Female economic participation and sustainable development in African countries: The moderating role of governance

Abstract

This study examines the impact of female economic participation on sustainable development and the moderating role of governance in African countries using data between 2002 and 2022. Despite the significant contributions of women to the economy, they remain underrepresented in economic governance. The study employs the two‐step dynamic system GMM approaches with fixed effects and Driscoll–Kraay standard errors, and to address potential endogeneity. The findings reveal that while female economic participation positively affects sustainable development, poor governance weakens this relationship, suggesting a substitutive rather than complementary role of governance. The study establishes a governance threshold of 2.667, on a scale of 0–5, above which female economic participation significantly enhances sustainable development. Subregional analyses indicate varying impacts, with governance complementing female economic involvement in Central and Southern Africa but acting as a substitute in East, North, and West Africa. These insights underscore the need for enhanced governance and targeted policies to empower women and promote sustainable development across the African continent and the need for incorporating context.