SHE MEANS BUSINESS| Is formal employment overrated? - Dr. Mary Kinyanjui weighs in

By Purity Jelagat

Kenya's informal economy remains the backbone of the country's workforce, yet it continues to receive limited policy and institutional support despite its significant contribution to economic growth.

Speaking during an interview, Dr. Mary Kinyanjui said the informal economy plays a critical role in creating employment and sustaining livelihoods, noting that it employs an estimated 15 million people, representing about 85 per cent of Kenya's workforce.

She explained that the term "informal economy" was coined by researcher Keith Hart after studying traders in Accra, Ghana. The concept was later adopted by the International Labour Organization (ILO), whose 1972 report on urban employment helped shape global understanding of the informal sector.

According to Dr. Mary, the informal economy encompasses a wide range of businesses, including mama mboga traders, jua kali artisans, dressmakers, fishmongers and second-hand clothes traders.She emphasized that these businesses are legal and operate under county government regulations through business permits, market fees and designated market management.

"The informal economy has its own systems of operation and regulation. These are not illegal businesses as many people assume," she said.

Dr. Mary noted that unlike some formal businesses that may transfer profits outside the country, many informal traders reinvest their earnings within local communities, stimulating economic activity and supporting livelihoods.She called on policymakers and researchers to pay closer attention to the sector, arguing that understanding how it operates is key to developing policies that support inclusive economic growth.

Mary also challenged universities to strengthen their engagement with the informal economy by encouraging students to undertake industrial attachments and research projects within markets and jua kali sectors.

She said exposing students to these work environments would help bridge the gap between academic research and the practical challenges faced by informal traders while encouraging innovations that directly address their needs.

According to Mary, every form of honest work deserves dignity, adding that the challenges experienced within the informal economy stem largely from inadequate infrastructure and limited technological support rather than a lack of commitment from those working in the sector.

She urged institutions of higher learning to move beyond classroom-based research and work more closely with informal workers to develop practical solutions that improve productivity and livelihoods.