Exploring the Trade and Gender Nexus: The Case of Manufacturing in COMESA Countries

13 June 2017

How did the setting up of export processing zones (EPZs) in COMESA countries affect women? How did tariff changes affect female employment in the manufacturing sector?

The Common Market for Eastern and Southern Africa (COMESA) was formed in 1994 to replace the former Preferential Trade Area for Eastern and Southern Africa, which had been in place since 1981.[1]COMESA is currently the largest operational free trade area in Africa, and 16 of its members have gradually moved towards the free trade regime established in 2000, providing duty-free and quota-free market access for COMESA-originating products. As discussed in the article by Simonetta Zarrilli in this issue, trade policy is not "gender neutral", and its distributional outcomes may vary according to the different economic roles played by women and men as workers, producers, and consumers.

The manufacturing sector can play a significant role in the shift to higher value-added activities, the expansion of exports, as well as in the technological upgrading of an economy. Liberalisation of trade in manufactured goods has often been associated with significant gendered outcomes, particularly in women's role as workers. Indeed, the female share of employment expanded in many developing countries following the expansion of labour-intensive production under trade liberalisation policies – a phenomenon known as the "feminisation of labour."[2]

More recent shifts from labour-intensive to capital-intensive production in the manufacturing sector, along with consequent increases in wage levels, have begun to attract more men in manufacturing, hence contributing to a decline in the share of female employment. This phenomenon has been defined as the "defeminisation process".[3] Yet, as explained here, the impact of trade liberalisation on women's employment is largely country- and context-specific. This article first presents the employment patterns in the export processing zones (EPZs) operating in the manufacturing sector of some COMESA countries from a gender perspective, and goes on to illustrate the broader impacts of trade integration in the manufacturing sector within the COMESA region.
 

Employment patterns, wages, and working conditions in EPZs: Examples from COMESA

Since the 1960s, EPZs have played a key role in improving the export competitiveness of many developing countries thanks to their special incentives which provide a competitive business environment for firms. Export-oriented industrialisation can have significant gender-specific effects, as very often, employment opportunities available to women have been linked to the expansion of production for export. Women have indeed constituted the majority of workers employed in EPZs in developing countries, ranging from 50 percent up to 90 percent in some cases.

EPZs have been instrumental in providing formal employment and a stable source of income to women who held informal jobs or were outside the labour market. The improvement in women's economic situation and the acquired financial independence certainly had positive repercussions on women's empowerment and bargaining power within their households and the society at large. Nevertheless, employment in the EPZs has proven to be double-edged for women: even when basic labour standards are respected, working conditions in EPZ factories can be harsh, particularly for women who are typically found in the most vulnerable positions. In terms of occupation, women tend to be concentrated in low-paid and unskilled jobs. For instance, in segments such as packing, sewing, and cutting, female workers are the vast majority of the workforce (up to 90 percent in some countries in Sub-Saharan Africa). Occupational segregation by gender, which typically confines women to unskilled and labour-intensive activities, hinders any possibility for skill development and advancement in the workplace. Moreover, wages in EPZs are often low and barely sufficient to cover basic living expenses such as food and housing, and thus do not enable workers to build up any savings or improve their life standards.

Within COMESA, seven countries have created EPZs, particularly in the textile and clothing industry: Egypt, Kenya, Madagascar, Malawi, Mauritius, Namibia, and Zimbabwe. Trends in female employment in EPZs in COMESA countries confirm the pattern that EPZs tend to employ more women than men – resulting in a "feminisation” of labour. For instance, in Mauritius, the number of female workers in manufacturing increased from 18,400 to 61,200 between 1983 and 2001, owing mainly to the creation of new jobs in EPZs. The role of female workers in the textile factories is indeed considered to have been crucial in the so-called "Mauritius success story". Likewise, in Kenya, the number of women employed in the manufacturing sector has increased by 76 percent over the period 1990-2000, and in Kenyan EPZs, women constituted 60 percent of the total workforce in 2006. Madagascar experienced a remarkable expansion of about 150,000 jobs in the apparel sector during the period 1997–2003, with more than 80 percent of the new jobs filled by female workers.[4] 

Regarding the recent trend of “defeminisation” of labour, existing statistics do not offer sufficient evidence on whether defeminisation has also taken place in the COMESA region. Yet, the limited data available suggests that, since the early 2000s, female employment has indeed lost ground in the broader manufacturing sector of some COMESA countries. Additionally, the economies of low-income African countries that were heavily relying on textile exports were hit by the phasing out of the Multi-Fiber Arrangement (MFA) in 2005, which had previously shielded them from more competitive Asian suppliers. Countries such as Madagascar and Mauritius experienced an absolute decline in their textile and garment exports, with female jobs being especially affected.

As far as wages are concerned, the impact of EPZs on women's earnings is not always clear-cut, as it is usually linked to country-specific differences in terms of labour markets, economic structures, and EPZ characteristics. For instance, research conducted in Madagascar during the period 1995-2001 has shown no significant gender gap in the hourly wages of male and female workers, as opposed to other sectors of the economy where men earn more than women. Wages in Malagasy EPZs were in average lower than those in the public sector or in non-EPZ firms, but nonetheless higher than wages in the informal sector. This suggests that formal employment in the EPZs has offered possibilities for improvement in salary conditions as compared to informal jobs. In addition, female workers' shift to formal occupations in the EPZs has prompted an upward pressure on wages in the informal sector, and this has indirectly benefited informal female workers. Overall, it can be said that increased employment opportunities in the free zones have led to greater gender earnings equality in Antananarivo during the period surveyed.[5]

Turning to working conditions in the free zones, despite the new opportunities for formal employment for women, the quality of jobs created has been widely questioned. For instance, in Madagascar, while the expanding textile industry hired equally qualified men and women, female workers were concentrated in the lower segments of the textile production, with lower wages and low-skilled positions. In addition, the setting up of EPZs is often correlated with a weak enforcement of national labour laws or with the prohibition of collective bargaining and freedom of association. Overtime is the norm and EPZs workers are often found to be working longer hours compared to workers in the broader private sector or the public sector. Of course, this has important implications for women’s burden in terms of care work. Also, turnover rates are often high, raising questions about the quality of employment. For instance, in Madagascar, the annual turnover rate of EPZs’ employees is estimated to be around one fifth, while this proportion falls to one out of ten in the private sector. Another recurring criticism of EPZs has to do with the precariousness of employment and the absence of long-term employment opportunities. In Kenya, 85 percent of female workers are employed on short-term contracts, while in Malagasy EPZs women are less likely than men with similar qualifications to be promoted.[6]

Overall, EPZs appear to have been instrumental in integrating women in the formal sector in COMESA countries, and they contributed in some cases to the reduction of the gender wage gap. However, evidence from the COMESA region has also confirmed that working conditions may not always be favourable to women, and will even likely worsen their work burden, similarly to what has been witnessed in EPZs in other developing countries.
 

The link between trade and female employment in manufacturing in COMESA

UNCTAD analysed the impact of trade policy on female employment in the manufacturing sector in COMESA countries.[7] Specifically, the study estimated the impact of tariff changes on the female-to-male ratio in the manufacturing sector, using firm-level data for five COMESA countries – the Democratic Republic of Congo, Egypt, Kenya, Uganda, and Zambia – and looking at the tariffs faced in the European Union (EU) market and in the market of member states of the future Tripartite Free Trade Area (TFTA) that is being negotiated among members of COMESA, the East African Community (EAC) and the Southern African Development Community (SADC). The findings of the study are informative about the expected impact of future trade agreements with the EU (the Economic Partnership Agreements, EPAs) as well as EAC and SADC (the TFTA).

The results show that the reduction of the tariffs faced by COMESA exporters when entering the EU market and the markets of future TFTA member countries is expected to have a negative effect on women employed in production tasks.[8] Specifically, it is predicted that a one percent decrease in the tariffs faced in the destination markets – both under EPAs and the TFTA – will result in a 5 percent decrease in the female-to-male labour ratio in exporting firms. This suggests that further trade liberalisation between COMESA countries and the EU and TFTA members states may lead to the expansion of male-intensive, export-oriented production activities at the expense of women, contributing to the defeminisation of labour force in production tasks in the manufacturing sector. It may also be the case that technological upgrading reduces the opportunities for production workers, of whom women constitute the most vulnerable segment.

On the contrary, the reduction of tariffs in the EU market and in the markets of TFTA members is estimated to have a positive effect on women in non-production tasks.[9] Precisely, it is predicted that a one percent decrease in tariffs faced in the destination markets will result in a 3.4 percent increase in the female-to-male ratio in non-production tasks. The implications of technological upgrading for the need for physical versus cognitive skills seem to be at work in COMESA countries as well. Technological upgrading is expected to benefit women in non-production tasks by reducing the relative need for physical skills. Reduction of average tariffs imposed on imported products into COMESA countries is found to have only a marginal effect on the female-to-male employment ratio in both production and non-production tasks.

As an illustration, in Zambia for example, for whom the average tariffs faced in the European market are 4 percent, the signing and implementation of the EPA is expected to translate into a 20 percent decrease in the female-to-male ratio in production tasks in the manufacturing sector’s exporting firms. The EPA would, on the contrary, work to the advantage of women in non-production tasks, increasing the female-to-male employment ratio in the exporting firms by 13 percent. Overall, it seems like the EPA and TFTA would imply a feminisation process in non-production tasks and a defeminisation process in production tasks in the manufacturing sector of the COMESA countries that are being investigated.
 

Policy recommendations

The example of COMESA countries shows that trade policy can play a catalytic role in job creation for women, providing opportunities for women's empowerment and wellbeing through formal employment and stable incomes, as in the case of EPZs. However, it can also concurrently generate new patterns of inequality and vulnerability.

In the context of increased international competition, which is likely to cause both gains and losses for different segments of the population, measures aimed at making the trade environment more gender sensitive and supporting the women involved in those most vulnerable segments should be encouraged. They include the following:

  • Promoting programmes aimed at developing women’s human capital and skills, so as to reduce or mitigate the possible adverse effects of trade liberalisation on women in the labour market, but also to enable workers to shift between industries when the trading environment or trade policy changes;

  • Taking steps to integrate women into new and expanding industries through on-the-job training and skills development programs;

  • Incentivising both horizontal and vertical gender mobility, particularly in EPZ, to curb female segregation in low-skilled occupations, integrate them into technical, high-skilled, or traditionally masculinised work, and close the gender wage gap;

  • Ensuring protection of EPZ workers' rights, including against various forms of gender-based discrimination that women workers face;

  • Ensuring adequate safety nets and the provision of basic public services such as education, health, and social protection services that contribute to reduce and redistribute women's burden of unpaid work.

Authors: Nursel Aydiner Avsar, Consultant, Trade, Gender and Development Programme, UNCTAD. Mariangela Linoci, Economic Affairs Officer, Trade, Gender and Development Programme, UNCTAD.


[1] As of June 2017, COMESA was comprised of Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe.
[2] Standing, Guy. “Global Feminization Through Flexible Labour: A Theme Revisited.” World Development 27, no. 3 (2009): 583–602.
[3] Kucera, David, and Sheba Tejani. “Feminization, defeminization, and structural change in manufacturing.” World Development 64 (2014): 569-82.
[4] UNCTAD. Trade and gender linkages: An analysis of COMESA. United Nations: Geneva, 2017.
[5] Ibid.
[6] Ibid.
[7] Ibid.
[8] The "production" category coincides with the traditional blue collar category.
[9] The "non-production" includes white-collar-type of activities.
This article is published under
10 July 2017
Aid for trade has made important interventions in services sectors, but going forward, there needs to be more emphasis on regulatory reform and building productive capacity, rather than just...
Share: 
10 July 2017
Gender-focused aid for trade initiatives in Africa have the potential to considerably accelerate the achievement of the Sustainable Development Goals. This article sets out the case and highlights...
Share: