This presentation explores the link between social security and inclusive growth in the context of Kenya’s informal sector.

The expansion of Kenya’s informal economy since the 1990s presents growing challenges for policy makers concerned to ensure that Kenya’s growth is both robust and inclusive.

The performance of the global economy continues to be defined by the COVID-19 pandemic with the war in Ukraine worsening the outlook for the world economy and Africa. For Africa ,the war in Ukraine will exacerbate food insecurity, increase fuel and food production costs, and push up the cost of living. Key global risks include the emergence of new COVID-19 variants which could prolong the pandemic and induce renewed economic and supply chain disruptions, energy price volatility, and high uncertainty around inflation and policy paths.

Kenya’s progress on inclusive financial sector development over the past five years places Kenya at the front of the curve relative to its peers. But beneath its headline success story, falling financial health and growing disparities in financial usage point to underlying challenges that compromise the ability of financial inclusion to deliver on its promise for inclusive and sustainable growth.

People’s ability to participate within the more formalised markets which characterise the modern sector of an economy is often conditioned by the degree of access to the financial system. Exclusion from finance can result in exclusion from opportunities to participate productively in value chains.

In 2016 FSD Kenya branched outside our core financial inclusion remit to embark on a new pilot in Marsabit county where we sought to develop a more holistic approach to economic inclusion. The ambition was to deepen the value of finance in people’s lives, moving beyond financial access and use and investing in building capabilities and market linkages to enable finance to yield stronger impacts on livelihood resilience and growth. Our aim was to reach the extreme poor and especially women, who are not well served by the financial sector.

This state of the economy report is a data brief on the key macroeconomic and households developments in Q2 an Q3 of 2021 as follows

This research seeks to unearth the financial needs and demands of urban female retail traders in Kenya by exploring how their financial needs are being met, through which instruments, and in turn, where the opportunities lie to drive improved or increased access to financial products.

The earning population in Kenya has risen by May 2021 from a low point in June 2020; but median income has gone down reflecting pressure on the wider economy. Check out the latest wave of the FSD Kenya COVID 19 Tracker to find out more…

In November 2020, FSD Kenya was invited to co-chair a session at the Royal Academy of Engineering’s Frontiers of Development Symposium. The 2020 symposium, bringing together experts and mid-career professionals from sciences and social sciences, debated the question: ‘How can we build resilience in world of shared resources?’. The symposium focused on 3 areas: economic resources, human resources and natural resources. FSD Kenya was asked to co-chair a session on economic resources together with Eka Ikpe of Kings College London. 

COVID-19 has underlined the need to fundamentally re-imagine the ways in which we produce and distribute resources.

In Kenya, divergence trends continue with macroeconomic resilience masking sustained inequalities and divergence in recovery. On one hand, inflation remains reasonable; export performance has been relatively strong (especially relative to other African countries); diaspora remittances have been robust; and the mobile money sector has demonstrated sustained resilience and growth.

Rather than a ‘cost’ to the state, social protection is an essential component of any sustainable, national economic growth strategy. Most of the world’s successful economies are significant investors in social protection, with spending across the OECD averaging 12 per cent of GDP.

Below, we’ll discuss the power of frameworks in shaping research and providing insights for financial inclusion policy and investment.

In mid-July we interviewed a subset of FSD Kenya/CARE’s Building Livelihoods programme beneficiaries in Northern Kenya to understand the extent to which resources built up through the programme are supporting resilience of beneficiary households during COVID-19, and how these compare and interact with traditional pastoralist coping mechanisms.

“Things are getting bad,” Vanessa told us. When we spoke with her in late June, her family had just about run out of food and were waiting for the next harvest.

The main objectives of this study was to explore the challenges faced by retail traders in Kenya, specifically women and youth traders, as well as the potential barriers and opportunities for women and youth to use digital solutions in their businesses. The research methodology included both qualitative and quantitative elements including an analysis of survey data and in-depth interviews with retail traders

Over the past four years, FSD Kenya’s Building Livelihoods programme in Northern Kenya has explored how extremely poor households can be transitioned out of poverty and into sustainable livelihoods through stronger engagements with markets.