BWIRE: Informal sector hardest hit by political impasse

Traders closing shop as demos continue in Mombasa on October 16
Traders closing shop as demos continue in Mombasa on October 16

The current political tension in the country with related uncertainty including civil unrest, which is part of the democratic process, is having a toll on our informal sector. Entrepreneurs in the informal sector are having it really rough, and the sooner we dialogue as a country to ease the tension the better. The destruction of property and goods, the unsafe streets and environment especially in the informal settlements and the escalating cases of election-based gender violence is pushing women to the extremes. Peace is paramount to the success of informal businesses.

While the economic effect of the political impasse is not limited to the information sector, the formal sector though equally hit has coping mechanisms, including insurance covers that cushion them against adverse effects of prolonged unrest. Democracy is expensive and indeed the price must be paid, but the effects bear differently to different classes in Kenya; that’s why there is need for the political class to dialogue, push for respect for rule of law, organise for credible and peaceful elections thus save the rest of Kenyans from the current economic and social miseries.

A number of people in the informal sector had taken loans to boost their businesses and now cannot service them because of tensions and disruptions to their working environment, schools and colleges where some were doing courses have closed down and frustrations have set in.

With a very progressive Article 41 of the Kenyan Constitution that provides for a framework for fair labour practices and protection of workers’ rights, existence of the Small and Micro Enterprises (SMEs) Act and strong emphasis of the sector in the Vision 2030 Medium Term Plan for 2013-17, a number of people have invested seriously in the informal sector, and the continued unrest and uncertainty in the country is costing them badly.

Article 27 obligates government to develop and pass policies and laws, including affirmative action programs and policies to address the past discrimination that women have faced before.

The banning of demonstrations from the CBDs in Mombasa, Kisumu and Nairobi is a clear indicator that the formal sector can be protected and shows that these disruptions can continue in the informal settlements, where the bulk of informal business happens. Thus the informal business including women in small businesses and domestic works will pay the premium as the political class settles their scores.

A project being implemented by Oxfam Kenya and supported by the EU notes that as per the Kenya Census 2009, 60 percent of the population in Nairobi live in the urban informal settlements. The Rockefeller Foundation estimates 2.2 million residents of Nairobi work in the informal sector living in under-served informal settlements. As per Wiego Statistical Report Brief No.5 nearly half (48 percent) of all employed people in Kenya are women but only 18 percent are paid employees earning a wage or salary in comparison to 39 percent of men.

In contrast, 37 percent of women are own account workers working for themselves with no regular employees, compared to 31 percent of men; 29 percent of women are unpaid family workers compared to 22 percent of men; and 11 percent of women are unclassified forms of self-employment, compared to 4 percent of men. Domestic workers record extremely low wages, equivalent to only about a third of the average earnings of all informal workers. Street traders earn much more than domestic workers but their earnings are still only just over three- quarters the average for all urban informal workers.

A study by Oxfam on domestic workers notes that women traders, especially those in small trade in the informal sector are unable to fully realize their economic and social potentials due to factors like unfavourable policy environment, limited/non-existent linkages of women to large/medium enterprises, limited access to market intelligence, limited access to credit, inadequate access to skills and technology, inadequate business skills, harassment, extortion and arbitrary arrests and often abused physically and sexually by their employers and by the enforcement officials and low understanding of their rights.

The writer works at the Media Council of Kenya as the Programmes Manager and a Journalists safety Trainer.  [email protected]

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