African countries lead the way on gender-responsive development financing
Using specialized financing frameworks, governments aim to incorporate women’s empowerment into national financing decisions.
Women drive sustainable development. In their governments, homes, businesses and communities, they are agents of change.
The problem? Around the world, and especially in Africa, our financial systems, our national budgets and our private investments impact men and women differently.
According to the IMF and World Bank, sub-Saharan Africa’s economy contracted by 1.7 percent in 2020, pushing an additional 23 million Africans into extreme poverty. Job losses are widespread. In Gabon, Malawi, Uganda and Zambia, over 80 percent of households reported loss of income in 2020. In Kenya and Gabon, over 60 percent of those surveyed lost their jobs during the pandemic.
These statistics translate to very real impacts for women: economic downturn and income losses affect women’s economic empowerment. These incomes are frequently used to provide food, health care and other social assistance to families. Women are ultimately hardest hit by a decrease in discretionary income for essential household products and services.
More than a billion women around the world are still unable to access formal financial services.
In sub-Saharan Africa, 37 percent of women have a bank account compared to 48 percent of men, a gap that has only widened over the past several years. This disparity is due to women’s limited access to education, technology, information and health services, as well as their high participation in informal economic activities, unpaid or low-paid jobs, and rising violence against women.
Within government, gender-blind financing strategies can have a negative influence on women’s income, while gender-responsive finance mechanisms are rarely employed to mitigate the pandemic’s effects on women or to incentivize private sector engagement in their empowerment. Budgetary allocations for women and girls are widely insufficient, and the ability to track spending is hampered by a lack of institutional capacity and gender-sensitive data on development flows.
Women and adolescents find it difficult to influence the finance agenda because their participation in budget allocation at the national and municipal levels, as well as access to decision-making positions, is limited. Over the past 25 years, Africa has registered modest gains in the proportion of political decision-making positions held by women, from 9.8 percent in 1995 to 24.7 percent in 2020.
The rights and well-being of African women and girls are harmed by these social, economic, and political constraints. Lack of equal participation in the financial ecosystem limits their ability to fully contribute to and benefit from financial resources dedicated toward sustainable development and COVID-19 recovery.
How can Integrated National Financing Frameworks help?
African governments are designing and implementing a wide range of reforms, projects, programmes, financing instruments, platforms and incentives schemes to address structural barriers to women’s economic empowerment. African governments are innovating all the time. The examples below are a testament to this.
Integrated National Financing Frameworks (INFFs) are helping governments build coherence between these innovations and broader national development financing decisions. They help governments target women’s needs and mainstream gender equality into financing processes and systems where gender considerations have historically been absent. They do this through better representation, policies and data.
It’s vital to incorporate women’s and girls’ needs, realities and demands into finance, trade, debt, governance, technology and innovation. To enable women’s full and equal participation and leadership in the economy, resource allocation and investment in gender equality institutions and women’s groups at the local, national, regional and global levels must be prioritized, dedicated and consistent.
These measures can include increasing access to finance for women-led businesses; developing or strengthening gender-responsive financing policies; encouraging a socially responsible and accountable private sector for women’s empowerment; applying a gender lens to debt management policies; promoting gender-responsive budgeting; ensuring the coherence of national planning, costing and budgeting processes with gender equality objectives; and establishing participatory tools and platforms to enhance women’s engagement in national and sub-national budgeting processes.
African leadership commit to gender-responsive financing
Despite challenges, African countries have emerged as leading advocates for gender-sensitive financing on the continent and around the world. Since countries began adopting the INFF approach in 2019, African countries have been among the earliest adopters. Africa accounts for about half of the 70+ nations developing and implementing INFFs.
With the support of a network of partners, the SDG Finance and South-South Cooperation team of the UNDP Africa Sustainable Finance Hub is helping governments mainstream women’s empowerment and gender equality into development financing — both through INFFs and as standalone projects.
In Gabon, Nigeria and Malawi, the government is implementing gender-responsive budgeting to ensure policy commitments related to poverty reduction and gender equality are reflected in budget allocations. Other African countries are developing their own initiatives to address gender-related disparities in their tax systems and financing strategies. Tax exemptions are offered in Sierra Leone for a variety of factors linked to gender equality and women’s empowerment.
To improve women’s access to finance, UNDP Accelerator Labs, in collaboration with Jumia Uganda, developed an online platform to connect consumers with micro, small and medium enterprises (85 percent of which are owned by working women). The Negocia platform in Cabo Verde is connecting young female entrepreneurs with investors and providing access to seed funding for SDG-aligned businesses.
In Rwanda, the government established a Business Development Fund with a focus on women and youth; and in Zambia, the UNCDF Loan Guarantee Portfolio Facility will provide the majority of its US$600,000 in guarantees and technical assistance to women. In Botswana, the Stock Exchange is looking into gender bonds and pushing the adoption of criteria to reduce detrimental gender practices in the workplace.
Riding the wave
“Post-COVID, there’s an awareness that the pandemic affected men and women differently,” said Nabila Aguele, Special Advisor to the Minister of Finance, Budget and National Planning in Nigeria, in a recent interview.
This growing awareness has opened new doors for political reform. “So, we are riding that wave and there’s been a really great reaction,” said Nabila of the country’s recent advances in aligning gender inclusion and gender equality with their fiscal policies and public financial management system.
Other African countries are also riding this wave. And they aren’t working alone. In addition to the UNDP Africa Sustainable Finance Hub, partners like UN Women, OECD, GIZ and UNECA, are helping countries capitalize on the renewed urgency for aligning development financing and stimulus packages with gender equality. At the Financing for Development Forum in April 2022, UNDP, UNDESA and the OECD will jointly launch the INFF Facility to meet the growing need for technical assistance and knowledge sharing between countries developing INFFs.
Over the next few years, African countries will progress from developing integrated financing strategies to implementing the policy, regulatory and instrument reforms indicated within those strategies.
INFFs provide a window to ensure gender checks, gender analysis, gender engagement and gender disaggregated data feed into financing decisions within both the public and private spheres. They offer a critical opportunity to harness global momentum, to bring gender into the discussion and to orient Africa’s financial systems towards equality.
“I’m a big fan of riding these waves,” said Nabila.
By Orria Goni, SDG Financing And South-South Cooperation Advisor, Luckystar Miyandazi, Regional Tax Specialist, Ankun Liu Programme Analyst, Ana-Maria Beldiga, SDG Finance and South-South Cooperation intern, UNDP Africa Sustainable Finance Hub and Lucy Martin, Communications lead, INFF facility.