By IPS Correspondent
UNITED NATIONS, Aug 6 2024 – After weeks of violent clashes against protestors, Bangladesh Prime Minister Sheikh Hasina resigned from her position and fled the country on Monday. Preparations are underway for an interim government to take over with the backing of the military, political parties, student leaders of the protest movement and all other groups involved in the transition. A UN spokesperson has urged that all parties involved in the current transition should work together to ensure a peaceful and democratic transition.

UN Secretary-General António Guterres is closely following developments, according to his deputy spokesperson, Farhan Haq. In a statement issued on Monday, Guterres condemned and deplored “further loss of life” during protests over the weekend, referencing protests held in the capital of Dhaka on Sunday. More than 100 people were reported dead, including at least 14 police officers. This has been the highest recorded death toll for a single day during a protest in the country’s recent history, according to Reuters.

During the daily press briefing at UN Headquarters, Haq said that the United Nations stands in full solidarity with the people of Bangladesh and has called for the full respect of their human rights. Haq added: “For us, the important things are for the parties to remain calm, and we want to emphasize a peaceful, orderly and democratic transition.”

“Ultimately, regarding what’s happened so far, there’s a need for a full, independent, impartial and transparent investigation into the violence that has happened so far,” he said.

As the situation continues to unfold, Haq added, the UN and its office in Bangladesh are keeping in contact with the authorities on the ground. “The situation is moving very swiftly. We will have to see what happens once the dust settles.”

What began as a movement to protest civil service recruitment practices has since evolved into a greater movement protesting the government’s crackdown, which was seen to have cracked down on human rights, such as freedom of expression and the right to peaceful demonstration. On August 4, protestors were calling for Hasina’s resignation in the wake of her government’s response to the month-long protests. In recent weeks, police and military units shot at protestors and civilians, enacted a curfew, and shut down internet and communications networks for several days.

In an address to the country on Monday, Chief of Army Staff General Waker-uz-Zaman announced Hasina’s resignation and the formation of the interim government. He also asked the people of Bangladesh to “keep trust in the army” during this period.

As multiple reports emerged of public vandalism and arson of government buildings and residences, Zaman said in a later statement that the public should refrain from causing damage to public property or harm to lives.

Senior officials in the UN system have publicly condemned the loss of life during this period. UNESCO Director-General Audrey Azoulay issued public statements condemning the killings of two journalists and calling on the authorities to hold those responsible accountable.

Sanjay Wijisekera, UNICEF Regional Director for South Asia, condemned the reported deaths of 32 children as of August 2, along with reports of children being detained. “In line with international human rights and the UN Convention on the Rights of the Child, to which Bangladesh is a signatory, and based on research into the effects of detention on children, UNICEF urges an end to the detention of children in all its forms,” he said.

UN High Commissioner on Human Rights Volker Türk issued a statement on Monday in which he called for the peaceful transition of power, guided by human rights and the country’s international obligations.

“The transition must be conducted in a transparent and accountable way, and be inclusive and open to the meaningful participation of all Bangladeshis,” he said. “There must be no further violence or reprisals.”

Türk called for those who had been arbitrarily detained to be released. He stressed that those who committed human rights violations need to be held accountable, while also reiterating that his office would support any independent investigation into these violations.

“This is a time for national healing, including through an immediate end to violence, as well as accountability that ensures the rights of victims to truth and reparations, and a truly inclusive process that brings the country together on the way forward.”

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By Promise Eze
ABUJA, Aug 6 2024 – Thousands of Nigerians have taken to the streets to protest against bad governance, corruption, soaring inflation, and the rising cost of living, in what has been termed “10 Days of Rage” and believed to mirror Kenyan protests organized by the youth.

Nigeria, Africa’s most populous country and a major exporter of crude oil, citizens claim that the benefits of the country’s resources do not trickle down to the masses but to a group of corrupt politicians.

The demonstrations, slated for the first ten days of August, gained momentum on social media, with the hashtag #EndBadGovernanceInNigeria accompanied by the slogan “10 Days of Rage.”

This follows the protests in Kenya, where young people engaged in six weeks of demonstrations over an unpopular bill that sought to raise taxes. Under pressure, President William Ruto retracted the bill and announced a cabinet shake-up.

There is no organized leadership for the Nigerian protests, but some of the demands include a total overhaul of the Nigerian system, including the reversal of economic policies implemented by President Bola Tinubu from his first day in office. A group is also clamoring for the unconditional release of Nnamdi Kanu, a leader of a proscribed secessionist group who was arrested in Kenya, extradited to Nigeria, and detained since June 2021. In the northern state of Kano there were demands the president step down.

Tinubu eliminated the contentious fuel subsidy and requested the central bank to stabilize the naira and control inflation, which experts say may improve the economy but has ultimately impoverished millions of Nigerians.

To appease Nigerians before protests began, the government hastily approved an increase in the minimum monthly wage from 30,000 naira (approximately USD 18.55) to 70,000 naira (USD 43.29) following pressure from labour unions. Observers note that this raise is negligible in the face of soaring inflation, which has exceeded 34%—its highest level in nearly 30 years—resulting in one of the nation’s most severe cost-of-living crises. Politicians promised to slash their salaries by 50% to help solve Nigeria’s hunger crisis.

Tinubu also held several closed-door meetings with leaders from across the country to appeal to Nigerians and quell the protests. Job advertisements in government institutions also made headlines.

Agabi Yusuf, a civil rights activist in Sokoto, Northwest Nigeria, argues that all of the “fire brigade”approaches to appeal to Nigerians to stop the demonstrations will not work because “Nigerians are hungry, and this time they have been pushed to the wall.”

“You don’t expect them to keep their mouths shut,” he told IPS.

Brutal Force

Yusuf is worried about the government’s brutal response to the protests. Human rights group Amnesty International reported that on the first day of the protests, at least 13 people were killed in clashes between protesters and police forces in various cities. Local media provided differing death tolls, with one newspaper claiming that up to 17 people were killed.

A 24-hour curfew was imposed in many parts of the country, including the northern state of Kano, which is the second-largest state and one of the country’s major voting blocs, following the looting of government and public properties there.

People defied the curfew, waving the Russian flag and chanting in the local Hausa language, calling on the president to step down and for the military to take over power. The police responded by killing no fewer than 10 people.

The Sokoto-based Yusuf, who was detained by Nigeria’s secret police on July 25 for attempting to organize youth to protest peacefully, said the threats and brutality from the government can only help but make things spiral out of control.

Yusuf told IPS that the security agency claimed he was part of those allegedly plotting to topple the government of Tinubu through the protests.

“The officers were just yelling at me. They locked me up in a very smelly room for about eight hours. In fact, they threatened that if anything went wrong during the protest, I would be held responsible,” Yusuf, a leader with the Northern Advocate for Good Governance, said.

Yusuf is not the only one who has been threatened and detained. According to Amnesty International, nearly 700 protesters, including journalists, have been arrested across the country while nine officers have been injured during the protests. The authorities are wary that the protests may mirror the deadly EndSARS demonstrations against police brutality in 2020, which resulted in deaths and injuries after security forces opened fire on unarmed protesters.

Oludare Ogunlana, Professor of National Security at Collin College in Texas, shares Yusuf’s views. He told IPS that suppressing people from protesting will result in very deadly repercussions.

“As we are appealing to the protesters to be orderly, we expect the security agencies to be cautious. If you use deadly weapons on people, then it will escalate and become uncontrollable. The people are simply telling the authorities to address their concerns, but the government has been indifferent.”

Nuredeen Hassan, a political analyst in Nigeria, argued that though the protests may have been inspired by what happened in Kenya, there were already signs that Nigerians may soon storm the streets. He noted that “people are really angry about the state of the country.”

“While Tinubu has only been president for about a year, his party has held onto power for nine years and only a few of the promises made over the years have been fulfilled. The country is getting worse and this has infuriated Nigerians,” he told IPS.

In the administrative capital Abuja, where residents are angered about the rising cases of kidnapping for ransom, police chased protesters and threw canisters of tear gas at them, injuring many. Security agencies shot live rounds at journalists and protesters, and indiscriminately arrested dozens.

Yakubu Muhammed, a reporter with Premium Times, a daily paper in the country, told IPS that while he was trying to film police officers arresting people, he was hit with the butt of a gun and dragged into a van. “Despite explaining that I am a pressman, they arrested me and seized my phone. In the van, I met four people. I was released some moments later,” he said.

Critics accused the security agencies of failing to protect protesters but rather choosing to give cover to allegedly government-paid thugs who, all over the country, are raising placards saying, ‘Say No To Protest’.

In Nigeria’s economic capital Lagos, thugs threatened and chased protesters while the police watched.

The Race For 2027

President Tinubu addressed the country on the fourth day of the protests. He pleaded for an end to the demonstrations but insisted that he would not reverse any of his economic policies.

His speech did not go well with the opposition who slammed him for not addressing the demands of the protesters. A former Vice President of Nigeria, Atiku Abubakar, said that Tinubu’s “speech neglects the pressing economic hardships that have besieged Nigerian families since the very beginning of his tenure.”

Ibrahim Baba Shatambaya, a lecturer in the Department of Political Science, Usmanu Danfodiyo University, Sokoto, Nigeria,  is concerned that the President made no reference or condemned the killing of protesters in the country by security forces, despite his promise to hold onto the tenets of democracy and human rights.

“The protest is just one event which is an outcome of the poor performance of the government. If the government does not do the needful in actually reversing the trends of economic hardships in this country, the tendency is that the ruling political party may not likely have a field day come the subsequent round of elections in 2027,” Shatambaya said.

Ethnic Tensions

Peter Obi, a former governor of Anambra State in southeast Nigeria, was criticized by Tinubu’s media aide, Bayo Onanuga, for allegedly leading his supporters to organize the protests to remove the president from power. He referred to Obi’s supporters as members of the proscribed pro-secessionist group  Indigenous People of Biafra (IPOB) led by the detained Kanu. IPOB is agitating for an independent Biafra Republic which would be made up of Nigeria’s southeastern states-the home base of the Igbo tribe.  Onanuga claimed Obi, a presidential candidate in the last elections, is unhappy that he lost to Tinubu in a very tight race.

Obi has denied this claim and has taken legal action against Onanuga for defamation. Observers like the political analyst Hassan say this is just a reflection of the level of ‘Igbophobia’ meted out against the Igbos by some actors in the government and, if care is not taken, could lead to an ethnic crisis.

Organized Igbo-led groups in Nigeria’s southeast denounced and pulled out of the protests before they began, fearing there would be a bloody backlash against them if the protest spirals out of control. They fear that, just like in 1966, when thousands of Igbos were blamed and massacred for allegedly leading a revolutionary coup that saw the deaths of many influential leaders and eventually led to a nearly three-year civil war, they could be targeted for actively calling for Tinubu’s resignation.

Meanwhile, in the Yoruba ethnic-dominated Southwest, Tinubu’s home base, there are growing calls for Igbos to leave the region, which has been condemned by the national government.

Elsewhere in the north, where the protests have become extremely violent with many cities shut down, and workplaces, hospitals, and schools closed, rumors are spreading that the northerners, the majority of whom are from the Hausa and Fulani ethnic groups, are actively protesting against the government because they want Tinubu, a Yoruba man, to step down for one of their kinsmen.

“Some Yorubas are defending Tinubu like they are not seeing this hardship only because he is their kinsman. The Hausas and Fulanis that called protests un-Islamic are now at the forefront of violent protests. They want to make Tinubu a one-term president like the former President Goodluck Jonathan so that another northerner can take over power,” alleged Michael John, who lives in Abuja.

Meanwhile, Ogunlala told IPS that while ethnic propaganda may have been instigated by politicians for their self-interest, Nigerians should be concerned about the factors that have made the country difficult to live in.

“Whether you are from the north or the south, suffering and hardship unites all of us. I don’t think these protests should be viewed through ethnic lenses but rather should be about how the government should listen to the demands of the aggrieved citizens,” he said.

Owolabi Toyibat in Lagos, who is against the violent outcomes of the protests and believes the demonstrations may last for more than 10 days, fears that the protests with their different leaderships may spark riots, especially when the government continues to ignore the demands of the protesters.

“Looting of public and private properties will soon become the norm. While I believe that protesting is our right, there can never be a peaceful protest in Nigeria, and only very few protests have brought tangible changes in this country. Look at the protests in Kenya and how they ended in so much violence and loss of lives. Such will be the case in Nigeria,” she told IPS.

Abdullateef Abdullahi in Sokoto thinks differently.

“I believe protest is very essential until our demands are met, as it serves as the only primary means to draw our leaders’ attention to the national issues we face and to pressurize them for tangible reform of our nation,” he said, adding that “only the urgency of this protest can bring our leaders back to their senses and listen to our plight. We are being treated like slaves while they live in luxury. Does this not call for protests?”

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By Kingsley Ighobor
UNITED NATIONS, Aug 6 2024 – The Economic Community of West African States (ECOWAS) was founded in 1975 to promote economic integration in the region. Forty-nine years later, the regional bloc boasts significant successes in integration, peace and security and good governance, but also faces some challenges.

ECOWAS Commissioner for Political Affairs, Peace and Security, Ambassador Abdel-Fatau Musah, participated in a high-level event at the UN headquarters in New York in June 2024, focusing on regional unity, peace and security in West Africa.

In an interview with Kingsley Ighobor following the event, Ambassador Musah, speaking on behalf of ECOWAS, highlighted the organization’s achievements and challenges, as well as ongoing efforts to strengthen integration. These are excerpts from the interview.

Ambassador Abdel-Fatau Musah, ECOWAS Commissioner for Political Affairs, Peace and Security

ECOWAS was founded on 28 May 1975. What are its achievements so far?

The achievements of ECOWAS over the last 49 years can be encapsulated in one key point: we have transitioned from creating an organization to building a community.

ECOWAS was created at the very height of the Cold War. The only possible area for people to come together and find common ground was economic integration, not political or ideological.

The protocol on the free movement of persons, goods and services (1976) permits citizens the right of abode in any member state and has been an ECOWAS calling card over the years. It is a major achievement that people in West Africa do not have to think about a visa when they cross borders within the region.

There was a lot of turmoil in Africa post-Cold War; without ECOWAS the whole region could have been engulfed in fratricidal wars. If you remember, a war started in Liberia towards the end of 1989 and continued throughout the 1990s, spreading to Sierra Leone and affecting Guinea and Côte d’Ivoire.

There is a lot the region can be proud of—the fact that ECOWAS is now a trademark, a pioneer in regional integration on the continent.

A: ECOWAS intervened through its multilateral armed forces, the Economic Community of West African States Ceasefire Monitoring Group (ECOMOG), which stabilized the situation and eventually provided a soft landing for the United Nations peacekeepers who came in subsequently.

On economic integration?

On economic integration, we can talk about many achievements. It is not just about the free movement of persons; it is also about creating a common market for the region. It is about helping countries develop infrastructure—energy, internet connectivity, and building road networks across the region.

This is ongoing. However, learning from the sad events of the 1990s characterized by civil wars and implosion of States, ECOWAS had no choice but to pivot to security matters and good governance.

Today, the values of democracy and human rights are very much embedded in West African culture, and ECOWAS is part and parcel of that process. West Africa is the only region in Africa that does not have an open, high-intensity conflict, despite the activities of Violent Extremist Groups.

There is a lot the region can be proud of—the fact that ECOWAS is now a trademark, a pioneer in regional integration on the continent. It provided a lot of the basis for the African Union’s frameworks.

ECOWAS morphed from an economic bloc into both an economic and political union. Is this correct?

Yes, it is.

Some ECOWAS members have indicated their intention to pull out of the group. Are there efforts to ensure they remain?

ECOWAS is a community. We have solidarity. We may have challenges or differences, but pulling out is not the answer. The countries intending to pull out talk about their Pan-African ambitions and other things, but the basis of Pan-Africanism is integration. Given that disintegration will not promote Pan-Africanism, we are doing everything we can to have them remain in the fold.

However, it is important to note that a country cannot just decide one day to withdraw from ECOWAS. There are procedures to follow, in accordance with Article 91 of the ECOWAS Treaty.

Several diplomatic engagements are going on behind the scenes to reunite the ECOWAS bloc.

What gives you hope these efforts will succeed?

What gives us hope is that ECOWAS held its extraordinary summit in February 2024 and lifted the severe sanctions against Niger, and we further encouraged them to return to the Community. We hope they understand that the advantages of being together far outweigh the disadvantages.

Talking about advantages, what further incentives do you provide these countries to encourage them to maintain their membership?

I spoke earlier about ECOWAS’ free movement of people, goods and services. About 10 million citizens of these countries are spread across the region. As we speak, 4.5 million Burkinabe citizens live in Côte d’Ivoire alone. If they withdraw from ECOWAS, the status of their citizens will change dramatically. They will have to regularize their stay, and those who cannot regularize will need to return to their countries.

We talk about trade liberalization. Intra-African trade is just about 15 percent. Within the ECOWAS region, exports from these three countries to other parts of West Africa do not go beyond 17 percent. What ECOWAS gets from them is meat products, vegetables and so on. Whereas they get energy and many manufactured goods from the other countries with virtually no tariffs attached.

The values of democracy and human rights are very much embedded in West African culture, and ECOWAS is part and parcel of that process.

Do not forget the three countries are landlocked. They will need outlets to the sea, which is being provided today under very favourable conditions within the framework of regional integration. If they pull out, they will have to find alternative outlets or pay higher freight charges and tariffs. It will take a lot of time and resources to do that.

We are also about community solidarity, which is something people take for granted. In fact, the three countries together consume more than 52 percent of the ECOWAS strategic food reserves, which is about 15,000 tonnes of food. Landlocked countries or those ravaged by cyclical droughts need such support.

Finally, the most effective way of combating violent extremism is by sharing intelligence and cross-border military cooperation. If they separate from us, how do they effectively fight violent extremists? We need them back in the family and I hope they rescind their decision.

Could their withdrawal have reputational consequences for ECOWAS?

A withdrawal will neither be good for them nor for ECOWAS because in international diplomacy today, strength lies in numbers. If we remain 15 member states, our influence in international diplomacy is greater. If they leave, ECOWAS will be weakened. This is something we must consider.

Remember that ECOWAS is an organization of solidarity. If you are seeking positions in international organizations like the UN and others, ECOWAS comes together and backs a candidate. For the sake of solidarity, we will back those who are within the community.

So diplomatically speaking, security-wise, politically, it is bad for both sides. But on balance, it is very much not in their favour.

Source: Africa Renewal, a United Nations digital magazine that covers Africa’s economic, social and political developments—plus the challenges the continent faces and the solutions to these by Africans themselves, including with the support of the United Nations and international community.

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By Anis Chowdhury, Khalilur Rahman and Ziauddin Hyder
SYDNEY, NEW YORK, WASHINGTON DC, Aug 6 2024 – The International Monetary Fund (IMF), World Bank and Asian Development Bank (ADB) are complicit in the gross human rights violations and death of democracy in Bangladesh. They continued to supply financial blood line to the regime, well-documented for its corruptions, human rights violations – such as forced disappearances and tortures in custody – and riggings of votes, including politicization of state institutions in its slide into autocracy. This is despite their professed commitment to transparency, accountability and good governance (IMF, World Bank, ADB).

Anis Chowdhury

A democratically elected government must not bear responsibility for any loan agreements that these organizations had with a regime remaining in power through rigged elections. The financial support from these multilateral institutions have provided legitimacy to a regime which is regarded widely as illegal, thus enabled it to survive.

Continued life-line from the IMF, World Bank and ADB
The IMF approved Bangladesh’s US$4.7 billion bailout in January 2023. The first review of the bailout plan was cleared in December and gave Bangladesh immediate access to about US$468.3 million for its economy and about US$221.5 million in support of its climate change agenda.

On 21 June, 2024 the World Bank’s Board of Executive Directors approved two projects totalling US$900 million. The Bank’s yearly commitment of loans increased from US$2 billion in 2015 to US$3 billion in 2018.

The (ADB) has been a major source of external financing in Bangladesh, providing an average of US$2 billion per year since 2016. As of 31 December 2023, ADB has committed 726 public sector loans, grants, and technical assistance totalling US$31.8 billion to Bangladesh. Cumulative sovereign and non-sovereign loan and grant disbursements to Bangladesh amount to US$23.52 billion.

Legitimizing an undemocratic regime
The government led by Sheikh Hasina retained power in successive terms since 2014 through rigged elections, unprecedented in the history of the country. She used her majority in parliament to change the constitution, especially the system of a neutral care-taker government to conduct elections, as well as to politicize state institutions with the sole aim of clinging to power.

Khalilur Rahman

The elections in 2014 were preceded by a severe government crackdown on the opposition, including widespread arrests, violence, attacks on religious minorities, and extrajudicial killings by the government, with around 21 people killed on the election day.

In 2018, the ballot boxes were filled the night before the election day. Following the rigged 2018 election, Deutsche Welle (DW) reported the findings of the Bertelsmann Foundation that Bangladesh has turned into an autocracy. Time Magazine in its cover story (30 Nov. 2023) expressed grave concerns about the fate of democracy in Bangladesh under the “Hard Power” of Sheikh Hasina. The New York Times (3 Sept. 2023) reported how “democracy in Bangladesh is quietly being crushed”.

The recent election, held on 7 January 2024, was a sham, was characterized by bans of the opposition candidates and boycotts by the main opposition party, ‘dummy’ candidates, coerced voting and a low voter turn-out.

Unfortunately, the IMF, the Bank and ADB turned a blind eye and continued to support the regime with a doubtful legitimacy. This has enabled the regime to become not only increasingly authoritarian, but also extremely corrupt.

Ziauddin Hyder

Enabling corruption
Laudably in 2012, the Bank pulled out of a project to build Bangladesh’s largest bridge, citing corruption concerns. However, it seems the Bank has been looking to absolve itself.

The Bank’s recently approved loan of US$900 million to Bangladesh is apparently for strengthening fiscal and financial sector and ensuring sustainable and climate-resilient growth. This time, the Bank seems not to care that around 54.40% of funding for climate change mitigation projects was embezzled or wasted through various irregularities and corruptions, and the country’s financial sector “has long been devilled by scandalous corruption”.

Bangladesh is the 10th most corrupt country in the world. As Sheikh Hasina’s regime turned into a kleptocracy after her winning power in 2008, nearly US$50 billion was siphoned off Bangladesh in six years (2009-2015). Money laundering by Bangladeshi elites is a “common knowledge”. The names of 89 Bangladeshis have appeared in the Paradise Papers and 6 Bangladeshis have been named in Pandora Papers of the International Consortium of Investigative Journalists (ICIJ).

There is a clear link between autocracy and corruption. The US has imposed sanctions on a former Army Chief for his “significant involvement in corruption”. A former Police Chief is also investigated for wide-scale corruption. Both played a significant role in undermining the democratic election process in Bangladesh and institutionalizing political repression.

A 2021 investigative documentary on Bangladesh, All the Prime Minister’s Men by Al Jazeera, exposed wide-scale corruption by powerful political and military figures connected to Sheikh Hasina herself.

Odious loans not a democratically elected government’s responsibility
Bangladesh is at a historic cross-road as it has just witnessed the demise of an autocratic and corrupt regime. In a re-born Bangladesh, the new democratically elected government should review all loan agreements of the corrupt and illegitimate regime, including those with China. If found dubious and the proportion lost in corruption, should be declared as “odious”.

As United Nations Conference on Trade and Development (UNCTAD) emphasizes, the international law obligation to repay debt has never been accepted as absolute. The obligation to repay loans is limited only to the category or portion that are not deemed odious.

Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia) & former Director of UN-ESCAP’s Macroeconomic Policy & Development Division.

Ziauddin Hyder, former Cluster Lead, World Bank

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By Vanina Vincensini and Jemimah Njuki
NEW YORK, Aug 6 2024 – Iceland’s gender bond last month caused great excitement in the capital markets community. While gender bonds have been increasing in popularity within the private sector, Iceland is the first country to issue a sovereign gender bond. Many in the development community are however asking, are gender bonds the solution to financing for gender equality?

So, what are gender bonds? Gender bonds are bonds that integrate gender equality objectives or the empowerment of women. Gender bonds follow the Social Bond Principles established by the International Capital Market Association and contribute to the United Nations Sustainable Development Goal 5 (SDG 5), and are verified by independent entities, known as second-party opinions.

In 2021, ICMA, IFC, and UN Women published the first gender bond guide. The guide offers practical guidance on how to use gender bonds to finance gender projects and strategies and includes examples of gender-based targets for issuers and the types of projects that can be financed by private and public sector issuers.

With declining ODA going to gender inequality, the ability to mobilize resources from multiple sources including both public and private to advance gender equality objectives is increasingly becoming critical

The focus on gender bonds, or debt securities to finance gender equality is driven my many factors, one being that the share of development finance for gender equality decreased after a decade of progress—from 45% in 2019-20 to 43% in 2021-22.

With declining ODA going to gender inequality, the ability to mobilize resources from multiple sources including both public and private to advance gender equality objectives is increasingly becoming critical. But important questions remain on how we can mobilize and hold capital markets accountable to address structural gender inequalities.

Potential of capital markets

Global capital markets are vast and diverse, encompassing various instruments including stocks, bonds, and other financial assets. and institutions that facilitate the flow of capital. As of 2023, the global bond market was valued at approximately $100 trillion, similar in size to global GDP according to the OECD.

This market includes government bonds, corporate bonds, municipal bonds, and other debt instruments issued by various entities. Despite the significant size of the bond market, the allocation of funds specifically targeted towards gender equality remains relatively modest. Gender bonds are still in their nascent stages, but their growth is promising.

At the end of 2023, the global capital invested in gender bonds had reached approximately $14.5 billion. While this is a small fraction of the overall bond market, it reflects a growing recognition of the importance of gender-focused investments.

Gender bonds are increasingly recognized as an innovative instrument that can be used to tap into capital markets to finance gender equality. For example, last year Latin America and the Caribbean saw 26 gender bonds amounting to $2.25bn, led by issuances in Mexico, Chile and Colombia. In Africa gender bonds have been issued in Morocco, Tanzania, Rwanda and South Africa.

Despite this, the potential of gender bonds is yet to fully be realized, and challenges remain on how to ensure they lead to impact on gender equality, and that they address structural gender inequalities. There is risk of “pink washing” with bonds being labelled as gender but not having gender equality objectives or not having impact on gender equality.

For gender bonds to be truly impactful, we believe three key things are needed.

First is to expand the use of proceeds to address structural causes of gender inequality. Most of the gender bonds issues so far have gone to financing women owned businesses.

The National Microfinance Bank Tanzania’s Jasiri Gender Bond launched in 2023 provides capital and resources to 3000 women-led small and medium enterprises.

The most recent issuance, by Bolivia’s BancoSol $30mn bond, announced on June 20, is intended to provide finance for up to 4,500 micro and small enterprises led by women in the country and aims to contribute to closing the country’s gender financing gap, where half of all businesses in Bolivia are women-led, yet only 24 per cent of economically active women have access to credit.

But bonds can go beyond closing financing gaps. Eligible projects for the Iceland gender bond, as per their bond framework developed with technical support from UN Women and aligned with the gender bond principles, include the provision of decent living standards for women and gender minorities, increasing the supply of affordable housing that benefits low-income women, as well as efforts to increase maximum payments during parental leave which create incentives for both parents to make use of their equal right to paid parental leave.

Second, set up broad-based accountability mechanisms to ensure gender bonds lead to sustainable and transformative impact on gender equality. Investors need assurance that their funds are making a real difference. And these instruments can only make a difference in women’s and girls’ lives if we know that gender-specific outcomes are achieved.

This is why bond issuers are encouraged to align with the voluntary guidelines developed by the ICMA, IFC and UN Women, which include recommendations on clear bond frameworks, second party opinions and verifications, and annual reporting on the use of funds.

Impact reports that include sex-disaggregated quantitative data and qualitative insights can then build investor confidence, gender bonds credibility, ultimately encouraging more investments in projects that have direct and positive impact on gender equality.

In Argentina, the first gender bonds issued in the country created new jobs for women-entrepreneurs and their employees. In South Africa, procurement from black women–owned suppliers of a corporate bond issuer increased from 13.8% to 16.26% in the first year.

Third, more sovereign bonds could significantly impact gender equality due to their scale and reach, if they are backed up by sound policies, action plans, and debt management strategies.

Unlike other financial instruments, sovereign bonds can mobilize large sums of capital, which can be directed towards national programmes and policies aimed at reducing gender gaps.

Additionally, the credibility and stability associated with government-issued bonds make them attractive to a broad range of investors. But a precondition to issuing more sovereign gender bonds is political will, sound debt management strategies, and robust gender equality investment and action plans.

Governments must demonstrate a strong commitment to gender equality by integrating gender analysis into their financial and policy frameworks.

They also need to ensure that public expenditures are aligned with gender equality goals. In the case of Iceland, the country’s action plans to close persisting gender gaps, its long-standing practice of gender-responsive budgeting, strong financial standing and fiscal discipline provided a conducive environment for successful gender bond issuance.

More countries could follow Iceland’s example in the context of the 2025 international financing agenda which will mark the 30th anniversary of the Beijing Declaration and Platform for Action (considered the most progressive blueprint ever for advancing women’s rights) and the fourth International Conference on Financing for Development, to be held in 2025 from 30 June to 3 July in Spain.

And while gender bonds have great potential, they are not a panacea for addressing the glaring gaps in financing for gender equality. Public financing is needed to bring about meaningful and transformative gender equality and gender bonds are just but a miniscule of a larger effort to plug the $360B annual funding gap for gender equality.

Vanina Vincensini is a global expert in sustainable and inclusive finance. She advised Iceland on its pioneering sovereign gender bonds proposition, setting a precedent for innovative gender-focused financial solutions worldwide.

Jemimah Njuki is the Chief, Economic Empowerment at UN Women and a New Voices Fellow. She writes widely on issues of gender equality and the empowerment of women and girls.