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close this bookThe Transition of Youth from School to Work: Issues and Policies (IIEP, 2000, 188 p.)
close this folderChapter IV. The integration of youth into the informal sector: the Kenyan experience by Ahmed K. Ferej
View the documentIntroduction
View the document1. Background
View the document2. The growth of the informal sector in Kenya
View the document3. Vocationalization of the formal education system
View the document4. Accessibility to skill training in the informal sector
View the document5. Implications for education and training
View the documentConclusion


This paper discusses the transition of young people to work, particularly into the informal sector of the economy in Kenya. The informal sector in Kenya is now responsible for absorbing the larger proportion of new entrants into the job market in comparison to the modern formal sector that combines the public and private sectors. To understand this process, this paper examines the development of the informal sector in Kenya and recent trends in its evolvement; entry into the informal sector and the characteristics of young people entering the sector; the training process in the sector; and implication for education and training. First, it is necessary to give a brief background of the country in order to understand how the informal sector fits into the larger picture of Kenya.

1. Background

1.1 Physical characteristics

Kenya obtained her political independence from the British in December 1963, after 65 years of colonial rule. Kenya is a multiethnic and multiracial country with an elected government. Kenya straddles the equator and is located on the East Coast of Africa. Only about 20 per cent of its land area has the climatic condition to support agriculture. The rest of the land area is semi-arid with little rainfall to support food crop production. This area is sparsely populated by mostly nomadic communities. Its location on the Indian Ocean and the provision of a deep-water harbour with adequate facilities to handle large sea vessels has made it the gateway to many African countries such as Uganda, Southern Sudan, Democratic Republic of Congo, Rwanda, and Burundi.

1.2 Economic characteristics

Economic performance has been inconsistent over the past three decades since independence. The first decade after independence provided the best sustained performance, averaging a Gross Domestic Product (GDP) growth of 6.7 per cent registered for the period 1964-1973. The next two decades resulted in average net declines of 5.3 per cent and 3.6 per cent. The 1990s has registered the most inconsistent performance, with the lowest performance ever coming in 1993 at 0.2 per cent (GOK, 1996). After a minor temporary recovery in the middle of the decade, the economy is once again on a downward trend and was expected to reach only 1.5 per cent for 1999. It is therefore now clear that the government target of 5.6 percent annual growth rate for the period between 1984 and the year 2000, as stipulated in Sessional Paper No. 1 of 1986 (GOK, 1986), will not be achieved.

1.3 Demographic characteristics

The population of Kenya was projected at 27.5 million in 1995 at an annual growth rate of 2.7 per cent (GOK, 1996). This is an improvement from earlier rates that peaked at 4.1 per cent in the mid -1980s. About 80 per cent of the population of Kenya live in the rural areas. This reflects the economic activity of the country, which is mostly based in agricultural activities. It is estimated that about 60 per cent of the population of Kenya are under the age of 20. Providing education and training therefore takes nearly 30 per cent of the government's annual budget.

1.4 Labour force characteristics

In 1997, 4.7 million persons were employed outside of small-scale agriculture and pastoral activities (GOK, 1998). This was an increase of 8.7 per cent over 1996. The public sector has stagnated due to donor pressures to reduce spending by the government. There has been virtually no change in the number of public employees for the past five years, that now stands at about 700,000 persons. The public sector's share in total wage employment reduced from 49.6 per cent in 1991 to 42.5 per cent in 1997 (GOK, 1998). In the modern formal sector of the economy, growth has been fairly small. The total number of employees in the modern formal sector grew by only 3.1 per cent to 1,646,000 only in 1967, while the informal sector expanded by 18 per cent in 1966 and 13 per cent in 1998 to stand at 2,986,900 persons. Thus more and more school leavers now join the informal sector that is rapidly growing and accounts for over 63.6 per cent of the labour force (GOK, 1998)

2. The growth of the informal sector in Kenya

Due to lack of employment opportunities in a shrinking formal economic sector, more people have had to seek an alternative livelihood in the informal sector. The informal sector was first officially identified by a 1972 landmark ILO study in Kenya that confirmed the existence of a parallel economy dominated by small businesses that absorbed a large number of persons that would otherwise be recorded as unemployed by economic surveys (ILO, 1972). The informal sector is described as consisting of «... all small-scale activities that are normally semi-organized and unregulated, and use simple labour-intensive technology... undertaken by artisans, traders and operators in work-sites such as open yards, market stalls, undeveloped plots, residential houses and street pavements... not registered with the Register of Companies, they may or may not have licenses from local authorities for carrying out a variety of businesses.» (GOK, 1997: p 72). The informal sector has been efficient at utilizing waste materials such as old tyres, scrap metal, etc. to produce goods that have found a ready market in the low-income sector of the society and, increasingly, the middle classes. The innovativeness and ingenuity of the craftsmen in the informal sector have been responsible for services being provided to the society that would have been imported or otherwise too expensive (Darrow and Saxenian, 1986). Numerous studies have shown that these small businesses have often been started with little capital by individuals and with virtually no support from government or non-governmental organizations (King, 1977; House et al., 1990; McCormick, 1988).

Their founders often start small businesses in the informal sector as self-employment ventures. Self-employment at best provides individuals with the autonomy and flexibility to realize their fullest potential, while at worst may represent survival activities for the marginal members of society. Enterprises in the informal sector are not homogeneous in size, in capital base or infrastructure. At the lower end of the sector, single or a minimal number of employees with a very small investment base characterize enterprises, while at the higher end they are often as well structured as any similar-sized formal-sector business. In Kenya, there has been a concerted effort by the government to encourage individuals to enter into self-employment as an alternative to wage employment, and to also create employment for others. Several non-governmental organizations have also been formed that focus on specific areas of the small business sector.

2.1 The Jua Kali Movement

'Jua Kali' is a Kiswahili phrase meaning hot sun. Although the term was originally used to describe informal-sector activities that took place in the open, it is now universally used to refer to all informal-sector activities. In Kenya, governmental attention on any issue can often be influenced by the amount of attention it receives from the President. When President Daniel Arap Moi, therefore, made some surprise visits to Jua Kali sites in 1988 to see first hand their operations, the informal sector received unprecedented publicity. The President directed that shades be constructed for the Jua Kali artisans, to protect them from the elements, and to provide basic infrastructure such as electricity and water (King, 1996). As the Jua Kali movement caught on, all urban centres in the country were being asked to set aside land for the construction of Jua Kali shades. A new government Ministry of Technical Training and Applied Technology was established in 1988, with one of its major objectives being the harnessing and developing of entrepreneurial efforts within the Jua Kali sector in the country.

In Kenya the terms informal sector, the micro and small-business sector and the Jua can be used interchangeably. Sessional Paper No. 2 of 1992 defines the category of an enterprise by the number of its employees. Thus micro enterprises are those that employ between zero and five employees; small-scale enterprises employ between 6 and 10; and small-scale industry 11 to 49 persons. An enterprise may fall within any of these categories but be considered to be formal because it is formally registered, has permanent structures, pays taxes, is licensed, etc. A similar-sized enterprise may be described as informal or Jua Kali, because it operates on temporary premises, even though it may actually be licensed. Sometimes whether to be categorized as formal or informal may be the choice of the operator in the advantages that may be gained, for example to escape paying taxes (King, 1996).

2.2 Recent trends in the informal sector

As the informal sector has continued to be the main source of employment for the largest proportion of employed Kenya citizens outside of rural small-scale agriculture, so has more attention been focused towards its organization, development, and training. The government has produced several documents to articulate official policy, for example a major policy document entitled 'Creation of employment opportunities for a growing population', which was expected to guide the development of small enterprises from 1989 and Sessional Paper No. 2 of 1992 on 'Small enterprise and Jua Kali development in Kenya: In this paper, the government articulated its policy as one of providing a conducive environment for the development of the informal sector.

The development of training capacity in entrepreneurship within the country was also felt to be crucial for encouraging people to go into self-employment. The enhancement of an enterprise culture in the country through provision of pre-service orientation courses to students of post-primary training and post-secondary institutions, and provision of in-service courses for individuals already in business was initiated in all technical training institutions in the country.

Recently there has been a major World Bank initiative to inject some funding into training and technological acquisition within the informal sector. In 1994 the World Bank signed an agreement with the Kenya Government to fund the Micro and Small Enterprise Training and Technology Project (MSETTP). The World Bank is providing a credit of US$24 million for the project. The objectives of the project included: providing skill upgrading for about 60,000 enterprises, increasing access of small-scale entrepreneurs to technology and marketing information, and attendant infrastructure, and improving the policy and institutional environment.

2.3 The future of the informal sector

While government and the NGOs have been encouraged by the ability of the informal sector to absorb excess labour force in the country, there has been concern at the lack of growth of enterprises in the informal sector. Most of the enterprises stagnate at the bottom and do not show signs of growing into medium and large-scale enterprises. Sessional Paper No. 2 (1992: p. 4), states, «Compared to other developing countries, the number of Kenyan manufacturing firms employing 10-50 persons is relatively small. In the interest of balanced industrial development, there is need therefore to increase the enterprises in the category which represents the 'Missing Middle' in Kenya's manufacturing and industrial sector.» Growth of enterprises into the 'Missing Middle' is expected to accelerate growth of employment of opportunities and also provide more room for others in the crowded bottom.

The informal sector in Kenya can be said to have developed with little or no assistance from the outside. In attempting to intervene to help it 'grow' there has been concern that its dynamism, ruggedness and innovativeness maybe affected (King, 1996). The Sessional Paper No. 2 (1996) on 'Industrial transformation to the year 2020', noted that the role of the government was to "... provide all necessary assistance to the sector while keeping in mind that overly interventionist policy can threaten the very strengths that create prosperity" (p. 54). Thus much of the intervention has been in providing training, credit, and reducing the harassment of the entrepreneurs operating on public land or sites.

2.4 Entry into the informal sector

Although ease of entry into self-employment has been one of its most attractive features (Fields, 1990), House (1984) however, from his exploration of small-scale enterprises, concluded that the ease of entry was mostly confined to self-employment at the lower end of the informal system of the economy. Those in the upper end of the informal system would restrict entry by barriers formed by higher skill and capital requirements. Those who enter self-employment at the upper-tier level are closely associated with the formal sector through their business operations or from their previous training and experience (Fields, 1990). The capital with which the business was started may also have been accumulated while working in the formal sector. Many of those who enter at this level include retired workers (retirement age in Kenya is 55 years) and retrenched workers. Others are those who may be straddling between self-employment and wage employment. The formal sector provides them with a safety net to break their fall should their businesses fail, or should they be forced into early retirement.

ILO estimates that only one out of ten of those who complete school can find employment in the modern sector (ILO, 1988), with the other nine seeking employment in the informal sector, initiating some type of self-employment, or remaining with the family to assist in small-scale peasant agriculture. Due to lack of capital and experience the type of self-employment the youth could get into is mostly petty trading (ILO, 1988). Many of the youth fresh from school enter at this level. Another avenue of entry for a large sector of the youth population is through apprenticing with a skilled craftsman or entrepreneur.

3. Vocationalization of the formal education system

Since the majority of the youth exiting from nearly all levels of the education system can only hope to find a source of livelihood in the informal sector, at the present, many programme could be described as possible routes for youth to enter the sector. The vocationalization of the formal educational programme was undertaken with this objective in mind. Tertiary programmes have incorporated the teaching of entrepreneurship in part to prepare the youth for the time they might start their own businesses.

The introduction of the 8-4-4 education system in Kenya in 1985 was a major effort to impart vocational skills to all students passing through the school system. The objective of the programme was to ensure that the youth that dropped out, or did not proceed to the next level of the educational ladder, would be self-reliant. In other words, the students would be able to consider self-employment as a viable alternative for earning a living (King, 1996). To meet this objective several subjects were introduced at the primary level and secondary level. At the primary level these subjects included: arts and crafts; home science; and business education. At the secondary level the subjects were placed in clusters, thus industrial education included: woodwork, metalwork, electricity, power mechanics, drawing and design, and aviation technology. Business education included: commerce, secretarial accounting and economics. Others were home science, agriculture (GOK 1984). More recently, computer education has been included in the secondary school curriculum as an option.

The original intention of the curriculum planners was to have these 'new' subjects offered as examinable in the same manner as the other traditional core subjects, for example mathematics, English, and sciences (King, 1966). After implementation of the curriculum, it became apparent that all schools were not going to be uniform in their ability to offer these options to their students. Each school community was required to provide the facilities to implement the new curricula, with the result that affluent communities were in a better position to raise funds to provide the new workshops, laboratories and the facilities to effectively teach the new curricula. Many rural schools chose to offer the cheaper options in each cluster. For example, in the industrial education cluster, most rural schools could only offer drawing and design and in the business education cluster, most schools offered commerce as these were the cheapest to implement in terms of basic infrastructure, and learning materials.

As a consequence of the disparities between schools, that affected their performance in critical national examinations, as well as their ability to finance the cost of offering the vocational subjects, pressure mounted on the government to reduce the number of examinable subjects. The Ministry relented and relaxed its stand on the vocational subjects schools were required to offer. This stand effectively diluted the number of options and the quality of the vocational education that could be offered and weakened the effort of communities to provide for the new curriculum. Thus students left school with little or no vocational skills at all. During a recent presentation to the Commission of Inquiry into the education system of Kenya, the Ministry of Education made a strong presentation recommending the reduction of examinable subjects in the formal school system. The Ministry proposed the reduction of examinable subjects to four, namely, mathematics, English, Kiswahili, and General Paper. This was clearly a reversal of the original vocationalization of the curriculum goal. For the secondary-school level, the Ministry recommended that «The secondary school curriculum should be flexible enough to allow the students to select at least six subjects in which they are interested and have ability to learn» (MOEHRD, 1999: p. 16). No direct mention is made of 'vocational', self-employment, as in previous government papers.

3.1 The impact of general education on youth entering the informal sector

Judging the impact of a curriculum is difficult and may require a long period of time to attribute success or failure to it. In the Kenyan experiment, it might be argued that the vocationalized curriculum was never implemented universally as planned, due to the difficulties previously stated. Unfortunately for most students, however, as they ascend the educational ladder it is inevitable that at the end of each cycle many enter the job market as fewer places for further education are available. Thus, the objective of providing young persons exiting at each level with sufficient knowledge and skills to enter the world of work or self-employment was quite noble. However, this has been difficult to achieve. At the primary level the government has admitted that, «Some of the subject contents have been found to be unsuitable for primary-school level... Graduates of primary school are not physically and mentally prepared and are not skilled enough to meet the challenges of the world of work» (MOEHRD, 1999:p.15).

According to government figures, about 400,000 students took the primary school examinations in 1997. Out of these, about 186,000 (46.5 per cent) were admitted into secondary schools (GOK., 1998). Thus, more than half were thrust into the job market. Some may have entered the youth polytechnics, informal-sector apprenticeship system and working as assistants in family businesses or subsistence farming. At the same time, nearly 600,000 (60 per cent) students dropped out of the school system before reaching the end stage, as about one million were originally enrolled at the beginning of the primary school cycle.

It is worth noting that the majority of informal-sector apprentices are those with eight years of primary school education or less. This fact contradicts the Ministry of Education argument that pupils at this stage are not old enough to prepare for the world of work.

At the secondary cycle the attrition rate is less, with over 80 per cent going on to the next stage. In 1994, for example, about 168,000 students were admitted into the first year of secondary education, while in 1997 about 149,000 (88.7 percent) students began their fourth-year secondary education. The loss of about 11 per cent can be attributed to any number of factors, including repetition of the previous class. Following the secondary school final examinations, only about 9,000 students, or about 6 per cent of those who complete secondary school, were admitted to public universities. A very small number will access university education through local private or overseas universities. About another 10,000 students join other tertiary institutions such as Polytechnics, Colleges of Technology, Teacher-training Colleges, Paramedical Training Colleges, and the Youth Service. Thus the majority of secondary-school graduates will end up in the informal sector, or in family businesses or subsistence farming.

The foregoing shows that the largest number of youth from each level of the education system will not find a place in the next higher level and will not find a job in the formal sector. The informal sector becomes the forced destination for the majority. Others that do not show clearly in statistics, work within family businesses or family subsistence farming.

3.2 Tertiary education

Institutions that provide Education and Training at this level include the Youth Polytechnics, Institutes of Technology (includes Technical Training Institutes and the National Polytechnics) and the Universities, Medical Training Centres, and Agricultural Training Colleges. Youth Polytechnics (YPs) number about 600 in the country and cater mostly to primary-school graduates. Lately, however, some secondary-school graduates have found their way into these institutions. YPs are mostly rural based and provide training that is practical-oriented and that prepares the youth for rural or urban employment or self-employment. A large number of the YP graduates form the bedrock of rural skilled labour, while many also enter into the informal sector in the urban areas.

The Institutes of Technology admit secondary-school graduates for a variety of programmes that mostly prepare the youth for positions in the formal sector. There has been a change in focus, however, as jobs have continued to be scarce in the formal sector. Now there is evident interest in encouraging the learners to think of careers in the informal sector or self-employment. Towards this end the parent Ministry now mandates the offering of entrepreneurship education to all the students in these institutions. The subject is compulsory and examinable (GOK, 1988).

3.3 Criticism of formal vocational education and training

A common criticism of the formal vocational education and training system, particularly the component covered in technical institutions, is the relevance of the content matter. Content is often not matched to local needs and conditions. Graduates of the systems therefore tend to be versed in operations and processes that are non-existent in many small enterprises, less so the informal or self-employment sectors (ILO, 1988).

Another criticism of the formal training system is the method of delivery. There is little effort to take training outside of the confines of institutions and bring it near to where the people live and work. This becomes even clearer when it is observed that the majority of skill training takes place in the informal system, but there is no recognized connection between the two systems (ILO, 1988).

Lack of continued contact between institutional instructors and the workplace tend to make the instructors' teaching less and less relevant to the changing workplace. The ILO (1988) report suggests that a system of continued interaction between workplace and technical institutions must be maintained to preserve relevance of teaching content.

Due to their large number and dispersal throughout the country, Youth Polytechnics (YPs) could have been the most accessible training facilities for the majority of the youth in Kenya. Sadly this is not the case. Community-supported YPs are the training institutions of last resort for most of the youth. These institutions are plagued with a host of problems. They lack teaching equipment and facilities; materials for practical training; textbooks; and quality teachers. Enrolment in most is too low for economic running of the community YPs. In contrast, YP institutions managed and funded by NGOs are often well equipped and attract more students than can be admitted, with many applicants being turned down. These NGO YPs produce graduates that easily find paid employment or successfully enter into self-employment. In some cases the latter institutions assist the trainees to procure tool-boxes that make it easier to enter into self-employment.

4. Accessibility to skill training in the informal sector

4.1 The informal apprenticeship

The informal (traditional) apprenticeship system in Kenya has its roots in the Indian craftsmen imported into the country at the turn of the century to help the British Colonial Government construct a railway line linking the seaport of Mombasa with the interior of the country (King, 1977). With the completion of the railway line, the Indian craftsmen stayed and formed the basis of skilled technical manpower in the country. Their skills were needed to maintain the railway system, operate and maintain factories that were being started to provide goods and services, and construct buildings for the settler community (King, 1977). People from the local communities were initially engaged as labourers on the railway construction project but gradually, by working alongside the Indians, acquired enough trade skills to work as semi-skilled and, later, as skilled workers.

A key characteristic of informal skill training in Kenya has been its relative ease of entry. According to King (1977), people in the East African region had not developed long traditions of craftsmanship and the inherent need to protect the skills from others in order to ensure continued patronage, had not been ingrained in them. Entry then, as now, was based on kinship, friendship, and philanthropy (Ferej, 1994). Informal apprenticeship in Kenya had no rigid rules or time constraints about the duration an apprentice would take to learn the trade. Once a learner entered into an apprenticeship his acquisition of skills would depend entirely on his aptitude, and the quantity and variety of work the owner/trainer was undertaking. A trainee could exit and seek employment elsewhere or start his or her own business, at any point he or she felt ready. In some cases the owner/trainer re-negotiated with the apprentice new terms, as the apprentice became more skilled. The fee structure too is quite flexible as the fees may range from nothing to amounts sometimes equivalent to high school annual fees (King, 1977; Ferej, 1994).

Another characteristic of the Kenyan apprenticeship system is the low regard for formal certification, unlike in some West African countries. The worth of the craftsman is measured in the quality of work he does (King, 1977).

With this flexible, non-protectionist mentality, trade skills have spread very rapidly in Kenya. The public has been the beneficiary of the abundance of skills as technical services are fairly cheap to obtain within the informal sector. The abundance of skilled craftsmen has helped to provide some essential skills in the rural regions of the country as well. Some of the skilled workers return to their rural village homes and set themselves up to offer services that were either unavailable or too expensive to obtain. Another important contribution of the informal apprenticeship system is the opportunity for large numbers of youth to obtain skill training with little cost to both the learner and employer, and at no cost to the taxpayer. It would be impossible for the current training capacity to absorb all the youth that are now obtaining training from the informal apprenticeship system.

4.2 The formal apprenticeship training system

An alternative route into apprenticeship training is through a government-sanctioned programme. In 1973, the government enacted legislation to formalize the apprenticeship training system through a comprehensive National Industrial Training Scheme for the training of craft apprentices. The scheme was based on the Industrial Training Act of 1973 (GOK, 1973), whose main objectives were to organize and ensure quality training of apprentices. Prospective trainees must meet minimum entry qualifications, currently pegged to secondary school certification, and must have a sponsoring company that would provide the work experience component of the training.

To encourage industries to train their workers in accordance with the new training scheme, a levy was introduced whereby all medium and large companies would be required to contribute. Those who provided training for their workers would be entitled to a reimbursement at the end of the year from the fund. The government presently encourages contributing firms to take on apprentices without any obligation to retain them at the end of the four years of apprenticeship. Presently a very small number of youth obtain training through this system. Between 1990 and 1996 a total of 4,468 craft apprentices were trained through the system (Ferej, 1997). This is an average of 750 persons per year. Many of the youth accessing training through the formal apprenticeship system nevertheless find themselves in the informal sector because the industries that sponsored them during their training period are not obligated to keep them at the end of training.

During the apprenticeship period the learners are required to take trade tests at appropriate levels of the programme. The lowest competency level awarded is at Grade 3 and Grade 1 is the highest level. The system of trade testing was started after the Second World War to provide a means of assessing skills and providing a hierarchical grading system to distinguish competency levels of skilled workers.

Some corporations, like the railways, started their own schools to train workers in skills pertinent to them. Nevertheless these apprentices still take trade tests as a means of defining their standards. It should also be pointed out that since the trade test is mostly a practical examination, individuals who acquire skills through the informal apprenticeship system can take the test and legitimize their status, and secure pay commensurate with their skills in the modern sector.

4.3 The learning process in apprenticeship training

Most of the learning in apprenticeship training takes place on the job. In the case of formal apprenticeship training, the Industrial Training Act in Kenya mandates vocational college attendance for about six months in each year. The learning process for the apprentice involves observing, or actually working on tasks. Within the informal sector no time limits are imposed. Apprentices progress at their own pace and can exit whenever they feel they have acquired sufficient skills. A unique feature of apprenticeship training is that learning is inextricably linked to productive work or economic activity, that is in sharp contrast with learning in school laboratories, where the learner's activities are focused on educational outcomes (Wertsch, et al., 1984). Further, the work environment of the apprentice has an important bearing on the type, depth, and the speed by which knowledge and skills are acquired by the apprentice.

The breadth and depth of the Craft Master's knowledge and skills as well as those of the other journeymen will, to a large extent, determine the knowledge and skills the apprentices acquire. Additionally the social interaction between the apprentice and the journeymen (skill superiors) and other apprentices is also crucial to the overall development of the apprentice. Overall the contextual factor will determine the quality of technical and enterprise skills of the apprentices as well as their entrepreneurial interests. This factor is even more critical in the training of apprentices in the informal sector, where the learners do not have another frame of reference. Each apprentice works and learns in an environment that is unique to the specific business. Ultimately this is the experiences the apprentice will take with them in starting their own business.

4.4 Influence of the work environment on enterprise skill acquisition

For most apprentices, learning how to run a business is usually outside the immediate requirement of their training. The standard practice is to be involved in learning those tasks that are relevant to the technical processes, for example learning to manufacture a component or a piece of furniture or learning to repair a broken piece of equipment. However each apprentice, depending on his or her keenness of observation or interest, will learn other business activities by simply being immersed in the environment for prolonged periods of time. In addition to an individual sense of observation, the type of the environment and the size of the enterprise will also impact on the quality and quantity of general entrepreneurial knowledge acquired.

In a small enterprise the close proximity of the owner/master to the workers provides the apprentice with an opportunity to observe many business activities. Customers in small enterprise environments tend to wander into the working area either to be shown products that would guide them in what to order, or to observe work being done. Important discussions are often held between the owner and the customer regarding costs, quality, deadlines, etc. Inadvertently the apprentices pick up critical information that would come in handy in the future when in their own businesses. Journeymen and senior apprentices also conduct work negotiations on behalf of the owners and thus directly acquire valuable business experience (McLaughlin, in OECD, 1990). This situation may not occur in a large enterprise. The workers seldom see the owners of the products they are working on. In such establishments signs are prominently displayed at the door to the work floor warning customers not to enter the area due to the risk of injuries. The shop workers are also often not aware of billing procedures and the actual fee customers pay for services. An apprentice learning in such an environment is, therefore, at a distinct disadvantage to his counterparts from small and informal enterprises who have plenty of opportunities to observe and participate in other activities related to the enterprise other than production work alone.

4.5 Quality of apprenticeship training

As explained earlier, apprentices in a formal setting often lack the variety of enterprise experiences that small informal-sector enterprises offer. Consequently apprentices trained in the formal sector or through the formal apprenticeship programme might lack critical skills needed in setting up their own enterprises. While the informal sector apprenticeship training offers its trainees more advantages than other formal apprenticeship in preparation for work, it too has some disadvantages. How much a learner acquires is critically dependent on the work environment, the breadth and depth of the sum total of the experiences of those in the unit, and the variety of the work involved. Clearly, therefore, the apprentice mirrors his work environment and if it is rich, then he will come out better trained than apprentices who were involved in a lesser environment. There is indeed a role for intervention programmes to enrich the knowledge and skills of the apprentices whose learning is only based on the job. The intervention could take the form of filling the gaps in business knowledge for owner entrepreneurs and work skills for apprentices or journeymen. Such interventions will have a multiplier effect as the next generation of apprentices will receive a higher level of knowledge and skills from entrepreneurs and craftsmen who would have had the benefit of outside training. This is precisely the gap which the MSETTP, sponsored by the World Bank, expects to fill by catalyzing the market in the informal sector to develop training providers that respond to the need of the sector.

4.6 The Micro and Small Enterprise Training and Technology Project (MSETTP)

Unlike the programmes discussed previously, the MSETTP is a one-off intervention project that is being implemented with the assistance of the World Bank. Its main objective is to establish a market for training and promote business development. Hereto, public and private sector trainers avoided the sector because of the perception that it was incapable of using, as well as paying, for such services. The MSETTP project has shown that serving the informal sector can be an attractive business. Sustainability is expected to develop through the micro and small enterprises appreciating the value of training and having the information to seek training to fill identified gaps in their operations. The MSETTP project expects to impart this culture by reducing their subsidy for repeat applicants for assistance.

The MSETTP Voucher Training Programme (VTP) was initiated in 1997. The project involved the cataloguing of all interested qualified training providers and the type of training that they could provide. Participants in the micro and small enterprise sector who were interested in specific training programmes were then invited to apply for desired training by completing appropriate forms. Successful applicants are required to pay 10 per cent of the cost of training to the administrators of the programme. The applicant identifies the training and the provider of his choice from the official catalogue of training providers. Once training has been provided, the training provider redeems the forms for reimbursement from funds provided by the World Bank. By mid-1998, about 4,000 vouchers had been issued indicating that the same number of persons had received various types of training that ranged from technical skills to managerial skills acquisition (MRTT&T, 1998). The first phase of the programme indicated that 85 per cent of the training was provided by master craftworkers. This is encouraging because it indicates the respect these hereto ignored informal-sector operators command. A danger exists, however, if the craftsmen find that training is so lucrative that they spend more time on training than actual work. This would effectively kill the whole concept of working on actual customer work while learning. The long-term impact of the programme cannot be assessed yet. The idea, however, is to encourage the operators of the informal sector to value training for specific needs, know where to obtain training and be willing to pay for such training. This can only be effectively judged when the MSETTP stimulus is removed.

The programme me also includes a technology component that envisages a system where locally developed tools and systems of work can be encouraged to solve specific problems. This phase is just starting and the component has been sub-contracted to the Kenya Industrial Research and Development Institute (KIRDI) for implementation (MRTT&T, 1998).

5. Implications for education and training

Formal education provides good preparation for the youth going to the informal sector. This is because, with some level of literacy and numeracy, the trainees can learn more easily on the job or take courses more easily. Perhaps a vocationalized curriculum as originally conceived might have played a more significant role in youth preparation. But since this was not effectively implemented due lack of adequate resources, it might be argued that a good general education could be a better preparation than a poorly implemented vocational preparation. Post-school education and training and apprenticeship programmes play a more significant role in youth preparation for work. The implication of these will be discussed.

5.1 Improving education and training in the vocational and technical institutions

As mentioned elsewhere in this paper, VTIs need to re-focus their programmes to the needs of the market place. At the moment that means the needs of the informal sector, as this is where most jobs are to be found. The greatest change therefore must come in the culture of these institutions. At present they are examination oriented with little emphasis on practical skill development, innovation and problem solving. The education level of graduates from this level is high as the average programmes take about three years. These trainees must be prepared to learn the realities of work in the informal sector. Once they come to terms with what the sector can offer, they are probably best placed to improve and do well due to the level of technology and scientific knowledge they have. At the same time, the VTIs need to play a more positive role in the training of apprentices by offering short-term courses that better meet their needs. The first phase of the MSETTP project showed that there was little interest in what they could offer. This is at variance with the facts because they offer improved prospects of institutionalizing the concepts created by the MSETTP project.

5.2 Improving the informal apprenticeship training process for the youth

The quality of training an apprentice receives is directly related to the work environment in which the training is conducted. To improve the quality of training in the informal sector, appropriate interventions are needed by the Ministry of Research, Technical Training and Applied Technology (MRTT&AT). The areas of intervention include flexible training programming for apprentices and trainers. MRTT&AT is responsible for the development of the informal sector, as well as technical training in general in Kenya. By providing flexible training programmes in its VTIs, MRTT&AT can have a multiplying training effect on the quality of training in the informal sector. Flexible scheduling requires the introduction of classes at times that are convenient to the operators in the informal sector. This largely means night classes. Another issue is the high academic entry point required to enrol into classes. Most studies have shown that at the present time informal-sector operators have primary education or less. Using the results of a good needs assessment, classes can be designed to meet the needs of these operators.

Training programmes can also be designed to meet the needs of the apprentices. The focus of such programmes would be to supplement informal apprenticeship training rather than to substitute it. Master craftsmen who are the principal trainers can learn methods of improving productivity, basic record keeping, and how to find information related to problems encountered in the workplace. Flexibility in scheduling, course offerings, credit accumulations and testing is needed to make the programme attractive to the trainees.

In the final analysis, however, the craftsmen or apprentices from the informal sector must be able to see gain for themselves in order to make the effort and time to participate in the VTI programmes. One incentive that can be explored, for example (see World Bank documents), is making it easier for informal-sector operators who have participated in training to obtain development loans. A craftsman, for example, who has participated in some specific training programme and shows transfer of acquired skills to his work, could be recommended for concessionary loans. Similarly, apprentices who participate in VTI training could also build up valuable training credits that may also be a useful requirement for start-up loans upon completion of apprenticeship training. The apprentices could also be given guidance in the taking of the trade test examinations. Acquiring the certificate would give the individual trainee confidence as well as contribute towards improving standards in the informal sector.

5.3 Collaboration with VTIs

To date little contact exists between the VTIs and the informal sector in Kenya, even though both are actively involved in the training of future technical operators and entrepreneurs (Ferej, 1996). Great opportunity exists for mutual gain for the two training sectors. In addition to the VTIs' theoretical and technical know-how that could supplement informal sector apprenticeship training, and improve efficiency and productivity of the artisan entrepreneurs, there are opportunities for the informal sector to complement VTI training for its current formal trainees. Students from the VTIs can seek internships with the informal sector during their regular industrial attachment phase, as well as during vacations that amount to about three months a year. Such internships should provide the VTI trainees with a live and active business environment to acquire both technical and entrepreneurial skills that exist in abundance in the informal sector (Ferej, 1994). In the short term the opportunity to take VTI trainees would provide the informal sector with a new source of income as well as recognition. In the long term the sector stands to gain from interaction with minds trained to a higher academic level.


Kenya will continue to rely on the informal sector for many years for employment creation for the youth coming out of the school system, retrenched employees and retirees, due to the depressed economic factors. It is also true that the majority of new entrants into the informal sector will continue to be the youth, as they form the largest number of job-seekers. For the youth, therefore, education and training to prepare them for work in the informal sector is extremely important. Adult entrants would normally have some work experience already.

The World Bank project is expected to attempt to bridge the gap between informal sector training and formal training systems. Already, a large number of youth in the informal sector have obtained training though the Bank-financed voucher system. It should be noted that most of the technical training that has been conducted to date has been by Master Craftsmen or private training providers, rather than the VTIs. This is indeed a healthy sign because market forces would seem to be at work in determining the choice of providers by the voucher holders. But if institutionalization is to be established, the VTIs need to be more active participants as resources expended through them may go into developing long-term training programmes. At the same time, because of the cash incentives provided by the World Bank project, the VTIs and the informal sector could be brought together and help to reduce mutual distrust between the groups.

As more youth with an ever-increasing level of formal education enter the informal sector, so will it be easier to integrate training within the sector and the formal training providers such as the VTIs. VTIs however will have to do more to inject the necessary flexibility into their programmes to attract more trainees from the informal sector. In spite of reducing job prospects in the modern formal sector, VTI training is still pegged to the needs of the formal sector, the introduction of entrepreneurship education notwithstanding.


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