The Real Truth about the Future of Gig-Economy in Africa

African governments and digital platforms can assist in fueling the continent’s future prosperity by establishing transferrable benefits for gig workers. In this absence, these platforms would lose top talent, nations would miss out on tax money, and Africa would fail to profit from the digital revolution.

Africa’s Digital Platforms

Digital platforms in Africa can help to close the gap between informal and formal employment by providing new avenues for employment. This shift might be aided by perks that a freelancer can take with them from job to job. In Africa, there are already more than 300 active digital platforms, employing around five million people. They include Jumia, a Nigerian e-commerce startup that currently operates in 14 African nations.

The Collapse of Conventional Work

Africans’ discussion over the collapse of conventional work contracts and widespread informal employment has been heightened by the arrival of platforms like Uber and Airbnb. Lower salaries and shoddy work might be a result of this change. Employees’ access to vital benefits, including sick leave, health insurance, and workers’ compensation, is similarly limited.

Rigid But Unproductive Platforms

Generally, when we speak about employment drawbacks and benefits in the developed world, we refer to occupations in the formal sector, such as those with regular hours, a regular salary, legal safeguards, and income tax registration. In contrast, most African employees are employed in the informal sector, whether in agriculture or informal manufacturing and service industries. If you can work, you should, since the state’s social safety net is almost nonexistent.

The decline in Formal Sector

Since 2012, the percentage of Kenyans employed in the formal sector has stayed at approximately 17%. In this respect, Kenya is not an exception. According to the International Labor Organization (ILO), over 80 percent of youth in their school-to-work transition surveys in Africa worked in the informal sector. According to the International Labor Organization (ILO) surveys, women are more likely to be entrepreneurs and workers in the informal sector than males in many countries. Most informal sector workers are self-employed; a small percentage are employers, and a substantial percentage are workers. There is a notable exception in Africa, South Africa, where just 17 percent of employees are employed in the informal sector.

Formalization – Made Easier with Platforms

Disruption is on the verge. Employees in the informal sector are replacing many occupations in the formal sector due to the fast automation of both the manufacturing and service sectors. African firms are replacing workers with robots and artificial intelligence (AI) rather than cheaper labor as wages rise, allowing them to produce cheaper and cheaper goods for distribution in the global e-commerce ecosystem. The World Bank fears that Africa will miss the development opportunity that drove Asia’s export-led industrialization and growth out of poverty.

Impact of New Technologies on Gig Economy

As new technologies grow and consolidate or skip the need for services entirely, the service sectors themselves might be put in danger (e.g., travel agents). It’s been a rough few months for Africa. What will happen to the informal economy when both commodities and services are automated? There is no guarantee that the market will go one way or the other, but digital platforms are already altering the basic definition of informal and formal. So, keep your fingers crossed for the gig economy in Africa!