Some aspects of the urban informal sector activities : a case study of Nyamira Town Kenya
This study examines some aspects of the urban informal sector namely, employment creation range and threshold of its goods and services and problems affecting its growth and development using Nyamira town, in Kenya as a case study. Unemployment poses a very serious socio-economic and political implication not only in the less developed countries (LDCs), but also in the more developed countries (LDCs). Its causes are complex and beyond the scope of this study. However, its implications are obvious, such as lack of income to provide basic necessities like food, shelter and clothing. Economies of LDCs have not kept pace with the rapid population increase. The formal sector has not been able to generate sufficient employment for this rapidly increasing population. It is for this reason, therefore, that the importance of the informal sector on the economies of the LDCs needs not to be overemphasized. In this study both primary and secondary sources of data were used. Stratified random sampling procedure was followed in data collection. A sample of 117 respondents was selected from a sample frame of 364 enumerated urban informal sector operators. In the data analysis, both descriptive and analytical techniques were employed. Analytical techniques used were, Pearson's correlation coefficient, chi-square and principal component analysis. From the analysis it was established that the urban informal sector can play an important role in employment creation and raising the standard of living of its dwellers and that of its rural umland. Indeed, the study revealed that, 1 entrepreneur running an informal sector activity was able to employ 1.4 other persons. This sector is labour intensive unlike the formal sector that is capital intensive, relies heavily on family savings for initial investments, acts as a source of relatively cheap goods and services for both urban and rural ,population and can be relied on to boost the rural economy through regular remittance. The sector provides cheap training and acquisition of skills through Apprenticeship and on the job training. Lack of sufficient capital for investment, local government restrictive policies and lack of premises were however given as the major drawback into the growth and development of this sector. The study gave key recommendations on how these problems can be solved. Given the increasingly important role that urban informal sector plays in the country's economic growth, it is recommended that the Government of Kenya strongly support the growth of this sector by making the necessary institutional structural adjustments and policy changes necessary in the promotion of growth of this sector. For sustained growth and development of this sector, there is need for a coordinated process of planning, decision making and implementation of government policy towards the sector. Finally, Considering that this study did not focus on the rural to urban migration which is one of the major causes of urban unemployment, but rather discussed ways in which urban unemployment could be addressed through promoting the informal sector, it is recommended that an elaborate study on how the rural to urban migration could be curbed be undertaken. A similar study can also be done in other urban centres to provide data base for comparison .