Nicholas Mugabi, “Digital Technologies: Opportunities and Adaptation for the Informal Sector of Uganda”


This article is a product of the presentation and discussions at the International Conference of Working in the Digital Age at Turin, Campus Universitario Luigi Einaudi, Sala Lauree Blu March 24-25 2022. It is based on the understanding that the digital revolution has changed profoundly the nature of work. Yet, Sub-Saharan Africa (SSA) has witnessed massive penetration of digital technologies ranging from simple mobile phones to complex internet-based platforms. Digital technologies have been enabled by the agency of end users as well as physical infrastructure, government policies, and social structures. This paper examines the effect of digital technologies on the nature of work in the informal sector. I interrogate how work in the informal sector is being reconfigured. Which technologies work or do not work for the informal sector? and what is the nature of technology adaptation? The article is organised with a highlight of the context of the informal sector, digital technologies, and work: opportunities, adaptations and challenges, conclusions, and recommendations.

The Context of Informal Sector

Since the evolution of human society, work is embedded in socioeconomic and political organisation. Societies pay close attention to work activities and the institutions associated with those activities. Work is a symbol of personal value, provides status, economic reward, and a means to realise self-potential (Watson 2003). In contemporary Sub-Saharan Africa (SSA) work is categorised into two: the formal organization with clear job expectations and compensation, and the informal work with less formal rules and rewards. In this article, the focus is on the informal sector.

In SSA the informal sector is nothing new it existed even before colonialism. However, political and economic independence brought in the distinction between informal and formal activities as countries sought to formalise or “modernise” their economies. The informal economy is small or undefined workplaces, unsafe & unhealthy working conditions, low levels of skills & productivity, low or irregular incomes, long working hours, and lack of access to information, markets, finance, training, and technology (ILO 1993). “The Labour relations-where they exist – are based mostly on casual employment, kinship or personal and social relations rather than contractual arrangements with formal guarantees” (ILO: 1993). Below are some of illustrations of informal sector work in SSA.

Over the past twenty years, there has been a debate that asks “…whether the informal sector should be seen as a marginalized, survival‟ sector, which mops up excess or entrenched workers, or as a vibrant, entrepreneurial part of the economy which can stimulate economic growth and job creation” (African Union 2008). That said, the SSA informal sector contributes an average of 41% of the GDP and 70% of employment destinations (Schneider, 2002). In my country of origin Uganda, it accounts for 75% of total employment: 85% of women and 92% of youth entering the workforce join this sector (Uganda Employment Policy 2011). The sector is hugely dynamic, spanning a wide range of small and medium enterprises, workers, and self-employed. Most of the informal sector jobs are in petty trade and business, agriculture, and a few in the service industry with limited capital and technical knowledge and skills. Many enterprises in the informal sector are characterised by; low labour productivity, limited training, and technical knowledge, use of basic technology, difficulties in obtaining raw materials, and limited access to trade financing (credit). However, there is global attention on the future of work vis-à-vis the ever-changing digital technologies (Okoruwa 2021). Most especially the future of informal work in SSA which employs the majority of the working population.

Digital Technologies and Work

By the end of the 20th century, the nature of work and organisations was changing. Every sphere of human life and sectors such as education, health, and agriculture, etc have all been transformed by several innovative digital technologies (Bridges, 1995). The terrific change in technology has been described as the 4th Industrial Revolution; characterised by artificial intelligence systems, machine learning, robotics, Internet of things (IoT), mobile applications, social media platforms, and other mobile technologies. As a result, organisations including the informal sector are responding to the need to achieve and maintain their competitive edge in increasingly global markets. Technologies usher in ‘boundaryless’; transcending traditional boundaries between organisations and businesses (Perrow and Rousseau 1996, 1996). For example, 27% of SSA with access to the internet in 2018; one adult out of three uses the internet compared to the global average of one in every two adults. There is an increase in telecommunication network coverage with 2G and 3G networks covering 85% and 75%, and mobile cellular subscriptions of 80% (Okeleke, 2019). In this case, digital transformation deals with coordinated change effort scales that are diffused through all aspects of the business. While digitisation is the use of technologies to enable or improve business models and processes e.g mobile transactions and ways of doing business.

Digital technologies have come with new approaches; creating new tasks, new ways of working, new roles, relationships and skills, lifelong learning, and human resource development. Without a doubt, digital platforms have become inter alia the new conveyor platforms for the delivery of a wide variety of services, a marketplace for the virtual meeting of buyers and sellers of goods and services, classrooms without walls, and a meeting place for job seekers and employers (UNCTAD, 2019). The uptake of digital technologies even in the informal sector was further accelerated by the COVID-19 epidemic; which reduced physical contact and embrace technologies for communication and work (Okoruwa 2021). Thus, digital technologies are now widely used in both formal and informal sectors of most countries in SSA.

Opportunities and Adaptations

The informal sector is growing and generates both wage and self-employment opportunities in unregistered small and micro enterprises. These enterprises are extremely heterogeneous. Anecdotal evidence indicates that some have grown rapidly and provide wage-earning opportunities to several workers, while others only offer self-employment and extremely low incomes to a single individual, or unsafe working conditions and poverty wages. The emerging pattern of engaging casual and part-time workers by established, registered enterprises has encouraged the expansion of the informal sector (Uganda Employment Policy 2011). Digital technologies are critical enablers for informal sector businesses and work. First, the growing digital technology wave in SAA has been embraced due to the growing young population who are potentially more amenable to change. This has been witnessed with the massive use of mobile phones, the internet, and social media platforms among others. For example, in Uganda, the digital financial system with the use of mobile money accounts 32.3M users. By and large, the adaption of digital technologies in SSA has created several opportunities namely:

  • Strengthen digital business communities, especially the use of social media such as Whatsapp and Facebook for market linkages.
  • Created networks and  business interconnection/relationships
  • Deconstructed the geographical borders of doing business in both informal and formal sectors and organisations.

Challenges to digital technology adaption

The influx of digital technologies in SSA has also had challenges to full adaptions by the informal sector. The challenges include:

  • Limited digital knowledge: awareness, technical knowledge, and social acceptance due to the safety and privacy of the technologies (who owns and is in charge of the data generated on digital systems?).
  • Limited digital skills: soft and cognitive skills, informal sector skills mismatch, and cultural lag.
  • Poor digital infrastructure: device affordability, limited physical infrastructure. For example, in SSA about 50% of the population has uninterrupted internet access compared to 80% in Europe.
  • Unfavourable government policies and laws, for example, Tax regimes that target digital platforms such as mobile money transfer and internet data use.
  • The digital divide between rural and urban informal sector businesses and work, gender (men and women), social-cultural context, and disability.

Conclusion and recommendations

The most prominent technology used by informal sector players is mobile phones for real-time information exchanges with clients, service providers,  suppliers, and peers, while internet-based services are the least used. Mobile phones mainly facilitate services such as financial inclusion through mobile money transfer, and digital savings, easing access to social services by creating synergies with the formal sector. Internet-based platforms and social media are least used due to illiteracy, operational costs for affordable and suitable devices, limited technical capacity, and costs of the internet. Notwithstanding the challenges, digital technologies create digital business communities, networks, and business interconnectivity as well as deconstruct the geographical borders of doing business in the informal sector. To harness digital transformation, informal sector players should further adapt their work and invest in technologies to enhance work resilience and efficiency. Technology developers should focus on continuous human center design tailored to the informal sector needs, while the informal sector must engage in lifelong learning, and governmnet should reduce legal and digital systems barriers for the informal sector to strengthen digital inclusiveness.


African Union. 2008. Study on the Informal Sector in Africa. Sixth Ordinary Session of the Labour And Social Affairs Commission of the African Union, 21 – 25 April 2008, Addis Ababa, Ethiopia: African Union.

GoU. 2006. The Employment Act 2006. The Uganda Gazette No. 36 Volume XCVIX dated 8th June 2006 by UPPC: Entebbe, by Order of the Government.

GoU. 2011. The National Employment Policy for Uganda 2011: Increasing Decent Employment Opportunities and Labor Productivity for Socio-Economic Transformation. Kampala: Ministry of Gender Labour and Social Development.

ILO. 1993, International Conference on Labour Statistics (ICLS). Internatonal Labour Organisation.

Okeleke, Kenechi. 2019. “Uganda: Driving Inclusive Socio-Economic Progress through Mobile-Enabled Digital Transformation.” Vol.  London: Global System for Mobile Communications Association (GSMA).

Okoruwa Victor, Tomson Ogwang, Njuguna Ndung’u. 2021. Regional Perspectives on the Future of Work: Sub-Saharan Africa. Future of work in the global South, CPPEC.

Perrow, C.,Arthur and Rousseau, D. M. 1996. The bounded career and the demise of civil society. The boundaryless career: A new employment principle for a new organizational era, 297-313.

Schneider, Friedrich. 2002. Size and measurement of the informal economy in 110 countries. In Workshop of Australian National Tax Centre, ANU, Canberra (Vol. 17).

Watson Tony (2003) “The Sociological Analysis of Work and Industry”, in Sociology, Work and Industry, 4th Edition. London & New York: Routledge, 103ff.

Questo articolo è parte del progetto SN-DICAP Scienza Nuova. Digital CAPital (PI: Maurizio Ferraris) finanziato dalla Fondazione CRT (Bando erogazioni ordinarie 2019)



Inserisci i tuoi dati qui sotto o clicca su un'icona per effettuare l'accesso:

Logo di

Stai commentando usando il tuo account Chiudi sessione /  Modifica )

Foto di Facebook

Stai commentando usando il tuo account Facebook. Chiudi sessione /  Modifica )

Connessione a %s...