- Gender financing is still lagging behind worldwide
- The UN is pushing for the inclusion of gender finance in national development agendas
- Women reinvest 90 percent of income in household and national development efforts – UN
Gender finance was the main topic at a high-level meeting held on the sidelines of the 39th Ordinary Session of the African Union Assembly in Addis Ababa earlier this month.
The meeting, convened by the African Union Commission (AU) Women, Gender and Youth Directorate, and chaired by HE John Dramani Mahama, President of the Republic of Ghana, called for renewed commitment on gender finance.
President Mahama, a renowned advocate for gender and development issues, underscored the need to increase gender financing across the continent.
During the meeting, the performance of; “The Women and Youth Financial & Economic Inclusion Initiative” launched in 2023.
The 42nd Gender Is My Agenda Campaign meeting was also convened, where experts reaffirmed their commitment to gender-responsive water, sanitation and hygiene (WASH).
The meeting emphasized that; “Africa invests $10 to $19 billion annually in WASH, but an additional $30 billion per year is needed by 2030 to achieve SDG 6.”
Mahama asserted that gender finance is the foundation for progress in all sectors; “Africa’s path to Agenda 2063 is inextricably linked to the economic power of its women and youth.”
“Promoting gender equality is not merely a moral imperative, it is a strategic imperative for Africa’s sustainable development and inclusive growth,” President Mahama said.
Overall, Mahama, a former gender finance advocate, decried the fact that despite the great strides made in financial inclusion, especially gender finance, significant gaps still exist when it comes to implementation.
He said although the African Union has established continental and global normative frameworks such as the Maputo Protocol, the AU Convention on Ending Violence against Women and Girls (AUCEVAWG) and the African Women’s Decade for Financial and Economic Inclusion (2020-2030), a significant implementation gap still exists.
“Structural barriers, including limited access to credit, land and digital innovation, continue to hinder progress,” he stressed.
Mahama also cited what he describes as a disturbing trend: “Progress on gender equality (and financing) is not only stagnating, but is facing setbacks in some regions due to economic shocks and climate crises.”
Taunted, Mahama, the champion on gender and development issues, called for the revival of the AU’s gender champion agenda.
He said there is a need for “critical intervention that goes beyond policy statements” if gender finance is to make progress in Africa.
In his words, the AU seeks to secure high-level political and financial commitments necessary to ensure gender finance for African women and youth.
“While the gender gap in access to financial services has narrowed from 9 percent in 2011 to 6 percent in 2021, it remains significantly wider in many regions, financially excluding 745 million women,” he pointed out.
Mahama asserted that only by investing in women’s financial inclusion, or what is now commonly referred to as gender finance, can countries accelerate development and ultimately overcome poverty.
“Women own a third of small businesses in developing countries, and can be a key driver of economic growth and job creation,” he stressed.
According to the AU, there are prevailing structural inequalities that prevent women from accessing finance, which prevents them and their countries from achieving their full potential.
These include legal, regulatory, social and cultural barriers that, according to the AU, “…prevent women from registering businesses, owning land or real estate, or opening bank accounts.”
In this regard, it follows that since the African continent has the highest percentage of women entrepreneurs in the world, the lack of gender finance is seriously weighing on the continent’s development efforts.
In this regard, it should be noted that, according to the Global Entrepreneurship Monitor (GEM) Women Report“The percentage of female entrepreneurs in sub-Saharan Africa stands at 25.9 percent of the adult female population, meaning one in four women start or run a business.”
Similarly, the AU also reveals that women typically reinvest up to 90 percent of their income in the education, healthcare and nutrition of their families and communities, compared to just 40 percent for men, a fact that underlines the need for gender finance.
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Gender Finance Challenges in Africa
Women entrepreneurs face multiple challenges when it comes to accessing financing.
It is estimated that there is a $42 billion financing gap for African women across corporate value chains.
Key limitations to gender finance include the perception that lending to women is seen as high risk, which in turn means that women face higher interest rates among other lending barriers.
In fact, because women often lack traditional collateral and guarantees, it follows that they are less borrowable.
Then there is the double-edged sword: on the one hand you have financial institutions that are unable to adequately respond to women entrepreneurs, and on the other hand you have women who do not have the financial acumen necessary to meet the needs of financial institutions.
Worse still, in many African countries, legal and regulatory frameworks hinder women’s involvement in private sector growth.
AFAWA’s approach challenges the gender gap in access to finance and liberates the entrepreneurial capabilities of women in Africa.
Gender finance is key to the development of any country. In particular, Ambition 6 of Agenda 2063 envisions an Africa whose development is people-driven, relying especially on the potential of its women and youth, the African Union emphasizes.
According to the Alliance for Financial Inclusion, “1.4 billion people worldwide are financially excluded.”
Due to limited financial inclusion, women and youth are deprived of access to financial products and services, thus lacking secure means to save or invest money, and are mostly dependent on informal lenders for credit.
Admittedly, technological advances are helping to increase access to financial services for women and youth, especially when you look at mobile money services, but a large gap still remains.
The UN claims; “Investing in financial inclusion has proven to be an efficient way for countries to lift people out of poverty, reduce inequalities, build sustainable communities, increase education levels, create jobs, ensure economic stability and promote growth, while maintaining the security and stability of the financial system.”
That’s why UN Women in Tanzania is working with partners to increase gender financing. One of the strategies applied is the integration of a systemic approach to gender finance.
To this end, UN Women in Tanzania is pushing for the formalization of global frameworks and gender-responsive laws and policies that advocate for gender finance engagement.
“Achieving financial inclusion requires both the private sector by launching innovative products and services and the public sector by developing effective policy frameworks and national strategies for financial inclusion,” notes UN Women in Tanzania.
To this end, UN Women Tanzania urges renewed efforts for Tanzania to uphold the principles of Gender Responsive Budgeting (GRB).
The GRB is considered a transformative factor that can transform development outcomes across all sectors.
Through GRB, the UN foresees renewed stakeholder engagement in public finance management to align with the UN Women Strategic Plan (2023-2027).
UN Women in Tanzania also supports gender finance through the integration of gender finance into the national development agenda
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