Digitization of informal sector to create more job opportunities

Written By: KNA

Digitization of informal sector to create more job opportunities

The informal sector has received a boost after the Inter Region Economic Network (IREN) in partnership with Friedrich Naumann launched a platform to digitize the sector and ease the cost of doing business.

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In a conference held in Nairobi with Uganda and Tanzania as regional counterparts, the partners discussed how to address the challenges faced in the informal sector and how-to digitalize and promote growth and development in the sector.

The IREN Director James Shikwata said that “Many ICT and technology companies have designed various platforms that will suit the informal sector and it is up to the informal sector to adopt these technologies.”

Shikwata added that the informal sector is worth Ksh 2 trillion and digitalization would create a platform on how to tap this potential.

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Shikwata also said that digitalization would enable the informal sector to tap into the many emerging technologies by utilizing the data and growing their businesses and opportunities.

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“As IREN, we have done market sizing to make it clear for whoever wants to invest in the sector to have a clear picture of how accessible the informal sector is,” added Shikwata.

He also added that there are ‘Tec gigs’ trained in information and technology to design platforms that are flexible enough to be used by people in the informal sector.

Kenya Association of Manufacturers (KAM) Head of Membership Development and Board affairs Tobias Alando said, “We are concerned in terms of the growth of the informal sector because the sector largely contributes to ultimate growth of the manufacturing sector.”

Alando said that the informal sector is growing faster than the formal sector and in 2016, the informal sector created up to 90 per cent of all jobs so there is a need for digitization to create more job opportunities.

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“The manufacturing sector Gross Domestic Product (GDP) contribution to the economy has stagnated at seven per cent for the last 11 years. To increase the GDP to 15 per cent, the informal sectors cannot be left behind,” added Alando.

Alando also said that the GDP gap could only be addressed by promoting value addition and formalizing the informal sector.

“The numerous challenges faced by the sector include competition from our regional counterparts, national and the international counterparts,” explained Alando.

“The policies and regulations set also have made it expensive to produce in Kenya due to different Government agencies coming up with different policies that are uncoordinated,” stated Alando.

He added that on every policy, there was an element of taxation attached which largely contributed to non-competitiveness of the manufacturing sector.

“If all the government agencies would coordinate and agree on specific fees and charges that would apply in a regularized manner, then it could not be difficult to produce,” said Alando.

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Head East Africa Friedrich Naumann Foundation for Freedom Stefanie Steinbach said, “We believe in the potential of digitization for innovation, social economy and social development of all African countries.”

The event was also graced by Narok County governor Mr Samuel Tunai who thanked the CA saying that the connection will go a long way in improving the lives of people and bring development in remote areas.

Besides Maji-Moto, other areas that have been connected to mobile service under this project in Narok County include Elangata, Enterit, Enkutoto, Entasekera Hill and Olomunyari.

The schools already benefiting from the USF broadband connectivity in Narok Counties are St. Mary’s Girls, Narok Boys, Maasai Girls, Ole Tipis Girls, Oloomirani Boys, Sister Mary Stephen Nkoitoi, Olchukut Supat, Bishop Collins Davies, Kilgoris Boys and Sosio Secondary schools.


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