The Impact of COVID-19 on Female Entrepreneurs in MENA

For the past six months, COVID-19 has held the world captive. Schools closed, shops shuttered, and living rooms were transformed into home offices. However, the impact of the crisis was not felt evenly by all, with women bearing the brunt of the economic and social fallout. The virus constitutes a threat to women’s rights and gender equality globally, and UN Deputy Secretary-General Amina Mohammed warns that without immediate action, “the pandemic could set back women’s rights by decades.” The MENA region was hit especially hard. UN Women estimates that 700,000 women will lose their jobs as a consequence of the crisis.  The pandemic has further widened the gender employment gap and dealt a heavy blow to the future of female economic empowerment in the region. 

Unfortunately, COVID-19 hit right as the company was about to launch. The effect was immediate: the entire education sector shut down practically overnight.

Months of Uncertainty for Female Entrepreneurs 

Female entrepreneurs, a group whose MENA membership has been steadily expanding, face a particularly tough challenge. “We had six months of uncertainty; we did not know what to do and how to proceed,” said Deema Sorri, the founder and CEO of the Egyptian education start-up, Explore AgoRa. Deema wanted to create the “next learning tool,” an app that uses the phone’s lens to turn everyday experiences into interactive learning opportunities simply by scanning an object. Over the past three years, she transformed AgoRa from an idea to a prototype, and finally, into a finished project. Unfortunately, COVID-19 hit right as the company was about to launch. The effect was immediate: the entire education sector shut down practically overnight. Originally, AgoRa had planned to partner with schools and kindergartens to launch the app. Now, however, these institutions lacked the financial capacity and time required. Six months of uncertainty followed as the future of AgoRa stalled. 

Deema credits her team’s hard work for saving the company. Rather than letting employees go with little explanation, she placed an emphasis on transparency in her leadership; Deema was frank, outlining exactly where the company stood and what they could expect in the coming months. Instead of jumping ship, the AgoRa team decided to place their trust in their founder. “It was the people who made it work,” Deema said. “The people came together to create change privately; we knew that if we lost each other, we would never be able to resume.” Everyone was flexible; those who could, accepted pay cuts or unpaid leave. Deema herself forfeited her salary and convinced the rest of the C suite to accept minimum compensation. While the budget remained tight and times were tough, the AgoRa team’s hard work and loyalty never abetted. 

The silver lining came months later, when schools reopened. The challenges of remote learning engendered a more positive attitude from schools towards utilizing technology in learning, a trend that had been largely absent from the education system prior to the pandemic. The resilience of the AgoRa team had paid off, as school administrators rushed to download its app. 

Many of the women Sireen works with are debating closing down their businesses, not just for the time being, but permanently. 

Deema is not alone in her conviction. Sireen Nijeem, founder of a business consulting firm ABW in Haifa, Israel, also believes that strong relationships are key to weathering the coronavirus crisis. Sireen aims to provide her female clients with the prerequisite knowledge needed to launch their own businesses, as well as to offer support for those with already established ventures. Her expertise is needed now, more than ever. The pandemic hit Haifa hard, devastating many female-run businesses. “COVID-19 has made women even more afraid,” she explains. “They are already in an economically fraught situation, afraid of losing everything and sacrificing their economic stability.” The combined pressure of the coronavirus and running both an ailing business and household has taken its toll. Many of the women Sireen works with are debating closing down their businesses, not just for the time being, but permanently. 

Sireen does her best to offer an alternative. She advises her clients to take it day-by-day, working with them to adapt their business strategies. Her go-to piece of advice: focus on expanding your social media presence. In a time when social contact is kept to a minimum, an online platform offers an opportunity to connect with customers. Sireen also places great emphasis on the power of networks, connecting her various female clients with one another, allowing them to exchange advice and encouragement. Like Deema, she believes that it is the support of a strong and unified community that will make the difference. 

Randi Barznji, who hails from Sulaymaniyah in the Kurdistan region of Iraq, also cites a strong support system as one of the reasons behind the success of her online retail business, shopyobrand. E-commerce is still an underdeveloped sector in Iraq, and Randi admits that she had little idea of where to begin. “I built my own website,” she shared. “My expectations were very low.” Lucky for her, Randi stumbled upon 51 Labs, an incubator program aimed at helping female founders launch and grow their businesses. After joining the 51 Labs Fellowship, Randi found herself surrounded by driven individuals with similar goals. It was this community and their support that allowed Randi to expand her business and become more established. 

When the coronavirus hit, shopyobrand was heavily impacted, because the site’s concept relied on importing international products. No orders were processed from March until September, as borders remained closed and the Iraqi postal service operated at minimum capacity. Nevertheless, Randi remained positive. Her time with 51 Labs taught her to believe in her company and provided her with a community to fall back on. Instead of focusing on the obvious negatives, she chose to treat this time as an opportunity to reflect on and redefine the goals of her business. After her experience during the lockdown, Randi plans to pivot the focus of her website; rather than exclusively offering international brands, she now wants to partner with and promote local companies. This shift will not only minimize the risk of falling victim to international trade fluctuations, but also help support her local community.

People may be less inclined to spend their shrinking disposable income on inessential consumer goods.

Things seem to be looking up for shopyobrand: each new day brings a wave of fresh orders, with Randi aiming to rehire employees she was forced to let go earlier in the year. Nevertheless, the tough times are far from over. Iraq faces a spiraling health crisis, which has compounded the country’s pre-existing economic troubles. People may be less inclined to spend their shrinking disposable income on inessential consumer goods. Randi is not easily deterred, however. “One thing I am sure about is that the future looks bright for entrepreneurship because we have so much talent. I am surrounded by young people who are full of ideas. They cannot just hold all of this energy in; they have no choice but to act.” 

One such young entrepreneur Randi has a lot of faith in is her close friend, Ranoo Hiwa. Ranoo founded the Bina App, a digital platform that connects skilled workers in the construction field with potential clients. Ranoo created the app to address one of the major difficulties she herself faced while working in construction. “The construction industry is very male-dominated and there are still many obstacles females face,” she explained. “We as a community still need to be opened more and more.” 

Bina is her response to the cultural and social barriers that prevent women from hiring skilled workers to complete projects for them. Many men still refuse to accept positions under female superiors. Furthermore, many women themselves reject the idea of hiring male skilled workers as they consider close unsupervised contact with non-family member males a violation of rules of modesty. The Bina App offers a solution, with skilled workers and clients able to choose each other based on published credentials and reviews left by previous employers. This system holds each side accountable for their behavior. 

Strangely enough, COVID-19 aided the success of Bina, which was launched on September 13 of this year. The pandemic set into motion a set of societal changes that greatly benefitted Ranoo. First, there has been an increased use of online applications, a trend that was largely absent from the country before the pandemic struck. Second, the construction scene ceased nearly all operations during the lockdown. Many skilled workers found themselves out of a job and contacted the Bina team, asking to be registered on their app. As a result, Bina’s database has grown significantly and continues to do so. 

Unfortunately, increased focus on digitalization is not always enough; some businesses rely on the social contact that has been inhibited by the virus. Hayfa Ben Fraj from Kairouan, Tunisia acknowledges how difficult the pandemic has been for her business. Back in 2015, Hayfa founded GOMARKET, a marketing and communications firm, and three years later GOCommunity, an associate co-working space for business owners in the city. GoCommunity had to close down completely for the entirety of lockdown. While it has since reopened, the space is a shell of its former being, with collaboration limited due to social distancing restrictions. 

GOMARKET has also suffered, as Hayfa depends on travel and social interaction to find new customers. It can be very frustrating for Hayfa, who has many ideas, but no means to execute them currently. Despite the hardship, she has learned one thing from the pandemic: she needs to increasingly redirect her focus towards tech entrepreneurship. It was the tech companies that were best able to weather the economic crisis created by the pandemic. Therefore, Hayfa is determined to encourage the members of her GOCommunity to look for opportunities in the space, while also searching for tech startup clients of her own. 

How to Move Forward?

“There doesn’t seem to be a grand plan,” one of the participants of Businessita’s second annual focus group lamented. “It doesn’t feel as if anyone has your back.”

The pandemic has created winners and losers. Some, such as Ranoo and Deema, even benefitted from this new normal, while others such as Hayfa were left behind. Future policies will have to be planned around this new reality if they are to meet any success. Governments would be well-served by a double-pronged approach, encouraging positive change such as rapid digitalization, while also addressing the structural and cultural barriers that continue to disadvantage women, such as access to capital. 

Nevertheless, at the outset of the crisis, states focused on combatting the macroeconomic fallout: slashing interest rates, deferring debt payments, and offering stimulus checks. While entrepreneurs benefit from these policies, Soha Elbaklawy, founder and CEO of Businessita, an organization dedicated to empowering women entrepreneurs in the Arab World, explained that Egyptian women to have been harder hit by the pandemic than men. “There doesn’t seem to be a grand plan,” one of the participants of Businessita’s second annual focus group lamented. “It doesn’t feel as if anyone has your back.” 

Almost all female founders cross-regionally agreed: entrepreneurs would benefit from making the business registration process more transparent. Christina Andreassen recounted how difficult it was to register her company, the Maia Exchange, in Dubai. While officials publicly promote entrepreneurship, the actual mechanisms of setting up a business remain convoluted. Banks are hesitant to work with start-ups and there are many hidden fees in the registration process. The same is true in Iraq, where Randi and Ranoo both described their challenges where there are no existing laws for registering an online business. Hayfa voiced similar frustrations, explaining that there is limited copyright protection of start-ups in Tunisia, deterring many with ideas from even trying.

At the start of the pandemic, Christina was stranded in the Seychelles, as Dubai locked itself down and barred anyone from entering. This stroke of fortune came at an inopportune time, as the Maia Exchange was in the middle of fundraising efforts. Instead of resigning herself to the sidelines, however, Christina proved incredibly flexible and innovative. When interviewed by a CNN reporter about her experience of being stranded, Christina seized the chance of free publicity to advertise the Maia Exchange to potential investors. The strategy was unconventional, but effective. States need to implement significant reforms to enable entrepreneurs and close the gender gap. However, Christina’s flexibility, and that shown by these other startup leaders, demonstrates that these women entrepreneurs are not only surviving, but leading the transformation of business in the Middle East.

The views expressed in these articles are those of the authors and do not reflect an official position of the Wilson Center.