WageIndicator's data indicates that the daily cost of living is increasing in several African countries.
In the context of workers who bear the financial burden of equipment, rising prices can have a substantial impact. This also applies to self-employed and freelancers.
Drawing on WageIndicator's 2023-2024 Individual Guidance cost of living*, this article identifies the category with the highest price increase in Egypt, Morocco, Ghana, Kenya, Nigeria, and Tanzania.
| LEARN MORE - In South Africa, the current problem of rising living costs is also affecting app-based cleaners (and the families that employ them) a lot. |
What's the context of rising daily costs for gig workers across Africa?
Gig work has proved to be a rapidly growing phenomenon in many African countries. For young or low-skilled workers, gig jobs could provide a stepping stone to better-quality employment.
In Ghana, for instance, the public transportation system in urban areas has contributed to the popularity of ride-hailing platforms such as Uber, Bolt, and Yango, as they offer a more convenient mode of transportation. In Kenya, the sector has an estimated annual value of USD 109 million (2024), and gig work opportunities have been adopted so quickly in Nigeria, where recent research indicates a high rate of youth unemployment.
As many experts and researchers have emphasised, the gig economy has the potential to generate income and work opportunities. However, calls for fairer working conditions have already begun. Firstly, gig workers are not typically protected by labour regulations against unfair practices, abuse, or injuries at work, and despite its growth, the gig economy still poses a number of challenges, including algorithmic management, platforms entering and leaving the market, and issues relating to compliance, deactivation, and safety.
In addition to this issue overview, there is an area which has not been extensively researched: the impact of rising work-related and living costs on this category of workers.
Is the cost of living in these locations as high as perceived?
If we focus on the equipment, as shown in the above visual, the cost of mobile phones has increased by 32% in Kenya, affecting both on-demand and remote workers who rely on this device to stay connected, receive orders, and find new clients.
However, there has been a significant increase in the cost of other essential goods and services:
- In Egypt, food expenses are a significant component of the overall cost of living. The WageIndicator Cost-of-Living survey is a comprehensive study of the food expenditure landscape, collecting price data for 71 food items to provide a representative overview of the potential food consumption basket of an average individual. From 2023 to 2024, in Egypt there has been a 66% increase in these expenses. This clearly demonstrates how the cost of living is having a significant impact on day-to-day operations.
- Increases in healthcare costs have the most significant impact on workers in Morocco: +77%. This estimate includes the average healthcare costs for a family of four, which may include health insurance but also out of pocket expenses.
- Transport costs in Ghana have increased significantly, with a rise of +99% observed between 2023 and 2024. WageIndicator's transportation expense calculations include the cost of a monthly pass for public passenger transportation during a full-time workweek in most locations. In areas where monthly passes are not available, the price of a one-way ticket to the nearest town in local transport is converted into a monthly amount.
- Within the utilities sector, water constitutes a substantial cost component in Nigeria, where the cost of potable water has experienced a surge of 73% from 2023 to 2024.
- Finally, Tanzanians are feeling the negative effects of high house prices. Rent went up by 74% between 2023 and 2024. The term "housing cost for a family or an individual" refers to the standard rental price for a two-bedroom or one-bedroom apartment in an average urban area, outside the city centre, neither centrally located nor upmarket, but also not in a slum.
As demonstrated by the findings of WageIndicator's quarterly cost of living data collection, the worsening cost of living crisis is a key concern for gig workers and freelancers globally.
In addition to equipment (laptop, smartphone, internet connection, phone credit, vehicles, motorbike and car, fuel, services, a helmet, or a uniform), gig workers must also deal with a range of additional expenses that employees generally do not incur. The Living Tariff concept provides a comprehensive overview of these additional expenses, including a tool to assist gig workers and freelancers in calculating optimal rates to ensure a decent standard of living. When using the Living Tariff tool, self-employed individuals must also consider a range of costs that directly impact their finances, such as income taxes and social security contributions.
How much does it (really) cost to be a gig worker?
The "What does it cost being a gig worker?" feature, which has been running for a year now, has been implemented in different countries, from Colombia to Vietnam.
As Daniela Ceccon, Data Director of WageIndicator explains, the conclusion drawn from this is as follows: "It's essential to have an ongoing discussion about the hidden work-related expenses that gig workers and freelancers face. These costs are often overlooked in conversations about the platform economy: people might compare earnings between freelancers and employees, but without factoring in these extra costs, those comparisons show an incomplete - and often misleading - picture."
This approach provides a genuine and authentic representation of the contemporary gig economy, offering a foundation for understanding the challenges faced by gig workers and advocating for enhanced working conditions.
| WageIndicator will be holding a discussion on the correlation between the Living Tariff for gig workers and freelancers and decent work, as well as the gaps that remain in the implementation, at the ILO's RWD Conference in July. |
*Note: WageIndicator provides new Living Wage estimates every three months. Every October, WageIndicator calculates the average of the last four quarters (or three, when estimates for three quarters only are available). Since October 2023, the yearly average has been used to calculate a Guidance Living Wage. If you would like to understand these calculations better, go to the Living Wage FAQ page.