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ECONOMY-KENYA: Informal Sector Perilous for Many...

Posted in by admin on Mon, 2005-10-24 21:55

Her next step was to purchase a plane ticket for Mumbai, India, where she bought clothes and household furnishings to sell on the informal market in Kenya's capital, Nairobi.

"The first few trips were good and I made some money," Nabwire says. "But retrenchments meant that soon there were so many of us flying off to Mumbai, Dubai and Hong Kong to bring in things."

Unable to withstand this fierce competition, she quit the business after two years and went out to look for a job -- her experience a cautionary tale about the pitfalls that can confront those who try to make a living in the informal sector.

Christi van der Westhuizen, a senior researcher at the Institute for Global Dialogue (IGD) in South Africa, says the growth of this sector is linked to globalisation, which has left many scrambling to make ends meet.

In the latest of a biennial series of reports examining gender equality, the United Nations Development Fund for Women (UNIFEM) also notes that the informal, unregulated sector is expanding.

'Progress of the World's Women 2005: Women, Work and Poverty' says those who make their living in the informal sector often have to forego the benefits associated with working formally and being legally recognised by the state, not least medical cover.

While women like Nabwire make up "a relatively small share" of those employed informally in certain developing nations, the sector tends to offer them more employment opportunities than formal business, says the report.

"In developing countries over 60 percent of women workers are in informal employment outside of agriculture -- far more if agriculture is included," it notes. "The exception is North Africa, where 43 percent of women workers, and a slightly higher percent of men workers, are informally employed."

In addition, women workers are to be found in the more precarious types of informal employment, where the earnings are most unreliable and the most meager.

For their part, Kenyan officials say informal trade has the potential for promoting economic development, but concede that vendors face many hurdles. "The lack of business skills works against them, and the competition in a liberalised environment comes with certain costs," observed a source at the Gender Desk of the Ministry of Trade.

The hurdles include difficulties in finding start-up capital and meeting the legal requirements for their businesses, said the source, adding that entrepreneurs might also struggle to reach markets.

These points are echoed in the UNIFEM report, which says that formal enterprises are more likely to have access to financial resources and market information, and to be able to secure written and enforceable commercial contracts.

The Gender Desk offers advisory services on trade issues and connects business people with other commercial development services and investment promotion centres.

However, officials say tax evasion by informal traders is undermining government's efforts to assist. "This means government is constrained in providing an enabling environment for entrepreneurs," said the trade ministry source.

These difficulties notwithstanding, there are still those who are ready to follow in Nabwire's footsteps, intent on succeeding where she failed.

Take the young woman behind a shop counter at the junction of Kimathi Street and Tubman Road in the centre of Nairobi, who arches her eye brow impatiently as she attends to a client who wants to buy airtime for his mobile phone. Money changes hands and he is gone, melting quickly into the heavy lunchtime pedestrian traffic.

The assistant, who declines to be named, casts an envious eye at rows of stalls bursting with imported clothes, shoes and other products, and declares: "I am giving myself one more year in this business, then I want to become a wholesaler and distributor."

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