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Kenya: ‘Mama mbogas’ and the path to recovery (New Humanitarian)

Saidi Mburi’s shop sales are a good barometer of the economic health of Kibera, Nairobi’s largest informal settlement, and they have been terrible. After months of COVID-19 curfews, transport restrictions, and social distancing measures, he says, “people just don’t have money.”  

His cramped one-man store has always offered credit to regular customers, but now, he says, “people can’t pay, and it’s affecting me as well.” There are gaps on the shelves because he’s stocking just the basics: bread, sugar, milk, and maize meal—anything else is a “luxury” people can no longer afford. 

More than 90% [1] of Kenyans have seen their incomes fall as a result of COVID-19, and nearly three-quarters of families have had to dip into savings—typically money set aside for school fees—according to Financial Sector Deepening Kenya or FSD Kenya, a trust that promotes financial inclusion.

Easing the lockdown in July led to a surge in COVID-19 cases—up from 7,800 reported infections at the beginning of the month to more than 33,000 by August 26.

Everyone is hurting in Gatwekera, one of the 13 neighbourhoods that make up Kibera. But there is a distinction in the suffering between those employed in Kenya’s formal and informal economy—and that could be significant for the country’s path to recovery.

Wage earners in Gatwekera like William Wajenge, a mason laid off last month, have been most affected by the lockdown and slowing economy. Since March, almost a third of low-income workers have seen their jobs disappear, according to the research firm Trends and Insights for Africa [2]

Without his wage packet, Mr. Wajenge’s family of six are now down to two meals a day, and sometimes, he says, it’s just lunch. His wife helps out by washing clothes, but that’s rare. Kibera is a COVID-19 hotspot, and people hesitate to hire domestic workers from here. 

Nairobi’s skyline is impressive, but Kenya is still an overwhelmingly informal economy. And in the age of COVID, the flexibility and resilience of that informality has—to an extent—tempered the economic hit [3] of the coronavirus.

All along the narrow mud lanes of Gatwekera, traders are tightening their belts. Irene Achieng owns a small food kiosk serving chips, coffee, and tea mainly to the motorbike taxi riders waiting outside for customers. She used to go through three big buckets of potatoes in a day—now it’s just one.

Mr. Mburi and his shop are clearly struggling just like everyone else. But, like other informal traders, he hasn’t folded. Traders have cut stock, reduced personal expenditures, and are likely juggling two or three chamas [4]—informal savings and finance clubs—to see them through this period.

Kennedy Odede is the founder of the grassroots movement Shining Hope for Communities, active in 14 of Kenya’s informal settlements. He says, “What is driving our country is the informal sector: 80% of the economy is the mama mbogas, or roadside vendors, selling tomatoes and living in the slums.”

Researcher Niti Bhan [5] sees this “indigenous economy” as the key to Kenya’s economic recovery. She points to the daily flow of fresh vegetables into Nairobi, controlled by local traders, as an example of its adaptability.

She says that women traders—and it’s overwhelmingly women—in Nairobi’s Marikiti wholesale market have shrunk their businesses and are absorbing a roughly 65% cut to their pre-COVID cash flow.

She believes that with an investment plan, the informal sector can rebuild far faster than mainstream bricks-and-mortar businesses, dependent as those are on global financial health.

Kenya’s best-known economist [6] David Ndii has called for an ambitious $500 million to $1 billion “lifeline fund” [7] to provide soft loans to informal businesses and the workers they employ. 

FSD Kenya has gone bigger—suggesting a universal basic income grant of $20 per month to every adult for three months at a rough cost of $1.08 billion.

This story was adapted from an article originally published by The New Humanitarian titled, “A Kenyan COVID-19 notebook: The ‘mama mbogas’ and the path to recovery.” To read the full story, go to: https://www.thenewhumanitarian.org/news-feature/2020/08/06/Kenya-coronavirus-informal-economy-mama-mbogas [8]

Photo: Saidi Mburi has run his business for two decades. Now, he says, “people just don’t have money.” Credit: Obi Anyadike / The New Humanitarian