Effects of Post Election in the Informal settlements (Nairobi)

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1 Effects of Post Election in the Informal settlements (Nairobi) Background Kenyans have experienced relative peace and stability for decades since the declaration of its independence in 1963.This has promoted growth and development for individuals and the country as a whole. However, all these were reversed by political disagreements occasioned by the results of presidential elections in December, A wave of violence followed leading to an internal displacement of over 350,000 people and refugees in Uganda standing at approximately (United Nations Office for the Coordination of Humanitarian Affairs, UNOCHA) The informal settlements of Nairobi witnessed a serious escalation of armed conflict with looting of business premises and in worst case scenarios arson to houses and businesses. This uprooted many people from their homes and destroyed livelihoods which many poor people depend on. Casual labour associated with many people in the slums was paralyzed and therefore many people couldn t access their daily wages. On the other hand, the small businesses operated by different people within the communities had to temporarily come to a halt. The wave of violence in the slums led to people hacking each other on ethnic basis and also the police shooting others perceived to be breaking the law. This gave rise to considerable realignment in these area based on ethnic identifications, certain tribes moved to certain parts of the slums which they perceived to be friendly. This situation completely destroyed the market place and rendered almost all households vulnerable to the smallest of financial shocks. Generally life in the slums is based on strong social networks which enhance the market place operations. Therefore, in the circumstances witnessed in the country these relationships have been completely destroyed making it difficult for business interactions in the market place. Methodology Data collection was conducted in the month of January and February This was basically through face to face administered questionnaires. Different church leaders were identified and through them the questionnaires were administered to members of their churches and community at large. This process involved over 30 churches that were used to facilitate the questionnaires. A follow up interview was conducted with pastors in Kawangware (13), Kibera (5), Korogocho (11) and Kabiria (2) to ascertain the humanitarian and development situation in these areas. Consultation1

2 Research Findings There is a strong presence of Churches in the informal settlements ranging from mainstream churches, Pentecostal to African Instituted churches. A good percentage of these Churches become unsustainable because the church membership significantly dropped. The violence forced some of the church members to move to safer areas while some of these church members went to their rural areas and did not return due to security concerns. Moreover, Church members businesses were destroyed or looted making it difficult for them to support their churches through giving. Similarly, those who access employment in the industrial areas lacked the opportunity to access these employment opportunities thus further crippling the churches. It is indicated that there are churches that shifted their operations to other areas because of the inability to pay monthly rents. Women are the majority business owners in the informal settlement; they constitute approximately 67% of the total Businesses community. Often times their education levels don t permit them to access some of the casual work available within the adjacent industrial areas of Nairobi. Moreover most jobs in these places are very manual hence becoming unattractive to the womenfolk. The joy of taking care and raising of children have also forced many of them to engage in business because of its flexibility, this is confirmed by the size of households which constitute approximately 5 children by the time they are 32 years old. The violence complicated the already vulnerable households by destroying many of their businesses; this was confirmed by the fact that 62% of these households have children under five years old. 71% of these businesses operated by women are Grocery and Cereals kiosks, Second Hand Clothes/ shoes, tailoring and Fuel (Charcoal, Paraffin Businesses). Roadside food manufacturing in the open is also common among women and all of these businesses had a start up capital of less than 10,000 Kenya Shillings. On the other hand, men constitute the larger population that seeks employment in the industrial area on casual basis. However, there are still those who are engaged in small businesses within the informal settlements. Many of the men operate Butcheries, Pubs, Video Halls (Small Cinema Halls), Metal works and Carpentry. These had business startups of over 20,000 Kenya Shillings. Challenges to Businesses All members of the community who lost their businesses intended to re start the same type of businesses they were operating before the outbreak of the armed conflict. This is because these businesses are the ones they have experience and expertise in. There are those also who had already re started their businesses but were not getting enough from them because of the reasons below. 1. The supply costs from the source markets had considerably gone up by more than 30% hence making it difficult for people to still sell at the same prices as they used to do in the eve of general elections. This was especially common for food related products and the manufactured ones due to increased transport costs. Consultation2

3 2. Many people were forced to smuggle in their raw material especially foodstuffs from the source markets because in some communities rowdy youths have erected illegal road blocks where they asked for some form of illegal tax or even the merchandise itself. 3. There were a number of businesses which were affected by the relief food distributed at the Internally Displaced Camps. A) People did not see the need to run their businesses because they could access relief food which fetched a higher income in monetary terms. It is estimated that a large number of people at the IDP camps in essence at Jamhuri Show ground were actually people who come from Kibera and were not displaced. They stayed at the camp the whole day and come back to their houses in the evening. Much of relief efforts therefore end up in the wrong hands because the weak people who really needed it cannot access it. B) Residents spend most of their time collecting relief supplies from Jamhuri show Ground and different sites. This rendered many businesses useless because many people were not willing to buy or simply many of them just lacked the purchasing power to do so. Some collected a large proportion of relief supplies and stored them in their houses; they were hoarding them while others sold them at lower prices further distorting the market forces. 95% of business merchandise was destroyed because many people stored their products in their stalls. The figure is also higher than the number of premises destroyed (86%) because in certain instances the people just looted and never burnt down the businesses structures. Roadside cookery (Businesses which are usually conducted on the roads where people come with sitting stools and cooking equipments) which surprisingly constitute less than 10% of the businesses sampled was not destroyed but the owners could not access the market for one week and therefore the perishable goods were thrown away because they went bad in their houses. The research found out that 38% of the people owned their businesses premises while the rest rented them or just traded by the roadside where there is no business structure. In places where business structures were completely destroyed a tussle emerged with different people coming up to claim ownership. Due to this eventuality, many people feared building any structure and therefore they bring their wares, products and services where there used to be shop premises then carry them back to their houses in the evening. This increases social and psychological costs to these businesses. The reason for this tussle is because many of these outlets were built on pedestrian walkways and road reserves hence nobody can have legal claim. However, it is worth noting that the businesses that used to be in these places supported a large proportion of residents in supply of basic essentials and income to the owners. Consultation3

4 The same case applies to a market like Toy Market (Kibera) where ownership of space was not protected by the law but by Gentleman/lady agreements. New people have therefore emerged claiming ownership. On the other side, the market in Korogocho (Soko Mjinga) and the Kawangware market were not affected. Korogocho was not adversely affected by the war because the youths set out to protect it from outside influence, incidentally Korogocho has always had tribal wars in the past, December 2007 was just an exception because of a deliberate effort by community members. However its outskirts like Gomongo, Lucky Summer, Baba Dogo and Kariadudu were greatly affected. In essence, Kariadudu was unstable longer than other slums. Men were forced to stay within the estate instead of going for their regular casual jobs in the light industries so as to protect the estate from outside aggression, this means going without sleep at night. As such many of these people were laid off from where they used to access casual labour and the market cannot operate normally due to lack of purchasing power and insecurity. Financial Provision Savings groups constitute the source of finance for various needs in the informal settlements, 39% of these business persons belong to local savings groups while 19% are members of Micro Finance Institutions. The local savings groups are mainly Rotating Savings and Credit Associations (ROSCAs) locally known as Merry go Round while a very slim number belong to Accumulating Savings and Credit Associations (ASCAs). The ASCAs are those linked to the Churches and NGOs like CARE Kenya in the slums. Much of business startups come from the local informal financial institutions, while upscaling of businesses was done by the local savings groups as well as the Micro Finance Institutions. The MFIs were Faulu Kenya, Jamii Bora SISDO, SMEP and K-REP. An estimated 48% of the business community in the informal settlements is not part of any form of financial institution. Their business startups were facilitated through savings, gifts and zero interest borrowing from friends and family. However, the conflict had a devastating effect on local financial institutions and indeed the Micro Finance Institutions. Burnt and looted businesses meant that those who had loans from these institutions were not in a position to pay back. Moreover, displacements and bad relations arising from the conflict imply that weekly meetings which are major strength of these groups did not take place. Savings, Loan repayments and solidarities in groups were damaged threatening the sustainability of these important institutions. The positive thing is that some MFIs developed special products besides writing off loans for their clients. However, it is difficult for Local informal financial institutions to develop any special products because even those with emergency funds cannot be able to support all the needs. Loans arise from member savings and the savings is their right unlike the MFIs who do not loan from clients savings. Consultation4

5 Recommendations The wide presence of Churches in the informal settlements provides a greater opportunity for the initiation of businesses and targeting of relief and livelihood support. The churches are closely in touch with their membership and members of the community who were affected by the conflict. A careful process of choice churches to facilitate these interventions was done. All these interventions were aimed at strengthening people relations through their existing institutions like the savings groups instead of starting new ones. However, where there are no institutions the members of the community should be helped to form one of their own instead of initiating any for them. Local institutions are critical in facilitating and enhancing good relations and reconciliation among individuals and communities. It is worth noting that if Relief and Livelihoods are sustained for a long period of time they are bound to fuel the animosity further besides destroying the social fabric and local institutions that exists in these communities. It can also completely destroy the very livelihoods it intends to build by devastating work and business ethics. MFIs still form part of the local institutions though ownership is from outside the community. However, they can still be used where they are relevant to members of the community and especially with that group of people who had started their businesses with 20,000 Kshs. This is because these will be the people who have some level of financial literacy. Churches with a large number of financially literate members can be helped to facilitate partnerships with MFIs for long term financial sustainability. By Alvin Mbola Economic Empowerment Program Carlile College-Centre for Urban Mission alvoh2002@yahoo.com Consultation5