Is Africa’s digital future creating jobs or deepening labour market risks?

Digitalisation is accelerating structural change across Sub-Saharan Africa (SSA), shifting workers out of agriculture and toward services while intensifying public demand for job creation and work-linked training, according to new research by Evans Tindana Awuni. The study finds that Africans facing digital disruption are not primarily asking governments for broad cash-style compensation, but for pathways into productive work.

Published in the Journal of Economic and Social Measurement, the study "Digitalisation, structural change and the demand for social programs in Sub-Saharan Africa (SSA)" uses dynamic panel data from 36 African countries between 1995 and 2019 and Afrobarometer survey responses from 45,684 people across 32 countries to show that digital diffusion is linked to declining agricultural employment shares, rising service-sector employment shares and productivity gains that depend on skills, infrastructure and other complementary capabilities.

Digital diffusion is pushing labour out of agriculture and into services

Mobile phone networks, internet use, digital payments, online platforms and emerging artificial intelligence applications are changing how people communicate, trade, work and access markets. However, the effects are unfolding in economies marked by high informality, weak social protection, limited electricity access, low levels of formal wage employment and large youth populations.

The macro-level analysis shows that higher digital diffusion is associated with sectoral reallocation. As cellphone coverage expands, agricultural employment shares tend to fall, while industry and services gain workers. The study reports that a one percentage-point rise in cellphone coverage is associated with an average decline of about 0.43 percentage points in agricultural employment, alongside gains of about 0.37 percentage points in industry and 0.32 percentage points in services.

The finding is significant because agriculture has long absorbed a large share of Sub-Saharan Africa’s workforce, often in low-productivity and informal conditions. Digital tools can reduce search costs, improve market information, support mobile money services, link buyers and sellers, and allow small firms to enter new markets. These mechanisms help explain why workers may move away from agriculture and into services, where digital coordination, communication and financial tools are more immediately useful.

The study also highlights a key difference between Africa’s current transformation and the historical development path followed by many advanced economies. In older industrialization models, labour typically moved from agriculture into manufacturing before services became dominant. In Sub-Saharan Africa, the transition appears to be moving more directly from agriculture into services, with only limited expansion of industrial employment. That raises concerns about whether the region is experiencing premature deindustrialization, deferred industrialization or a services-led transformation that could still generate decent work if supported by the right policies.

The services sector is not uniform. Some services, including logistics, digital finance, information technology support, business services and tourism operations, can be productive, tradable and employment-generating. Other services, especially informal retail and personal services, may absorb labour without producing strong productivity gains. 

The study also notes that digital platforms are opening new income channels in the region. Gig work, e-commerce, mobile money agency work and platform-based services can create opportunities, especially for young people in countries with limited formal employment. But these same channels can also deepen precarious work, expose workers to unstable earnings and leave them without social insurance. The result is a labour market in which digitalisation expands opportunity and risk at the same time.

The findings suggest that governments cannot treat connectivity as a development endpoint. Mobile network coverage and internet access are important, but they are only the foundation. Without reliable power, affordable data, digital skills, business support, transport links and workplace training, connectivity may shift labour without delivering broad productivity growth.

Productivity gains depend on skills, infrastructure and meaningful connectivity

Digital diffusion is linked to productivity gains, but those gains are conditional - they are strongest when connectivity reaches a level where firms, workers and markets can use digital tools effectively.

Cellphone coverage is associated with small productivity gains in agriculture. This is important because agriculture remains a major employer in many countries in the region. Digital tools can improve access to weather information, input prices, market prices, payments, buyers and extension services. Even modest improvements in information flows can matter in rural economies where farmers often face weak transport links, fragmented markets and high uncertainty.

Internet use shows a different pattern. In industry and services, the relationship is non-linear. The study finds that productivity effects become positive only after internet use passes moderate thresholds. In industry, the estimated threshold is around 14.5 percent of the population using the internet. In services, the threshold is around 9 percent. Below those levels, adoption may be too shallow to overcome adjustment costs, weak managerial capacity or limited infrastructure. Above them, the benefits of digital coordination, scale and producer services become clearer.

This threshold finding shows why digitalisation may appear weak or uneven in some African economies despite rapid growth in phone ownership or internet access. A basic connection does not guarantee productive use. Workers and firms need affordable data, devices, reliable electricity, business skills, digital literacy, logistics systems and management capacity. Without those complementary inputs, digital tools may remain underused or confined to basic communication.

The study argues that Sub-Saharan Africa’s digital dividend depends on turning access into capability, which means policy must move beyond infrastructure rollout and focus on the wider ecosystem that allows digital tools to raise productivity. This includes reliable electricity, affordable broadband, practical digital skills, firm-facing services, digital payments, cloud-based back-office tools, logistics, accounting support and vocational training tied to actual labour demand.

The research also connects digitalisation to the future of work debate. SSA has a young population, high levels of informal employment and limited formal social insurance. These conditions make the region especially exposed to both the promise and threat of digital change. Digital platforms can lower barriers to business creation and flexible work, but automation and artificial intelligence can also threaten routine jobs and reinforce low-productivity service traps.

It further points to a key development dilemma. If digitalisation mainly expands informal services and platform work, it may increase labour absorption without improving job quality. If governments and firms build complementary capabilities, digitalisation could support higher-productivity services, better market access, firm growth and more stable jobs. The difference depends on policy choices.

The study’s macro evidence also suggests that industry remains an uncertain channel. Digital tools can support manufacturing through logistics, design, payments, customer management and supply chain coordination. But the region’s industrial employment share remains limited. The author argues that services-led development may still offer a path forward, provided it includes productive and tradable services rather than only low-paid local services.

Citizens want job creation and work-linked training, not broad compensation

The study’s public opinion findings show that citizens’ policy demands closely reflect the labour market realities of SSA. Across 32 countries, people with higher digital exposure were more likely to prioritize job creation and job training. They were less likely to prioritize general education or business loans, while support for broader social services showed no systematic relationship with digitalisation.

The results are in contrast with debates in many advanced economies, where technological disruption often triggers discussion of unemployment benefits, income protection, redistribution, universal basic income or broad welfare expansion. In SSA, the dominant demand is different. Citizens appear to want productive inclusion through work.

The study links this preference to the structure of African labour markets. Informal employment is widespread, and many workers lack access to contributory social insurance, pensions, unemployment benefits or stable wage jobs. In such a setting, income replacement policies may appear less credible, less accessible or less useful than direct job creation. For many workers, the most urgent issue is not protecting a formal wage, but gaining access to earnings in the first place.

The preference for job training also reflects the pressures created by digital transformation. Digitally exposed citizens may be more aware of changing work demands, online job platforms and the need for practical skills. But the study finds that support is stronger for work-linked training than for general education. That suggests people are prioritizing skills that connect directly to employment rather than broader schooling that may not lead quickly to jobs.

The negative relationship between digital exposure and support for business loans is also notable. In many development debates, entrepreneurship finance is often promoted as a solution to youth unemployment. The study suggests that digitally engaged citizens may not see loans as the most reliable response. In economies where small businesses face weak infrastructure, volatile demand, limited markets and governance concerns, credit alone may not be enough. People may prefer jobs and training that produce more immediate and visible returns.

Policy implications

Governments aiming to respond to digital disruption should prioritize employment-rich programs, apprenticeships, short-cycle vocational training, public works with local job content and support for middle-skill roles. These include technicians, installers, call centre workers, logistics coordinators, digital finance agents, warehouse staff, maintenance workers and back-office service employees.

The study also recommends that governments target secondary cities and transport corridors where digital usage thresholds may be easier to reach and where agglomeration effects can support job creation. Rural areas should not be left behind. Policies should pair connectivity with digital market access, input delivery, e-commerce links, agricultural extension services and off-farm income opportunities.

Employment-focused policies must be matched with protections for non-standard workers. As platform work grows, governments should develop portable benefits, simplified registration, basic insurance, transparent platform rules, dispute-resolution systems and clearer standards for algorithmic management. This would allow workers to benefit from flexibility without carrying all the risks alone.

Speaking of the limitations, the macro analysis identifies strong associations rather than final causal proof. The digitalisation measures capture broad access and use, not direct artificial intelligence adoption or the intensity of digital work. Sectoral data may also hide important differences within services, industry and agriculture. The micro-level survey data shows policy preferences, but it cannot directly link every individual’s attitudes to local infrastructure or labour market conditions.