Economic cost of gender inequality in South Africa

Gender equality is achieved when women and men enjoy the same rights and opportunities across all sectors of society, including economic participation and decision-making, and when the different behaviors, aspirations and needs of women and men are equally valued and favoured.

Despite the considerable progress South Africa has made in raising women’s representation in political parties, governments and companies are still missing out on the full benefits of a gender-diverse leadership. Social institutions must commit to transforming the way that they think and act.

Every year, an estimated 15 million girls under the age of 18 get married worldwide, with little or no say in the matter. Less than a week ago, Statistics South Africa reported that young girls between 10years and 19years contributed 11% to new births in 2017. The country’s Gender Inequality Index score is 0.462 – that places South Africa at 90 out of 148 countries according to UN Global Gender Inequality Index. This is classified as a low score, and the reason for such a low score in a constitutional democracy with a globally celebrated Bill of Rights demands an explanation.

In South Africa, men still enjoy authority in public life, economic decision-making and social discourse, while women have a limited voice and in some instances are subordinate to men. Patriarchal social labour division is still entrenched, including social expectation of child rearing, seeing to the wellbeing, feeding and care of the family. Even though women’s participation in labour markets has increased, they are still under-represented in decision making and critical leadership positions. Across political parties’ top leadership structures women are under-represented.

Poverty in South Africa has a gender dimension that challenges the equal status of women in law, and poses a threat to the realisation of their full equal human rights in practice. The “feminisation” of poverty is significant because poverty is experienced differently by women than by men given economic, political and social dynamics. The problem is therefore not just statistical, but rather that poverty for women tends to be more severe, and poses greater challenges for women who, in addition, bear the burden of caring for children under these circumstances, and so the issue is also one of the quality of that experience.

Women parliamentarians have almost doubled over the past 15 years and the number of women in cabinet has grown over the years. Credit for this growth goes largely to targets for women’s representation set by political parties. However, numbers aren’t equal to influence and women do not necessarily have greater power. In the public sector, most cabinet ministers hold the social welfare portfolio, with arguably limited political influence, that does not create access to top leadership roles and there’s no real redistribution of power.

Research shows that companies with a greater share of women on their leadership structures both the board of directors and executive committees tend to perform better financially. The OECD report found that the earnings before interest and taxes (EBIT) margins of companies with a slightly higher share of women on their boards was on average 20 percent higher than the industry average.

In South Africa, about 39% of local businesses do not have any women at all in leadership positions, according to a Grant Thornton report on Women in Business.

On top of that, the survey found that women hold only 23% of senior positions in SA – down from 27% in 2015 – out of 200 companies that were surveyed . The JSE changed its listing requirements in August 2015 to prompt listed companies to disclose the female representation on their boards and drive transformation and diversity at an executive management level. From January 2017, all listed entities would need to have a policy on the promotion of gender diversity at board level, as well as disclose how they are performing against this policy. The above statistics reflect that women stand on the sidelines of the economy, even though they constitute more than 51% of the population.

Entrepreneurship is crucial to economic development, promoting social integration and reducing inequalities. Women generate only 37% of gross domestic product (GDP) and run only about a third of small and medium-sized enterprises. Globally, women are still confronted with barriers to trade, lack of access to working capital, trade financing and sub-optimal participation of women in public procurement markets. There are no attempts to collect gender-disaggregated economic data that could be used to scrutinize our own policies through a gender lens and women’s participation in the economy . South Africa is struggling with closing the gender gap on economic participation and opportunity; progress is so slow it would take.

The level and distribution of wealth in a country are important indicators of the longer-run welfare of its citizens. Whereas income and consumption tell us something of the current living standards of a household or a society, data on assets and debts is important in assessing whether households can maintain these living standards during spells of unemployment or throughout their retirement. South Africa is notorious for its extreme income inequality, gender wage-inequality and wealth inequality is even greater. Statistics shows that white males earn much higher than African or Black men, while white women earn higher than Black or African men and women. This economic exclusion on the basis of race or gender demonstrates that asset accumulation or ownership by Africans and Black women is lower and they are trapped in chronic poverty. Chances of creating generational wealth are minimal.

Consequently, unequal employment opportunities, lack of access to economic opportunities, spread over a generation’s entire lifetime, is setting the stage for a scary scenario for old age pensions. Because women have worked fewer years, too often part-time, participated informal work or markets and have been paid less, the women now coming into retirement will experience a gender pension gap that will be as high as 50% or lower in comparison to their male counter parts. These women will have to rely on government services to make up the difference. Thus, the unwillingness to include women fairly in the past is going to come back to haunt the future.

In the coming years, we will experience many other economic dislocations caused by the exclusion of women. Societies need to learn to anticipate and plan for such negative outcomes. Most of the rhetoric around “inclusive growth” focuses on the positive potential to achieve greater prosperity by having more women in the workforce and starting up businesses. But, actually, I think it likely that the bigger economic impact lies in avoiding the costs associated with exclusion, such as the effect of ignoring early childhood development, addressing food security, gender based violence, equal access to decent economic opportunities and access to quality health care that we already know is caused by keeping women, especially mothers, vulnerable.


Transforming traditional gender roles and promoting gender equality requires addressing discriminatory social norms. The need to change boys’ and men’s attitudes towards caregiving and other unpaid work and ensuring that men are not stigmatized when they take on care responsibilities is a keystone of gender equality.

People who are in leadership positions should develop enforceable cohesive gender diversity transformation strategy, take ownership including monitor progress through gender diversity metrics and address the root causes of lower shares of women’s representation. There should be a more concerted effort in promoting culture of entrepreneurship and trade. We must remove barriers to entry on strategic sectors of the economy.

There is a need to develop policy mechanisms to ensure financial inclusion as well as access to working capital for small, micro and medium enteprises.

Gender equity policy must be included in public procuremenat and up nitive financial penalities should be applicable to companies that perpetuate gender wage gap.

Lastly, we must dvelop a clear policy on early childhood development, including allocation of public resources.

By Ms Phelisa Nkomo

Posted in Phambili
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