Sharp Daily
No Result
View All Result
Friday, July 11, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Opinion

OPINION: Informal sector fuels 81% of Kenya’s employment, but barriers remain

Fridah Karei by Fridah Karei
December 9, 2024
in Opinion
Reading Time: 2 mins read

Kenya’s informal sector is widely recognized as a cornerstone of the nation’s economy, particularly in terms of employment creation and socio-economic development. As of 2024, this sector plays a pivotal role in driving economic activity, contributing to job creation, and sustaining livelihoods for millions of Kenyans. According to the Labour Market Profile report 2024/2025, Kenya’s informal economy dominates employment, representing 81.0% of employment in non-agriculture and 97% among those in agriculture. This includes a broad spectrum of businesses, ranging from street vendors and market traders to small-scale manufacturers and service providers.

 The small and medium-sized enterprises (SMEs) that dominate the informal sector are crucial engines of economic growth. These SMEs are responsible for creating the majority of new jobs and also contribute to the growth of local economies across urban and rural areas. According to the Micro and Small Enterprises Authority (MSEA), SMEs are a driving force in economic diversification and employment.

While the informal sector is undeniably a critical part of Kenya’s economy, it faces significant challenges. These include limited access to finance, lack of formal training, and poor infrastructure, which hinder the sector’s potential for growth and formalization. The Central Bank of Kenya (CBK) reports that access to credit remains one of the major barriers for SMEs, with many informal businesses unable to secure financial support from traditional banking institutions. Additionally, the informal nature of these businesses means they lack the protections and benefits that come with formal registration, such as access to government tenders and social security programs.

Despite these challenges, the informal sector’s contribution to the national GDP is notable.  In Q2’2024, agriculture had the largest contribution to Kenya’s economy. The sector added roughly KES 1.0 tn, approximately USD 8.0 bnt to the country’s Gross Domestic Product (GDP). The informal sector’s role in poverty alleviation is significant, as it offers employment opportunities to a large segment of the population that might otherwise remain excluded from the formal labor market.

RELATEDPOSTS

Opinion: Austerity wrong medicine for Kenya’s economy.

June 16, 2025

Breaking the 9-to-5: Is the gig economy the future of work?

June 10, 2025

In my opinion, while the informal sector plays an indispensable role in Kenya’s economy, there is a need for more targeted efforts to support its growth and enhance its productivity. The government and private sector can create a conducive environment by improving access to finance, providing business development services, and ensuring better infrastructure. Additionally, promoting the formalization of informal businesses through incentives and support programs would enable these businesses to tap into more opportunities, including accessing better financing options, legal protections, and the ability to expand their operations.

Previous Post

Kindiki explains delay in reconstituting IEBC due to court injunction

Next Post

OPINION: How private equity is driving growth and innovation in Africa

Fridah Karei

Fridah Karei

Related Posts

Business and Finance Concept - Coin, Currency, Financial Item, Graph,
Opinion

Opinion: Why lower taxes may be Kenya’s only escape route

July 10, 2025
Opinion

Privatization in Kenya: A new dawn for capital markets and fiscal stability

July 10, 2025
Economy

What happened to president Ruto’s economic dream?

June 27, 2025
Opinion

Opinion: Populism feeds votes, not growth

June 27, 2025
Opinion

Unlocking the power of REITs: A path for retail investors

June 26, 2025
Opinion

How Kenyan banks can bridge the cybersecurity talent gap

June 25, 2025

LATEST STORIES

Why Employers Should Prioritize Pensions Over One-Time Gratuity Payments

July 10, 2025
Business and Finance Concept - Coin, Currency, Financial Item, Graph,

Opinion: Why lower taxes may be Kenya’s only escape route

July 10, 2025

Nvidia becomes the first company globally to hit USD 4.0 trillion market value

July 10, 2025

Privatization in Kenya: A new dawn for capital markets and fiscal stability

July 10, 2025

How Kenya is future-proofing its economy against illicit finance

July 9, 2025

The importance of Investment Policy Statements (IPS) for pension schemes in Kenya

July 4, 2025

Understanding Life Cover as an Additional Benefit in Retirement Benefit Schemes

July 4, 2025

Del Monte foods files for bankruptcy in USA

July 3, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024