Growing Informal Sector is Driver of Kenya’s Job Market

The informal sector acts as an important shock pillar for Kenya’s economy gripped by a fairly lengthy period of sluggish jobs and income growth.

It employs a significant amount of the people who are supporting the majority of the households in the country their purchasing activities of the various household consumables and capital goods significantly contribute to the Value-Added Tax.

The sector contributes in excess of 35 percent to the Gross Domestic Product and employs close to 80 percent of the workforce.

It includes home businesses, domestic workers, street vendors, small-scale artisans, car repairs, bakeries, and livestock traders and the sector makes a huge contribution to the economy.

According to the Kenya National Bureau of Statistics for 2015, the economy generated a total of 841.6 thousand jobs of which 128.0 thousand jobs were in the modern sector while 713.6 thousand were in the informal sector, during the period under review.

The main challenge is how they contribute to taxation and are policy makers noting the sectors contribution.

It is disheartening that Nairobi’s Commercial Court ordered hawkers operating from the city centre to designated places within the city statin that they cause immense suffering to other street users.

Chief magistrate Peter Muholi further dismissed cases filed through the street vendor’s lawyers to bar the county officers from interfering, harassing, intimidating, unlawfully arresting or confiscating the hawkers’ goods or items while at their designated areas at plot zero.

This is not the first time such orders have been issued.

On July 13 2016, Nairobi County formed a sub-committee tasked with restring order and sanity in the central business district. A crack down on informal sector.

Subsequently, 500 Inspectorate Officers and 100 have been enrolled to its fire brigade team to meet the demand for city Askari’s to deal with the spiraling number of hawkers within the central business district.

The training will commence in early December and run up to March next year before the officers are deployed in various parts of the city.

However, the County Secretary Robert Ayisi is on record stating that there is no alternative location to place them.

Evans Kidero the Nairobi County Governor, they are expanding the existing markets, renovating others and constructing new ones to accommodate upcoming informal businesses. “Most people do not seem to appreciate the magnitude of the unique problems we face in this county. The numbers trooping to this city in search of opportunities are overwhelming to services that we can afford for them,” he said.

The county has 43 markets run on rental, tenant purchase, site and service scheme and open air terms such as Wakulima market, Gikomba, Muthurwa, Kangemi and Kawangware.

In contrast to the developments aimed at curbing the soaring numbers of street vendors in the city, the UN-HABITAT Global Campaign on good urban governance is the ‘Inclusive City’. The campaign advances the position that an inclusive approach must be used for balancing, reconciling and trading off competing interests and priorities. In most cities, the interests of micro and small enterprises such as street and informal traders are competing with those of medium and large-scale enterprises, with the former being disadvantaged.

“Urbanization provides the potential for new forms of social inclusion, including greater equality, access to services and new opportunities, and engagement and mobilization that reflects the diversity of cities, countries and the globe,” according to the Issue paper on inclusiveness.

The Bellagio International Declaration of Street Vendors of November 1995 urged governments to develop national policies for hawkers and vendors by making them a part of the broader structural policies aimed at improving their standards of living by giving them legal status, issuing licenses and providing appropriate hawking zones in urban areas. The declaration further called on governments to integrate vendors into urban development plans.

Dr. Chris Kirubi says, “While the obvious contributors to the fastest growth of Kenya’s GDP would be attributed to macro-economic factors like political stability, exponential growth of the technological landscape, a robust and growing economic environment among others, it is important to note that the growt