KEY POINTS
- Nigeria’s gig economy provides adaptable work opportunities, fostering income generation and professional growth for its young, digitally savvy population.
- Challenges like inconsistent earnings and limited access to social safeguards hinder the potential of Nigerian freelancers in the gig economy.
- Investments in infrastructure, skills development, and supportive policies are crucial for freelancers to thrive and ensure sustainable gig economy growth in Nigeria.
The gig economy has become a significant force in the world with Nigeria no exemption, altering conventional employment structures and generating fresh freelancer opportunities.
The World Bank reports that there are 545 online gig-work platforms worldwide, headquartered in 63 nations, serving platform workers and clients across 186 countries.
Online gig work comprises 4.4-12.5 percent of the global workforce, with approximately 154 to 435 million gig workers engaged online around the world (World Bank, 2023).
The gig economy is marked by short-term contracts, adaptable work arrangements, and digital platforms.
Given the growing young population, extensive internet availability, and rising unemployment, freelancing has become a practical option for earning income in Nigeria.
The unemployment rate increased to 5.3 percent in the first quarter of 2024 from 5.0 percent in Q3 2023.
Among youths aged 15 to 24, the unemployment rate decreased to 8.4 percent in Q1 2024, from 8.6 percent in Q3 2023.
The notable youth employment rate can be attributed to the rise in youth engagement in the gig economy, which further attests to the 84 percent Q1 2024 self-employment rate.
Nonetheless, while the gig economy offers many opportunities, it also introduces considerable challenges that must be addressed to guarantee sustainable development.
Opportunities in the Nigerian gig economy
The opportunities presented by the gig economy include, but are not limited to, the following:
Employment opportunities and income generation
The gig economy has opened up avenues for Nigerians, especially young people, to make a living via freelance platforms like Upwork, Fiverr, and local options such as FieldInsight.
The Jobberman report indicates that the informal sector provides 76.7 percent of employment in Nigeria, including the freelance sector.
The freelance sector comprises work areas such as writing, graphic design, programming, and digital marketing leading the market.
Freelancing enables people to avoid conventional job obstacles, providing chances for both skilled experts and semi-skilled laborers.
Ride-hailing apps like Bolt and Uber generate revenue for drivers, whereas delivery services such as Gokada and Jumia Food help logistics workers to succeed.
Adaptability and independence
Individuals working as freelancers in Nigeria appreciate the freedom to select their work hours, assignments, and clients.
This independence enables people to juggle their jobs with personal obligations, promoting an improved work-life balance.
For numerous Nigerians, particularly women and caregivers, this adaptability is transformative, allowing them to economically contribute while balancing family duties.
Skill advancement and professional progression
Engaging in the gig economy promotes continuous learning and the enhancement of skills for Nigerians.
Freelancers frequently develop new skills to stay competitive, improving their job prospects.
The digital characteristics of gig work also expose individuals to new technologies and global standards, preparing them for career growth in a swiftly changing job environment.
Lowered entry barriers
The gig economy diminishes conventional obstacles to employment by emphasizing skills instead of formal credentials.
People skilled in fields like graphic design, writing, programming, and digital marketing can secure employment regardless of their educational qualifications.
This inclusiveness provides opportunities for underrepresented communities to engage in the economy.
Challenges facing Nigerian freelancers
The challenges posed by the gig economy include, but are not limited to, the following:
Earnings volatility
A major difficulty for freelancers is inconsistent income. In contrast to conventional jobs, gig work lacks regular paychecks, complicating financial planning.
Numerous freelancers go through times of reduced demand, resulting in irregular income and financial pressure.
Absence of social safeguards
Freelancers in Nigeria work without any access to social welfare benefits like health insurance, pension schemes, and unemployment support.
The absence of safety nets makes them susceptible to financial crises, health issues, and uncertainties regarding retirement. The lack of formal labor protections worsens these risks.
Restricted availability of funds
Obtaining credit and financing poses a major challenge for freelancers. Conventional financial institutions frequently consider gig workers as high-risk borrowers because of their inconsistent income sources.
This restricts their capacity to invest in tools, training, or additional resources essential for business expansion.
Challenges in digital infrastructure and connectivity
Although the gig economy flourishes on online platforms, Nigeria’s digital infrastructure faces obstacles.Â
Weak internet access, expensive data, and unreliable power supply impede freelancers’ capacity to produce quality work and compete successfully in the international market.
Strategies for overcoming challenges
The following strategies can help address the challenges posed by the gig economy, including but not limited to:
Policies and regulations support
The government can significantly assist freelancers by enacting policies that cater to their specific requirements.
This encompasses enacting labor regulations that acknowledge gig employment, offering social safeguards, and guaranteeing equitable treatment on online platforms.
Enhanced digital infrastructure
Funding digital infrastructure is crucial for the expansion of the gig economy. Enhancing broadband availability, lowering data expenses, and guaranteeing consistent electricity can enable freelancers to compete on a global scale. Public-private collaborations can speed up these enhancements.
Programs for financial inclusion
Financial institutions ought to create customized offerings for freelancers, including adaptable loans, savings options, and insurance solutions.
Programs such as credit scoring models that utilize gig income can assist in closing the financing gap and encourage economic inclusion.
Enhancing abilities and skill advancement
Offering training programs for freelancers can improve their competitiveness in the gig economy.
Collaborations among government entities, the private sector, and educational organizations can provide training in digital skills, financial literacy, and business management.
These initiatives will allow freelancers to adjust to market needs and attain lasting growth.
Platforms promoting Nigeria’s gig economy:
Paystack’s impact on digital freelancing
Paystack, a fintech firm from Nigeria, has transformed online payment processes, allowing freelancers to effortlessly receive payments from both local and global clients.
Its connection with international platforms has simplified cross-border transactions, improving freelancers’ access to worldwide markets.
Gigmile’s influence on local gig workers
Gigmile, a platform from Nigeria, links gig workers with potential jobs in logistics, ride-hailing, and delivery services.
Through financing for vehicles like motorcycles and cars, Gigmile enables freelancers to expand their businesses and enhance their standard of living.
The future of freelancing in Nigeria
With the development of the Nigerian gig economy, there is a potential of promoting entrepreneurship, tackling unemployment and playing a crucial role in national advancement.
Nonetheless, realizing this potential necessitates a collective effort from all stakeholders.
For the Government: Enact favorable policies and fund infrastructure development.
For freelancers: Adopt ongoing education and connection building.
For platforms: Establish just opportunities for Nigerian freelancers and guarantee equal compensation.
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