The coronavirus pandemic has left a trail of havoc in its wake almost two years since the onset of the global crisis. AMAKA examines its economic effect on African and Black women.  

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Pandemics have historically been known to be incubators of social unrest and COVID-19 has been no different, with countries facing the worst socio-economic challenges in decades.

The World Health Organisation officially declared COVID-19 a pandemic on 11 March 2020, and although efforts to curb infections reduced fatalities, it exposed gender-based social, political and economic inequalities in global systems. 

Evidence shows poor and marginalised communities are more susceptible to COVID-19, and those from Black and ethnic minority backgrounds have significantly higher infection and mortality rates worldwide when compared to white and Asian people. Various studies report gendered norms endangered women during the outbreaks as they are more likely to be exposed due to their roles as main caregivers in families and as front-line healthcare workers. Women carry out more care work when compared to men — up to 10 times more according to OECD Development Centre’s Social Institutions and Gender Index. 

While the crisis came with a price for everyone, being a woman became a penalty. Women lost around $800bn (£583bn) in income in 2020. A McKinsey report suggests women make up 39% of global employment but accounted for 54% of job losses during the pandemic.

Gender, race and economic inequalities  

Women are more affected by economic crises due to the gender-pay gap, disproportionality working in informal sectors and being burdened with unpaid care and domestic work. There is also the issue of gender disparity when it comes to who is expected to take care of the kids. And women are more likely to drop out of the workforce for childcare reasons, especially amid COVID-19 with children being home-schooled as schools were shut down during the most difficult times of the pandemic.

The world heavily relies on women to deliver healthcare services. Globally, 70% of healthcare workers and first responders are women, they account for almost 90% of nurses and midwives and around 50% of doctors, but still earn less than men. At 28%, the pay gap is significantly higher than the global average of 16%.

In the workplace, women are more vulnerable to layoffs, losing their livelihood and depending on less secure income avenues. According to the United Nations, 58% of women work in insecure informal sectors and estimates show informal staff globally lost an average of 60% of their income in the first month of COVID-19. 

In Africa, whether employed or self-employed, rural, or urban, the nuances of how the pandemic unfairly affected women have become clearer through data. Women on the continent and across the world are more likely than men to live in extreme poverty. Poverty estimates indicate nearly 60% of the world’s poorest women live in Sub-Saharan Africa and this number is expected to exceed 71% by 2030.

Meanwhile, measures aimed at mitigating the impact of COVID-19 have been uneven and few are gender responsive or gender specific. Across Sub-Saharan Africa countries, less than 16% of total economic, fiscal, job and social protection responses tackle women’s economic security. Of the 45 measures across 24 nations and territories in the region, 22 fall under the social protection category. 

The rate of women working in informal sectors or in traditionally female sectors increased during COVID-19, with 63% of women in Africa’s non-agricultural labour force being self-employed in the informal sector. The informal economy is a key component in most Sub-Saharan Africa economies, where around 90% of women work in informal sectors. 

COVID-19 triggered the worst job crisis since the Great Depression and more women in Uganda and Ethiopia lost work than men. In the latter, despite accounting for 42% of Ethiopia’s workforce, 64% of laid off workers in April 2020 were women, this slightly improved to 57% in June 2020. 

Other African countries saw similar trends. Nigeria – Africa’s largest economy with a GDP of $443bn in 2020 – and the continent’s largest oil exporter, was particularly vulnerable due to a sharp decline in oil prices. Nigeria’s informal sector contributed 67% to the country’s GDP in 2017, and women are overrepresented in pandemic-rampaged industries. Vital Nigerian sectors dominated by women, like markets, shut down during the pandemic, leading to 91% of market traders reporting zero profits due to COVID lockdowns in February 2021. 

History has consistently proven women are more at risk than men to job losses in times of socio-economic crises. Although there were pre-existing gender and race issues in the workforce, studies show African and Black women bore most of the brunt both pre-COVID and during. 

As the pandemic progressed, the labour market deteriorated. Unemployment numbers in the US showed Black and Latina women were hard hit, with rates at 8.9% and 8.5% respectively. In February 2020, before COVID-19 was classed a pandemic, Black women had an employment population ratio of 60.8%; this stood at 55.7% in June 2021 – a drop of nearly 5 percentage points. Black women were only 14% of America’s female workforce, but accounted for 26% labour force drop outs since then. 

The full impact of COVID-related job losses in Britain is yet to be realised, but furlough figures indicate women are at greater risk of job losses once they wrap up. Women and people from ethnic minority backgrounds were disproportionately impacted socially and economically by the shutdowns of many sectors. Official analysis from the Office for National Statistics (ONS) shows the unemployment rate for Black, Asian and Ethnic Minority groups rose at more than twice the speed of the rate for white workers — from 5.8% to 9.1% between the final quarter of 2019 and the same time in 2020. Another survey found 34% of Black people in the UK identified as key workers. Of this, a higher percentage of women from Black African and Black Caribbean backgrounds worked in the front-line healthcare and social work sector. This puts them at greater risk of COVID-19, and leaves them with additional financial burdens like childcare. While Black women in the NHS earn less than their white colleagues, earning 93p for every £1. 

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Impact on funding for female-led companies 

African women lead the world in the number of entrepreneurs and make up 58% of the continent’s self-employed population. They also play an important role in several sectors, accounting for 40% of the crop production sector in the agricultural labour force in Ethiopia, Malawi, Uganda, Nigeria, Tanzania, and Niger, according to the World Bank. 

While a high percentage are entrepreneurs and small business owners, they face several challenges to access finance as lending to women is considered to be riskier. There is also the issue of a funding gender gap, which currently stands at $42bn, with agriculture alone accounting for $15.6bn according to the African Development Bank. 

Venture funding for women-led companies was also lopsided during COVID-19 and the underrepresentation of women in sectors like tech added fuel to the fire. Africa’s venture capital market declined 29% in total value of deals last year and female-led micro, small and medium sized enterprises (MSMEs) are more at risk of losing out on funding and business closures due to the crisis. In 2019, less than 5% of venture capital funding for African startups went to firms with women co-founders. 

Most MSMEs across Sub-Saharan Africa suffered harsh COVID-induced business impacts due to corresponding public health measures, like lockdown. According to an International Financial Corporation (IFC) study, women-led MSMEs entered the pandemic with lower rates of financial inclusion compared to male-led ones and COVID-19 exacerbated these trends. IFC’s research found more women-led MSMEs lost over 50% of revenue and faced pandemic-related cost rises compared to men-led firms. Those in construction, manufacturing, education, trade, and hospitality reported the most losses.

Outlook for the future 

Unprecedented, the pandemic caused economic activity to shrink in Africa in 2020, but real GDP is forecast to grow by 3.4% in 2021 after contracting 2.1% last year as economies reopen. “This projected recovery from the worst recession in more than half a century will be underpinned by a resumption of tourism, rebound in commodity prices and the rollback of pandemic induced restrictions,” an African Development Bank Group report says. 

While COVID-19 amplified earlier biases and slowed progress to improve diversity, equity and inclusion in the workplace, hope is on the horizon as addressing gender inequalities in COVID-hit sectors could add $13trn to the global GDP by 2030. 

There are suggestions the crisis created a boomerang effect that reverses changes made in certain industries, however the tech sector provided a silver lining. The ICT sector grew as businesses accelerated digitisation and people worked from home. African tech startups also had a “record year for investment” in 2020, the number of investors grew substantially, while fintech remained the dominant sector for investment, health tech is catching up. Another study by AfricArena suggests venture capital funding for African startups will reach up to $2.8bn this year and is predicted to climb above $10bn by 2025. 

Although COVID-19 has forever changed life as we know it, it created opportunities to fill gaps in markets as we enter a post-pandemic economy. With African female founders on the rise, the future looks bright and African women are set to unleash their prowess on burgeoning sectors including tech, with prospects of closing the high gender gap.