By Amanda Ellen Nicola Jojo
Currency and exchange rate changes can disproportionately impact women, especially those involved in informal or small-scale businesses. Adapting to new denominations and fluctuations can be challenging. Women relying on remittances are vulnerable to exchange rate shifts, affecting their purchasing power and ability to support their families. Limited financial education and access to resources exacerbate the difficulties, as many women cannot deposit old currency or access banking services, leading to loss of earnings.
In a statement, director of Women for Economic and Social Empowerment (WESE), Kundai Chambara noted that a market-determined exchange rate system can lead to fluctuations in currency value, which may disproportionately affect women who are more likely to be engaged in small-scale import businesses.
She said: “…women, especially those in rural areas or marginalized communities, have limited access to formal banking services and information.
“Therefore, policies aimed at ensuring efficient money supply management should also include measures to promote financial inclusion for women, such as mobile banking services or microfinance initiatives targeted at women entrepreneurs. Policies promoting efficient money supply management should consider gender disparities in financial inclusion.”
She further highlighted that there is need for strict monitoring to ensure that the money printed is inline with the reserves that are held.
“Women, who are often disproportionately employed in the informal sector or in low-income jobs, bear the brunt of currency fluctuations through reduced purchasing power and increased economic insecurity.”
Because Zimbabwe rely on imports for approximately 30.90% of its GDP, currency devaluation can lead to higher prices for imported goods like food, medicine, or clothing, affecting women’s purchasing power and potentially exacerbating gender inequalities in access to essential items.
“Women, especially those in informal sectors or with limited access to financial services, are facing challenges in adapting to the transition, managing their finances, and coping with potential price changes.”
Fact File: Reasons for a Smooth Transition and Recommendations for Zimbabwe’s Currency Transition
- Financial Instability:
– Majority of women in Zimbabwe rely on informal sectors for income, making them economically vulnerable.
– Transition to a new currency can lead to fluctuations in currency value and uncertainties, impacting women’s ability to budget effectively and plan for expenses.
- Access to Goods and Services:
– Disruptions in availability of goods and services can occur during the transition period.
– Women, responsible for household provisioning and shopping, may face challenges in accessing essential items due to shortages or price fluctuations.
- Employment Concerns:
– Women constitute a significant portion of the informal workforce, engaging in activities such as market vending or small-scale trading.
– Currency transition can lead to income losses or changes in market dynamics, affecting women’s livelihoods.
- Banking System Challenges:
– Financial institutions may struggle to adapt to the new currency, causing difficulties for women relying on banking services for savings or transactions.
- Inflationary Pressures:
– If the transition does not stabilize the economy or address underlying inflationary pressures effectively, women with limited financial resources may face rising prices and reduced purchasing power.
- Gender-Based Impacts:
– Economic shocks or disruptions caused by the currency transition can disproportionately affect women, exacerbating existing gender inequalities.
Recommendations for Zimbabwe’s Currency Transition:
- Evaluate Monetary Policies:
– Policies should be assessed based on their contributions to gender equality and women’s empowerment.
– Promote financial inclusion, economic opportunities, and social protection for women to narrow gender gaps in income, employment, and access to resources.
- Ensure Women’s Inclusion:
– Women’s voices and perspectives should be represented in decision-making processes related to monetary policy formulation and implementation.
- Focus on Production and Diversification:
– Concentrate on diversified production rather than solely relying on monetary supply.
– Anchor the economy on increasing the output of goods and services domestically, reducing reliance on imports, and driving economic growth.
- Address Fundamental Issues:
– Sound fiscal policies should be implemented to avoid challenges that undermined previous currency attempts.
– Stiffer measures should be taken against financial market speculation.
- Eliminate Tenderpreneurship and Corruption:
– Combat economic instability caused by tenderpreneurship.
– Siphoning off public resources through corrupt practices reduces the government’s ability to invest in productive sectors, leading to currency devaluation.