South Africa needs to ensure greater financial inclusion of women in the economy, President Cyril Ramaphosa has said.
In his weekly newsletter on Monday, following Women’s Day on Sunday, Ramaphosa said government will begin the implementation of the National Strategic Plan this month to combat gender-based violence and femicide.
He said a key aspect of the plan was to ensure greater financial inclusion for women.
“This is because economic inequality and social inequality are interconnected. The economic status of women in South Africa makes them more vulnerable to abuse. We must therefore scale up support for women to enable them to become financially independent,” said Ramaphosa.
The president’s call coincided with PwC’s 12th edition of the Executive Directors: Practices and Remuneration Trends report, released on Tuesday, which showed that women were still the lowest paid in the workplace
The World Economic Forum’s 2020 Global Gender Gap Index also showed that progress towards closing the gender pay gap had stalled.
“No country has yet achieved gender parity in wages. It adds that although there are many initiatives globally aimed at solving the gender parity problem, none has managed to resolve the issue,” said the report.
In November 2019, Statistics South Africa released a report titled Inequality Trends in South Africa: A multidimensional diagnostic of inequality.
The report found that female workers earn approximately 30% less, on average, than their male counterparts.
Throughout the years, income from the labour market has been the main source of household income in South Africa, accounting for over 70% of overall income.
Additionally, labour market income is overwhelmingly the largest contributor to income inequality when compared to other income sources, according to the StatsSA report.
It was against this backdrop that the president asked for the private sector to come to the party in empowering women and promoting them to senior positions, while also calling for support of women-owned businesses when buying goods and services.
Ramaphosa urged the private sector to eliminate gender disparity by promoting women to managerial positions, after a lack of equity in the top echelon across various economic sectors was revealed in the PwC report.
He said South Africa had joined a ground-breaking campaign that linked us to global efforts to achieve gender equality by 2030, and government would drive women’s economic inclusion through public procurement.
“We have set the target of ensuring that at least 40% of goods and services procured by public entities are sourced from women-owned businesses.”
He said government was going to scale up support for women-owned small, medium and micro enterprises (SMMEs) and for women who work in the informal sector or are unemployed.
Ramaphosa said this would include engagement with the financial sector to make financial services accessible and affordable for women.
He added that more women have access to productive assets such as land.
“It is essential that women are beneficiaries of the accelerated land reform programme. It is significant that of the R75 million in Covid-19 relief earmarked for farming input vouchers, 53% of the beneficiaries will be rural women. We must ensure that women subsistence and small-scale farmers continue to receive support beyond the pandemic,” said Ramaphosa.
Economist and a director of Mazra Solutions, Muzi Maziya, said financial inclusion had a direct impact on overall economic development because it was a strong element of a pro-poor development strategy.
“For example, some have argued correctly that access to formal financial institutions allows poor households to expand consumption, absorb disruptive shocks, manage risks and invest in durable goods, health and education.
“A discussion of the structure of the SA financial sector and its evolution from apartheid to the present period is important for the advancement of the financial inclusion agenda.”
“Ideally, this discussion would look at issues relating to ownership, barriers to entry, loans for low-income housing, agriculture and black SMMEs, empowerment financing and BEE transaction financing,” said Maziya.