Skill Aquisition among Youth in the Informal Economy

According to the World Bank, in terms of skills acquisition, apprenticeships have traditionally been the most important skills development system available to youth for the informal sector. However, we live in a dynamic society where business operations have to adapt to the constant changes in the environments in which they exist. In order to remain relevant and profitable, most informal business capitalise on this dynamic so as to stay afloat. This has led to an increased level of innovation on their part, giving rise to new technologies.

Informal businesses can raise their credibility when trying to access financial backing by coming together under the different platforms on which they operate to form groups which can amass their resources. This will put them on a stronger negotiation platform when it comes to engaging with facilities such as government procurement systems and larger institutions. Dr Jacob Omolo, a lecturer at Kenyatta University’s School of Economics reiterates that youth engagement interventions should increasingly target the enhancement and promotion of the youth entrepreneurial potential. This can be achieved within the framework of promoting linkages between youth enterprises with medium and large firms as well as government, mentoring programs, entrepreneurial exchange initiatives, and exhibitions to promote markets and market information.

The Kenya Economic Update 2016 estimates that between 2015 and 2025, the working age population will increase, on a net basis, by nearly nine million people. One third of them, three million people, will be made up of young people aged between 15 and 24 years. There clearly lies an opportunity in as far as reaping the benefits of this demographic group is concerned. More should be done on areas like exploiting their creativity, developing a savings culture as well as improving systems that increase the productivity of their businesses. There also needs to be a concerted effort towards coming up with credible support structures that are aimed at building up their start-up businesses.

Given the number of youth who are engaged in the informal economy the demographic dividends that can be reaped from this group are immense. Building the capacity of the businesses that they operate will go a long way in providing a credible platform from which they can attain financial freedom. Training on financial skills is a key factor in building up these businesses in a way that they will be well equipped to manage their growth. By developing a culture of documenting financial dealings, informal businesses will be better placed to access loans and grants from financial institutions.

The challenge still exists in terms of how to equip the youth with adequate skills for the labour market outside the realm of formal education. Compared with many other African countries, Kenya offers an unusually wide range of informal training options for the formal and informal sectors due to the presence of tertiary educational institutions like colleges and polytechnics. However, because of a lack of good evaluations and tracer studies, much uncertainty still exists about what works and what does not work in terms of creating sustainable employment among youth. Given the size and importance of the informal sector to the economy, more attention needs to be focused on the constraints to skills acquisition among the youth engaged in the informal sector. 

Informal Economy Analyst 




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