African Youth find Opportunities in Informal Sector Biashara

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Biashara in Africa’s emerging economies – Nigeria, Kenya, Zimbabwe- are at loggerheads with the state.  An ever bulging young demographic  and a failure to absorb them into the formal economy has resulted in increased biashara.  The informal sector’s low barrier to entry, appeals to the young Africans’ aspirations, like Simon Danda from Zimbabwe. Rather than to idle, he is one of many tapping into biashara opportunities, mostly in trade and services. A common theme is sweeping across the the continent. Yacine Bio- Tchane observes from Benin, West Africa

“ECOWAS countries’ economies are driven by more than 50% by the informal economy. In Benin, where the informal sector represents more than 90% of the economy, graduates are found becoming drivers of taxi-motos to make ends meet. They were not able to find work within their sector so they became taxi-motos.”

But, the peculiar nature of the informal economy is a challenge for state agencies.

On July 13 2016, for the umpteenth time, City Hall officials from Kenya’s capital, Nairobi, vowed to crack down on informal sector biashara people: Hawkers, Matatus, Boda bodas, car washes, roadside eateries, and street families.

“The Nairobi County Government has formed a sub-committee tasked with restoring order and sanity in the central business district (CBD) following complaints from businesses over hawkers’ invasion of key streets. All car washes, kiosks and hawkers will be arrested with immediate effect”  – Business Daily

2 weeks earlier, the Nigerian state of Lagos had clamped down on street trading in a bid to sanitize its streets.

“Lagos State Governor Akinwunmi Ambode, said the renewed enforcement was in line with Section One of the Lagos State Street Trading and Illegal Market Prohibition Law of 2003, prohibiting street trading.” – Lagos Goes Tough on Street Trading, Hawking

2 months prior to Nairobi’s crackdown, Zimbabwe’s efforts to contain protests were met by strong resistance from informal biashara people. Traders opposed an ultimatum to either vacate streets by end of June or face arrest.

“We are not going anywhere until the government give us jobs, it’s better they kill us. I have an accounts degree and was forced into street vending because there are no jobs. They destroyed the economy and now they ban us from selling on the streets.”Ventures Africa

In Africa, the line between an entrepreneur and a lawbreaker is a thin one.

Biashara contributes to the economy

informal sector jobs

When I walk through Nairobi’s Tom Mboya and Moi Avenue, I see entrepreneurs. Young men, women, breastfeeding mothers and the disabled committed to biashara. They will sell you anything you want! From foodstuffs, to electronics, or the popular mitumba (second hand clothes) to a quick boda ride out of the city.

Arguably, no one understands the needs of consumers better than biashara people. They naturally seek out demand and will go where they can find it. The massive evening foot traffic of the continent’s buzzing capital’s (Nairobi Lagos,Harare) makes for a great concentration of demand.

More people are now turning to the informal sector. GDP and labour force statistics highlights the vital role of this segment in Africa’s economies

“In Kenya, it is estimated that the informal sector in excess of 35 per cent to the GDP and employs close to 80% of the workforce.” – Taxing the informal sector requires better strategy

“In Nigeria, informal trading of which hawking is a part thus accounts for 10% of total Nigeria’s GDP, bigger than crude production” Yemi Kale, Director General of Nigerian Bureau of Statistics

The trouble is the conflict between the state agencies’ perception and the value creating biashara. How we view this sector is important and matters for both public and the private sector in

  • Crafting public policy

Biashara people are taxpayers, and economic contributors just like formal institutions, a fact often forgotten. Just like we craft targeted policy for the formal economy, after considering stakeholders interests, so we should for biashara.

  • Product and service design for Sub Saharan Africa consumer markets

Biashara people are the consumers of the formal economy’s products and services like mobile money transfer services, mobile banking services, sports betting, airtime, and FMCGs.

We need to understand biashara’s operating environment (business or people), if we are going to sell goods and services to this sector.

  • Innovation for Sub Saharan Africa’s economies

Once we appreciate biashara people as a market segment with its own merits, we can free ourselves of our one eyed biases and innovate for their  biashara needs.

For example, we can start by not referring to them as Bottom of the Pyramid people.

 

 

*The original version of this article appeared on my blog

This entry was posted in Africa, African Consumer Market, Base of the Pyramid, Biashara Economics, Informal & Flexible, jua kali, Kenya, Mama Biashara, Prepaid Economy & Informal Sector and tagged , , , , . Bookmark the permalink. Trackbacks are closed, but you can post a comment.

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