Africa’s traditional economy vs. gig economy: Which way forward?

In today’s vertiginous economic landscape, Africa is plagued with a massive exodus from its longstanding formal traditional work economy to the informal gig economy. While the traditional economy has been the backbone of the continent’s livelihood for centuries, in recent years, the gig economy has created new opportunities and challenges. Let’s face it: the future of work is changing, and the change didn’t begin during the pandemic. The roots can be traced as far back as when informal work arrangements were seen as precursors to gig work. At the time, people engaged in informal and flexible work arrangements, like artisanal skills, small-scale farming, and local trading, to earn a living. These activities were often characterised by short-term engagements and were driven by immediate needs and opportunities. The traditional work economy in Africa has been the backbone of employment for generations. It is characterised by regular hours (9–5), regular pay, various legal protections, registered income taxes, employment contracts, and well-established labour regulations. This sector has been the primary source of employment for many and is often associated with benefits such as job security, health insurance, and retirement plans. The formal sector includes various industries like government, banking, manufacturing, and multinational corporations. The big question is: If the traditional work style has this much security and benefits, why are we even having this debate? As evidence of massive migration to “gig work” continues to be more glaring, there has to be an explanation for this economic exodus in almost every part of the continent’s workforce. Like every sector in a typical economic setting, none is without its challenges, for instance, the unemployment epidemic. Africa has a significant youth population, and many of its young people of eligible working age face challenges in finding traditional employment opportunities. As of 2023, the unemployment rate in Africa is 7.7%. To put this in perspective, the total population in Africa is over 1.4 Billion, and seven per cent of that figure is a staggering 112 million Africans who are either out of jobs, unemployed, or ineligible to work. If that’s not a recipe for an epidemic, what is? In light of these challenges, “gig work” comes into play because it offers and still offers alternatives for young talents to use their skills and expertise to secure work and generate income. The gig economy has been providing the freedom to work and live more efficiently. One MasterCard Foundation survey revealed that the gig economy in Africa is growing at an average rate of 20% per year and is expected to reach a staggering 80 million gig workers by 2030. It’s important to assert here that the phrase “gig economy” is a catch-all term that describes people who are not salaried workers but work independently and get paid for each transaction or “gig” they complete. Experts have often referred to this system as a disruptor in a well-established system. Growth of the gig economy in Africa The growth of Africa’s gig economy is often linked to the advancement of technology and the decline of traditional manufacturing and agricultural jobs, which has forced people to seek new sources of income. The global financial crisis of 2008 also played a role in the growth of the gig economy in Africa. The crisis led to a decline in traditional employment opportunities, forcing people to turn to informal work. However, there is no doubt that 2020 was a defining year for the global economy. Its effects have reshaped our lives for decades on a physical, economic, and behavioural level. Pre-COVID, the biggest change to society resulted from technology. Digitalisation offers better flexibility, freedom, and choice. Although the pandemic forced major changes in how we live, at the time, it ushered in total reliance on technology. Particularly, these changes hit the hardest on the gig economy. It also opened up a lucrative portal for the revenue stream, as millions of people could apply and work as they deem fit. Digital advancements in technology, deeper internet penetration, and the rise of e-commerce spiked demand for freelancers in various fields like web development, graphic design, content creation, and digital marketing. This increased demand has attracted African freelancers to join online platforms like Upwork and Fiverr. In this dispensation of work, freelancers and gig workers can tap into the global marketplace to offer their skills and services to clients beyond their borders. “I know the market is hot and the world needs programmers, so for now, this is the best way for me to be creative and earn good money,” says Sheikh Sarr, a 19-year-old university graduate from The Gambia. Sheikh Sarr took charge of his future by enrolling in a computer programming course at Banjul’s Indian Institute of Hardware Technology. After mastering five programming languages in under 10 months, Sarr has joined Africa’s booming gig economy. Setting up profiles on Fiverr and Upwork, he is leveraging his skills and creativity for lucrative freelance work. With access to affordable broadband, Sarr dedicated nighttime hours to learning and coding. Confident in the demand for programmers, he sees freelancing as a pathway to financial success while fueling Africa’s thriving tech market. According to research by KEPSA (Kenya Private Sector Alliance), over 1.2 million people, which is 5% of Kenya’s adult population, now perform one form of gig work or the other. “The shift towards remote work during the pandemic has led to an increase in demand for certain types of online work, particularly in the tech industry,” says Fabian Stephany, a research lecturer in AI & Work at the Oxford Internet Institute. African governments are proactively developing initiatives to capitalise on the potential of the expanding gig economy in Africa. In Kenya, for instance, the Ajira Digital Clubs initiative equips young people with digital skills to compete in the global marketplace. More so, policymakers are poised to mitigate the challenges plaguing the vast informal sector by promoting upskilling through gig work to enhance the workforce’s overall skill set and employability. Do African women stand a chance in