Let us give legitimacy to the small entrepreneur

Jan 25, 2004 Management, Sunday Nation

This week, I’d like to introduce a couple of Kenyans to you.

January is traditionally the time of year that many of us try to accumulate calendars to give out to junior employees, underlings etc. This year, a dog trainer did a neat reversal on me. Instead of pleading for a cheap calendar from me, he gave me one! A specially printed one advertising his services in dog training, sales and consultancy, complete with a mobile contact number and e-mail address. He also told me I could have additional copies to give to my friends! This example of initiative is in keeping with the man’s character. After receiving his initial training from an established firm, he struck out on his own and built up his own set of clients. Today, customers happily recommend him.

The second person I want to bring to your attention is a magazine vendor who plies his wares along Uhuru Highway. This ever-smiling chap is renowned for his energy and gusto as he runs up and down the highway every day in search of customers. Due to his friendly nature and exceptionally pleasant service, he has an extremely loyal customer base. To these customers, he offers services that most shopkeepers would baulk at, such as sourcing hard-to-find magazines, and even offering credit facilities! Come rain or shine, his megawatt smile will brighten your day on that jam-packed highway.

I believe it is people like this dog trainer and this magazine vendor who have kept this country afloat. They are the beating heart at the centre of our economy.

They are part of a breed of Kenyans who do not look to the government to sort out their lives for them. They do not wait for consignments of foreign aid to arrive in order to boost the economy. They are not looking for multi-national corporations to invest in this country. They are not angling for a distant relative to offer them employment at a parastatal. No, these people make things happen for themselves. They learn a trade, grit their teeth and get out there.

They are everywhere. Look at our roads and you will see a teeming mass of taxis, matatus, tuk-tuks and mkokoteni carts. Visit a market and you will find people buying, selling, cooking, eating, bargaining and counting. Visit an informal workshop and you will find people twisting metal, carving wood, weaving reeds or painting signs. There is activity everywhere. There is no shortage of resolve, no lack of determination, no dearth of ideas.

And, as my two examples showed, there is also often no problem with standards. Many of our ‘informal’ entrepreneurs have an instinctive understanding of customer service that would put formal institutions to shame. The dog trainer’s calendar, for example, did not contain a single spelling error or typographical mistake. Compare that with an advertisement I saw in the press recently, placed by the University of Nairobi, describing its Master of Business Administration (MBA) degree. This advert, placed in full colour and presumably at great expense, contained no fewer than thirteen errors in spelling, grammar and layout. Who is enforcing higher standards – the dog trainer with no formal training in English, or the venerable institution?

In fact, the university example reflects that there is, unfortunately, another breed of people at work in this country. These are those who regard the acquisition of a university degree of questionable quality as the beginning and end of their achievements in life. Dubious degree in hand, they will use sycophancy, nepotism or tribalism to get themselves a job in a public or private institution. Once in situ, they will relax. The rest of their careers will be spent agitating for better pay and conditions – with no corresponding improvement in productivity whatsoever. The institution they work for is their ‘mama na baba’ for life. It must provide good pay, housing, transport, school fees, etc throughout their lives as a matter of right.

People in this latter group have dominated the country in terms of status and power for too long. They have been a drag on our progress. They have no drive, no new ideas and no contribution to make other than occupying office. It is time we consigned them to history.

For this to happen, we must focus our development efforts on the entrepreneurial base in this country. The World Bank’s Callisto Madavo said recently: “To reduce poverty in Africa, nurturing entrepreneurship in disadvantaged areas is essential. The entrepreneurship is there. We have to give it a chance, to give it an environment in which it can truly flourish. And when I say entrepreneurship, I talk about people, I talk about the small entrepreneurs and those who depend on them…we have to give these people the opportunities that they have been lacking until now.”

The little businessman and businesswoman must be brought into the embrace of the formal economy. It is telling that when the government made its much-derided claim that 400,000-plus jobs were created in 2003, the figures were dominated by the informal sector. To date, the informal sector has been growing of its own accord, quite independently of government initiatives, and often in spite of them. It is time government woke up to what it can do to boost the self-help economy.

Government’s rightful role is to provide organisation, regulation and incentives. Hawkers and stallholders are not given an organised venue in which to trade, and so they conduct their business here, there and everywhere. They are not governed by consistently enforced rules regarding sanitation, and so they mess up the environment. They are not able to place legal claim on their assets, and so they cannot raise additional capital to grow their businesses. They are not given any tax incentives, and so they stay in the black economy. It is time some real thought and effort was given to recognising and formalising the activities of these busy little people.

They also need guidance and education. Most would benefit from understanding basic accounting practice. Many are on the threshold of growth, but lack the knowledge of formal business planning. Still others need to know how to manage a growing workforce. These skills are easy to provide, if the will is there. We have a plethora of universities in this country, but where are the institutes that provide practical business skills to the multitudes of small-scale entrepreneurs out there? Such establishments would, I believe, receive enthusiastic support from donors, who would provide the funding; from civil society, which would provide the organisation; and from the private sector, which would provide mentoring and skills transfer.

The government, for reasons unknown, has had a different emphasis thus far. It prefers to spend Shs 4.5 billion on restructuring institutions like the National Bank of Kenya. That sort of money put in the hands of the busy bees of the informal economy could reap real dividends. Let us give them legitimacy, finance and a framework in which to strive. It is time they were brought in out of the hot sun.