In the Driver’s Seat

• Author: Christine Dieterich, Dalia Hakura, and Monique Newiak

In the Driver’s Seat Finance & Development, June 2016, Vol. 53, No. 2

Christine Dieterich, Dalia Hakura, and Monique Newiak

Gender equality can boost growth in sub-Saharan Africa

Togo’s thriving textile industry is attributed to Maggy Lawson, better known as “Mama Benz” for the striking Mercedes-Benz she—and her mother before her—was famous for driving. In a break from tradition, she inherited her mother’s business and rose to prominence as a businesswoman in the 1970s by selling brightly printed cotton cloth for garments made throughout west Africa. Her immense success created many local jobs.

Mama Benz is just one of many examples of the positive effect women can have on sub-Saharan African economies.

Gender inequality and economic outcomes are intertwined, research shows: stronger growth advances gender equality, and gender equality boosts growth (Duflo, 2012; see Chart 1).

There are many reasons to believe that gender equality lifts growth. Closing worldwide gender gaps in education would give a tremendous boost to global human capital and reduce income inequality (Gonzales and others, 2015b). Women tend to spend more of their household income on the education of their children and grandchildren than men do, so that closing the pay gap between men and women could translate to higher school enrollment for children, in turn leading to higher growth. And more women in the workforce means a larger pool of capable workers and entrepreneurs.

A faster demographic transition—lowering the number of dependent children—can contribute to reducing inequality, particularly for low-income households, and allow greater investment in the human capital of the female labor force (Soares, 2005; Soares and Falcão, 2008).

Sub-Saharan Africa’s labor markets show relatively high female labor force participation, reflecting women’s need to work for subsistence, but the jobs are often in the low-productivity agricultural sector and mostly in the informal sector. Wage employment remains a male-dominated domain—limiting the efficient use of talent.

These inequities are mirrored elsewhere. According to the United Nations (UN) Gender Inequality Index, which measures inequality in the labor market, mortality and fertility rates, education, and empowerment, many countries in sub-Saharan Africa—notably Mali and Niger—stand out as having some of the world’s highest gender inequality.

Income inequality is also high in sub-Saharan Africa. In the past 15 years, rapid growth in the region has boosted per capita income, and...