Policy Brief No. 95 of 2019-2020 on Determinants of the Informal Sector in Kenya

Abstract

The informal sector in Kenya is characterized by limited job security, low productivity, low incomes, unskilled apprentices, low absorption of technology, poor working conditions, unfair competition to formal establishments, prevalence of illicit trade and counterfeits and lack of formal statistics for proper planning purposes. To address the problem of persistence informal sector and improve the sector’s performance and contribution, the study analyzed the determinants of informality in Kenya. The study also reviewed four selected countries (Indonesia, Rwanda, South Africa and Brazil) to draw lessons from the analysis being cognizant of the heterogeneity and ambiguity that the informal sector presents...