Freelancers have become a major part of the workforce in countries like the United States, with over 59 million freelancers in 2020 and Statista predicting that more than half of the US workforce will be freelancing by 2028.
The freelance revolution extends beyond the United States. Global freelance platforms, valued at USD 4 billion in 2020, are expected to experience a compound annual growth rate of 15% between 2021 and 2026.
According to Payonner, Africa is home to a significant portion of the world’s freelancers, finding that 10% of all freelancers are based in Africa. Despite this, African freelancers are often overlooked by companies in Europe and the US for remote workers. In this article we will explore the state of the freelance market in Africa, including the growth of African freelance platforms, as well as the challenges facing the market and potential solutions.
Exploring the World of Freelancing in Africa
Freelancing has become a popular choice for people around the world who seek greater flexibility and a better work-life balance. However, in Africa, the motivations for engaging in freelance work go beyond just these personal benefits.
Unemployment is a major issue in many African countries, with three of the highest rates in the world found in South Africa, Namibia, and Nigeria. This is especially true for young people, with many graduates unable to find employment in their chosen fields. For example, a 2020 BBC article highlighted the story of Chekole Menberu, a 27-year-old Ethiopian engineering graduate who was forced to make a living cleaning shoes due to a lack of job opportunities.
The lack of job opportunities in Africa has forced many young people, even those with advanced degrees in lucrative fields, to seek alternative sources of income. This has led to the development of a significant freelance workforce in Africa that is capable of working remotely.
The Dynamic Demographics of Africa: A Young and Rapidly Expanding Population
While many countries around the world are facing aging populations, Sub-Saharan Africa is the only region where the working-age population is rapidly expanding. This youth boom is expected to increase by 20% over the next two decades.
With such a large and young population, many African countries will need to find ways to absorb and utilize this workforce in order to sustain economic growth and development. As the youth revolution in Africa continues to shape, it is important to consider the implications and opportunities this trend presents.
The Role of Global Networks and Technology in Enabling African Freelancers
Over the past decade, platforms that offer short-term freelance tasks for payment have seen significant growth in Africa. As of 2017, for example, Uber was operating in 15 major African cities and had around 60,000 drivers in countries such as Egypt, Ghana, Kenya, Morocco, Nigeria, South Africa, Tanzania, and Uganda.
Uber’s expansion into the African market contributed to the proliferation of mobile and mapping technology, which is essential for operating a ride-sharing service. As a result, the company now faces competition from local firms that have adopted these technologies.
Technological advancements have also led to the creation of more jobs that are well suited to freelance work, such as content writing, digital marketing, graphic design, and web design. While Africa is often overlooked as a market for companies seeking to hire remote freelancers, there are actually many talented professionals available on the continent.
African Freelance Platforms: A Rapidly Expanding Industry
Professionals in Africa are increasingly using international freelancing platforms to find work with companies based outside of the continent. For example, a study found that there were 40,000 Kenyans registered on Elance (now Upwork) in 2014. However, in recent years, a number of local freelance platforms and companies targeting freelancers have emerged in Africa.
One example is Andela, a tech talent platform founded in 2014 with the goal of helping people build careers based on their skills, rather than factors like location. Headquartered in Lagos, Nigeria, the company has since expanded to over 90 countries and has assisted over 175,000 tech freelancers in Africa, South America, and Eastern Europe in finding work.
Gebeya is another platform, offering a marketplace for digital talent in areas such as design, digital marketing, AI, and cybersecurity. Based in Addis Ababa, Ethiopia, the company helps businesses with a presence in Ethiopia to connect with local experts.
Sost is a pioneering platform that connects businesses with experts in Ethiopia and beyond. The company is known for its innovative use of bitcoin payment on its platform, which allows for fast and secure transactions. With its focus on Africa, Sost is well-positioned to help businesses navigate the dynamic market on the continent and tap into the wealth of expertise available.
Whether you are a small startup or a large multinational seeking to expand your presence on the continent, Sost can help you find the right experts to support your goals.
Challenges Facing Freelancers in Africa
While there has been significant progress in the African freelance market in recent years, there are still some obstacles that are holding it back from reaching its full potential.
The Impact of Limited Internet Penetration and Speed.
Internet penetration rates across Africa vary significantly. Some of the countries with the highest rates of internet connectivity include Kenya (42%), Nigeria (51%), and Ghana (53%). At the other end of the scale, countries such as the Democratic Republic of the Congo, Somalia, South Sudan, and the Central African Republic have penetration rates of less than 20%. South Africa has the highest rate of internet connectivity on the continent, with an estimated 68.2% of the population connected to the internet.
Although these numbers have been steadily increasing, internet contracts are still relatively expensive in much of Africa, with the monthly cost of broadband internet averaging $80.1 in Nigeria, $86.2 in Kenya, and $95.8 in Sudan, for example. When compared to the average monthly cost of $66.2 in the US and considering the difference in average income between the US and most African countries, it becomes clear that for many people, these costs present a major barrier to entry into freelancing, which is largely conducted online.
Internet speeds in Africa are also typically low, averaging 5.68Mbps in North Africa and 6.56Mbps in Sub-Saharan Africa, compared to 90.56Mbps in Western Europe. This low speed can make tasks such as research, client search, and even skill acquisition extremely challenging for freelancers who often rely on slow internet access through mobile devices.
Overcoming the Challenges of Payment Options.
PayPal is a popular and convenient way for freelancers around the world to receive payment. However, the company’s limited presence in Africa can be a significant obstacle for African freelancers trying to get paid by their clients.
Currently, PayPal is active in more than 40 of Africa’s 54 countries, but it only allows users to receive payments in 12 of those. In Nigeria, one of the largest economies on the continent, PayPal users are only able to send money, not receive it.
This means that many African freelancers are effectively unable to receive payments from international clients. While other payment methods are available, they may not be widely known or trusted internationally, and often have significant fees attached. This can make them cost-prohibitive for many freelancers in Africa who may already be struggling with lower incomes and less access to financial resources. The adoption of bitcoin-lightning payment by Sost could be a solution to this problem, as it offers a fast and secure way to receive payments with zero fees.
African Freelancing: Looking Ahead
Although there are still challenges to be addressed, the freelance market in Africa is showing strong growth and has significant potential. According to McKinsey, online talent platforms could contribute an estimated $2.7 trillion to global GDP and create 72 million full-time equivalent positions by 2025. This indicates a bright future for freelancers in Africa and the potential for significant economic growth and employment opportunities in the sector.
While the projections for the global freelance market may not specifically include Africa, the continent’s young and rapidly growing population, increasing technology adoption, and rising internet penetration make it a market that should not be overlooked.
In conclusion, companies working with freelancers in Africa should be open to exploring new payment options that will work for both parties. While it may require some additional effort to adapt new payment solutions, the potential benefits of tapping into Africa’s largely untapped talent pool are significant.
Implementing innovative options such as bitcoin-lightning payment, platforms like Sost not only facilitate smooth and efficient payment for their African freelancers, but also potentially improve the success and outcomes of projects. Ultimately build strong, mutually beneficial relationships with African freelancers and clients.