How digital technology is powering up East Africa’s growing gig economy

The gig economy has experienced exponential growth in the past five to ten years, becoming a significant source of financial independence for freelancers globally. According to the 2020 Mastercard Gig Economy Industry Outlook report, the industry is currently valued at $193 billion and is projected to grow to almost $450 billion by 2023, with an estimated one billion freelancers worldwide. In East Africa, particularly in Kenya, the gig economy is also rapidly expanding, with around five million gig workers, representing 21% of the population engaging in gig work. To gain a deeper understanding of the drivers of growth in this sector, Mastercard commissioned research in Kenya, which revealed some interesting insights. A staggering 80% of gig workers in Kenya access gig platforms through their mobile phones, highlighting the importance of digital technology in enabling gig work in the region. Moreover, over 70% of the surveyed gig workers in Kenya have higher education qualifications, dispelling the notion that gig work is predominantly for low-skilled individuals. The research also showed that gig workers value instant payments and access to credit as key features in a gig platform. With more than 60% of gig workers in Kenya joining gig platforms in the last two years, there has been a significant acceleration in the gig economy in the region. Another notable finding was that gig workers are willing to pay for extra benefits on platforms, debunking the narrative that affordability is a major barrier to growth in Africa. Despite some findings being expected, the research also provided deep insights that are essential for the industry to consider moving forward. It is evident that the gig economy presents immense potential for socio-economic development in East Africa, and it is crucial to explore strategies to unlock this potential further. Ngozi Megwa, Senior Vice President of Digital Partnerships for Middle East and Africa at Mastercard, emphasized the importance of understanding the real needs of gig workers beyond basic requirements like timely payments. The research indicated that 98% of gig workers surveyed expressed a preference for platforms that offer a wide range of services, including access to credit, loans, and insurances, all delivered through a personalized and consistent experience. To meet these evolving demands, Megwa stressed the significance of partnerships in the industry. Collaboration between gig platforms, financial institutions, and technology providers is essential to offer comprehensive services to gig workers and ensure a sustainable ecosystem that benefits all stakeholders. By embracing digital technology and fostering strategic partnerships, the gig economy in East Africa can continue to thrive and drive economic growth in the region.