What We Get Wrong About Jobs in Africa

News Anchor: Ending extreme poverty around the world by 2030. 

News Anchor: 2.2 million South Africans lost their jobs. 

News Anchor: Unemployment is the major driver of poverty. 

Development Professional: We have to do a few things as a global community. 

UN SDG Chairman: It is so decided…

Justin Norman: September 25, 2015, world leaders met in New York City for the United Nations Summit on Sustainable Development, where the UN published its 17 Sustainable Development Goals. Number 8 on the list is Decent Work and Economic Growth. It’s an important one that impacts so many of the others on this list, especially the primary goal of ending global poverty. The SDGs place a particular focus on job creation in Africa. It’s a region with the highest levels of poverty, the lowest levels of formal employment and where the population is going to double in the next 30 years. African countries need to create more jobs. But what kinds of jobs? And how? 

Justin Norman: There’s millions if not billions of dollars put towards addressing this issue on the African continent. And yet, the gap remains wide. But what if I told you that the way governments and development organizations are trying to create jobs in Africa is all wrong? To make a dent in this problem requires an understanding of the realities on the ground and how that has impacted the preferences of the labor markets in question. The future of work, for Africans in particular, is not a formal job but a technology-enabled portfolio of work. 

Justin Norman: Driving around African cities like Lagos or Kampala or Accra or Nairobi, something stands out. It’s the bustling activities in the streets - where work happens. in the markets, in front of the small shops, on the corners, and everywhere in between. This is the so-called informal economy. Upwards of 60% and as high as 80 or 90% of the work in most low-income African countries is informal. And as development economist Louise Fox once said:

Louise Fox: Informal will be normal for a long time. 

Justin Norman: This is the reality on the ground. And the context in which problems are attempting to be solved. Here’s Janet Wandia with the Jobtech Alliance. 

Janet Wandia: Every year there are about 20 to 22 million youths entering into the job market while on this other side, on the demand side, there are only about 3 million jobs being created.

Justin Norman: The Brookings Institution calls it a “missing jobs crisis” - it’s not that the issue is necessarily one of lack of skills or education amongst the youth population, but that “people of all ages face a staggering shortage of formal, productive jobs”.

Janet Wandia: A recent study that was done last in 2022 by the ILO actually painted a very rightful picture about Africa whereby you found that Africa's unemployment rates were at around 12 percent while the world unemployment rates were at around 14.7 percent. This 80, 85 percent of the people who are left out of the equation? They are thrown into the informal economy. 

Justin Norman: The issue isn’t unemployment, it’s underemployment; where 30 percent of the population is the “working poor”.

Janet Wandia: And that's why it's important for people to think about how do we create more meaningful work as opposed to just creating a job.
  
Justin Norman: Pervasive underemployment has an impact on the preferences of labor on the continent. When speaking to users of digital platforms, a common theme emerges. 

Joyce Mwangi: Personally I prefer to have multiple jobs. 

Joyce Edem Agbo: You cannot count on the salary for the rest of the month, so at least doing something aside that will… it’s really helpful. 

Raphael McAdjei: Accra is very, very expensive, so I can’t be tied to one particular income source. 

Joyce Mwangi: It is currently you have to have a full-time job and not settle just for that. You have to find some gigs, some part-time jobs for you to be able to cater for everyday needs. 

Justin Norman: There is a preference for multiple jobs - for a portfolio of work - for one to meet their financial needs. Instead of one job and one single source of income, it’s multiple jobs or gigs and multiple streams of income, that may come and go, and vary depending on time of year or demand in the market.

Justin Norman: On one hand, even for the small number of people with a full-time job, like Joyce in Accra, it’s proving to be insufficient, particularly in an environment experiencing currency devaluation and a rising cost of living. 

Joyce Edem Agbo:  I've worked with Ghana Health Service for over 18 years. Because of the economic system and then the school fees too, every time they increase it, though money comes from different sources, it's not enough. And then how much is the salary? So if you don't find anything to do, you'll be broke. You’ll just be broke always. 

Justin Norman: But also for university graduates like Joyce in Nairobi, who studied agricultural engineering, there aren’t jobs available. 

Joyce Mwangi: I graduated in 2021, as I was applying for several jobs, I guess I have applied more than 500 jobs, different jobs in area. I still apply for jobs every day. There are so many graduates and if you don't know someone, you just end up in the streets hustling.

Janet Wandia: A few years back in Africa, it was very common to have people looking into getting into the white-collar kind of employment, the eight to five with the different benefits. But the youth of today, due to the different challenges they have in times of getting employment, have learnt how to shift this kind of mindset and think about how to create a portfolio of work that can give them meaningful work.

Justin Norman: And for that reason, many people are turning towards jobtech platforms for supplemental income. Jobtech refers to digital platforms that connect people to work opportunities that build livelihoods. This can include gig platforms, as well as platforms for digitally delivered work, and digital tools for microenterprises. One example is Tendo, based in Ghana, a platform for individuals to resell products using social media. 

Felix Manford: My name is Felix. I am the CEO of Tendo. Tendo is a platform that enables anyone in Africa to start an online store with zero capital. Our typical user is between the ages of 20 to 35, 70 percent of them are women. The majority actually use it as a source of side income. They have a full-time job. They have a gig that's already going on for them, and this is an additional income that they're getting.

Justin Norman: Tendo is a social commerce app for resellers. The platform has built a network of suppliers and then handles the fulfillment when an order is placed. For the resellers, after identifying the products they want to sell through Tendo’s app, they can add a markup on the wholesale price - which is their profit - and they use social media to sell to their community. 

Felix Manford: They would find the products that they want and we would guide them on how much they can price, how much profit they can add to the product… But once they share it and they generate orders Tendo actually fulfills the order. So we deliver to their end customers and send their profits to them. These resellers act as sources of truth and recommendations for, for the end buyers. Their desire really is to leverage on that community to generate an income.

Justin Norman: From an earnings perspective, Tendo isn’t providing the equivalent of a full-time income for their users. That’s by design. They are one part of their users' portfolio of work. 

Felix Manford: Our average user base earns right now about $60 monthly, and I think it's significant because a lot of these users are using the income that they're earning on Tendo for very impactful things. So paying for fees, paying for their children, buying things, the essential things that they need. But the idea is to find something that's very easy they can do on their smartphone, they can do it while they're doing all their different other things and then we can take the heavy lifting and just leverage on what they have, which is their drive, their skills, and their relationships that they've built.

Janet Wandia: Each job that is done by a gig worker is contributing to a portfolio of incomes. As platforms find innovative ways of creating work in Africa and in sub-Saharan Africa, they have to be aware of the context that exists here. The important thing to remember is that these solutions might not emanate from just one platform. Remember, it's a portfolio of work. People are thinking about what is the total income I'm earning as opposed to being stuck to one platform. So they have to create a product that creates that sort of flexibility. But at the same time, they have to balance between creating good economies, being able to hit their bottom line, and at the same time pay the gig workers meaningful income.

Justin Norman: For organizations like the Jobtech Alliance, and for jobtech platforms themselves, the measure of success then is earnings, not employment. 

Janet Wandia: Success for a job created in here should be meaningful livelihood. 

Joyce Edem Agbo: For me, I just want to give my children a better education. It’s a good feeling that sometimes you'll be there and then the salary is finished, then you don't know what to do. Then you just open to your Tendo account, you have some money that you cash out… Yes,  it's nice.

Justin Norman: Now, the biggest question of all is to what degree jobtech platforms can address the underemployment issues across the continent. Much of the same market considerations that lead to a lack of formal jobs - demand for labor, government policy, and so on - may also constrain the earnings opportunities for any given platform. And the same concerns - about dignity and meaningful livelihoods - apply to platform workers, who do not have the same benefits and protections of those who work in a full-time job. 

Justin Norman: But if we accept the fact that most Africans won’t have full-time jobs, in an environment in which most people work in the informal economy, a tech-enabled portfolio of work can provide newfound opportunities and even an alternative path to formalization. On one hand, much like a financial advisor suggests building a diversified portfolio, a portfolio of work may prove more resilient than a formal job and one single source of income. At the same time, by building better digital tools for platform workers, we can also avail traditional benefits previously tied to employment, as well as other means of enablement like access to finance. 

Justin Norman: And this is possible, if we start from the premise that there will not be enough formal job creation to meet the demands of a rapidly growing labor force across the continent, and we instead build in accordance with the realities on the ground. Because again, as development economist Louise Fox says:

Louise Fox: Informal will be normal for a long time. Yes, it's a good idea to focus on formal jobs, but we need to understand that not everybody's going to get one. Somewhere between 25 and 50% of the new entrants, depending on the country, uh, and the context are going to get one. So we need to focus on that.

Justin Norman: For more on this topic, check out the future of work podcast series we published last year - which we’ll link to in the show notes - and check out the work that the jobtech alliance is doing at jobtechalliance.com. And one more thing, if you enjoy the show and want to support the content that we create, please hit that subscribe button. It only takes a second, but it will mean a lot to us if you do.