Aid to Africa is being cut – but promoting women can make the continent self-sufficient

Africa is at a pivotal moment, with significant cuts in development assistance and reductions in foreign aid worldwide. In an unprecedented move, the US has put its USAID funding on ice, while finance to developing nations is also being cut across Europe. That includes Germany, one of the main donors worldwide, and the UK, whose overseas aid is being scaled back from 0.5% of gross national income to 0.3%, effectively a £6 billion cut intended to pay for increased defence spending.

This realignment is resulting in the underfunding of important sectors in Africa, notably education, healthcare and infrastructure. Such aid cuts run deep: For instance, the UK government’s decision translates into a reality where half a million fewer girls will be going to school each year. When aid is reduced, this creates more violence, shrinks trade opportunities, and ultimately makes donor countries less safe and prosperous.

Africa has an urgent mandate to identify and create sustainable pathways for economic resilience. The key to this self-sustainability lies in leveraging an untapped resource: women’s leadership and entrepreneurship.

Women make up about 58% of the self-employed population in Africa and contribute about 13% of the continent’s GDP. Sub-Saharan Africa has the highest female entrepreneurship in the world with 26%. Yet, despite these striking numbers, persistent gender gaps keep holding women back; closing them will add about $2.5 trillion to Africa’s GDP. In addition to the economic shortfall, there is a political one. The number of countries with more than 50% of women in parliament is just six globally, and for Africa, it is only one: Rwanda. Only 27% of members of parliament in sub-Saharan Africa are female. Bridging the gender gap is not just a matter of equity, it is an economic and political imperative.

The under-representation of women in leadership is expensive at the economic level. Businesses led by women tend to make social impact an equal priority with financial returns, thus developing and raising the living standards of the community. Evidence shows that at least 90% of income earned by a woman is channelled back into her family and community, while for a man, the comparative figure is 40%. An earlier study on the Panchayat, India’s rural local self-government, found out that areas led by women had proposed 62% higher drinking water projects compared to male leadership. In Norway, a direct connection between women's presence in the municipal council and childcare coverage has been proven.

Equally important, female political leaders are also shown to promote issues critical to long-term development. Women most often come up with policies related to education, healthcare, electoral reform, pensions and other social welfare programmes. They also develop new economic strategies: For example, in Africa, supportive policies have contributed to the growth of small-and-medium-sized women entrepreneurs, who contribute between $250 billion and $300 billion to economic growth.

Ellen Johnson Sirleaf, Africa’s first female president, steered Liberia out of economic chaos. Through negotiations and support from the international community, the country’s national debt, approximately $4.9 billion in 2006, now stands at virtually zero. She highlights the intersection between gender, development and economics by redefining leadership through her NGO, which improves market infrastructure, providing micro-credit support, literacy and business management training. From 2014 to 2016, she empowered communities to take responsibility during the Ebola outbreak, leading to effective contact tracing and containment of the virus.

Jacinda Ardern redefined leadership in times of crisis for her country, with empathy and decisiveness on the global stage. New Zealand had one of the lowest death rates related to COVID-19 in the world, while still maintaining economic stability. In the aftermath of the Christchurch mosque attack, she responded quickly with tough reforms for gun controls and sent a message of solidarity. She spearheaded a “well-being economy” in which the focus was not just GDP, but also social welfare, mental health and child poverty; a concept that has widely influenced governance models.

To harness the full potential of women's leadership in Africa, the following strategies are essential:

Africa is at a crossroads: Women-led initiatives and enterprises are poised to catalyze economic transformation that will take Africa beyond aid dependency onto self-sustained growth. This year’s International Women’s Day theme, “For all women and girls: Rights. Equality. Empowerment”, and the UN’s Pact for the Future reiterate that gender equality is a basic prerequisite to sustainable development. Through the full integration of women into leadership roles, Africa can realize unprecedented economic resilience that turns potential into tangible progress.