Measuring informality in Nairobi's Jua Kali

Hilary Nicole Zainab Ervin, Nairobi Community Manager

The 2015 Kenyan Economic Survey found that the informal sector accounted for 86% of new jobs created since 2014, while the number of new jobs created in the formal sector declined. Measuring informality, or 'hustling,' as it is known locally, can be challenging. For youths in Nairobi, small business entrepreneurship is by far the most accessible form of income available.

For many Nairobians the 'hustle' is part of day to day life: individuals engage in small-scale manufacturing and artisan trade; they provide transport services; and are the frontline innovators fueling the growth in the information, communication and technology sector.

Capturing the real economic and social impact of these activates can be challenging and is muddled by intersectional issues of social exclusion and poverty politics. As highlighted by Lori Lobenstine and Kenneth Bailey in their review of informality and the new futures of work, the long-standing hustle economies face considerable pressures and occupy a tenuous position within many markets.

Informal traders in Nairobi face constant threats of eviction, extortion from security guards and police, and a general lack of access to credit and saving schemes. This is particularly true for the 80% of Kenyan women employed in the informal sector who face additional constraints in security, as well as disabled persons who suffer from high rates of discrimination.

Efforts to measure the real impact of the informal sector have tended to focus on either the social impact of illicit trading and/or the economic loss with respect to government revenue and taxes. In Kenya, this hides the real and substantial contribution informality has on boosting the nation’s Gross Domestic Product and fueling the considerable growth the country has managed to sustain amidst a period of heightened insecurity from terrorist activity and politicalized ethnic violence.

From community-based sanitation services in the slums of Mathare to the clothing stalls in Toy Market and the matatu stages of Kangemi, Nairobi's lifeblood is a hustle. On your daily commute you pass the local botanist, acquire all the necessities for dinner and grab airtime for your mobile. As a consumer your engagement in the informal economy provides direct and critical income to individuals who lack the type of social safety net that make employment in the formal sector so attractive.

Attempting to capture what exactly the 'hustle' is has been the focus of the work undertaken by Tatiana Thieme. Her work to quantify the spaces of informality in which the majority of Nairobian youths currently operate has shed light on the vibrancy and innovation that typifies their work. The economic benefits of hustling can be challenging to capture, identifying the social impacts of this form of economic activity even more so. A first step in quantifying the transformative impact of informality on economic growth in Kenya is a reconceptualization of how it is viewed.

By locating hustlers as the agents of change in her research, Thieme shows that far from comprising a negative externality, community hustlers provide critical services in a context where the central government and public works is largely absent.

Photo: Erik (HASH) Hersman

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