Read time: 3 minutes

Bridging digital divide key to Kenya’s gig economy

Kenya , 01 Oct 2020

According to a new report from MasterCard, The Gig Economy in East Africa: A Gateway to the Financial Mainstream, the digital divide is hampering progress of East Africa’s Gig economy – of which online represents only a small part.

An excerpt from the report reads: “Research-based estimates in 2019 put the total size of the online gig economy in Kenya at USD109 million, employing 36,573, while the offline gig economy comprises 5.1 million workers, and accounts for USD 19.6 billion.”

Research shows that online gig economy work is preferred with 60% of the respondents saying it enables end-to-end project management..

“A third (over 35%) said that finding gig work was easier on a platform, and about 30% said platforms made faster payments possible and helped them connect to other workers,” it added.

Jorn Lambert, Chief Digital Officer, MasterCard said that having access to digital technologies would enable the growth of online gig workers significantly.

“If each key player in the gig economy ecosystem comes together – from the platform to the mobile industry and the payments provider – we can ensure that the end-to-end journey of the gig worker is both smooth and profitable, and realise the true potential of inclusive, sustainable growth across the continent,” said Lambert.

Another study, released by Consultative Group to Assist the Poor (CGAP) in December 2019, stated that digital finance platforms also enabled workers to embrace freelance work.

CGAP stated: “Some platforms offer start-up capital to enable workers to purchase the tools needed to start gig work. LYNK, which connects customers with trusted domestic workers, carpenters, mechanics and skilled blue-collar professionals, offers soft loans repaid through deductions from platform earnings.”

“DigiFarm is a one-stop platform for farmers to access inputs, transact, learn, grow and sell their produce. It also links farmers to M-Shwari loans. However, it appears that there are not enough sources of credit to meet the demand of the youth we interviewed.”

Kenya’s government is on the verge of approving the Digital Economy Strategy to strengthen the online gig economy that has a higher number of online workers.

A section of the latest draft of the strategy reads: “The digital economy has the opportunity to create ‘jobs of tomorrow’ in the sector of online work, catalysed by the Ajira Digital Programme. Presently, various ‘gig economy’ platforms have been expanding in, and into, Kenya, facilitating 677, 961 digital/online workers and thousands more engaging in digitally-enabled work, such as ride-hailing taxi drivers, and providing accountability and traceability to jobs which previously would have been exclusively in the informal sector.”

Daily newsletter