Lillka Cuttaree, Director of KIP Center for Leadership, and Gender and Trade Expert talks to Investor’s about the Women in Trade Protocol and how it could positively impact women entrepreneurs in Mauritius. She also gives her views on the major constraints faced by women-owned businesses.
You acted as the UNDP National consultant with regard to the Report of the National Consultations on the forthcoming African Continental Free Trade Area (AfCFTA) Women in Trade Protocol. Could you please tell us more about this new Protocol?
The African Continental Free Trade Area (AfCFTA) – the world’s largest free trade area – started operationalising on the 1st January 2021, creating a market of 1.2 billion people and a USD 3 trillion consolidated GDP expected to more than double by 2050. It is viewed as a larger and more unified trade area complementing SADC and COMESA. It goes beyond simple trade liberalization to capture trade in services and build stronger partnerships between public and private sectors.
Policymakers have only recently begun to account for the reality that trade agreements can often have unforeseen and unaccounted for impacts on women, compared to men. Gender, informal work, and poverty often co-exist, and the informal economy, although not yet quantified in Mauritius, remains an important source of employment and income for women.
As the national consultant appointed by UNDP, we conducted over a period of three months, high-level consultations with public and private stakeholders, including women entrepreneurs of Mauritius. The ultimate goal of the consultative process was to assess challenges and opportunities faced by women-owned enterprises and provide solutions to foster optimal use of opportunities for women contained in the agreement. But the end results went beyond a simple consultation work to truly cement a new area of public-private partnership with hands-on data on the state of women in trade in Mauritius.
What are the challenges that most women business owners face?
Women-owned businesses face several challenges that could indeed hamper effective participation in the regional markets.
The first challenge is export readiness: from feedback received, women business owners prefer to mitigate risks when it comes to export strategy and be present either in Mauritius or in traditional markets such as Europe and Indian Ocean Islands where reliable counterparts and security of persons and goods are present.
Secondly, the lack of access to finance is very often detrimental to an expansion strategy, despite commercial loans and preferred support loans for women without collateral. Very often, women put forward the lack of flexibility from traditional financial institutions to grant soft loans to meet cash flow issues or immediate business opportunities.
Trade facilitation including the limited understanding of customs policies and procedures, rules of origins within the African continent, even though there have been attempts to get access to trade data from public institutions.
Finally the recovery from shocks: Women and youth have been disproportionately affected by the Covid-19 pandemic and its multiple shocks. 50% of women interviewed stated that the lockdown impacted on their turnover and general competitiveness. Cumulated with the disruption brought by home-schooling and childcare, women saw the level of unpaid work increase: micro-enterprises were not prepared to put in place business continuity plans to redeploy staff to work from home.
We can see it in terms of figures. Only 10% of businesses entities are women-owned and it is a decreasing trend since a few years.
How will the Women in Trade Protocol assist or resolve some of the issues that women business owners face?
The Women in Trade Protocol needs to take into consideration all recommendations of its key members and provide positive discrimination for women in trade. One of the requirements proposed would be the setting up of dedicated AfCFTA trade desks in each country to assist any business owner from the region on business opportunities and trade facilitation. During a transition period, embassies in the region could play this role. We should not forget that South Africa is now the first export market for Mauritian textile manufacturers and this opens the door to explore further cross-border trade for women. Linkages with a regional warehousing system need to be encouraged with preferential access and minimal cost of storage at preferential rates for women business owners.
We should also encourage a clustering approach and identify where Mauritian women entrepreneurs could scale up within the regional value chain strategy – should it be through public procurement, preferred networking or digital trade platforms.
The main difference with other countries in the region is the lack of ecosystems for women entrepreneursLillka Cuttaree | Director | KIP Center for Leadership, and Gender and Trade Expert
What are some of the salient findings of your draft Report?
First, the national consultations with public/private stakeholders and women business owners have put forward the necessity for social dialogue and agencies alignment. Women business owners are not limited to micro-enterprises; there are a few true success stories scaling up in the region which could be real game-changers to create a real ecosystem for others.
Indeed, we have seen that women exporters registered with SME Mauritius tend to perform well in high-growth sectors including Information Technology, creative industries, jewellery, detergents, and professional services, opening opportunities for business scalability in the region.
The services cluster – from professional services to IT outsourcing offers tremendous opportunities for women. Mauritius benefits from a strong technology backbone allowing business continuity and remote work. Moreover, women involved in the services industry are very often better educated or equipped and have previously worked in a previous corporate environment – giving them access to a strong personal network.
How does Mauritius compare to the other African countries in terms of the participation of women in the value chain?
The figures show that last year only 10% of businesses were owned by women and when it comes to exports, only 2.5% are already operating at that level. Unlike other countries, our geographical location does not allow informal cross-border trade. However, the internal market is very often too small and export strategy becomes a necessity for scaling a business or even thinking in terms of supply chain. Compared to the rest of Africa, Mauritian women entrepreneurship has for the longest time been associated with grassroots business, fostering financial autonomy but not necessarily creating a new breed of women business owners who will create a new economic powerhouse in Mauritius. The main difference with other countries in the region is the lack of ecosystems for women entrepreneurs. You need to start this way to develop poles of competitiveness and eventually see where you fit in a supply chain. Maybe we will then realize that our strength is more to create rather than produce. For example, we may not be good at producing luxury handicraft but we could design the product.
How can Mauritian women entrepreneurs benefit from this Protocol?
In terms of access to market, the business potential is huge, and I hope this protocol will remove a number of inherent barriers for women entrepreneurs to trade. With the predominance placed on the services industry in Mauritius, both in terms of women employment and businesses. Focus needs to be placed on branding this sector differently and providing preferential access through public procurement. We will need to encourage more girls in STEM and eventually create tech incubators for women funded by regional venture capitalists. We are also lucky to have a reliable technology backbone: Fintech is certainly an area to watch carefully for Africa and specifically for Mauritius.
In a nutshell, women entrepreneurs in Mauritius will have a key role to play in AfCFTA and we hope Mauritius will take a leadership role to shape this agenda.