In early March 2022, the GSMA Mobile for Development Central Insights Unit hosted a discussion with invited guests and panellists, to share key findings from the latest report titled ‘Informal Youth Employment in the Mobile Industry in Sub-Saharan Africa’. The industry has grown rapidly in the last few decades and employs 1.2 million youth in the region, 800,000 of which derive earnings from informal income-generating opportunities.
The GSMA was joined by three panelists with extensive experience in either the mobile industry or in supporting youth employment in the region:
- Jackie Ochola, currently a country manager at CSquared, a tech company bringing fast and reliable internet across Africa. She was previously at Andela Uganda, which is a software engineering services company.
- Dr. Robert Afutu-Kotey, a professor at The University of Ghana whose research focuses heavily on young people deriving their income from informal jobs in the mobile industry.
- Rob Burnet, the CEO of Shujaaz Inc, a network of social ventures based in Nairobi, Kenya which inspires and mobilises over 7.5 million 15-24 year old youth across East Africa. In 2019, Shujaaz Inc. launched the “Hustla MBA”, an ambitious peer-to-peer training course designed to upskill young micro entrepreneurs working in Kenya’s informal economy. As of April 2021, over 250,000 young people had logged in to watch videos, chat and learn directly from young entrepreneurs about how to set up and run successful micro-business.
This blog presents key takeaways from the discussion.
The Challenges
While young people working informally in the mobile industry enjoy a range of benefits, they face challenges in growing their enterprises.
Dr. Afutu-Kotey, who has been working with youth over the years in the informal industry in Ghana, found that they started generating incomes from the sale of smartphones (both new and second-hand) coming into Africa from other regions of the world. Mobile phone businesses progressively developed across the region, and informal income-generating activities in the industry became increasingly diverse. These economic opportunities generally present an additional source of income that allows young people to diversify their earnings, to gain financial independence, and to acquire new skills while having flexible work hours.
Youth working informally are extremely dynamic, but Dr Afutu-Kotey found that they struggle to grow their enterprises and need increased institutional support. Our research also found that youth are constrained by a lack of access to funding and financial services. They often struggle to meet the requirements of traditional banking institutions, such as offering proof of identity and financial documentation, which prevents them from accessing capital to set up and grow their businesses.
This observation was also shared by Ms. Ochola. She witnessed the same during her time at both CSquared and Andela. In infrastructure work for instance, young people are not offered the opportunity to bid for and obtain contracts. Jackie also mentioned the persistence of gender disparity in software development roles which she noticed while working at Andela. Less women take on such roles because of cultural and social norms, but once they join, there are no differences between their achievements and those of men.
Although informal employment has its challenges such as lack of social security and insurance, panelists agreed that informal opportunities that help youth earn an income are extremely important in supporting livelihoods. Over half of youth surveyed in our research indicated they would continue their informal activity if they were to find a formal job, which suggests they value adopting a “mixed livelihoods” approach to income-generation.
Support Available
Better institutional support is essential if youth are to reap the benefits of working informally
The discussion then shifted to the potential solutions and policies needed to better support young people working informally.
Youth surveyed in our research identified the lack of formal jobs opportunities as a key driver of informal employment. In sub-Saharan Africa, the number of youth entering the labour market significantly outweighs the number of formal jobs that are created, according to the World Bank.
Our panelist Mr. Rob Burnet of Shujaaz Inc. has been tackling this challenge head on, by providing youth in Kenya and in the region with the opportunity to build and grow their informal work opportunities into sustainable businesses. He discussed the importance of youth learning from peers and mentors who have shared their experiences “Young people want to learn but they don’t want to be taught. Part of the journey is about skills but also stories people tell themselves and narratives that build their identity.”
As Dr. Afutu-Kotey noted an increasing number of young people complete secondary school, and most have the potential to participate actively in the higher-end of the value chain, when offered adequate training and guidance. Ms. Ochola also noted that mentorship and role models are key to making youth who are women realise that technical fields are equally open to them.
Shujaaz Inc.is based on the belief that informal entrepreneurship can provide a dignified and decent livelihood for youth, if they are provided the right skills, mentorship and networks.
Within the wider development community however, discussions around how to better support young people working informally are still limited. While formal job creation remains the long-term goal, young people would benefit from increased support for informal enterprises and opportunities.
What’s Next?
Informal work is enormously heterogenous and is the norm in sub-Saharan Africa. The discussion concluded with the need to consider what strategies could best support youth in building sustainable livelihoods, in a region where not enough formal jobs exist, and between 80 to 90 per cent of youth will build incomes from informal roles. Panelists pointed out the importance of the role of increasing cross-sector collaboration in addressing their needs, which is something that the GSMA research report also concluded. MNOs, policymakers, development organisations and educational institutions all have a contribution to make to better support youth working informally in the mobile industry.
The GSMA research report on ‘Informal youth employment in the mobile industry in sub-Saharan Africa’ discussed at the event can be found here.
