Bank’s financial instrumentstotransformAfrica’s bankingandfinanciallandscape, creatingincentivesforlendingto women in business. AFAWA technical assistance provides advisory services to financial institutionstoensuresuccessful implementation of their product portfolios for women and strengthens the capacity of women entrepreneurs through training to enhance business productivity and growth. AFAWA’senabling environment engages with African governments and stakeholders to support legal, policy and regulatory reforms and strike down the structural barriers impedingwomeninbusiness.
For further information about LionessesofAfrica,visit www.lionessesofafrica.com
For further information about African Development Bank visit www.afdb.org/en
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