| dc.description.abstract | The study’s intent was to investigate the impact of the informal economy on employment
creation using the case of Jua Kali in Nairobi’s Kamukunji cluster. Specifically, the study
related government policy, stakeholder involvement, incentives to urban informality and
skill diversity with employment creation. Descriptive research design was adopted
targeting Kamukunji Jua Kali unit managers/owners, association officials, and Ministry
of labor officers for the purpose of gathering the required information. Data was collected
from 80 artisans by use of questionnaires and data analysis was done using descriptive
statistics and was fit into a regression model. The study found out that, government
policy approach, stakeholder involvement, incentives to informal economy entry, and
diversity of skills embodied in the economy helped create employment opportunities for
people with different knowledge and skills. By regression, government policy approach
had the lowest impact followed by stakeholder involvement. Skill diversity was rated
highest factor above incentives to entry in the informal business activities. Components
of skill diversity which enabled its heightened impact included learning and skill
development opportunities, accumulation of skills over time, no need for basic
qualifications to join the industry, numerous options in the industry to take up, and easy
diversification into other skill fields. The incentives to informal economy entry included
attraction due to wider investment opportunities, personal drive for Jua Kali business,
joining Jua Kali a result of missing formal employment, unlimited investment freedom in
Jua Kali business and partner support opens up more opportunities. To a large extent the
government policy failed in ensuring interdependence with the formal economy,
provision of adequate financial assistance, capacity building, fair input taxation, and in
making appropriate business interventions. Moreover, stakeholder involvement sparingly
failed in providing appropriate support like making tailor-made credit facilities from
financial institutions, marketing of the products, and availing working knowledge and
skills in the cluster. Based on the findings, the study recommended sensitization of
relevant government institutions in embracing informal economy within an appropriate
strategy. Also, there is need for a workable framework on maximizing synergy through a
complete participatory approach between informal and formal economies. | en |
