Having an honest job is one of the most respectable activities a person can be consumed with. As long as one is able to pay bills, sustain their livelihoods, while living a dignified life, and of course pay taxes, should the latter be of grave concern, being employed has a positive social stigma associated to it.
Regardless, the privilege of having a job, especially today is one that many take for granted. Youth, in particular, those entering the workforce have an even tougher road to trek, when finding employment. The matter is worse in the developing world, where jobs are increasingly becoming scarce, even though politicians consistently campaign about job creation as a means to win voters.
Over the course of the past decade, labor productivity has become a major issue affecting all corners of the globe, but in Africa, the situation stands in peril.
The International Labor Organization (ILO) Global Employment Trends for Africa: 2020 report, paints a rather grim picture, indicating that the number of current unemployed in Africa is alarming. Since 2012, the figure has been increasing drastically. Today, nearly one in five youth, are not in school or formal training, and/or jobless, indicating that at least 20% of the formal, employable workforce is unemployed. (ILO, 2020).
While the scenario seems mendable today, if left unattended the unemployment across the continent can rise to nearly 20.8% by 2021. The most vulnerable of the group within this indicator is young women, who form the core of the risked population, namely due to gender gaps prevalent across the continent (ILO, 2020). This in turn can cause other gender-related social disparities, which we shall not delve into for the purposes of this article.
Today, while the world continues to absorb the impacts of the the Covid-19 Pandemic, youth globally have proven to be survivors, learning to adapt to technological changes using the digital economy as a means to generate revenue.
With the use of internet young people can now earn income through fast, and convenient platforms, Airbnb, Uber, Taxify, Fiverr and many more. This brings out the potential of the gig economy through the effective use of digital platforms.
With greater connectivity the ability to take on more temporary, flexible jobs become more commonplace. Many companies also see the benefit in hiring independent contractors and consultants rather than full time employees, and to add to that, with the pandemic running rampant, many offices have chosen to work from home, creating new opportunities, the world over.
This essentially is the “Gig-Economy” a term widely used in much of the developed world, but one that is now becoming more common in Africa.
Unemployment in Africa
The African Development Banks (AfDB) states that while 10 to 12 million youth enter the workforce each year, only 3.1 million jobs are created, leaving vast numbers of youth unemployed.
It is important to note, the results of youth unemployment in Africa are permeative and severe. Unemployment propels to poorer living conditions, fuels migration out of Africa, and contributes to conflict on the continent itself, not to mention is a major driver of crime and social ills.
The rampant youth unemployment constitutes a failure to capitalize on one of Africa’s greatest assets for growth, which is its large and growing population of talented young people.
Currently, nearly 86 percent of the informal economy across the continent rests alone in Sub-Saharan Africa. There’s a significant need to examine the role that digital technology can play in harmonize the current unemployment. Furthermore, the opportunity to catalyze the large youth bulge stands to be a game changer for the continent worldwide.
The Gig Economy in Africa.
With digitization taking root across the continent, its a matter of time that the Gig Economy will take shape. The free-market system enabling many of Africa’s youth to acquire temporal jobs using the internet, featuring flexible means of payments and schedules is an enticing feature that has seen the growth of various “tech” ecosystems.
In Tanzania for instance, the presence of social media, particularly WhatsApp Messenger and Twitter, has been used as a hiring tool by many companies. For instance, many research companies can recruit field enumerators, evaluators, data experts, and those can also extract flexible workers based on proximity and experience, enhancing recruitment conditions—as much of the work is done remotely.
In Africa, the landscape of gig jobs is a bit different. Zimbabwe, for example, it is estimated that 90 per cent of people work in the informal sector as subsistence farmers, vendors and small-scale traders, according to CDC, a UK–based development finance institution.
71 percent of registered businesses (Finmark Trust, 2020) consist of individual entrepreneurs, many with multiple ‘hustles’ – some entrepreneurial, some not. McKinsey & Co. estimates that 63 per cent of the total labour force in Africa engages in some form of self-employment, (CDC, 2020).
The digital infrastructure in Africa is expanding and gaining much attention from youth, which means, digital recruitment services such as Zoom and BrighterMonday in Tanzania—where employers can recruit temporal talents to present a much richer experience to unemployed graduates.
Kenya’s Lynk—an online platform linking people’s appropriate skills with work they need has taken a strong leap to incorporate more robust features, such as developing sustainable digital identities for the app users.
The app has taken further steps to provide new things which were unavailable to the working space such as logistics and warehousing support, material wholesaling, and ongoing skill training (Brookings, 2019). The platform itself allows much of the informal sector to undertake odd construction jobs such as fixing a table or even plumbing. The platform currently has seen considerable growth in the Kenyan market, but also presents massive opportunities if expanded continentally.
Africa’s Potential in the Gig Economy
The gig economy is a useful tool in enhancing economic growth and access to decent work in Africa. As matter of fact macroeconomics expert and author William Baumol, argues that employment rate and economic growth are linked. This is a plausible correlation that makes sense and many are aware of, but few can discern its importance.
When workers produce valuable goods and services, which in turn receive a wage (not frequent as in gig economy), it aids them to execute different forms of transactions, whether buying goods, paying bills and eventually taxes.
The World Economic Forum (WEF) finds the gig economy to be one of Africa’s potential if utilized well—in possible terms of appropriate taxing if sound policies can guide the gig economy landscape. Alternatively, if regulators come to exercise the usual policing of yet another tool or platform, the system fails. Similar to Adam Smith’s Wealth of Nations.
In a WEF 2019 article How the gig economy could help power Africa’s growth, the author demonstrates that Africa has much to benefit under a properly managed gig economy landscape guided by the digitization potential.
“With digital commerce estimated to benefit at least 80 million young Africans by 2030, opportunities for gig workers will increase. And if access to a range of valued benefits, from health insurance to pensions, is made conditional on registering their business and paying taxes, they will have a powerful reason to formalize their work,” WEF argues.
If the gig economy is not harnessed the right way, the loss of potential revenue will definitely affects countries’ ability to invest in education, health, and basic infrastructure, all of which are vital for boosting the productivity of the workforce and sustaining broader economic growth.
“There are already about 300 active digital platforms in Africa, employing close to five million workers. They include e-commerce company Jumia, which was established in Nigeria and now operates in 14 countries on the continent” according to WEF.
There are a couple of downsides with this option, such as the increment of gig-jobs attached to lower wages and lower quality work, trouble accessing critical benefits, such as sick leave, health insurance, compensation and employer-funded retirement savings plans.
Regardless, the gig economy seeks to be a provider of opportunities to many youth whom are dependent on acquiring all sorts of employment, necessary to live sustainable livelihoods. The only problem it really creates is the ability to become dependent on contractual jobs, in which competition is high, trapping contractors into a circle of low productivity.
Despite these challenges, there are also several benefits acquired across the region. In Nigeria, nearly 10,000 commission-based sales agents (namely J-Force) have been hired by Jumia, Africa largest e-commerce platform (CDC, 2020).
As more than 44 per cent of Africa’s population has a mobile phone and less than one per cent of all retail is executed online, Jumia has utilized the digital potential present in Africa to maximize profit and give equal opportunities to talents.
The scheme offers a decent payment option, with contractors making between $100 -$300 per month, a bit higher than a Nigeria teacher net-salary of $140 per month.
“A J-Force member is usually a tech-savvy young person, such as a recent graduate or a young mother, eager to make some part-time income. After receiving training from Jumia on customer service and the intricacies of how to shop, order and pay on the site, J-Forcers then engage with their neighbours and the larger community to help those without internet access or unfamiliar with e-commerce to shop online and deliver the goods,” according to CDC.
Role of digitization to gig economy
The role of digitization is crucial to the development of the gig economy. With thousands of youths demanding space to put their talent to use, there is need for more platforms, rather than Lynk, Uber, or Taxify.
Lynk has set a good example for other innovators to follow. The platform offers more to the landscape than any other skill-matching solution. Whereby, it accrues data on jobs completed, income earned, and other efficiency metrics, necessary for developing sustainable digital records of its clients.
Hence, such services are rather poised to offer advanced services such as development of a digital footprint, enabling workers to access loans and skills accreditation, two areas which many traditional institutions have struggled to build (Brookings, 2019).
The potential for gig platforms to provide a source of consistent work and centralized governance and support is even more exciting in Africa where platforms can leapfrog informal economies.
Tanzania’s Fundi Popote—a digital platform that gives technicians/fixers ability to get clients in almost 6 regions across Tanzania, is making waves across the gig economy by capitalizing on the digital potential.
The gig economy can transform farming, by offering smart-farming solutions such as digital extension and market access services, such as Esoko and Farmline in Ghana.
Further, digitization offers plenty of alternatives for local talents to garner incomes, through drone survey solutions on farmlands.
In the context of modern agriculture, there is a demand for precision farming across Africa. African tech savvy youth can capitalize on providing farm data and crop condition surveys to smallholder farmers at a decent price over time and space.
The space of digital inclusion in farming is not new in Africa. Kenya has led the way as the telecommunication sector and agriculture have been working together, hand in hand for the past decade (FAO, 2019).
“There have been positive strides in ensuring smallholders become involved in digital agriculture. An estimated 33 million people – about 13 per cent of all sub-Saharan African smallholders and pastoralists – are already registered for services such as weather updates and market linkages” according to Food and Agriculture Organizations (FAO).
To achieve a sustainable level of output, decent work must be attained at all cost. That is why the gig economy ought to be examined carefully, to ensure policymakers fish-out best and most feasible ways to benefit both employers and workers.
It is important to put pressure on employer’s, rethink beyond the conventional manners of labour compensation and benefits. Across Africa, employers ought to find it crucial to pay a certain percentage toward universal benefits for all work they commission over time and space, regardless of contractual terms with workers.
“Digitization could enable the formal sector to offer a spectrum of benefits for workers and responsibilities for employers. African labour-market regulators and tax authorities can play a significant role in recognizing and incentivizing progress along this spectrum. This means taking stock of which benefits workers value most, and then designing effective policies that encourage digital platforms to offer them,” WEF argued.
Regardless, these policies must be tailored in a way that is still attractive to workers, and portable, so that people have a choice of what they’re getting into.
The digitization landscape plays a crucial factor in propelling the growth of the informal sector and eventually formalizing it. Both—African governments and digital platforms have the potential to propel the economy to better heights, by utilizing the best talents and tax revenue the region has to offer under the gig economy.