Trade and Labour Pathways for Decent Work in Kenya's Digital Economy 2025

Executive summary Kenya’s digital economy is undergoing rapid growth, driven by expansion in gig work, business process outsourcing (BPO) and digitally delivered services. The sector is expected to reach $23 billion by 2025,1 accounting for 9.24% of GDP .2 An estimated 1.9 million Kenyans are now engaged in digital jobs,3 including 1.2 million gig workers.4 Kenya has positioned itself as a regional leader in financial technology (fintech), cloud services and remote outsourcing, bolstered by a young, tech- savvy population and strong mobile infrastructure. However, labour challenges persist in terms of: –Access to digital jobs: Only 23.8% of households have access to the internet,5 with rural communities, women and low- income groups facing disproportionate exclusion. Access to infrastructure, devices and digital skills training remains highly unequal. While government programmes have reached hundreds of thousands of learners, stakeholders point to gaps in curriculum relevance, certification recognition and links to employment. Job creation through trade, investment and domestic ecosystem development is needed. –Decent work6 deficits in digital jobs: Digital workers operate largely outside the formal protection of labour laws. Most are classified as independent contractors and lack protections such as minimum wages, social insurance, paid leave and recourse against algorithmic management decisions. Risks related to mental health – especially in content moderation and data labelling roles – remain unaddressed. Kenya’s five core labour laws, last comprehensively revised in 2007, do not account for platform-mediated, gig-based or remote forms of work. Employers face unclear regulatory obligations, while workers lack bargaining power and formal recognition. The result is a growing segment of the labour force that is productive but in a precarious position. –Job churn in the context of AI and automation: AI is reshaping roles across sectors, from transcription to customer service, and threatens many of the digital jobs Kenya has created and attracted. Kenya’s National AI Strategy outlines national ambitions but lacks targeted support for worker reskilling or transition planning. To address these challenges, this white paper explores three areas for coordinated action: –Modernizing labour laws to better reflect the realities of digital and platform work: Options may include introducing a third “worker” category (in addition to “employee” and “self-employed”), extending basic protections to contractors and mandating algorithmic transparency. –Developing guidance for business action: Decent work toolkits co-created by government, employers and workers can set sector-wide standards for pay, grievance mechanisms, mental health and fair management. –Using regional platforms such as the East African Community and African Continental Free Trade Area to advocate for common digital labour standards: Investment incentives and public procurement rules should reinforce decent work expectations domestically. Kenya stands at a pivotal juncture. With deliberate policy choices and inclusive governance, it can become a model for building a digital economy that delivers both innovation and dignity at work.Kenya’s digital economy is expanding rapidly, but risks from unequal access, weak protections and looming automation demand urgent policy action. Trade and Labour: Pathways for Decent Work in Kenya’s Digital Economy 4