July 10, 2008: I can today confidently say that the fantasy of the stocks market gravy train has reached a high plateau in Kenya. Whilst acknowledging wealth accumulation is good in itself, establishing enterprise is even better.
It is a blatant fact that the kiosk economy “informal markets” or “small scale private sector” is the force behind many business establishments in Kenya today.
Accounting for 35-50 per cent of the Kenyan GDP, the kiosk economy has breezed a long way. The kiosk economy literally is believed to have strong roots and relations to the “dukawallas,”— the Indians who were imported as labourers in the late 1800s to build the Uganda Railway.
But a number of benefits can be traced to the interactions between these traders and locals; the art of vicious negotiation, high aggression to business pursuits and the spirit of team building. With the above analogy the shopkeeper concept was born and it was a matter of time before the spirit was replicated everywhere.
While in today’s ostentatious era of capitalism the word “entrepreneur” has come to be commonly associated with persons motivated to craft new venture largely by the craving for personal wealth or even greed, the fact is that entrepreneur simply means “one who undertakes an enterprise,” a person who initiates and directs an organisation.
The informal economy has unknowingly informed scores of Kenyans about fundamental business lessons that in business spheres they have intricate titles. Millions of Kenyans still stash their spare cash under mattresses; invest in livestock, plots of land, and mostly in informal services such as savings clubs (chama, merry go rounds), and small microfinance’s outfits.
With only 20 per cent of African families having access to bank accounts one can imagine the huge informal transactions taking place out there. M-PESA, a mobile payment scheme by Kenya’s premier cell network, Safaricom sought to seal the gap. In a huge market with about three million account owners, already it is said as many as one million Kenyans use the service. Economies operate as a web, all things are interconnected.
A savvy entrepreneur must be able to patch up the system and see the bigger picture. “Knowledge is credibility”. In the housing industry the informal economy is responsible for the erection and accommodation of approximately more than 70 per cent of the Nairobi’s population.
Studies have shown that “the most successful entrepreneurs have never waited for someone to give them a leg up”. An entrepreneur only needs to discover how money flows into their business and for sure they are in business. Locally this cannot be epitomised better other than the financial statements of some micro- lending establishments that are making blue chip banks manager’s lose sleep.
Although the informal economy is good for startups, there is need to encourage these setups to legalise and make their operations formal. Armed with loyal customers a good product cannot operate as a miniature player for long. Concepts of service for the greater good of the society rather than for personal gain, and of creativity and innovation designed to improve the quality of life, though are rarer than they should be encouraged.
Though the kiosk economy in Kenya promises enthusiastic prospects, a lot has to be done to shore the impoverished populace from the current shocks of capricious commodity prices, unpredictable weather patterns and political turmoil’s.
As a precursor to attract informal sector to formalise; Promote descent wages, increase incentives to legalize business, lower costs and lessen hassles in business start-up, provide service and let there be equitable distribution of resources. Meanwhile millions of people will still be busy transacting in their tiny-informal markets hoping for a brighter bigger “formal economy” tomorrow.
Daniel Mayabi, is an architect in Botswana.
It is a blatant fact that the kiosk economy “informal markets” or “small scale private sector” is the force behind many business establishments in Kenya today.
Accounting for 35-50 per cent of the Kenyan GDP, the kiosk economy has breezed a long way. The kiosk economy literally is believed to have strong roots and relations to the “dukawallas,”— the Indians who were imported as labourers in the late 1800s to build the Uganda Railway.
But a number of benefits can be traced to the interactions between these traders and locals; the art of vicious negotiation, high aggression to business pursuits and the spirit of team building. With the above analogy the shopkeeper concept was born and it was a matter of time before the spirit was replicated everywhere.
While in today’s ostentatious era of capitalism the word “entrepreneur” has come to be commonly associated with persons motivated to craft new venture largely by the craving for personal wealth or even greed, the fact is that entrepreneur simply means “one who undertakes an enterprise,” a person who initiates and directs an organisation.
The informal economy has unknowingly informed scores of Kenyans about fundamental business lessons that in business spheres they have intricate titles. Millions of Kenyans still stash their spare cash under mattresses; invest in livestock, plots of land, and mostly in informal services such as savings clubs (chama, merry go rounds), and small microfinance’s outfits.
With only 20 per cent of African families having access to bank accounts one can imagine the huge informal transactions taking place out there. M-PESA, a mobile payment scheme by Kenya’s premier cell network, Safaricom sought to seal the gap. In a huge market with about three million account owners, already it is said as many as one million Kenyans use the service. Economies operate as a web, all things are interconnected.
A savvy entrepreneur must be able to patch up the system and see the bigger picture. “Knowledge is credibility”. In the housing industry the informal economy is responsible for the erection and accommodation of approximately more than 70 per cent of the Nairobi’s population.
Studies have shown that “the most successful entrepreneurs have never waited for someone to give them a leg up”. An entrepreneur only needs to discover how money flows into their business and for sure they are in business. Locally this cannot be epitomised better other than the financial statements of some micro- lending establishments that are making blue chip banks manager’s lose sleep.
Although the informal economy is good for startups, there is need to encourage these setups to legalise and make their operations formal. Armed with loyal customers a good product cannot operate as a miniature player for long. Concepts of service for the greater good of the society rather than for personal gain, and of creativity and innovation designed to improve the quality of life, though are rarer than they should be encouraged.
Though the kiosk economy in Kenya promises enthusiastic prospects, a lot has to be done to shore the impoverished populace from the current shocks of capricious commodity prices, unpredictable weather patterns and political turmoil’s.
As a precursor to attract informal sector to formalise; Promote descent wages, increase incentives to legalize business, lower costs and lessen hassles in business start-up, provide service and let there be equitable distribution of resources. Meanwhile millions of people will still be busy transacting in their tiny-informal markets hoping for a brighter bigger “formal economy” tomorrow.
Daniel Mayabi, is an architect in Botswana.
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