The G7 must place women at the heart of build back better agenda – Thomson Reuters Foundation

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

By Bogolo Kenewendo, an economist, a member of the UKs Gender Equality Advisory Council, the formerMinister of Investment, Trade and Industry of Botswana and the managing director of Kenewendo Advisory, an economic advisory firm based in Botswana

There is an African saying: empower a woman and empower a community.

As the G7 leaders meet in Cornwall, the acknowledgement of this simple truth has never been more vital.

The UN estimates that the COVID-19 pandemic has dumped 47 million more women and girls below the poverty line. Women are particularly vulnerable to the pandemics impact because they tend to work and run businesses in the informal economy where there is no state-provided safety net of any sort.

This disproportional impact extends to access to capital. In sub-Saharan Africa, 40% of businesses are owned by women but only 20% of that number have access to institutional finance. Thats a funding gap of $42 billion. As risk averse private financial institutions retrench in the wake of the pandemic, this situation is getting significantly worse, causing what could be termed a she-cession.

In order to lessen the impact of the pandemic and potential of economic scarring, governments have to employ transformative economic recovery plans that focuses on inclusion through building womens economic agency. This is where gender-lens investing comes in. In simple terms, gender-lens investing is about deploying capital in people and companies with the specific goal of supporting women.

Gender lens investing wont only assist in reaching the UNs Sustainable Development Goal on gender equality, but is also a catalyst for achieving all of the other SDGs. The economic, business, as well as the social case, for investing in women is obvious. Among many different metrics which support this argument is a recent study by McKinsey estimated that if women's economic participation rates were the same as men it would be worth an additional $28 trillion to the global economy by 2025. By anyones standards, these numbers are huge and underline the scale of both the problem and the opportunity to invest in women.

The 2X Challenge, founded by the development finance institutions of the G7 nations to increase investment in women, has a set of qualifying criteria for investments which serve as a very useful guide for what this means in practice.

There are hundreds of examples of businesses that have benefited from gender lens investment. PEG Africa, a solar power company providing home systems to customers in West Africa has received $12.5 million of 2X investment from the UKs CDC Group. As a result, the company has doubled the number of women in leadership positions from 22% to 44%.

The success of the 2X Challenge, which is set to raise a further $15 billion over the next two years for investing in women in the developing world, is very welcome. And that success underlines the vital importance of development finance institutions, such as DFC in the US and CDC Group in the UK, in encouraging global private financial institutions to adopt gender lens criteria.

As a member of the Gender Equality Advisory Council (GEAC),set up by the UK government to look at how we support women as part of the build back better agenda, we will be pressing the G7 leaders to place women and gender equity at the heart of plans to build back better. They have an opportunity an opportunity to provide leadership in building inclusive economies that prioritise women and their children.

The G7 can play a key role in providing access to capital and labour markets for women. This is a crucial component of economic empowerment, and central to womens financial independence globally. Women more often face barriers to securing finance, insurance and business ownership, thereby hindering entrepreneurship.

We need to encourage financial stakeholders to leverage the power of capital markets and movements of resources to steer responsible business conduct and foster inclusive corporate cultures.

Job creation initiatives should be pivoted to increase support for women-led industries and policies tailored to support women-owned micro, small and medium sized enterprises (MSMEs).

We require existing and new Aid for Trade initiatives to include the tools for crafting gender-responsive trade policies, to support women in programmes that foster trade and economic empowerment and to work directly with women-owned businesses in developing countries.

The stakes could not be higher, nor the opportunity greater.

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The G7 must place women at the heart of build back better agenda - Thomson Reuters Foundation