7 December, 2022

Closing gender gaps that derail economic growth

Not yet inclusive- the country's financial system

Many women are still locked out of economic opportunities in Least Developed Countries (LDCs) like Malawi which harms growth and resilience of the economy.

This is also reflected in a report by the International Monetary Fund (IMF) tittled How to close gender gaps and grow the global economy.

The report states that for countries with greater gender inequality, just closing the gap in women’s labor force participation could increase economic output by an average of 35 percent.

Shocks ranging from health and climate disasters and social unrest continue to worsen gender inequality by directly affecting women’s lives and livelihoods or keeping them out of school and work.

In Malawi, the Covid-19 pandemic effects have further affected women’s involvement in economic activities and worsened the financial inclusion gap between men and women.

“Appropriate economic and financial policies can help change these negative outcomes, improving economies by supporting the recovery and building resilience against future shocks,” reads the report in part.

It also suggests that investing in women’s human capital,enabling women to work outside the home or start their businesses, tackling biases and increasing the representation of women in leadership positions are critical to empower women and improve productivity.

“In recent years, some countries have reduced these costs through legal actions such as curbing underage marriage, criminalizing domestic violence, and increasing the number of female elected officials.

“IMF analysis shows that a greater presence of women in financial institutions and financial policymaking goes hand in hand with greater financial resilience,” it says.

Another IMF study tittled Women in Finance –a case for closing gaps by Ratna Sahay and Martin Cihak found out that women leadership positions in corporate sector are more critical than appointed positions.

It notes that women are underrepresented at all levels of the financial system, from depositors and borrowers to bank board members and management –with women accounting for less than 2 percent of financial institutions’ Chief Executive Officers.

For instance, there is only one female chief executive officer in Malawi out of the available eight commercial banks. She is Zandile Shaba of MyBucks Banking Coporation.

“Controlling for relevant bank and the presence of women as well as a higher share of women on bank boards appears associated with greater financial resilience. New evidence suggests that greater access for women to and use of accounts for financial transactions, savings, and insurance can have both economic and societal benefits,” states the IMF study.

The study is justified in the Reserve Bank of Malawi (RBM) latest national payment systems report which feared that widening gender imbalances in mobile money usage is threatening the country’s financial inclusion agenda.

It adds, “the trend shows that gender imbalance continues to be heavily skewed towards males as women only constitute 38percent of the total subscriber base.

“This outturn shows that women who constitute the majority of the country’s population are left behind in usage of mobile money services and this may, if left unchecked, derail the country from achieving meaningful financial inclusion.”


Apart from this, geographical distribution of mobile money agents is still skewed towards urban and semi-urban areas leaving the rural areas with less access points.

For instance, 78 percent of total agents are located in urban and semi-urban areas with only 22 percent in rural areas, a situation which further puts rural women at a disadvantage when it comes to financial inclusion.

However, authorities at local level are implementing an initiative aimed at mitigating the effects of these gaps in rural areas called gender responsive budgeting which analyses society needs before distributing resouses –according to the Malawi Local Government Association (MALGA) Executive Director Hadrod Mkandawire.

“When public institutions are doing their budgeting they have to take into consideration the basic needs of all segments of the population regardless of the constraint resources that are available.

“Majoirity of Malawians live in rural areas so if local councils will be able to ensure that the budgets are gender responsive it means we will be addressing the gender disparities that are very common in the country,” Mkandawire states.

Meanwhile, MALGA is training female councilors on gender responsive budgeting to equip them with skills on how to implement this modern approach of dealing with gender disparities when disbersing resources in rural areas.

Councillor for Namwalimwe ward in Blantyre Getrude Chirambo who participated at one of such trainings said: “We are learning how to include all sectors in our communities in budget formulation for maximum effectiveness.

“We should identify the existing gender gaps so that whenever there are chances of giving out, for example, social cash transfers, we should be able to identify relevant beneficiaries.”

In a separate interview, Chairperson of budget and finance committee of parliament Gladys Ganda describes the initiative as helpful as it will guide government on the critical needs of a particular community.

“This will help to ensure that the budgeted resources are appropriately used and reached to the intended beneficiaries.”

Despite acknowledging that Malawi is one of the countries where women are not on equal legal standing with men, Minister of Gender Patricia Kaliati partly blames the judicially for linient sentences and delaying of gender based violence cases.

“We have raised our concerns to judiciary that perpetrators deserve stiff punishment as well as swift prosecution of gender based violence cases.  We do not want to see perpetrators being released on bail because at the end of the day such cases end prematurely, Kaliati lamented.

Kaliati however says Malawi is doing well on empowering women in leadership positions as evidenced by President Lazarus Chakwera’s recent appointments of women in ministerial positions which makes 41 percent.

This story was produced with support from the Women in News Gender Balance reporting Initiative

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