Links between trade and gender in the African services sector
Featured in GREAT Insights Magazine, Volume 5, Issue 6. December 2016/January 2017. Author, Irene Ochem: Founder & Managing Director, AWIEF
Gender-sensitive policy-making and legislation is needed to address the challenges with gender inequality and harness the great potential that trade in the services sector holds for women’s economic empowerment and sustainable development in Africa.
The components of the services industry are defined as elements of economic transactions that are intangible, invisible and non-storable as opposed to goods transactions, and they serve as ingredients for successful manufacturing, agricultural and industrial activities in an economy. It follows that the services sector would encompass such areas as: wholesale and retail trade; information and communications technology (ICT); transport and storage; banking, financial and insurance services; education; health; environmental protection; real estate; business services and advisory; tourism and hospitality; community, social, and personal services.
The services sector is becoming increasingly important as it contributes in a significant measure to Gross Domestic Product (GDP) and trade in many countries. Interestingly too, a progressively larger percentage of those engaged in the services industry are women, underscored by the phenomenon of women moving out of agriculture into the services sector in developing economies and out of other industry settings into services in developed economies. The sector also represents the main sector of employment. A World Bank’s 2012 global survey on women employment showed that whereas 30% of women were employed in agriculture, and 16% were in industry, more than 50% of working women were engaged in the services sector.
Trade in the services sector has the potential to be a strong driver of economic growth and sustainable development in Africa and other developing regions of the world. Recent rapid developments in innovation and changes in technology have created new possibilities and capabilities. This article presents a consideration of the relationship between gender and services trade and its impact on the economic empowerment of women in Africa.
Services trade and constraints to women empowerment
Women engagement in the services sector in Africa significantly contributes to poverty reduction, employment and wealth creation. However, despite playing an important role and making reasonable contributions to their economies, African women as a group are not given adequate attention by their governments and policy-makers. This lack of an enabling policy environment and regulatory framework impedes the development of a more robust services sector in Africa. Trade policy outcomes such as income, employment, empowerment, and intra-household relationships have been seen to be gender-specific or gender-differentiated. In contrast to men, women operating in the services sector are mainly concentrated in micro- and small-scale enterprises and low-productivity activities with many working in the informal settings. In the tourism and hospitality spheres of the services industry for example, women often manifest an innate propensity to assume leadership positions and functions, besides constituting the backbone of activities in the sector. Therefore it would be argued that this industry, at least from this specific viewpoint, offers impressive career development and enhancement opportunities as well as personal realisation for women. Ideally, and also in consideration of the foregoing discussion, it would be expected that the huge potential encompassed in the different sectors of the services industry would be maximally harnessed to foster the economic empowerment of women especially in a world region like Africa where the economic relevance of women’s work or its contribution to socio-economic development is not yet fully appreciated.
In a globalised world where women thought leaders, innovators and policy influencers are beginning to take the lead in various spheres of public life, it would be hoped that the necessary enabling environment is created to enable women achieve their potentials in the services sector. Yet trade in the services industry is laden with the same gender-based discrimination, segmentation and limitations that affect the organisational levels of engagement for women and impede their advancement to leadership positions in all spheres of human endeavour. Women in Africa are more negatively affected by the disadvantages of trade liberalisation and face more challenges tapping into opportunities that international trade offers.
Despite the growing proportion of women in services sector trade and the contribution to a country`s economic growth, there still remain several challenges and constraints to economic empowerment of women. These include gender inequalities in access to economic opportunities, gender bias in education and skills development, less access to capital, finance, technology, market information, business networks, and ownership of productive inputs such as land. Women are additionally constrained by disproportional responsibilities for unpaid domestic work and family care, which translates to time poverty and less energy for unleashing their full potential for economic enhancement.
We take as an example the tourism and hospitality industry, a major services sector that offers important opportunities for women’s employment, revenue earnings and personal realisation across different African countries. It is widely observed that women’s participation is significant in the entire tourism value chain ranging from accommodation, transportation, restaurants, and souvenirs, to guides, tour operators and travel agencies. However, women’s job careers and economic activities in this sector remain predominantly at the lower levels of operations with fewer women than men occupying space at the topmost height of the leadership and corporate management ladder. Another example is the case of women informal, small-scale trans-border traders who make an important contribution to economic growth and government revenues in sub-Saharan Africa. On the one hand this offers appreciable employment opportunities and revenue earning for the operators who usually are inhabitants of the border areas. On the other hand women informal cross-border traders are vulnerable to invisibility, stigmatisation, violence, sexual harassment and similar serious abuses, as well as corruption by immigration officials and challenges related to poor infrastructure in terms of communication technology and accessible roads. They endure poor working conditions, illiteracy, data paucity due to the informal nature of cross-border trade, and lack of recognition of their economic worth and contribution.
Lessons and recommendations for policy-making
Women play an important role in trade in the services sector that helps to build African economies and contribute to sustainable development. It is therefore imperative for African countries to facilitate and ensure the policy space, institutional and regulatory mechanisms to make services trade work for women, their equal economic opportunities and empowerment. Governments must put in place appropriate trade policy and gender-sensitive legislations targeted at removing barriers and enhancing opportunities. These can include:
- fiscal policies that provide incentives to encourage exports from women-owned services sector businesses;
- reducing tariffs in services enterprises with high female employment ratios such as tourism and hospitality;
- enhancing access to finance and advancing financial inclusion for women;
- putting in place policies and regulatory frameworks to encourage banks and finance institutions create more innovative gender-focused products and services to boost women entrepreneurship;
- having appropriate education and skills development policies to reduce illiteracy and allow women be more qualified to take up higher-level jobs in the services value chain;
- increased access to STEM (science, technology, engineering and mathematics) education and equitable technical training to enhance women innovation in business and entrepreneurship; and
- instituting policies to reduce women’s time poverty by redistributing unpaid domestic and care work.
All in all, it is essential to create the necessary awareness and building capacity that will make women more knowledgeable and aware of their rights to equal economic opportunities. Policies should ensure that women are treated as equal parts of the labour force and are not exploited – “equal pay for equal work” – and that they acquire skills sought by services companies as they expand and trade internationally.
About the author
Irene Ochem is the Founder and Chief Executive Officer of the Africa Women Innovation & Entrepreneurship Forum (AWIEF), a not-for-profit women economic empowerment organisation based in Cape Town.
Photo: Nigerian Minister of Women Affairs and Social Development, Senator Aisha Jummai Alhassan visiting an exhibition and a grassroots/rural woman exhibitor proudly showcasing her products. Credits: AWIEF photo gallery.
This article was published in GREAT Insights Volume 5, Issue 6 (December 2016/January 2017).