E Pahad: Conference on Gender and Women’s Economic Empowerment in
Women’s Month

3 August 2006

THE BACKBONE OF THE SECOND ECONOMY

Thank you very much for inviting me to address this very important
conference. I am here today less than a week before one of the most significant
dates in the history of our struggle for freedom and emancipation – the 50th
anniversary of the Women’s March.

We have to recognise the role played by Minister Lindiwe Hendricks in the
struggle to empower women entrepreneurs, more particularly her inspiration and
leadership in setting up South African Women Entrepreneurs Network
(SAWEN).
Our government has many policies on the empowerment of women, however, these
policies need to be implemented. Deputy Minister Elizabeth Thabethe has since
her appointment, just over a year ago, as Deputy Minister of the dti worked
tirelessly towards the implementation of these policies to empower women and in
particular women entrepreneurs.

The 1956 march signalled to all of us that the struggle against apartheid
was also a struggle against patriarchy, gender oppression and discrimination in
our country. So it is no surprise that freedom and democracy in our country,
has opened the doors for the assertion of the rights of women, has entrenched
the equality of women in our Constitution and has made it illegal to
discriminate against women. In the very first year of our young democracy Thabo
Mbeki who was then Deputy President said "The progress we make towards the
attainment of a democratic society can only have full and deeper meaning if it
is accompanied by significant progress in the struggle for the emancipation of
women" (The Emancipation of women: Paper delivered at the National Conference
on Women Abuse and Domestic Violence, Cape Town 23 November 1995).

As a country we are committed to the creation of a non-racial, non sexist
democratic and prosperous South Africa. In this context, two of the most
important issues facing our government and our society are the challenges
facing women entrepreneurs and the integration of the First and the Second
economies in our country. Therefore encouraging women as entrepreneurs is:

* An indispensable adjunct to narrowing the gap between the first and the
second economies
* Important in ensuring that the fruits of economic growth and development, of
our massive infrastructure development initiatives and of our 2010 investments
are more equitably shared among all sectors of our society and is
* Essential to meeting our national socio-economic objectives of halving
poverty and unemployment by 2014.

One important caveat requires mention – we must be careful not to confine
women entrepreneurs only to the Second Economy, for in doing so we will be
reinforcing male domination of the First Economy. Part of our transformation
project requires us to close the gap between the two economies and to increase
the participation of women as entrepreneurs and as decision makers in the First
Economy as well.

Evidence from around the world suggests that creating an enabling
environment for small, medium and micro enterprises (SMMEs) to survive and
thrive has enormous positive effects on the economy as a whole. Through SMMEs
historically disadvantaged communities can become actives agents in the
economic transformation process in a sector that is labour intensive and
creates gainful employment. Evidence also suggests that empowering women as
entrepreneurs in both the urban and rural environments, in the retail,
industrial, service and agricultural spheres is an important strategy in the
fight against poverty and unemployment.

For these reasons and because of our commitment to social justice, we as a
society and as a government cannot rest until we have eradicated discrimination
against women, the stereotyping of women, gendered poverty, gendered
unemployment, violence against women, the exclusion of women as entrepreneurs
from the economy from the labour market and from the political and economic
decision making centres in our society. We know that the majority of people
living in poverty globally and in South Africa are women and children
particularly those who find themselves in rural areas.

Women in South Africa have gained enormously from national liberation and
the dismantling of apartheid. For the first time the overwhelming majority of
women in South Africa were politically emancipated and they exercised their
democratic rights. Women in South Africa have strategically advanced their
rights and interests in society. They have utilised their organisational skills
and devoted considerable time, energy and resources to ensuring their political
inclusion and to ensuring that the policy frameworks and the policies adopted
by our government in the First Decade of Democracy were gender sensitive and
inclusive.

We all recognise that these gains have been substantial but that women in
South Africa still face enormous barriers and are still discriminated against
and still face stereotyping precisely because they are women. As a result we
need to work ever harder to ensure that women entrepreneurs are encouraged,
empowered, are afforded the opportunities and are provided with the tools and
resources necessary to be successful as entrepreneurs in both the First and the
Second economies.

So as we assess the new political reality two years into our Second Decade
of Democracy, we note that now more than ever there must be a sustained
commitment to gender equality at the very top and there must be commitment and
participation in the realisation of that commitment throughout the economy.

Our government’s commitment to gender equality in governance and
administration has made us one of the global leaders in women’s representation.
We recognise that pursuing strategies to economically empower the historically
disadvantaged communities is fundamental to dealing with the evils of
unemployment, underdevelopment, poverty and economic marginalization.

Transformation, undertaking measures to improve equality of opportunity for
all and particularly for those from historically disadvantaged communities
requires, vision, commitment, passion and a willingness to take risks.

When it comes to women entrepreneurs the risks are often exaggerated and the
benefits are underplayed. Let us take a look at the situation of women
entrepreneurs in our country. A number of recent studies on women entrepreneurs
indicate that data is hard to come by, however of the women surveyed:

* 70% indicated that financial support was more important than
organisational support
* 42% were unaware of organisations that supported businesses in South
Africa
* 71% of women entrepreneurs were African, 11% were Indian and 8% were
Coloured
* 15% of women owned businesses were in rural areas
* 31% were in information and communications technology (ICT) and
services
* 65,5% of the women who disclosed their turnovers generated revenues of over
R100 000 and
* 69% were in operation for less than five years.

This 2003 Annual Review of SMMEs by dti notes that in the informal sector
there are 570 000 males who are employers and self-employed and there are 664
000 females who are employers and self employed. However, in the formal sector
there are 378 000 males who are employers and self employed and 128 000 females
who are employers and self employed. In terms of percentages, about 28% of
formal businesses are female owned whereas 62% of informal (non-VAT registered)
is female owned.

The conclusion is inescapable, whereas women form the majority of small
business owners they are significantly outnumbered by men in the formal sector.
In addition, women owned businesses although more numerous than male owned
businesses, remain weaker because they are usually smaller, less formal and
operate in more vulnerable sectors, especially in trade, catering and
accommodation.

Thus to ensure that women are the backbone of the Second Economy what is
required of is for us to implement our policies and strategic approach, which
includes the following:

1) Micro financing arrangements where the major financial institutions are
provided with incentives to provide loans to women entrepreneurs
2) A legislative environment focusing on the service industry that encourages
meaningful partnerships between economic actors in the first and the second
economies
3) Skills development and training directed at potential women entrepreneurs in
both the urban and rural areas
4) Providing mentorship and learnership opportunities for women seeking to
become entrepreneurs
5) Encouraging young female learners to take business courses in high school
and in tertiary education
6) Undertaking a communications campaign to champion and profile successful
women entrepreneurs in both the first and the second economies
7) Ensuring that women entrepreneurs have access to the incredible wealth of
data that government has accumulated with respect to future growth points in
the South African economy
8) Encouraging the private sector to direct and target their spending on social
investments at women entrepreneurs.

A recently published book by Jeffrey Sachs Special Advisor to the United
Nations (UN) Secretary-General and a leading economist titled “The End of
Poverty: How We Can Make it Happen in Our Lifetime” points to the role of women
in sustainable development and in the fight against poverty and
underdevelopment. In his book Sachs asks a very important question: “how is it
that some very poor countries escaped the ravages of a poverty trap, while
others did not?”

After comparing those countries that made it with those that did not, he
concluded that “the most important determination, it seems, is food
productivity” (p. 69). Sachs noted that the so called poverty trap is
predominantly a rural phenomenon of rural small farmers and peasants caught in
a vicious cycle of increasing population and falling food production (p. 70).
We in South Africa see that African women entrepreneurs in the Second Economy,
largely as a result of our land reform and restitution initiatives are engaging
in cash crop farming and they need our support.

Jeffrey Sachs also notes that one other possible reason for the persistence
of poverty especially in the rural areas is that in many countries, women face
discrimination. Our mission has to be to address this discrimination and to
ensure the economic empowerment of women through the creation of business
opportunities.

We must be moved to end poverty in our lifetime. We must be moved to provide
food for all in our lifetime. Empowering women in the sphere of food production
is one nail in the coffin of poverty and hunger. But we need more such nails.
The active encouragement of women to enter agriculture as entrepreneurs not
simply as subsistence producers is essential. But it must be done with
sincerity and with a keen strategic sense of the future. If the findings of the
Sachs report are correct then encouraging and empowering women is an essential
ingredient in the fight against poverty and underdevelopment.

In providing support to women entrepreneurs we will be realising one of the
goals of the UN Millennium Development Summit, which resolved: “To promote
gender equality and the empowerment of women as effective ways to combat
poverty, hunger and disease and to stimulate development that is truly
sustainable”.

Much as we are here to discuss the role of women entrepreneurs as the
backbone of the Second Economy, we must be ever mindful of the data, which
suggests that the representation of women in the First Economy is woefully
inadequate. In addition, we must be conscious of not reproducing the unequal
ownership and decision making patterns which currently characterise the First
Economy. Consider the following:

* The South African Women in Corporate Leadership Census 2004, commissioned
by the Businesswomen's Association (BWA) found that despite women constituting
52% of the population, only 41% of women were employed. And out of a total of 5
011 executive managers in the country, only 739 or 14,7% were women. Of the 3
125 directors, only 221 or 7,1% were women. Only 11 women were chairpersons of
boards and a mere seven were Chief Executive Officers (CEOs).

Of the 364 Johannesburg Stock Exchange (JSE)listed companies and 17
state-owned enterprises (SOEs) that were surveyed, only seven have female CEOs
and 60% have no female faces on their boards at all. The JSE-listed companies
lagged far behind state-owned enterprises, which prove to be better employers
for women – SOEs have a high level of both female directors (35%) and executive
managers (31%). Only 17,6% of SOEs had no female directors.

The second such census conducted recently found that in 2005 there were only
marginal increases in these figures. In the public sector we are clearly making
strides towards gender parity in government and at the executive levels. There
is greater participation of women in policy decisions, implementation and
monitoring. Currently 42,8% of our Ministers are women. 47,6% of Deputy
Ministers are women. 32,7% of Members of the National Assembly and 35% of the
National Council of Provinces (NCOP) are women. This outcome is due in large
measure to the political commitment of our President Thabo Mbeki and his
Government, which is committed to an equitable system of political
representation.

Recently Cabinet took a decision to reach gender parity in senior decision
making positions in the public sector by 2009. Clearly where there is
leadership and commitment from the top the process of transformation is much
more rapid.

In conclusion allow me to say that if we want women entrepreneurs to be the
backbone of the second economy and if we want them to be equally represented in
the First Economy, then we need to be bold and decisive. There must be
purposeful partnerships between the public and the private sectors. The
challenges we face continue to revolve around the structural transformation of
the first economy, eradicating poverty, unemployment and underdevelopment and
closing the gaps between the first and second economies. And in meeting these
challenges the empowerment of women is absolutely critical.

Thank you.

Issued by: The Presidency
3 August 2006