Current State of the Gig Economy in East Africa

An assessment[1] issued by Mastercard in 2020 showed that Kenya, with a population of a bit over 50 million, had 5 million gig workers. The report further showed that 80% of gig workers accessed gigs through mobile and 60% of them joined a digital platform in the last 2 years.

With Ethiopia’s youthful population quickly reaching 115 million, informal gig workers exist in the millions. Although digital platforms for gig work are only recently emerging, there is a great potential for them to scale to create millions of decent jobs in the next few years.

However, these platforms should not scale in silos. They should come together to accommodate the future of work where gig workers who have different skills want to make themselves available in a way where they control their schedule and decide how far they want to travel to deliver their services. In other words, in a country like Ethiopia, a female gig worker should be able to provide rides on ZayRide from 8 to 11am after she drops her kids at school in the morning, then become a nanny from 11:30am until 1:30pm on Gooday, tutor students from 2 to 3:30pm using Astegni before she picks up her kids from school at 4pm, then spend her late evening designing graphics for a client she found through FreelanceEthiopia.

Enters the Exchange

In the future, a gig worker should be able to seamlessly sell their services from one centralized platform. What would such a centralized platform look like? Look no further than stock markets. According to Wingham Rowan, “when new technologies for information retrieval, dissecting data, payment transfers, graphic displays, and back-office processes emerged, financial institutions built themselves markets that come as close as possible to perfectly frictionless. A trader at Goldman Sachs or Citi uses software that seamlessly identifies and executes opportunities across multiple exchanges, forces down overheads, and minimizes transaction risk while proactively combing for openings to suit current objectives.”[2]

If a trader or investor can have access to such sophisticated platforms, doesn’t a gig worker deserve a sophisticated labor market too? With very complex labor laws and legacy systems, it might be difficult for western countries to implement such exchanges.

The situation is different for emerging economies. These countries can indeed leapfrog and become trend setters by designing and implementing bespoke labor exchanges.

The Stages of Implementation

Each country has its own idiosyncrasies; thus, it is important to customize the exchange to local laws and design it based on the capabilities of local gig platforms. Nevertheless, the maturity stages of implementation remain the same for any emerging economy (See figure 1).

​Ultimately, in its mature stage, the Gig Exchange for the gig economy of a whole country is financed by investors. Like the stock market, investors can win or lose when they invest in impact tokens (See figure 2).

The case of Ethiopia 

L&A has brought existing generic gig platforms in Ethiopia (Gooday, Taskmoby, ShegaMuya, PickPro, Gigs Ethiopia, Fetan, etc.) together into an alliance so that a Stage 1 framework as described above can be initiated. More platforms focused on delivery, taxi hailing or logistics (i.e verticals) can be brought into the fold to create a larger framework (i.e horizontally) breaking the silos while allowing each platform to thrive and scale. The framework would then incrementally grow into a super-platform and ultimately into an exchange.

Ethiopia: setting a trend on top of following

In June 2021 the Federal Parliament of Ethiopia approved and enacted a capital markets proclamation[3]. A Capital Market Authority and the Ethiopian Securities Exchange will become operational in 2022 with public-private partnership arrangements. 

The coming of a capital market in Ethiopia is of utmost importance not only for large corporations, but also for startups (including that in the Gig Economy) that have the potential to go IPO in a few years, creating an exit opportunity for investors. However, this has been a long time coming.

Where Ethiopia could truly trailblaze and become a trendsetter would be with the establishment of the EGX, an innovative and disruptive way for finally cracking the tough nut of job creation. In Ethiopia, 2 million individuals enter the labor market each year hence the economy needs to create close to 8 thousand jobs every business day; A ticking time bomb that can be defused by the EGX.

[1] Mastercard, September 2020, The Gig Economy In East Africa, https://newsroom.mastercard.com/mea/files/2020/09/The-Gig-Economy-in-East-Africa-White-Paper.pdf

[2] Wingham Rowan, June 2021, Remaking the Modern Market, https://americancompass.org/essays/remaking-the-modern-market/

[3]