The economic potential of gender parity for Africa

By Acha Leke & Lohini Moodley

JOHANNESBURG – As home to some of the world’s fastest-growing economies, Africa is an exciting frontier for businesses looking for opportunities to expand in new markets. Yet persistent gender inequality is limiting the continent’s potential.

Notwithstanding success stories about women at the top of the pyramid, millions of ordinary African women are not sharing equally in Africa’s economy and society. Worse, progress toward gender parity has stagnated, or even regressed, in recent years. While women account for over 50% of the continent’s population, they generated just 33% of its GDP in 2018.

Progress toward gender parity varies across regions and countries, of course. Whereas Southern and East Africa have achieved solid progress, other countries in Sub-Saharan and northern Africa still have not. Some African countries have advanced gender equality in the workplace, but not in society at large, and vice versa. Ultimately, though, progress on one front is impossible without progress on the other.

Greater gender equality on both fronts would yield significant economic dividends. New research from the McKinsey Global Institute (MGI) and McKinsey & Company in Africa finds that the continent could add $316 billion to its GDP (a 10% increase) between now and 2025 if each country were to match the progress made by the region’s best performer on a particular indicator. But this scenario remains a distant possibility. At the current rate, it could take Africa more than 140 years to achieve gender parity.

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For example, some African countries – notably Botswana, Kenya, Uganda, Rwanda, and South Africa – have made headway in getting more women onto company boards. Across the continent, women now hold 25% of board positions – well above the global average of 17%. Yet there has been very little trickle down. Although Africa’s female labor-force participation rate is above the global average, most African women work in low-paid jobs in the informal sector, and have neither the skills nor the opportunity to advance. In fact, the share of African women in middle-management roles has fallen over the past four years. To make progress, more African countries will need to learn from the examples of Rwanda and South Africa, which have increased women’s representation in middle-management roles by 27% and 15%, respectively.

For example, some African countries – notably Botswana, Kenya, Uganda, Rwanda, and South Africa – have made headway in getting more women onto company boards. Across the continent, women now hold 25% of board positions – well above the global average of 17%. Yet there has been very little trickle down. Although Africa’s female labor-force participation rate is above the global average, most African women work in low-paid jobs in the informal sector, and have neither the skills nor the opportunity to advance. In fact, the share of African women in middle-management roles has fallen over the past four years. To make progress, more African countries will need to learn from the examples of Rwanda and South Africa, which have increased women’s representation in middle-management roles by 27% and 15%, respectively.

Beyond the workplace, Africa’s progress toward gender parity is comparatively poor. While Algeria has cut its maternal mortality rate by around 9%, the average maternal mortality rate across the continent is still higher than that of any other region in the world. Africa also falls below the global average in terms of women’s education and financial and digital inclusion relative to men. Indicators of financial inclusion among women actually declined over the last four years. And Africa has high levels of violence against women: 19% of African women have been victims of violence by an intimate partner, compared with 11% globally.

One brighter spot is political inclusion. At 25%, African women’s overall representation in cabinets and parliaments is higher than the global average (22%), and has risen by 6% and 3%, respectively, in recent years. Three countries are leading the pack: Ethiopia (which has a female president), Rwanda, and South Africa have each achieved gender balance in their cabinets. But in 12 other countries – including Morocco, Niger, and Nigeria – women’s political representation has declined since 2015.

If Africa is to secure the economic dividend that will come from empowering its women, it needs to step up its game. Empowering all African woman, rather than just those at the top, calls for systematic and concerted action by governments, businesses, and community leaders. Five priority areas stand out.

First, Africa must expand its human capital by investing in girls’ education. In Sub-Saharan Africa, for every 100 boys enrolled at the lower secondary level, there are fewer than 90 girls, and that number drops to less than 85 at the upper secondary level. Beyond basic education, women need far more support to develop their digital, financial, and legal literacy, and the skills required for the future of work.

Second, African countries should be looking for ways to create more economic opportunities for women in both the informal and formal economies. Success will require policymakers to address the third area: ensuring that women have equal access to the digital and mobile technologies that increasingly open doors to economic opportunity. In Sub-Saharan Africa today, only around 25% of women have access to the mobile Internet, whereas half of all men do.

Fourth, policymakers, businesses, and community leaders need to make a greater effort to change deep-rooted social attitudes about women’s role in society and work, as these underlie many manifestations of gender inequality. Lastly, African women need the support of the law, which starts with actually enforcing anti-discrimination laws where they already exist.

Across the continent, countries are starting to adopt explicit policies designed to close gender gaps. Some are making rapid progress, showing what is possible with foresight and a commitment to act. If governments and businesses can open the way for more women to experience rising incomes and job satisfaction, and to live healthier and more balanced lives, the benefits will accrue not just to millions of women, but to all Africans.

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Leke is a senior partner in McKinsey & Company’s Johannesburg office. Lohini Moodley is a McKinsey & Company partner in Addis Ababa.