OPINION: Embracing the future of work in urban Africa

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Although the gig economy might not be well-defined in African labour policies, its principles are integrated within many business environments in Africa

Street business are one of the most common sights in the urban centres of Sub-Saharan Africa.

These businesses are mainly run by street vendors and can be found on the corners of any commercial business district. Regardless of whether they sell food or non-food items, people who engage in street sales are small parts of a very complex business ecosystem.

In many African countries, street vendors represent a significant portion of the informal economy. According to the International Labour Organization (ILO), informal economies represent some 66 percent of the total employment throughout Sub-Saharan Africa.

Recently, I visited Maputo city in Mozambique, and to my surprise, the city’s street businesses had evolved.

The traditional buying and selling of food and non-food commodities from tables or racks is no longer an exclusive characteristic. Street businesses have evolved to gain new categories: mobile car washers, real-estate intermediaries, car guards, parking attendants, and many other services. So, what makes these new categories special? Perhaps it is the fact that tools and technologies are used to run operations and make financial transactions.

For example, real-estate intermediaries use social-media platforms such as WhatsApp and Facebook to advertise their businesses and gather clients. Meanwhile, the majority of street-vendor workers use the mobile-phone application M-Pesa to make financial transactions.    

Street business is not a new activity in Mozambique. However, the general factors that drive the informal economy have become much more complex than they used to be, and modern street enterprises in urban Mozambique are the result of decreasing education levels as well as increasing unemployment and migration.    

The transition from informal to formal economy has proven to be cumbersome and complex.

It requires in-depth structural, economic, and legal arrangements across all areas—including society as a whole. As the urban economy’s structure shifts toward services and retail, changing the narrative around informal economies and exploring innovative and alternative solutions to problems are necessary endeavours.

Today, the international business community is discussing the gig economy, the sharing economy, the future of work, digital economy, artificial intelligence and more. Mozambique might not be prepared to embrace all of these themes at once, however, a few of them can be related to the current economic and social dynamics.

While I was watching the TV special report on “Unknown Women” that aired during Mozambique’s Women’s Day this year, something caught my attention. Anastácia Nhantumbo runs a business that is branded as an early-morning door-to-door bread-delivery operation. Ms. Nhantumbo works multiple gigs to be able to sustain her household’s livelihood. Using a very modest business strategy, Ms. Nhantumbo uses a mobile phone to connect with her potential clients.    

Ms. Nhantumbo’s story is just one reminder that gig work is already driving economic growth in Mozambique. However, the general concept of the gig economy is now associated with the use of technology to enable so-called temporary jobs.    

Although the gig economy might not be well-defined in African labour policies, its principles are effectively integrated within the current economic and business environments of many African nations, including Mozambique.

In the last five years, Mozambique has experienced a rapid expansion of digital infrastructure; this expansion has resulted in improvements to connectivity and network coverage in the major metro areas.

In 2017, the Global Economy estimated that 71 out of 100 people had mobile phone subscriptions; that translated to 11.8 million subscribers throughout the entire country. Additionally, fast-moving technology- and business-incubator initiatives support start-ups in various industries.

There is no magic solution for the transformation of informality in the digital age. However, the existing structure and knowledge in the street-business ecosystem can help speed up and scale up urban entrepreneurship in Mozambique.

Enormous challenges remain, but the transition must start from somewhere.

First, promote and incentivize entrepreneurship that looks at contextualized opportunities; support and empower initiatives such as Standard-Bank Incubator, Compra, BISCATE, D-Fruit, BINDZU, and E-MOB that are enabling both skilled and unskilled people to find opportunities to buy, sell, and offer services demanded by the market.

Secondly, reform labour laws and policies to support innovation. This would require an aggressive move to improve the current Doing Business environment that is deemed too heavy for small and medium-sized enterprises and start-up initiatives.    

Antonio Inguane is an international development specialist and works with Cadasta Foundation.