Kenya Eyes E-Commerce Platforms to Curb High Unemployment Rates

E-commerce platforms have the potential of creating about 3 million jobs by 2025 across Africa and is one of the areas Kenya is looking to invest in to create jobs for its citizens and ease the unemployment rate for youth in the country.

This follows a report by Boston Consulting Group, which said that online e-commerce platforms such as Jumia, Souq, Uber, and Travelstart could create many jobs for millions of individuals.

Digital platforms are becoming the best choice for enterprises looking to leverage on inefficient distribution infrastructure in Kenya.

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They provide a niche where consumers, retailers, and wholesalers of goods and services can interact with minimal disruption to existing businesses and workforce norms.

E-commerce penetration in Kenya is still very low, which suggests that there is minimal risk in terms of the platforms displacing existing retailers and that much of the population is undeserved.

Boston Consulting Group’s How Online Marketplaces Can Power Employment in Africa study noted that e-commerce platforms and their penetration in markets is a clear indication of how the digital revolution is creating economic opportunities which will help tackle Kenya’s youth unemployment rates.

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According to the study, around 58 percent of the created jobs will largely be in the consumer goods sector. The mobility services sector is set to account for 18 percent of the jobs created whereas 9 percent will be in the travel and hospitality industry.

Most of the jobs will be created directly, indirectly, and through the additional economic activity generated by online marketplaces.

“Growing in the offline world means more shops and more stock – which takes working capital but online, entrepreneurs reach new customers without additional investment and build up a digital sales history that can be used to unlock finance at a future point,” Sam Chappatte, Jumia Kenya Managing Director said.

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Meanwhile, the unemployment rate in Kenya is expected to reach 10.50 percent by the end of the first quarter of 2019, according to Trading Economics global macro models and analyst expectations.

However, the Kenya National Employment Authority on April 1st said that the unemployment rate in Kenya has reached 43.5 percent. Also, in May 2017, the United Nations in the Human Development Index (HDI) 2017 report, noted that the rate of unemployment in Kenya is the highest in the East African region standing at 39.1 percent.

Read Kenya’s Unemployment Rate Hits 39.1 Percent 

The controversial reports all point to one thing, that Kenya’s unemployment rate is extremely high compared to many countries in Africa. The youth are the ones hit the most and unless something about is done, the economy is in jeopardy.