Domestic services play a key role in economic growth

[dropcap]T[/dropcap]hat Kenya is increasingly tapping a growing number of industries to drive economic expansion is a no-brainer. By and large, the growth of any country, is driven by interconnected sectors. The 2016 Kenya Country Economic Memorandum (CEM) by the World Bank, for example, notes that between 2006 and 2013, 72 per cent of the increase in gross domestic product (GDP) came from the service sector.

Expansion in services such as Fintech and communications stimulated demand for other services, such as trade, according to the report. Surprisingly, Kenya’s domestic services sector largely remains untapped, despite its immense potential to contribute to the Kenyan economy. Domestic workers; cleaners, cooks, gardeners, nannies and housekeepers comprise a substantial part of half of the global workforce that is in informal employment.

Kenya’s food and drink industry is perhaps the most developed in the region, with the country leading in hotel and supermarket numbers. The rapid expansion of major food chains, entry of global supermarkets and new international brands is a clear manifestation of this. Additionally, with tourism being one of the region’s biggest earners and with a huge growing middle class, the food and beverage industry is set for exponential growth. There is therefore a growing need for expertise to serve this flourishing market.

The CEM report proposes some “how-to” ideas to sustain growth in the services sector. Interestingly, most of the jobs within the period were created by the informal economy and are concentrated in low-productivity areas such as trade, hospitality and jua kali entrepreneurs who can be hired to do just about any task.

The International Labor Organization (ILO) estimates that there are 67 million domestic workers, aged 15 years and older, worldwide (ILO, 2015c). Fifty million of these are estimated to be in informal employment, making it one of the sectors with the highest share of informal employment.

Locally, domestic services is shaping up as one of the biggest employers as is with housekeeping and laundry in the country’s hospitality industry. However, the domestic services sector largely remains unstructured.

This calls for deliberate investments to improve the fortunes of this key segment. Increasingly, more and more domestic workers are willing to pursue further education to build on their skills, in effect mainstreaming this sector.

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But besides getting into formal and self- employment, the youth trained in domestic services can be empowered and facilitated to operate own businesses, where they can in turn employ their peers. They can, for example, operate businesses such as coin laundry; commercial-grade, self-service laundry equipment strategically placed at the numerous malls spread across the country, apartments or high density residential areas in urban centres.

Specifically, the coin laundries are unique in that they have no receivables or inventory, and can be operated whole day or even run 24 hours. Additionally, the youth can be facilitated to set up mobile cleaning units or container depots where they can conduct their businesses.

It’s on this background that the KCB Foundation has partnered with technical training institutions to support training of domestic workers under its 2jiajiri programme. Upon training the beneficiaries are provided with business development support services and access to capital in form of discounted loans to start or expand their domestic service businesses.

Mobile eateries

Over 1,000 youth have to date benefited from the domestic services programme. The Foundation has organised the beneficiaries into groups to enable them set up sustainable businesses in the catering, hospitality and housekeeping sub-sectors. The beneficiaries will eventually be linked to established businesses in the sector keen on sub-contracting as a service. They will also be supported to venture into mobile eateries.

2jiajiri is a wealth and job creation programme launched in 2016 which seeks to formalise the informal sector and skill for self-employment and targets the youth and small businesses. The programme has a three-step approach; Inception, where vocational skills training is provided in the areas of agribusiness, automotive engineering, beauty and personal care, building and construction and domestic services; Two, incubation, where programme participants receive finance support as well as business development services (BDS) for their existing or new businesses for a year.

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BDS is deployed through a three-member consultancy team drawn from a pool of graduates from leading local universities to offer legal, marketing and financial management support to the Small and medium-sized enterprises (SMEs); Three, maturity, where the small and medium businesses become bankable and can secure business services from a financial institution.

Innovative initiatives such as these will not only open up the space in the domestic services sector but will also guarantee employment opportunities for Kenya’s youth.