SUB-SAHARAN Africa could add at least $300 billion to its economy by 2025 if it kept pace with the fastest improving country in its region in achieving work parity for its women, a new report from the McKinsey Global Institute shows.
And if the region created the space for its women to play an identical role in labour markets to that of men— what the study calls a ‘full-potential scenario’—these gains could feasibly rise to $700 billion, or just under half of its current $1.7 trillion Gross Domestic Product (GDP).
The impact of moving towards parity varies by country, the authors of the report say, with Zimbabwe for instance seeing a 6% bump in annual 2025 GDP, to 17% in the Democratic Republic of Congo.
The region’s biggest gains would come from moving women to more productive areas of the economy such as industry and business services. Increasing the labour force participation of its women, and closing the gap in the number of hours worked would also add to the additional billions in a region where men work more hours in part due to women having more family and home-based responsibilities.
The institute, the research arm of McKinsey & Company, authors of the 2010 market-stirring Lions on the Move report, say its numbers are double those of previous studies as the report is a “more comprehensive” view of gender inequality in work.
The report studied women in 95 countries—which 93% of the world’s female population calls home and account for 97% of global GDP. Yet women generate just 37% of that GDP, despite making up half of the global working-age population. In some regions this was much lower: women in India for example account for just 17% of the country’s GDP.
In sub-Saharan Africa this was a still-low 39% of GDP, but only a percentage point behind North America. Women are just 40% of the labour force, but are paid less than men for equal work, and are even in developed countries lowly represented politically—at a time when studies show more women in legislatures tend to allocate more to education, and contribute to lower levels of corruption.
“Achieving gender equality through economic development is however a slow process, and economic development does not have a decisive impact on equality in work and on many broader gender equality indicators,” the authors said, calling for targeted action.
Globally, women were also highly represented in unpaid work, including vital household functions—work which despite not being captured in conventional economic measures the study “conservatively” estimates to be worth as much as $10 trillion in output, or 13% of global GDP.
Despite women in sub-Saharan Africa having the least per capita income, they are closer to men than those in South Asia (Bangladesh, Nepal, Pakistan and Sri Lanka), according to a new weighted measure the study calls the Gender Parity Score and which it says gives a view of what will help close the gap.
From a weak base
But African women still have the least access to key services and economic opportunities, with both regions however coming from a weak base on most indicators—high gender equality broadly mirrors the stage of economic development, with a link drawn between social inequality and work inequality.
The report identifies 10 key areas that would change the fortunes of more than three-quarters of women in the world by moving them closer to parity and which it says should be a priority for both policy makers and business.
These include opening up economic potential, looking to address unpaid carework, improving political representation for all, and region-specific issues such as health, labour force exclusion and improving financial and digital inclusion.
Globally, a ‘full-potential’ scenario would add $28 trillion to annual global GDP in 2025 compared to doing nothing, while keeping up with the best performer in their region would give as much as a $12 trillion lift to the world economy.