Developing economies lose $1tn in GDP over exclusion of women from digital economies
Low and lower-middle income countries have lost over $1 trillion in Gross Domestic Product (GDP) over the last decade for excluding women from their respective digital economies.
This is according to a study by the Alliance for Affordable Internet (A4AI) and re-iterated by the Second Deputy Governor of the Central Bank, Mrs Elsie Awadzi-Addo.
Delivering the keynote address at the UN Capital Development Fund (UNCDF) International Women’s Day Dialogue, the Second Deputy Governor noted that, based on current tax-to-GDP ratios, the $1 trn loss in GDP represents an estimated $24.7bn in tax revenue in developing countries for 2020 alone.
The $1tn loss in GDP as noted by Second Deputy Governor, is facilitated by the existing gender gap whereby women in developing countries are less likely to own and use a smartphone for digital transactions as well as connect to the internet.
“Based on current tax-to-GDP ratios in these countries, this loss represents an estimated US$24.7 billion in lost tax revenue in 2020 and unless the gap significantly narrows, these countries will likely continue to lose billions more of economic activity (USD) each year if women continue to be excluded from the digital world,” she stated.
Speaking further on the theme “Women as Builders of Digital Economies in Ghana – A Call to Action to Close the Gender Gap in Access to and Usage of Digital Financial Services in Ghana,” Mrs Awadzi-Addo averred that digital financial services (DFS) has the potential to make a significant difference in bridging the gender gap in access to finance which has remained at nine percent in the developing world since 2011.
DFS she added, can help bridge the gap in account ownership, increase women’s participation in the financial system and give women the opportunity to save formally or access credit.
“It can also help their business by lowering costs and giving access to a diversity of financial services. McKinsey estimates that DFS could turn 1.6 billion of the 2 billion unbanked people into formal financial services customers by 2025, thus adding US$3.7 trillion to the GDP of emerging economies,” she added.
Touching on digital economy development in Ghana, Mrs Awadzi-Addo stated that 44% of micro, small, and medium enterprises (MSMEs) in Ghana are female-owned, and the sector accounts for about 92% of all businesses and contributes about 70% of Ghana’s GDP.
Adding that, despite the fast-growing and fast-evolving digital economy running the real risk of excluding many women and their valuable contributions to our socio-economic development, opportunities exist for women to harness the benefits of technology and new markets across Africa under the AfCFTA and beyond Africa.
“These market opportunities offer hope to women to start, sustain, and scale up their businesses and compete around the world. To enhance more participation of women in Ghana in the digital economy, however, there is the urgent need to address supply-side and demand-side barriers by adopting gender-focused interventions to respond swiftly to the opportunities presented by the digital economy,” she opined.
Read details of Mrs Awadzi-Addo’s speech below:
2nd Dep Gov Mrs. Elsie Addo Awadzi's Speaking Notes – IWD 2022 UNCDF – BoG Event by Fuaad Dodoo on Scribd
