- For instance, countries like Chile, Peru and China which have integrated a gender lens into coronavirus response measures have higher credit scores
- It said recovery policies alone will not be enough to address existing gaps.
Countries with inclusive gender policies could improve credit conditions post the Covid-19 crisis, Moody's has said in its latest report.
The global credit rating firm said it incorporated the UN's gender inequality index in its assessment of social risks faced by sovereigns and found significant variation among emerging markets in terms of gender inequality.
"There tends to be a stronger correlation between a country's per capita income level and gender equality performance, than between a country's gender performance and rating level," Moody's said.
For instance, countries such as Chile, Peru and China, which have integrated a gender lens into coronavirus response measures, have higher credit scores compared to countries such as Kenya whose creditworthiness has been projected to decline further.
In November last year, the rating firm maintained Kenya’s loan outlook for 2021 at negative status, citing coronavirus’s negative effects, which have weighed down economic activities, government finances and complicated policy choices.
According to the 2021 Moody’s Sovereign Outlook, 60 per cent of Kenya’s 108 sovereign rating actions have been negative – a higher proportion than 20 per cent in 2019 and 30 per cent in 2018.
On Monday another rating firm, Standards and Poors, cut Kenya’s credit rating, dimming the country’s chances of tapping cheap credit on the international market.
The agency lowered its long-term foreign and local currency sovereign credit ratings on Kenya to 'B' from 'B+' in a move that could raise borrowing costs for cash-strapped Treasury.
“There are significant risks to the government's fiscal consolidation plan, while external indebtedness will remain high.
But recovery policies alone will not be enough to address existing gaps. Argentina, for instance, scores well on gender equality compared to most major emerging economy peers despite its low rating. While countries such as India and Indonesia rank much lower in terms of gender equality, their sovereign ratings are much higher at Baa3 and Baa2, respectively.
Consequently, we are lowering our ratings on Kenya to 'B' from 'B+',” said S&P in a statement.
The report said the global coronavirus pandemic-associated expenditures and revenue loss have led to widening fiscal deficits and record-high debt levels.
In the latest Global Gender Gap Report, Iceland, Norway and Finland emerged top with average scores of 0.87, 0.84 and 0.83 out of 1.0. The three countries rank fairly in credit rating with scores above A3.
The least performing countries included Yemen, Iraq and Pakistan with average gender parity scores of 0.49, 0.53 and 0.54.
Kenya ranked position 109 out of 153 globally with a gender score of 0.67.
The overall gender gap performance is a synthesis of performances across the four dimensions composing the index—the Economic Participation, Educational Attainment, Health and Survival and Political Empowerment subindexes.
But recovery policies alone will not be enough to address existing gaps.
Argentina, for instance, scores well on gender equality compared to most major emerging economy peers despite its low rating. While countries such as India and Indonesia rank much lower in terms of gender equality, their sovereign ratings are much higher at Baa3 and Baa2, respectively.
According to Moody's, there tends to be a stronger relationship between a country's per capita income level and gender equality performance, as reflected in the wide gap between median GDP per capita and gender inequality scores in advanced economies compared to major EM peers.
Fundamental social policies, particularly with regards to women's access to education and employment, are more likely to create enduring change.
"We expect to see an increase in government policies that target female economic security – including direct cash transfers for the least skilled and training, technical support and credit lines for female business owners," Moody says in a report.
This, in an effort to ensure that female labor and income disparities do not worsen in the aftermath of the pandemic.