Institute for Development Studies, University of Nairobi

The informal sector in Nakuru plays a significant role in the economy of the town by way of revenue generation to the Municipal Council and also by way of employment generation. However, the role of the informal sector, particularly with respect to employment generation, should not be over-estimated especially when we take into account the growth pattern of this sector. The growth pattern of the sector reflects horizontal expansion accompanied by little, if any, vertical growth. In spite of our misgivings with respect to the employment potential of the informal sector in Nakuru, we emphasize that there is a "social" role of the informal sector which is not always easy to quantify. Taking this into account, the sector perhaps plays a more important role than would seem at first glance.