With more than 50 per cent of the population living in poverty, the economic imperative for the Narc Government is to ensure a macro-economic environment that supports enterprise, creates employment and ensures rising incomes. 

The Government proposes to create 500,000 new jobs annually in the next five years. The bulk of these, some 2,319,794 jobs, are envisaged to come from the informal sector. However, the sectoral policies and what local authorities are doing do not match this commitment. 

A recent survey I conducted in Kenya revealed serious constraints on small businesses and the livelihoods of petty traders. When I sought their views on their circumstances, they had some choice things to say about the cause of their troubles.

Despair and hope could be heard in the overall message. More importantly, one could discern that to a large extent, Government policies were on trial. 

In the households of the group of petty traders I spoke to in Nairobi, the total mean income per adult equivalent was $0.85 compared to the international poverty line of $ 1.08 a day – meaning that a majority live in abject poverty.

Debates about what policy approach to adopt towards the informal sector have always been riven with controversy. In the 1950s, a scholar asserted that economies were made up by the subsistence (traditional) sector with surplus labour and low incomes, and a modern (industrial) sector, which was capital intensive with higher wages.

In this model, informal micro-businesses were seen as a temporary consequence of disequilibria in the economy. They could thus be ignored by policy-makers and would disappear with time.

Not so, stated the ILO in its 1972 report, which advocated support to the informal sector as a source of growth and prosperity. This is the approach the Economic Recovery Strategy for Wealth and Employment Creation (2003-2007) crafted by Narc takes. But a lot remains to be done by the Government if this dream is to turn into reality. 

The main constraint on micro-businesses is low capital and lack of access to affordable credit. The novel ideas we have witnessed in the jua kali (informal) sector need to be elevated from the shoddiness that results from lack of capital to inventions with commercial viability. This can be only done if there is a good credit market, aggressive marketing and an enabling policy environment. 

Hostile local authorities continuously harass micro-business people, extort money from them and destroy their property. With the high unemployment levels, authorities need to weigh the benefit of people employing themselves, feeding their families and adding to economic progress against the negligible cost of occupying public land that is idle anyway. 

Kenya needs policies that provide permanency to the occupation of space by micro-businesses.

Improvement in local authority attitude towards petty traders has a lot to do with the fact that local authorities have no real powers to meet local demands. Provision of better services would be greatly helped if councillors were given real executive power over finances and decision-making. 

In the new constitutional dispensation, local authorities should represent local interests and also accommodate representatives of all interest groups such as disabled people, petty traders and youth.

On their part, the petty operators need to organise themselves to agitate for these policies because governments only respond to issues that put them on the spot. 

The ILO cites the case of petty traders in Durban and Johannesburg who have organised themselves into strong associations that have ensured they are protected against eviction from public spaces and are recognised by the local authorities.

Mr Sisule is an economic development consultant based in Birmingham, UK.

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