The role of women and SMMEs in growing Southern Africa and Africa's economies
Thuli Phiri | Tuesday October 14, 2025 06:03
Women primarily contribute as business owners and drivers of the small, medium, and micro enterprise (SMME) sector. SMMEs are the backbone of economies worldwide, especially in Africa, where they account for approximately 90% of businesses and make significant contributions through job creation and GDP growth. The World Bank estimates that SMMEs contribute about 33% to sub-Saharan Africa's GDP and employ approximately 60% of the workforce.
Clearly, SMMEs are crucial to Africa's economic growth. Yet, despite their vital role, SMMEs often receive inadequate support from both African governments and the private sector.
There are systemic barriers to entry, including limited access to capital, overregulation, and insufficient legislative oversight. SMMEs also face unfavourable payment terms from clients, including large multinational companies and the very governments that are supposed to champion their interests.
This raises an important question: Who truly supports SMMEs? When government leaders and politicians loudly proclaim the importance of SMMEs as the backbone of economies, who are they really fooling?
As a woman business leader and an SMME operator working across Africa, I have learned that 'SMMEs, you are on your own. No one is coming to support you.”
Therefore, it is essential for us in the SMME sector to organize ourselves and create our own sector representation collective to advance our interests. The journey ahead will be long and challenging as we aspire to grow into large cooperatives that are invested across the continent.
Reflecting on our eighth anniversary, I want to share my experiences and 'Aha' moments, despite the challenges:
Lessons Learned
Cash is King
Prioritize customers who pay on time. If a customer refuses to pay you on time or does not value your services, it’s best to walk away. They are not worth your energy. Whether you have good or bad-paying clients, your working hours, overhead expenses, and salary commitments to your employees remain the same. Invest your time in clients who respect your business; after all, running a business is not a charity. Tragically, some clients act as if hiring an SMME is akin to making a charitable donation.
Set Boundaries
Deliver ONLY against the agreed scope of work. Some clients may exploit the contractual relationship by demanding work that goes beyond the agreed scope, often to avoid payment. Be clear about your deliverables, provide excellent service, and remain open to discussing adjustments to the scope of work. Politely decline any requests for unpaid work outside your contract. It is alarming how many fellow SMMEs have faced situations where clients believe that an extended contract gives them the right to make excessive demands. These behaviours can drive many SMMEs to experience silent suffering or even depression due to the unfair treatment they receive from corporate clients.
Build Networks
Your network if your net worth.
Understand your sphere of influence and leverage it to create lasting relationships with businesses and government entities in your sector. Government and industry are interdependent; both need each other to thrive. SMMEs that grasp how policy and government functions are valuable assets to multinational companies, as they can provide essential guidance and support navigate the complexities of growing in business and, being compliant and having a presence better.
Transact Across Africa
Leverage the broader African market of over 1 billion people.
SMMEs have access to vast untapped markets across the continent. Many countries require the services and support that we can provide. Don’t hesitate to build alliances and strategic partnerships with fellow SMMEs from other nations and consider offering your services to large companies in those countries. Utilize technology to bridge distances and deliver excellent service.
Invest in Your IT Systems
Your data is valuable.
As your business grows, so does your intellectual property and the respect you earn from clients. Safeguarding your valuable information is critical. Your clients trust you with sensitive information, and it strengthens your relationship when they see you are dedicated to protecting it. Cyber-attacks are a genuine threat, even for SMMEs.
Build a Work-Life Balance
All work and no play makes Jack a dull boy.
While it’s crucial to work during expected hours, rest is also essential. Overworking yourself can harm your health, which ultimately impacts your wealth and support systems. Taking time to recharge is just as important as your work commitments.
Train yourself to begin and end work at specific times and ensure you completely disconnect unless there is a crisis. One important lesson I learned is to manage expectations with clients, helping them understand that I work during designated hours and that my family time is just that—family time. Reflecting on past experiences, I realize that responding to client calls after hours led them to believe I was available 24/7. This ultimately resulted in disappointment during weekends or evenings when I could not take a call or respond to an email.
Hire for attitude.
When hiring, prioritise attitude over qualifications. For small, medium, and micro enterprises (SMMEs), the decision of whom to hire is critical. In my experience, hiring solely based on high qualifications often did not meet my expectations. In contrast, those who came with a desire to grow, learn, and improve themselves have excelled.
In conclusion
While there is much SMMEs can do better, it is essential for governments and international organizations to create supportive environments through tailored policies, funding, and mentorship programs. A prime example is the African Development Bank's (AfDB) Boost Africa initiative, which aims to provide $1.5 billion to support youth entrepreneurship and innovation across the continent.
Delayed payments continue to be a significant challenge for SMMEs. A study by Xero found that 63% of SMMEs experienced payment delays from larger clients, with an average delay of 45 days beyond agreed terms. As if these payment issues weren’t enough, the National Treasury estimates that only 20% of SMME loan applications are approved. This leaves many businesses relying on informal lenders, who often charge exorbitant rates. Furthermore, even when loans are granted, the collateral requirements—such as property or personal guarantees—are stringent, placing undue risk on entrepreneurs whose ventures may already be fragile.
Ultimately, the success of SMMEs depends on a collective effort—from policymakers and financiers to entrepreneurs and consumers. By working together, we can create ecosystems that enable SMMEs to thrive, thereby driving broader economic prosperity and societal well-being.
*Thuli Phiri is the Founder and Managing Director of The African Storyteller, Africa's leading public affairs consultancy offering brand reputation and stakeholder relations management services to B2B brands across the continent