Studies have shown that women who are empowered economically invest a significant share of their income back into their families and communities. This has the ripple effect of improving education access, health and well-being of their families and communities.
Despite this huge contribution, they are often left out of the formal economy. The International Monetary Fund (IMF) in 2023 estimated that only 47 percent of women are in the labour market compared to 72 percent of men since 1995.
Women are also kept out of the formal workforce by unfair laws, unequal access to opportunities and services and discriminatory attitudes which are obstacles to women realising their full economic potential.
Being deliberate in including women fully in the economy could raise long-term gross domestic product (GDP) per capita by nearly 20 percent on average according to the World Bank.
Studies further estimate that by giving the nearly 2.4 billion women of working age the same rights as men and closing the gender employment gap could stimulate global economic gains of $5-6 trillion, especially if women started and scaled new businesses at the same rate as men.
Additionally, employers stand to gain a great deal from giving women more opportunities in the workforce and in leadership roles as it enhances organisational performance and growth. More women in leadership in the fintech and corporate sectors has been directly correlated to better performance, profitability and greater financial resistance according to the IMF.
Unleashing the economic potential of women could therefore lead to many more women-owned businesses, creating more jobs and therefore substantially increasing the GDP of global economies through accelerated development. However, this can only be made possible by empowering women in the economy and closing the gender gaps in the labour market so that they have equal opportunities for growth and development.
These opportunities include access to quality education, financial opportunities and favourable policies that protect women from exploitation in the labour market and allow them access to equal opportunities for economic growth. Investing in women’s economic empowerment sets a direct path towards the achievement of UN Sustainable Development Goals.
It sets the stage for the achievement of the SDG goals on gender equality, promotion of full, productive, decent work for all and inclusive economic growth, eradicating extreme poverty, hunger and food insecurity and reduced inequalities.
This is because economies expand as a result of increased economic diversification and income equity when there are more working women.
As we marked International Women’s Day-themed Invest in Women: Accelerate Progress, the emphasis on why we need to invest in women and harness their potential to create prosperous global economies and a healthy planet is even greater.
Having macroeconomic and financial policies that take gender equality into account will eventually lead to increased growth, more economic resilience and stability, promote innovation and decrease income inequality which will cascade to everyone in the society including women. It therefore requires a multifaceted approach between governments, institutions and policymakers to ensure the closure of the gender finance gap to realize the economic potential of women and speed up sustainable economic growth.
