Economical article 1

How growth can begin for Africa’s largest employer

Publisher: Medium
Publishing Date: Apr 17, 2019

Artisans hard at work in Kenya (Courtesy of Standard Media Group)

In a moment of reflection, I chose to start this blog, with the hope that I can share insights that I have learned in the rough-and-tumble world of Africa’s informal sector, sprinkled with observations made in other emerging markets that I have been privileged to visit.

My story begins with frustration. It is not news to many Africans that academic textbooks and the corporate marketplace can be worlds apart. It is also not surprising that two economies run almost parallel to each other - the formal sector, a dream sector for many recent graduates, and the informal sector, full of an enterprising spirit but low on capital and technology. The two also frequently bleed into each other, with a professional being an employee by day and a hustler by evening.

As I observed my environment, it became clear that a successful startup in Africa would have to blend the techniques employed by these two sectors - borrowing from the informal sector survival tactics and acquiring growth tactics from the small but valuable corporate sector. In Kenya for example, 83% of new jobs came from the informal sector - this indicates that it is time for growth strategies in Africa and other emerging markets to orient around this key sector.

In the digital age, we would be tempted to ignore the informal sector and focus on how the global private sector communicates at scale. However, to do this would be at one’s own peril. African vegetable hawkers, for example, have been implementing these tools in spite of their limitations and the harsh operating environment.

How?

They take the time to chat with their customers and take note of events happening in those customers lives. They store this information in their brain. They modify the vegetables to respond to customer needs e.g cutting collard greens for busy moms to cook hence shortening meal prep time. They ask customers if they would prefer new products and take note of the feedback, adding to the treasure trove inside their heads.

If only these workers in the informal sector got to raise their current low-level technologies to a higher standard, they could save and invest more and plug the holes in their businesses.

This is what motivates me to study and talk about this sector, for I see potential. Education, advocacy and an influx of more professionals in this sector operating in a full-time capacity would help it grow financially and reduce underemployment in Africa’s labor force. There is hope in the silicon savannah that is working hard to create more must-need and less nice-to-have data products on the continent, the rise of the youthful agripreneur and more corporates developing mobile money solutions that have fostered financial inclusion across the continent.

All we have to do is start paying attention to it and test growth frameworks and strategies, ultimately creating models that are not only robust in more developed markets but also in emerging economies.