Melinda French Gates on how leaders can boost women’s economic power

EARLIER THIS year I contacted a few African development experts for their views on the continent’s priorities. Our conversation centred on issues like debt restructuring and taxation policy, but just as we were wrapping up, one of them, a Ghanaian economist, offered a different piece of advice: “Don’t stop talking about gender.”

I appreciated the encouragement—and I understood why it was offered. In the two decades I’ve worked as an advocate for women and girls, I’ve learned that there will always be people who insist that now is not the time to talk about gender equality. When the global agenda gets crowded, gender equality is one of the first items to fall off. It is treated as a distraction from the world’s most pressing problems, even though the data make clear it’s a central part of the solution.

Decades of research have shown that when women can fully participate in economies, it increases financial stability for their households, helps families recover more quickly from shocks and supports a country’s resilience. The data show a correlation between women’s economic agency and reduced poverty, and experts consider such agency essential to food security. What’s more, it fuels growth: new figures from Eurasia Group indicate that if policymakers prioritised investments in women’s economic power, the global economy could grow by an additional 7%, or $10trn, by 2030.

One way to unleash this power is to increase women’s access to affordable capital. In emerging economies where job opportunities are limited, a woman’s ability to earn an income often depends on her ability to start a business. The Global Entrepreneurship Monitor estimates that 17% of women in developing countries are already “early-stage” entrepreneurs, and more than 40% hope to start a business. In a recent survey of women in Nigeria, the vast majority said owning or expanding a business was their “biggest economic ambition”—and the biggest barrier they faced was “lack of access to startup capital”.

Their concerns are well-founded. In regions such as sub-Saharan Africa and South Asia women receive only a small fraction of loans to small and medium-sized businesses. In 2021 the global financing gap for women’s enterprises—between what they receive and what they would if credit were unconstrained—stood at an estimated $1.7trn.

In many emerging markets women on low incomes seeking startup loans face sky-high interest rates and numerous other constraints: many lack formal credit histories; most are seeking loans too small to appeal to lenders; and gender discrimination in credit decisions remains legal in nearly 100 countries.

Governments are learning how to address these challenges, though. India’s National Rural Livelihoods Mission, for example, has been a pioneer in providing affordable credit to women who belong to informal savings-and-loans groups. According to analysis by the Bill & Melinda Gates Foundation, over the past decade government investments of $15bn have catalysed over $90bn in additional investments from domestic financial institutions. Now, some of Africa’s largest economies are experimenting with similar ideas.

Another step countries can take to boost women’s economic power is building safe and inclusive digital public infrastructure. DPI, as it is commonly known, is as essential to the 21st-century economy as roads and bridges were to the eras before it. If women have equal access to the mobile technology they need to use it, DPI can help accelerate their economic participation.

Last December I visited India to learn more about its digital transformation. Across the country, India’s digital ID and payments systems have enabled millions of people to use financial services for the first time. In Delhi I met a 90-year-old widow who showed me how she can now access her pension payments on her phone, instead of making the long, difficult journey to the bank. In places where social norms restrict women’s mobility, this is a game-changer.

The proportion of Indian women with digital bank accounts jumped from 26% to 78% in the ten years to 2021. With a digital account a woman gains a safer place to store her savings, access to other services, such as insurance, and, perhaps most important, more control over how her money is spent.

By introducing policies aimed at increasing women’s control over their earnings, governments can also help change broader gender norms. When women in the Indian state of Madhya Pradesh had their wages paid directly into their own accounts instead of those of male heads of households—and were trained in using those accounts—they were more likely to work outside the home, and both men and women were more likely to support women’s employment.

Countries must also remove the barriers that constrain women’s productivity. Some are sector-specific: consider the hundreds of millions of women farmers who are stuck in subsistence poverty on underperforming farms because they don’t have access to the same tools and information as male farmers. If they did, their farms would be an estimated 20-30% more productive.

Other barriers cut across industries and geographies. In a moment when women’s reproductive rights are under attack in many countries, underscoring the link between access to contraception and women’s economic power is crucial. A robust body of evidence shows that access to contraceptives is associated with women gaining more decision-making power at home and more say over what kind of work they do.

Another barrier is the disproportionate amount of time women spend on caregiving. The International Labour Organisation estimates that, every day, women and girls work 12.5bn hours for free. This unpaid work subsidises the global economy while keeping hundreds of millions of women from achieving their economic goals. With few public resources to rely on, many women are forced to come up with their own ad hoc solutions—like negotiating accommodations for breastfeeding, reducing their hours or bringing a child to work and suffering the “baby-profit gap” that can dramatically lower a small business’s profits.

As recent efforts in the Democratic Republic of the Congo have shown, investments in child care are a cost-effective way to increase women’s workforce participation, productivity and income. Such policies can unlock massive gains: analysis from Economist Impact, commissioned by the Gates Foundation, found that increasing access to child care across 15 countries (including both rich European economies and emerging African ones) could boost their GDP by $1.2trn—equivalent to Indonesia’s annual output—in only five years.

Next week, when the World Bank and IMF hold their annual meetings, there will be many crises competing for policymakers’ attention: the lingering effects of covid-19, the war in Ukraine, a food shortage in Africa, climate change. As the world searches for a better way forward, I urge them to remember that now is precisely the time to talk about gender equality. The case for investing in women’s economic power has never been so urgent, so promising or so actionable. ■

Melinda French Gates is co-chair of the Bill & Melinda Gates Foundation and founder of Pivotal Ventures.

Economist Impact is an arm of The Economist Group, separate from The Economist newspaper.