Absence of gender lens stifles economic growth

United Nations Conference on Trade and Development and other numerous researchers on the trade and gender nexus reveal that the economy is a gendered structure where the distributional outcomes of trade policies are influenced by gender.

CHANGES in trade patterns and volumes due to change in trade policies have a varying impact on men and women. Furthermore, the trade effects on women themselves vary as they are not a homogenous group. They play multiple roles in a given economy as tax payers, traders, producers, workers, and as providers of care for the entire labour force.

Trade management through trade negotiations, trade liberalisation and trade policies is not a new phenomenon. However, it is the absence of the gender lens in trade management that delivers undesired outcomes that perpetuate gender inequality and stifle economic growth in countries.

Women as producers

Women almost make half of the labour force in the agricultural sector in developing countries. In the rural areas, women in the agricultural sector are overly represented as subsistence farmers. Furthermore, they are employed as contributing family workers, own-account, or casual workers. Subsistence farming is prone to trade shocks and economic down turns exposing women to poverty.

Women are less likely than men to have formal work arrangements in the agricultural sector. When employed formally in agricultural commercial value chains, they tend to be seconded to segments that have low wages and with precarious working conditions.

The AfCFTA will come with expanded markets and it is through trade liberalisation that opportunities will be created for these women farmers to integrate into global supply chains including high value chains of agro-based processes. It is important to mention that the downside of liberalisation may be also characterised by increase in demand for intra-Africa food imports that will initially have a negative impact on these women producers.

Furthermore, barriers that range from phytosanitary, sanitary standards, restrictive non-tariff measures usually imposed by authorities in the importing countries, and other product-related measures will present challenges to these women farmers to access export markets. Without capacity building in the areas mentioned, women may find it difficult to participate in the huge market created by AfCFTA.

The current Covid- 19 pandemic is a threat to the food security. It calls for policy makers to address the existing gender inequalities within the agricultural sector and avert a looming food crisis. Governments, Chambers of Commerce and international agencies must therefore harness the traditional subsistence oriented-sector through empowerment programmes that will not only benefit women but will also avert hunger for the African continent as a whole.

In the foregoing view, Covid-19 presents an opportunity to tackle gender-specific obstacles within the agricultural sector, while enabling women to engage effectively in commercially oriented agriculture through specific capacity building aimed at completely eliminating the middleman.

Women and Taxes

Zimbabwe’s income tax laws reflect a progressive society where husband and wife are taxed separately and yet in some countries both incomes are pooled together and taxed as one. This has been a significant driver for women to disengage from formal employment in those countries where couples are taxed as an entity. Women are driven into the informal sector in some countries by these tax laws.

However, with Zimbabwe’s indirect tax, Value Added Tax(VAT), that is based on consumption and not income, changes the ball game. This tax is regressive in that it tends to impact more on lower income groups mostly women who face a higher tax incidence as they pay more taxes on basic commodities in proportion to their income.

In 2017, the Ministry of Finance and Economic Development introduced Statutory Instrument 20 that levied 15 percent VAT on basic commodities. The outcry about the tax forced the ministry to reverse the decision as it impacted negatively on the already burdened tax payer. The group that benefited most was the women — and the economy as a whole as this addressed inequalities within the socioeconomic society.

Corporate tax impacts women and men differently. Large corporates are associated with men.

These corporates benefit from tax rebates and tax benefits, while women enterprises are not able to enjoy the same due to the fact that most of their businesses are informal entities. This illustrates how women through relative limited capacities in resources fail to take advantage of opportunities and coping mechanisms created by trade policies as a result of trade reforms.

Women as Consumers

The desire to attract investment into countries inadvertently force governments to be in a race to the bottom, as countries outbid one another by lowering taxes in order to lure investment. In some cases these multinational companies are offered tax holidays which, are essentially a revenue loss that compromise the provision of public goods and services. Revenue losses from trade liberalisation and countries’ endeavours to attract investments into the country impact the fiscus negatively and governments may fail to finance essential public services like health, education, electricity, sanitation and water infrastructure.

Investment companies, while driven by return on investment, is important for them to remember that as they pursue profits, they should not perpetuate poverty and inequality. Women as the largest consumers of public services bear the brunt when governments fail to provide the mentioned services.

In a trade- tariff derived economic shock, the effects on domestic prices of the imported goods are felt more by women as caregivers who contribute to the sustenance of the family, while the men’s income is largely spent on “purely luxury items”. Changes in household goods prices are largely felt by women.

It is prudent to be aware that trade integration will put pressure on all aspects of business including MSMEs (Micro Small and Medium Enterprises) and Women-Owned Organisations (WOBs). Within the short run, as is typical with trade liberalisation, businesses expand and conglomerate across borders, forcing revenues to go down. Established MSMEs including (WOBs) may be swallowed or close shop. However, in the long run, with the right policies in place, trade liberalisation will give women entrepreneurs access to export markets and opportunities while they increase their earnings.

The right policies comprise gender trade sensitive policies that will ensure the productivity and survival of the economic activities of WOBs and MSMEs as these are very significant in the development and growth of African economies.

◆ Sitshengisiwe Ndlovu is the president of OWITZIMBABWE: MBA/UNCTAD: Trade and Gender Linkages/ IAC Dip/ Cert: Trade in Services and SDGs: Robert Schuman Center of Advanced Studies/IDEPCert: Making the African Continental Free Trade Agreement Work. She writes in her personal capacity/For more on trade matters visit her Blog on website: www.owitzimbabwe.org