Online Marketplaces, as a catalyst for job creation in Africa

Online marketplaces could create 3 million new jobs in Africa by 2025; Jumia (NYSE:JMIA) contributed to the study and has already created 5,000 direct jobs on the continent

According to the World Bank, unemployed youths in Africa account for about 60% of the continent’s unemployed workforce. With a growing population of 1.3 billion people whose average age is 20 years and a snowballing middle class expected to reach 1.1 billion out of the 2.5 billion Africans by 2050, there’s no doubt about the importance to create more jobs on the continent.

A new report released recently by the Boston Consulting Group (BCG), dubbed “How Online Marketplaces Can Power Employment in Africa”, shows that online digital platforms, such as Jumia, which match buyers and providers of goods and services, could create about three million new jobs in Africa by 2025. These online marketplaces could also boost inclusive economic growth with minimal disruption to existing businesses and workforce norms, according to the report.

Jumia’s impact on job creation already includes 5,000 direct jobs across the 14 African countries it operates in, and indirect job creations with sellers, logistic partners, commercial agents, marketing partners. The study highlights the example of two Jumia sellers in Nairobi, Kenya, who have been able to create new jobs and increase their sales and revenues significantly.

Of the 420 million Africans aged 15 through 35 years, one-third were unemployed as of 2015 according to estimates by the African Development Bank. Around 58% of the total job gains generated by online marketplaces will be created in the consumer goods sector, while the mobility services will generate 18% and the travel and hospitality sector 9%, the report states.

The study finally highlights other positive economic impacts of online marketplaces in Africa: multiplying vendors’ income through increased demand for goods and services in locations currently beyond the reach of conventional retail networks, as well as bringing more women and youth – who in some countries have been excluded from the labor market – into the formal workforce.

A copy of the report can be downloaded here