Financing for Development Must Account for Women
Seville: The Fourth International Conference on Financing for Development (FfD4) is taking place at a time of escalating debt crises, rising poverty, declining food security, and proliferating climate-related damage. These crises are all exacerbated by deep reductions in official development assistance (ODA), and they all disproportionately affect women and girls, especially in developing countries.
Almost half of humanity – 3.4 billion people – now live in countries that direct more revenues towards servicing interest on debt than towards education or health, where a lack of investment directly undermines economic opportunities for women and girls. Moreover, only 5% of ODA goes towards programmes with gender equality as the principal objective.
Women’s options for improving their own economic circumstances are limited, not least because of limited access to finance. The total finance gap for women-led micro, small, and medium-sized enterprises is an estimated $1.7 trillion. Women running medium-sized enterprises, in particular, struggle to access both venture capital to support growth, and working capital to support day-to-day operations. Some 740 million women worldwide lack access even to a bank account.
Compounding the problem is unequal access to the internet, which is essential for financial and digital literacy. It does not help that women continue to dedicate a disproportionate amount of time to unpaid care work, which, if properly compensated, would add at least $10.8 trillion per year to the global economy. Female labour-force participation amounts to just under 47% globally, compared to 72% for men.
These problems are set to worsen. For starters, the algorithms underpinning AI tools – which are being used in a growing range of areas, from assessing creditworthiness to making hiring decisions – may perpetuate existing biases. Furthermore, many developing economies will struggle to create enough jobs for their burgeoning youth populations: while 1.2 billion people are set to reach working age within the next decade, only 420 million jobs are expected to be created. Young women are more likely than young men to be left out. At the current rate of progress, it will take 134 years to close the global gender pay gap.
There is now a large body of evidence showing that everyone loses when women and girls are not given the tools and opportunities to reach their potential. Economies in Sub-Saharan Africa lose $210 billion annually – more than 10% of the region’s total GDP – as a result of girls leaving school early. Low- and middle-income countries stand to lose $500 billion over the next five years if they fail to close the gender gap in internet access and usage. Studies also show that gender-responsive approaches significantly increase the effectiveness of climate-adaptation finance. All told, investing in gender equality could increase global GDP by more than 20%.
FfD4 represents an important opportunity to build a global financial architecture that expands women’s access to finance, increases their labour-force participation, and contributes to shared prosperity. If done right, this process would harness the energy of young people and make the most of emerging technologies.
There is good reason for hope. The FfD4 outcome document (Compromiso de Sevilla), adopted on Monday on the first day of the conference, includes commitments to gender equality and the empowerment of all women and girls, including through poverty eradication, female entrepreneurship, and equal access to financial services.
But commitments are just the beginning; to deliver real progress, a robust framework for implementation and accountability will be essential. The “Sevilla Platform for Action” – which will mobilise partnerships among government, civil-society organisations, and private-sector actors to advance concrete initiatives – is a promising step in this direction.
Promising initiatives are already taking shape as part of this platform. One of them – called Investing in Care for Equality and Prosperity: A Global Initiative to Advance Gender-Responsive Financing for Development – aims to expand impact investments in care policies, infrastructure, and services. For example, partnerships with the private sector would focus on delivering supportive workplace policies and decent working conditions for care workers, and partnerships with financial institutions would drive investment in care infrastructure. This initiative is led by a small group of countries and civil-society organisations, and has been endorsed by many more, including our organisation, GWL Voices.
Such initiatives have huge potential to advance gender equality. But closing the gender gap will require leaders to apply a gendered lens to policy debates across the board, not least when it comes to finance. And that can happen only if women have a seat at the table.
As it stands, women remain woefully under-represented at the top of international financial institutions and in senior finance-related positions in public institutions. In 2023, only 26 of the International Monetary Fund’s 190 members had female finance ministers, and only 23 central banks were led by women (though the total rose to 29 in 2024). Many international financial institutions, finance ministries, and central banks have never had a woman at the helm.
The development community must address the structural barriers women face head-on, at FfD4 and beyond. This is not just a moral imperative; it is smart economics. The time to invest in women and girls is now.
María Fernanda Espinosa, a former foreign minister of Ecuador and a former president of the UN General Assembly, is Executive Director of GWL Voices and Co-Chair of the Debt Relief for a Green and Inclusive Recovery Project.
Anita Bhatia, a member of GWL Voices, is a former deputy executive director of UN Women and a former UN assistant secretary-general.
Copyright, Project Syndicate.
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