Business
Gig economy: Nigerians adjust to new telecom reality amidst uncertainty
With the rise of online platforms and remote work, job advertisements promising flexible, convenient, and easy side gigs have become increasingly common. While these opportunities often seem attractive, what’s the reality behind them?
The gig economy has evolved significantly, drawing in more individuals and businesses—both large and small. But is it truly as rewarding as it appears?
The term “gig” dates back to the early 20th century when jazz musicians used it to describe their short-term performances. Later, during World War II, companies began hiring temporary workers to address labor shortages, setting the stage for today’s gig economy.
In Nigeria, the gig economy saw significant growth during the 2009 financial crisis. The Great Recession weakened the liquidity and solvency of Nigerian banks, leaving many unemployed. As a result, people turned to multiple part-time jobs to make a living, fueling the expansion of gig-based work in the country.
So what exactly is the gig economy?
The gig economy, often called the sharing or access economy, revolves around short-term and part-time work arrangements. Businesses tend to opt for independent contractors and freelancers rather than hiring full-time staff. This model provides gig workers with a degree of flexibility and autonomy; however, it typically comes with the trade-off of reduced job security and lack of benefits. Employers benefit from cost savings, as they aren’t required to offer health insurance or paid time off. Essentially, the gig economy allows individuals to earn income through on-demand work, services, or goods.
In Nigeria, the gig economy predominantly consists of informal jobs, as reported by the Nigerian Bureau of Statistics (NBS). Most gig workers log less than 40 hours a week and lack the protections and benefits afforded to regular employees. This trend can largely be traced back to economic pressures, advancements in technology, and a significant preference for flexibility and autonomy among workers. A critical factor is also the high unemployment rate, particularly among young adults, who struggle to find traditional employment opportunities.
This scenario raises an important question: why do so many people pursue gig work, and is it a better option than regular employment in Nigeria? Notably, many gig jobs offer hourly or daily rates that can surpass the proposed minimum wage of ₦70,000 per month, a wage that has yet to be formally instituted. Thus, pay and flexibility play vital roles in this decision-making process.
Despite the potential for higher earnings and various economic advantages, such as increased productivity and elevated employment rates, there are significant concerns regarding the rights and interests of both consumers and workers under this system.
Daniel James, a tech entrepreneur, shared his frustrations about being underpaid, particularly by Nigerians living abroad. He noted, “One of the reasons I avoid Nigerians abroad trying to hire back home for remote work is that while some of them are quite successful, they often seek to hire individuals to do a $1,000 job for $100. Now, this doesn’t apply to everyone, but it’s a common trend.”
Agboola Sodiq, a social media strategist, recounted a frustrating experience with a startup that aimed to grow its social media presence. They were offering just $40 per month, equivalent to #24,000 at that time, for a 3 to 6-month engagement.
Another social media user, @tee_tayme, shared her thoughts on the toxicity of remote employers in Nigeria, stating, “Most Nigerian Startups are Toxic. I once got half salary because I told my Boss I believe the product he wants us to sell is basically collecting people’s money and giving them nothing (The product we wanted to sell wasn’t ready). After that, I went to do the GRE exam.”
Victory Akaniru also faced challenges, resigning from her first full-time remote job after just a month due to a toxic work environment filled with swear words and racist comments. She expressed her frustration, saying, “I have a lot to say about this experience, but I’ll take the next 2 weeks to clear my head and find my way back in the game.”
The gig economy has significantly impacted Nigeria, offering a blend of advantages and challenges. One of the key benefits is the creation of new job opportunities, which has allowed for increased flexibility and access to global markets. Data from the Nigerian Bureau of Statistics indicates that as of Q3 2023, a remarkable 87.3% of employed Nigerians were primarily self-employed, while only 12.7% worked as full-time employees.
Additionally, the gig economy has helped bridge the urban-rural divide by connecting individuals in rural areas with global markets, thus broadening their economic prospects. Services like ride-hailing and package delivery have also optimized logistics, leading to reduced traffic congestion and improved environmental sustainability.
However, significant challenges remain, particularly regarding the classification of gig workers as independent contractors. This classification leaves them without the protections afforded by labor laws, exposing them to exploitation, irregular pay cycles, and insufficient infrastructure.
Furthermore, gig workers often lack job security, benefits, and social protections. Unlike traditional employees, they are not entitled to health insurance, pension contributions, or paid time off, making them vulnerable to economic instability.
To address these issues, it’s crucial to implement effective regulations, raise awareness, and educate stakeholders. The government should invest in digital infrastructure, enforce fair working conditions, and provide social safety nets for gig workers to lessen the adverse effects of the gig economy.