Grapevine

Why informal sector could be choking local private investments

Stephen Muhoma goes through his Jua Kali work at Bama Market in Nakuru on June 13, 2019. [ Kipsang Joseph, Standard]

Kenya’s vast informal economy which is largely made up of micro, small and medium enterprises (MSMEs) has been cited as a source of unfair competition for mainstream firms.

The lawlessness that some of these businesses operate under has been termed disadvantageous to mainstream firms that have to abide by every rule in the rule book.

As such, it is one of the reasons private firms look into it when deciding if the business environment is conducive for them to inject more capital.

The recent paper by the Kenya Institute for Public Policy Research and Analysis (Kippra) notes the lack of enforcing regulations in the business environment which should provide a level playing field for all enterprises.