More than 15 million Kenyans work in the informal economy. It accounts for 24% of the country’s GDP and employs five times more workers than the formal economy. From 2023 to 2024, Laterite worked on a study to surface deeper insights into Kenya’s informal economy. With a particular focus on youth and women, we sought to understand the current realities and future possibilities for the millions of entrepreneurial Kenyans who have been sustaining livelihoods through informal economic activities.
Alongside TRANSFORM and Brink, we collected and analyzed quantitative and qualitative data on three informal sector market segments: food service provision, creatives & entertainment, and agri-livelihoods. The data collection involved in-depth interviews with youth organizations, government representatives, academics, local business owners and operators. It also involved focus group discussions and a phone survey of 400 people across Kenya working in the informal economy.
The study focused on urban and peri-urban areas, specifically Nairobi, Mombasa, and Kisumu. Our work revealed significant differences in income opportunities and challenges faced by people of different genders, ages, locations and market segment.
The Future of Work in the Informal Economy series
The findings from the research resulted in the creation of seven chapters on the ‘Future of Work in the Informal Economy’ that document the daily lives of members of Kenya’s informal economy, detail their livelihood creation strategies, and put forward a portfolio of recommendations for inclusive growth. This body of work was a culmination of work across multiple organizations across the ecosystem aiming to collectively shape the narrative around the future of work in Kenya.
Laterite authored three of the chapters:
Chapter 2 – From Kibanda to Content Creation: Exploring the Invisible 83% in Kenya’s Informal Economy
This chapter delves into three critical segments that are poised to shape the future of this dynamic workforce: food service provision, creatives & entertainment, and agri-livelihoods. Informal food outlets such as street vendors not only make up a significant portion of informal economy workers (employing over 1.4 Kenyans), they are also an important aspect of urban food security and nutrition among underserved communities. Propelled by digitalization, creatives & entertainment is a rapidly growing segment that offers promising opportunities particularly for young Kenyans entering gig economy roles. Farming on the other hand is the very foundation of the economy, which plays a crucial role in food security and employment.
To read more, download the chapter here.
Chapter 3: 400 Voices of Resilience and Aspiration from across Kenya’s Informal Economy
Next, this publication presents findings from a survey involving conversations with over 400 Kenyan informal economy business owners across Nairobi, Mombasa, and Kisumu. Conducted in October and November 2023, these 400 voices were captured through a combination of phone interviews, in-person conversations, and focus groups. Focused on the three market segments food service, creatives & entertainment, and agri-livelihoods, we aimed to uncover the lived realities and experiences of Kenyan informal workers’ daily lives, including their work, livelihood strategies, needs, challenges, aspirations, and thoughts on the future of work.
To read more, download the chapter here.
Chapter 4: Invisible Livelihood Strategies of Kenya’s Informal Economy
Lastly, this chapter delves deeper into specific livelihood creation strategies often referred to as business models. The publication focuses specifically on nine invisible livelihood strategies across the three market segments:
- Food Service Providers: ‘Mama mboga’ (fruit and vegetable sellers), ‘Kibanda operators’, and ‘Sale of pre-packaged food or beverages’
- Creatives & Entertainment: ‘Dancers, actors, street performers’, ‘Musicians, DJs, MCs’, and ‘Social media content creators and influencers’
- Agri-livelihoods: ‘Distribution and transport of agricultural products’, ‘Aggregation and storage of agricultural products’, and ‘Sale of plants and flowers for domestic use’
To read more, download the chapter here.