Africa’s leads the way in the gig economy

June 6, 2019 12:33 pm Published by

Although the gig economy and the concept of informal employment is a new model in developed markets it has however been the norm in developing economies throughout history.

In Africa 85.8% of employment is still considered informal and in Africa’s fifth-largest economy Kenya, the informal sector is the country’s main job creator.

Indeed, according to the 2019 Economic survey by the Kenya National Bureau of Statistics, 762,100 of the 840,600 new jobs created last year were informal employment and they even have a name for it ‘Jua Kali’.

So, the gig economy is booming throughout Africa but so is the constant need to create new jobs. According to figures from The International Monetary Fund (IMF), by 2035 Africa will contribute more people to the workforce each year than the rest of the world combined.

By 2050, the continent will be home to 1.25 billion people of working age which means that Africa needs to create nearly 20 million new jobs each year for its rapidly growing population.

Across Africa, more and more companies are seeing the power of the gig economy and informal job market as a way of forging business models that ‘bridge’ the formal and informal sectors.

This is possible due to the increased penetration of mobile phones and their ability to be used to transfer money, coupled with new avenues of investment being made available.

Each ‘bridge’ company is a formal entity but can mobilise large numbers of informal ‘employees’ in their supply chains or service delivery.

This is not a new concept and has been working successful for a number of years in dairies and coffee and cocoa out growers through Africa and is being seen the world over with the likes of Uber or Airbnb.

Although in many parts of the world the move towards an ‘Uberised’ job market has been seen as a step back for employment rights, in Africa however these ‘bridge’ companies offer more security than what is currently available.

Bridge companies are registered, centrally managed and have a public brand and are therefore more likely to be pressured into addressing issues around workers’ rights.

One this is clear if, like it or not the gig economy and bridge companies might be the only way of solving Africa’s pressing job creation need.