How gender bonds can help bridge gaps to empower women in Africa

The COVID-19 pandemic has brought to light the disproportionate impact on women in Africa, threatening to undo decades of progress towards gender equality. CNBC Africa's Ridhima Shukla recently spoke with Mary Njuguna of FSD to discuss how gender bonds can serve as a bridge to empower women on the continent. Gender bonds are thematic bonds specifically designed to fund gender-sensitive initiatives, targeting women entrepreneurs, small businesses, and SMEs. In Africa, where about 8-9% of the workforce consists of women working in the informal sector, and a significant number are involved in the agricultural value chain, the pandemic has posed challenges for many. Women-owned businesses, such as hairdressers, farmers, and tailors, faced difficulties accessing finance during the crisis, impacting their operations. Gender bonds play a crucial role in providing financial support to these women-led enterprises, ensuring the transparency and accountability of funds allocated. By investing in gender bonds, individuals can track the allocation of proceeds and measure the impact on women beneficiaries over time. Njuguna highlighted the importance of clear metrics for identifying and supporting women in various sectors, including agriculture, healthcare, and climate resilience. She emphasized the interconnected nature of gender empowerment initiatives, underscoring the need for holistic solutions that address multiple challenges simultaneously. Despite the challenges posed by the pandemic, gender bonds offer an opportunity for institutional investors to align their funds with sustainable objectives. These bonds serve as a valuable tool for promoting diversity and inclusion within target entities, leading to enhanced performance and returns. Transparency and accountability in fund utilization are key factors that attract capital to these initiatives, benefiting both the investee companies and the investors involved. Njuguna's insights shed light on the potential of gender bonds to drive positive change and empower women across Africa, paving the way for sustainable development and economic advancement. As the continent navigates the post-pandemic recovery phase, initiatives like gender bonds play a crucial role in ensuring that women receive the support and resources needed to thrive in a rapidly evolving landscape.