The State of Kenya’s Gig Economy

According to a recent study on Kenya’s informal sector, the online Kenya economy is valued at around $109 million, employing 36,573 workers!

Originally published Abu Okari on Tagelmust.

Earlier this year, British media outlets quoted an official of Imperial College, London decrying rampant cheating by students in British universities. The British government also pressured PayPal, the payments and money transfer service, who subsequently announced they will stop processing payments for essay writing companies that sell their services to students.

These developments could have been of little consequence on the Kenyan side of the world except for one thing, British students farm out their assignments to young Kenyans. A crackdown on cheating in British varsities is a crackdown on many a young Kenyan’s pockets.

These Kenyan academic writers are part of the dynamic bit of the informal sector, an ever present section of Kenya’s economic fabric;

“The gig economy has been the norm in Kenya for decades given that the economy is largely defined by a large informal sector which accounts for 83.6 percent of the working population, employing 14.9 million workers.”

Mercy Corps/Youth Impact Lab’s Kenya Gig Economy Report 2019

And, for the first time, there is a more reliable estimate of its total size. According to a recent study on Kenya’s informal sector, the online Kenya economy is valued at around $109 million, employing 36,573 workers.

Youth Impact Labs, a programme of Mercy Corps that is funded by Google.org commissioned the study. They work with tech startups in Kenya to test and support tech enabled solutions that have a potential of creating jobs.

Currently, Kenya’s unemployment rate stands at 26.4%. The Kenyan economy is still struggling to create jobs, a bigger challenge if you factor in the youth segment. Approximately 20% of Kenya’s population is aged between 15-24 years, which is a higher percentage than the global and Africa averages. Globally, 15-24 year-olds form 15.8% of the population, and in Africa, they constitute 19.2%.

Youth Impact Labs consider online gig work as a potential avenue to catalyze job creation in Kenya, and rightly so. Global work trends are pointing more towards the rise of remote, and fragmented work. Gig work is expected to grow as employers seek to lower operating costs.    

In Kenya, it is expected to hit $345 million, employing 93,875 gig workers in the next five years. That will be a 33% growth based on the current investment levels.

Here are other key findings from the study:

  • Demand, especially in transport and domestic service uptake by urban households, drives the gig economy in Kenya. At $45 million and $55 million, ride hailing and online professional services respectively have the highest share. Online rentals account for $5 million, while blue collar match-making platforms add $3 million

  • Gig workers operate in a regulatory grey area as current labour laws are yet to be updated to cover gig work. This is the case globally

  • Online gig work in Kenya is limited to urban areas

  • Women’s participation in the gig economy is hampered by societal and occupational barriers. For instance, women tend not to be employed in sectors like ride hailing platforms

  • Gig work can help address unemployment in Kenya, however, it is not growing fast enough

Feature Image Credit.

About the author
Abu Okari runs Tagelmust.com. Tagelmust is three things in one: a blog focusing on technology, startups, and entrepreneurship in Africa, a newsletter called Curiouser that will make you smarter about Africa, and a podcast featuring conversations with Africans who are building consequential entities because they either, interest them, are inspired by them, or just because they can.

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