Each year, millions of youths enter the job market in Africa, contributing to a rapidly growing employment gap across the continent. The growth of digital platforms and the explosion of the gig economy could help bridge this gap and provide formal employment to millions of low-income individuals.

Around 60% of Africa’s unemployed are aged under 25, and a large proportion of them are women[1]. Despite efforts from governments and global investors, traditional jobs are not being created quickly enough to absorb the 122 million new entrants in the coming years[2].

With these figures in mind, and considering that every year between now and 2030, 29 million Africans will reach working age, productivity policies need to be put in place to provide the population with formal employment. In the meantime, the gig economy – based on independent workers and short-term agreements – could provide a solution.

The gig economy

In Africa, the lack of formal jobs available means many people turn to the informal sector, in jobs such as subsistence farmers, domestic work and vendors. In Zimbabwe, for example, it is estimated that over 90% of people work in this sector[3].

The gig economy, which provides freelance jobs to remote workers through digital platforms, has the potential to provide a source of consistent work, particularly for young people. Flexible work can also have significant benefits to the economy as participation in the labour-force grows and productivity is boosted, as long as centralised governance provides support.

In Kenya, the rapidly growing gig economy is worth an estimated $109 million, according to a recent report[4]. Thanks to mobile, internet and smartphone penetration, the digital revolution has created over 36,000 gig workers, a number estimated to reach almost 95,000 in the next five years.

Along with creating well-paying jobs for web designers, transcribers and taxi hailing drivers, mostly in urban areas, gig work has also unleashed new job opportunities in household services, hospitality and healthcare industries. There is a need, however, for the government to scale up investments to ensure rural towns also benefit from the boom.

Gig work challenges
Besides the advantages, the concept has also prompted a debate around the demise of the traditional employment contract and trapping people in a cycle of low-skill jobs with little career progression. Furthermore, informal employment can leave workers vulnerable and without access to critical benefits, such as sick leave, health insurance and retirement savings plans.

For this reason, it is important to note that gig-based companies must take responsibility and treat their external workforce with dignity and respect[5]. There are tools to achieve this, by providing benefits such as training, more predictable incomes and an affiliation to a multinational company, which workers would not otherwise get in the informal sector.

In Ghana, where 80% of workers are employed in the informal sector, a pension scheme has been created for the informal economy[6]. By introducing portable benefits for gig workers, dependent on the time worked not the job, African governments and digital platforms can help to power the continent’s future growth.

TRANSFORM supports projects that encourage entrepreneurship and employment in low-income communities, especially among women and young people. You can read more about the projects working to advance the Sustainable Development Goals (SDGs) in our Portfolio.
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