The Future of the Gig Economy in Africa: Opportunities and Challenges
According to the Mastercard Foundation, the global gig economy is projected to be worth $455 billion by 2023, up from an estimated $193 billion in value currently, with an annual growth rate of roughly 17.4%. About 40.7 million freelancers who rely on digital platforms to make a living are a part of the gig economy, and it generates $127 billion in payments to these gig workers annually.
Africa’s gig economy features the development of digital platforms, task-based payment, independent work, short-term job relationships, and skilled and unskilled labor, among others. Detailed statistics are not available to determine the size of the African gig economy and the number of people who scratch out a livelihood here. However, the Mastercard Foundation predicts that by 2030, there will be over 80 million gig workers in Africa, and We Forum estimates that there are over 300 active digital platforms across the continent.
The growth of the gig economy in Africa has been influenced by the demand for more job opportunities due to the unemployment situation on the continent, flexible work schedules, better earnings, and work-life balance. In spite of the challenges that must be addressed and opportunities that must be seized, the gig economy has a bright future in Africa, and Gigmile is well-positioned to participate in creating that future.
The Future of the African Gig Economy
Given the demographic dividend to be harnessed, the anticipated rise in internet access and 5G connections, the transformation of the corporate setting, and the improvement of the legal and policy frameworks, the gig economy in Africa has a promising future.
The youngest population in the world is forecasted to be in Africa by 2050. We must recognize that the gig economy is where the majority of young people in Africa will actually find work considering the shortage of formal employment opportunities and the rising unemployment rates.
According to a World Bank report titled “The Future of Work in Africa: Harnessing the Potential of Digital Technologies for All.”, the chances of finding jobs in sub-Saharan Africa went from 3.1% to 13.2% between the late 2000s and the early 2010s as a result of increased internet access. This current rise in internet connectivity will therefore enable the rise of the gig economy in Africa.
According to MIT Technology Review, by 2035, it is expected that the 5G global value chain would increase output by $3.5 million while supporting roughly 22 million jobs globally and that 5G technology will generate $12.3 trillion in additional revenue. 31 million of the 1.8 billion 5G connections globally in 2025 — or around 3% of all 5G connections — will be in sub-Saharan Africa. Given these statistics, it is anticipated that the gig economy in Africa would grow.
Africa’s gig economy is also anticipated to grow as the corporate environment shifts to one that appreciates flexibility more. It is important to highlight that the COVID-19 pandemic spurred the growth of the gig economy in Africa as well by allowing for more flexibility in formal employment.
The gig economy will grow even more quickly as and when African governments improve the regulatory and policy settings. Regulatory frameworks will simplify operations in the continent’s gig economy and speed up its expansion, which will in turn result in the development of decent jobs, steady income, comprehensive social protection plans, among other benefits.
Opportunities and Challenges
Opportunities
The gig economy has opened up new doors for participation in and competitiveness on the global market from any location at any time.
Low barrier of entry, flexible working hours, the option to choose the sort of work and projects to be completed, and the freedom to work from any location are all benefits of being a gig worker.
Additionally, the gig economy can provide some standardization for gig workers by facilitating access to digital and financial services.
Other opportunities in the gig economy include cost effectiveness for businesses, readily available labor force, and increase in output production due to worker satisfaction.
Challenges
The gig economy in Africa faces a number of challenges, including low levels of flexibility, particularly for women, income instability, irregular jobs, social insecurity (lack of pension, social and health insurance; no sick leave or annual leave; minimal job security in terms of dismissals or notice periods; no guaranteed earnings), price wars, and income inequality between platform owners and independent contractors, among others.
The lack of significant venture capital investment on platforms is another problem the local gig economy in Africa has to deal with.
There are also loyalty issues for businesses and issues of isolation for workers because gig workers are largely independent.
Gigmile’s Role
To ensure that gig workers succeed, Gigmile anticipates and develops the necessary infrastructure for the African gig economy. It does so while appreciating the opportunities and challenges presented — setting up gig workers and keeping them resilient.
Gigmile enables gig workers to establish and maintain a solid identity and financial history. By providing gig workers with opportunities to own productive assets and placing them on partner gig platforms of their choice, Gigmile provides solid livelihood opportunities for several people, especially people at the base of the pyramid, who would not have been able to get started by themselves. To ensure that these workers have regular jobs and stable incomes, Gigmile partners with gig platforms to boost their chances of earning more.
Gigmile provides even more security for gig workers by offerings such as social and health insurance, working capital, productive loans, as well as good working conditions and support. This helps gig workers remain resilient and viable over the long term.
