The democratisation of investing (and the app that helps women get ahead)
This content is brought to you by Shyft, the global money app powered by Standard Bank
In South Africa, the percentage difference between average hourly earnings for men and women is among the highest in the world. This Women's Month, it's time we discuss the democratisation of investing and how to equal the playing field.
The 17th edition of the World Economic Forum's Global Gender Gap Report (GGGR) was published a few weeks ago, dovetailing our local commemoration of Women's Month. This, coupled with a year of stubbornly high inflation and purse-pinching interest rates, makes for a timely opportunity to reflect on gender equity from a financial perspective.
According to the GGGR
The GGGR is an insightful snapshot of global gender parity across four key dimensions, namely: Economic Participation and Opportunity; Educational Attainment; Health and Survival; and Political Empowerment. It's the longest-standing index of its kind, having launched in 2006. According to the GGGR 2023, the current global gender gap score is 68.4%, up from 68.1% in 2022. This means that at the current rate of progress, it will take 131 years for the global community to reach full parity between men and women.
Pleasingly, South Africa ranks 20th on the Global Gender Gap Index 2023, out of 146 countries, with a score of 0.787 (scores are between 0 and 1). The top-ranked country, Iceland, scored 0.912, and the lowest-ranked country, Afghanistan, scored 0.405. The UK achieved a score of 0.792, placing it 15th, while the US achieved a score of 0.748 to rank 43rd on the index.
With a rank at least 20 positions above the world's leading economy, you wouldn't be blamed for thinking that we have nothing to worry about, but our impressive ranking is not a clear representation of the full picture.
The SA scene
Regarding "wage equality for similar work", South Africa ranks 111th – meaning that the percentage difference between average hourly earnings for men and women is among the highest in the world.
According to Saadia Zahidi, the Managing Director of the World Economic Forum, "accelerating progress towards gender parity will not only improve outcomes for women and girls but benefit economies and societies more widely, reviving growth, boosting innovation and increasing resilience".
One of the main ways to work towards gender parity is to address the 23% – 35% difference in what men and women in South Africa earn for doing the same work. It's not only the right thing to do, it's also socioeconomically meaningful, especially when you consider that a sole female breadwinner heads more than 40% of South African households and that far more children (41.7%) live with single mothers than with single fathers (4.4%).
It's also important to acknowledge that women's social responsibilities leave them less economically developed than their male counterparts. And because women have less to save and invest, they are often more financially vulnerable – a reality that comes to full bloom at retirement.
In Mind the gender pension gap!, a research paper written by Dr Lee-Ann Steenkamp1, Programme Head: PGDip Financial Planning, Stellenbosch Business School, Steenkamp notes: "The Organisation for Economic Co-operation and Development (OECD) defines the gender pension gap as 'the difference between the average retirement income of men and women in the latest year available', i.e. the difference between men's and women's accumulated wealth at retirement. Several studies have attempted to quantify the gender pension gap, with estimates ranging from 37% in the EU to 30% in the UK and 26% in OECD countries. South Africa's gender pension gap mirrors that of the OECD, with the average difference in retirement income between men and women measuring 26%."
Read also: The top 5 gadgets for 2023 (so far)
A way forward
Steenkamp offers several valuable solutions that various stakeholders can implement in helping women get ahead or gain equal footing in money matters. She mentions, for example, that retirement schemes should consider the gender differences that cause women to participate less in retirement schemes or make smaller contributions by accounting for women's irregular career patterns, including career breaks following childbirth.
She also says: "Women's financial literacy and independence should be encouraged from a young age. Many women rely on their life partners to manage their finances and to provide for them in their old age. However, abdicating financial responsibilities to one's partner is, in my opinion, risky and unwise."
The tech solution
Investment apps such as Shyft allow women to take their financial future into their own hands, quite literally, with just a few taps of a smartphone screen. It's part of a growing movement to make investing more relatable, accessible and downright doable – consider it the democratisation of investing.
Powered by Standard Bank, which is the largest bank in Africa by assets, Shyft can be used by any South African who is 18 or older – even if they don't bank with Standard Bank – to enjoy access to over 300 top global stocks and ETFs that users can invest in. The app also offers the cheapest forex in South Africa, meaning users get more value for their money, which means having more money to invest in stocks and ETFs.
Encouraging the use of investment apps is not just about the convenience of tech but also about giving women the tools to invest independently in companies that resonate with their values and are aligned with their priorities. In this way, financial literacy goes from being a theory to being practical.
1 Steenkamp, L. (2022). Mind the gender pension gap! In A. Bosch (Ed.), Women's Report 2022: Women and fiscal policy. Retrieved from www.womensreport.africa.
This post was sponsored by Shyft, the global money app that's powered by Standard Bank. Anyone, anywhere, can use Shyft – no matter where you bank. Download the app at getshyft.co.za and enjoy the cheapest forex in South Africa and access to over 300 top global stocks and ETFs to make money moves that matter to you. Shyft operates under the licence of The Standard Bank of South Africa Limited, an authorised Financial Services Provider (FSP number 11287).