Client
Ethiopia's Gig Economy Stakeholders – Mesirat, supported by the Mastercard Foundation.

Problem
Ethiopia's gig economy, while rapidly expanding, operates within an ambiguous regulatory landscape. Key challenges included:

• Regulatory Gaps: Existing laws failed to address the flexible, technology-driven nature of gig work, leaving platforms and workers in a legal gray area.

• Complex Licensing: Gig platforms faced excessive and inappropriate licensing requirements, often needing multiple licenses not tailored to their operational models.

• Taxation Challenges: Both platforms and workers struggled with unclear tax obligations, leading to compliance issues and lost revenue.

• Worker Vulnerability: Gig workers lacked protections under traditional labor laws, leaving them without access to benefits, safety nets, or data privacy safeguards.

  
  

Solution
L&A developed a Regulatory Sandbox Framework tailored to Ethiopia's gig economy to bridge these gaps and promote innovation. The comprehensive solution included:

1. Research and Stakeholder Engagement

   • Conducted surveys with gig platforms to identify licensing, taxation, and operational pain points.

   • Collaborated with key government agencies such as the Ministry of Revenue, Ethiopian Communications Authority (ECA), and Ministry of Labor to align objectives.

   • Benchmarked best practices from countries like South Africa, Singapore, and Canada to design globally informed solutions.

2. Regulatory Sandbox Design

   • Proposed a sandbox model where gig platforms could test innovations under regulatory oversight with temporary exemptions from restrictive regulations.

   • Established clear phases for sandbox operation: application, testing, monitoring, and evaluation.

   • Recommended cross-sector governance structures to streamline collaboration between government agencies.

3. Policy Recommendations

   • Developed licensing recommendations to reduce bureaucratic hurdles, proposing a unified "gig platform" license category.

   • Introduced taxation strategies tailored to the gig economy, balancing compliance needs with gig workers' realities.

   • Advocated for stronger consumer protection and data privacy laws, leveraging the Personal Data Protection Proclamation 1321/2024.

   • Implementation of international labour conventions and comprehensive strategy to enhance gig worker protections, including legal recognition of gig work, establishment of minimum wage regulations, working hour protections, and access to social benefits

4. Capacity Building

   • Designed training materials and workshops for government agencies to effectively regulate and support the sandbox.

   • Provided platforms with tools to align their practices with emerging regulations.

     
     

Result
The Regulatory Sandbox Framework by L&A provided Ethiopia’s policymakers and gig economy stakeholders with a clear path forward. Key outcomes included:

• Policy Clarity: A roadmap for adapting existing regulations to the gig economy's unique needs, ensuring scalability and sustainability.

• Innovation Enablement: A controlled space for platforms to test new business models, fostering innovation while managing risks.

• Worker Protections: Recommendations to integrate gig workers into broader labor protections, safeguarding their rights without stifling flexibility.

• Economic Potential: A foundation for leveraging the gig economy's growth to drive job creation, technological advancement, and entrepreneurship.