Amid jobless growth and expanding informal economies in many African countries, ICT innovations promise new mechanisms of economic and financial inclusion for those who live and work at the bottom of the economic pyramid. Innovations such as mobile money, text-based price information for farmers, or ride-sharing applications for motorcycle taxis are celebrated for their ability to reduce transaction costs, create jobs and increase efficiency and incomes for informal actors in rural and urban areas. However, enthusiasm about the potential of ICTs to enhance economic inclusion for workers and consumers at the bottom of the pyramid (BoP) often overlooks the impact of these innovations on the sustainability of informal livelihood systems. While ICTs can improve access to credit, markets and services in ways that enhance efficiency for some informal actors, they can also disrupt informal value chains, displace livelihoods and undermine incomes for others.
This paper explores the benefits and challenges of ICT innovations for those who live and work at the bottom of the pyramid in contemporary Africa. If focuses on four key sectors: mobile money, urban transport, impact sourcing and agriculture, with specific examples from Ghana, Kenya, Nigeria, Somalia, South Africa. Drawing on experiences in these and other parts of Africa, this paper looks at how digital inclusion is reshaping the livelihoods and new opportunities facing informal workers and consumers across the continent. What are the terms of digital inclusion for informal actors? How are the gains distributed, and who is excluded in the process of digital restructuring of informal economic systems? Does digital inclusion promote formalization or increased informalization of work? By tracing the institutional ecosystems involved in digital inclusion, this paper explores how ICTs reshape informal economic access to income, decent work and social rights. It looks beneath the hype of digital Africa to examine how powerful technological forces and players interact with Africa's most vulnerable workers to gain a realistic understanding of who gains and who loses in these complex digitization processes.
Analyzing the ways in which digital innovations create losers and well as winners, this paper explores both the positive potential of ICTs as well the unforseen side-effects of adverse incorporation, exclusion, contestation, sabotage or economic fragmentation that digital innovations may unleash. Six focus areas are used for assessing the effects of digital inclusion on informal actors: terms of inclusion, visibility, infrastructural reliability, capturing the gains, contestation, and regulation and social design. These are used to devise a set of parameters for social best practice in digital innovation for the informal economy, with a view to promoting more informed, pro-poor approaches to digitial innovation for African informal economies.