Analysis of Informal Sector Activities In Machakos Town: Towards A System Policies Design.

The main theme of this study is to provide a clear understanding about the operations of the informal sector activities in Machakos town so that sound policies and programs can be made based on the results of the analysis. This is based on the premise that is after understanding a system that proper measures can be taken to influence its behavior. Informal sector as a system in Machakos town can be regarded as ‘black box’ since no research has been carried out on the project. This work tries to open so that what is happening in it is properly understood by planners and policy makers.

The nature and characteristics of informal sector activities are evaluated on the basis of areas of employment, income generation, saving levels and the factors determining each. Financial situation of the entrepreneurs is also examined. Problems affecting the sector as well as the impact of government policies and programs form an important part of the analysis.

The study sampled three sub-sectors randomly from the informal sector. They include manufacturing, service and trade. Data generated from the sample is analyzed using both qualitative and quantitative techniques.

From the data analysis it is established that informal in Machakos town is a source of employment and income. Savings and capital required to open informal enterprises is found to be low. Policies and programmes which are operational have positive impacts but are accompanied by some problems. Problems affecting the informal sectors are common to all sub sectors but vary in intensity.

It is recommended that the informal sector entrepreneurs be consulted when drawing up policies and programmes to affect them. Solutions of problems affecting the sector should be tailored to suit each sub-sector. Tax levied to the informal sector should not be uniform to all. The informal entrepreneurs should strengthen their existing co-operative so that they can act as a block to bargain for financial assistance, secure raw materials and market their products. Apprenticeship as a source of training needs to be modified to enable entrepreneur’s mobility.

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