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The Rise and Role of Africa's Platform Economy in Inclusive Development

The Rise and Role of Africa's Platform Economy in Inclusive Development

Chernay Johnson (Cenfri, South Africa), Hennie Bester (Cenfri, South Africa), Doubell Chamberlain (Cenfri, South Africa), Matthew Dunn (Cenfri, South Africa), and Roland Mwesigwa Banya (Cenfri, South Africa)
Copyright: © 2021 |Pages: 25
DOI: 10.4018/978-1-7998-3234-8.ch003
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Abstract

Digital platforms are bridging barriers to financial and economic inclusion and in the process giving rise to new financial needs in Africa. This chapter presents findings from research conducted by insight2impact that explored the landscape and growing influence of digital platforms in Sub-Saharan Africa. This research identified 277 unique digital platforms across Africa, of which 80% are homegrown. These platforms provide income-generating opportunities to over 4.8 million Africans and are creating structure and efficiency in formal and informal markets. Understanding the impact and magnitude of this disruption is vital if digital platforms are to achieve inclusive development in Africa.
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Introduction

A new set of actors are transforming how Africa's large population of informal workers and enterprises are being matched to income-generating activities: multi-sided matching platforms. Globally, the platform ecosystem and its potentially disruptive qualities have been a source of excitement and anxiety as they create new spaces where individuals are empowered to work together, to transact in new ways and access previously unavailable financial services and products.

The sections of the chapter are structured as follows:

  • 1.

    Defining digital platforms in Africa: This section provides background information on digital platforms and the types of platforms that are becoming prevalent in Africa.

  • 2.

    The landscape of Africa's digital platforms: This section presents findings from a systematic review of platforms operating in sub-Saharan Africa (SSA). The characteristics of Africa's platforms, including the nature of their matching activities, the region of origin and operation, the economic sectors that they contribute to and the role of platforms in the lives of individuals in the region.

  • 3.

    Issues to think about: The chapter will conclude with a summary of key insights across the themes and a short discussion of issues that are relevant for researchers' further investigation with respect to Africa's platform economy. Some of these issues include platform governance and regulation, platform envelopment, labour policy, digital skills development, and regional trade dynamics.

The objective of this chapter is to contribute to the discussion on multi-sided digital platforms and the role they are playing in SSA. This chapter is informed primarily by findings from seminal research conducted by insight2impact that explores the nature and size of the platform economy as well as the emerging relationships between the platforms economy, the financial sector and inclusive economic participation.

Key Terms in this Chapter

Microworkers: Individuals who complete small tasks (microwork) assigned by an organization or through a digital platform. Microworkers work remotely and perform a variety of tasks like data processing, transcription, and data gathering. The tasks typically require some human judgment or thought and cannot be done by a computer or algorithm.

Homegrown: Platforms of unique African origin (i.e. launched in Africa).

Place-Based: Whether a matching activity on a digital platform depends on the location of the users to be completed.

Payment Mechanisms: Systems that facilitate monetary transactions for users on the platform.

Transaction Platforms: A type of digital platform that derives primary value from facilitating the exchange of goods and services between distinct buyers and sellers.

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