BUSINESS FOCUS: THE JUA KALI SECTOR, KENYA

Printing down town.jpg
A large format printing, down town Nairobi.

Brisk, lucrative business

I was heavily involved with the Jua Kali sector in 2016-2017, then working for a printing and promotions company. Then, since we were heavily involved in production of items as ordered by clients, rushing downtown to pick package and deliver to waiting clients as samples and or finished items was the norm. I saw great brands having their promotional items being produced, packaged and shipped for delivery. Big orders, like a 2,500 diaries, 1000 A3 calendars and 5,000 t-shirts for printing works come in thick and fast, as money exchanged hands, orders were made and confirmed. It was a great eye opener at the thousands jobs the sector has created for Kenyans and the lucrativeness of the investments made by shrewd entrepreneurs who decided to put their stakes down town.

What intrigued me was how much these guys made per day. Most seemed simple, ordinary and minimum education, but on a good day took home more than what the white collared fellows made in a month. Other than printing, Jua Kali sector involves artisans in metal welding, mitumba selling, mechanics and vehicle repairs, bus pimping, canvas covers  & tent selling, carvings and sculptures etc.

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Jua Kali: Artisans at work

The informal sector, popular known as Jua Kali is dominated by SMEs. A survey done as documented in Kenya 2014 Economic Survey showed that out of every five working Kenyans, four are in the Jua Kali sector. Almost 100,000 jobs were created from the sector alone, and these has continually contributed heavily in Kenya’s industrialization and development. Creation of employment opportunities and production of materials and consumables from within the country contribute towards industrialization , as opposed to the oppressive importation.

Professor Bwisa in an incisive article on the Jua Kali sector pointed out that Kenya is on the right track, as this will empower the country’s economy even as we come to terms with the crippling national debt. Using own manpower, skills, tools at disposal, good which are otherwise expensive to import can be produced and used within the borders. This imitation phenomena is not new, since countries such as China, India amongst other Asian countries adopted it and largely depend on it for production. Maybe, the government need to study and adopt some of the policies and philosophies used in these countires, especially in regards to mass production, production by masses and empowerment of the local people through a practical education system.

Challenges

Although the lucrativeness of this informal sector is evident, the structures and policies in place do not make it sustainable. The SMEs are vulnerable as they come with short life spans and susceptible to situation within or beyond their control. Witnessing how county council askaris harass hardworking hawkers and shop owners tell a sad story of the informal sector players.

mitumba stall owners.jpg
Second hand Stall Owner, Nairobi.

The fires at Gikomba Market that destroy millions worth of merchandise do not help the situation in any way. The well connected and rich individuals use their power and influence to push the jua kali players to the very edge of survival, as they eat at the high table. lack of proper education on finance management, business planning and expansion strategies affect the very operations of these sector, even for the most successful ones. Promises made by governments all seem empty, as same problems go unresolved over decades.

Optimism in the forecast

With a growing of an educated population, and a decrease in of opportunities and scarcity of resources manifest over years, the jua kali sector seems to be way to go. Self employment and development of skills that empower individuals to produce locally would be highly regarded. The government did extremely well with the introduction of Huduma Centers and the e-citizen portal that enabled business registration processes faster. Huduma centre Busia.jpgEven the tax compliance processes are now online and less of menace, compared to past years. Roads are getting better, and electricity to remote areas makes it easy to locate production areas in remote areas,where cost of production is cheaper, and easily transporting them to markets for sell. Also, the county governments are now more empowering in enabling upcoming business owners the platform and opportunity to develop and grow their enterprises. Banks are lessening their stance on their requirements to consider SMEs for financial assistance, and micro-finances and rapidly expanding and providing fiances and financial plans that assist the SMEs, major players in the informal sector grow to desired potential.

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