Oxfam GB Consultancy on Empowering the Informal Sector Jobs in Kenya

Oxfam GB Consultancy on Empowering the Informal Sector Jobs in Kenya

About Oxfam

Oxfam is an international confederation of 21 organizations, working with its partners and allies, reaching out to millions of people around the world.

Together, we tackle inequalities to end poverty and injustice, now and in the long term – for an equal future.

Oxfam has been operating in Kenya since 1963.

The geographical focus of our programmes has been the urban areas mainly Nairobi City and arid and semi-arid lands, where we have been working with the poor and vulnerable groups to realize a transformed Kenyan society that challenges poverty and inequality to claim their rights.

Background Information

The informal economy relates to economic activity that is unregulated or unprotected by the State.

It is associated with small-scale traders, small holder farmers, casual labourers, artisanal miners etc.

It comprises two thirds of the global workforce and up to 90% in Sub-Saharan Africa, majority of which are women.

Policies and developments affecting the informal economy, therefore, have the ability to drastically improve women’s economic position.

Kenya’s informal sector employs almost 15 million (2018), compared to the 2.9 million who work in the formal sector.

They have few legal protections including lack of unemployment benefits, safety regulations, or social security.

The informal sector generated 83.6% of total employment in 2018 and 33.8% of GDP in 2015 (KNBS).

Nine in every 10 informal sector workers are in informal microenterprises.

Social security coverage is generally low in the informal economy with 75.7% of the enterprises not paying the monthly National Social Security Fund and National Hospital Insurance Fund contributions for their workers.

There exist low levels of unionisation among informal enterprises and up to 99% of informal workers 99% do not belong to any trade union.

About one-half of informal enterprises are financially constrained due to inadequate collateral, lending ceilings and high interest rates.

A mere 1.4% of informal enterprises are ready to formalise while less than 1% are fully formalised.

The costs of formalisation (which include high costs of compliance with tax regulations, existence of too many procedures and delays, high cost of compliance with social security regulations and labour laws, lack of information and informal costs incurred through corruption) appear to outweigh the gains from formalisation.

These gains include reduced cost of inspection, better access to credit, access to strategic business location, expansion of clientele base and eligibility for business development services and other support programmes.

A major factor that drives informality in Kenya is lack of opportunities to do business with the government and failure to export goods and services.

The micro, small and medium enterprises that trade with the government and export their goods and services are more likely to be formal than those who do not.

The Perceived Constraints Include:

Lack of access to or difficulty accessing markets;

A prohibitive business environment including difficulties in getting licenses;

Lack of or inadequate access to information and services on compliance to taxes;

Difficulty accessing credit; and

Inadequate skills among others.

However, despite the richness of the information on barriers and bottlenecks in the informal economy, the limitations and weaknesses of policy measures and interventions continue to hold back these players.

Purpose of the Assignment

Oxfam in Kenya is seeking the services of a researcher and strategist consultant to explore approaches to better capture the informality and look into the factors and policies that could trigger transformative change.

The overall purpose is to develop research and concrete policy advocacy asks from the generation of evidence by addressing the following specific questions;

How effective has the informal economy policy, legal and regulatory framework been in governing the sector?

Which policy measures have had unintended consequences (both positive and negative) on the informal economy?

Which policies or tools have worked and what is the evidence?

How can we continuously monitor and evaluate the effectiveness and impact of policies and programmes targeting the informal economy including but not limited to:
how the Ministry of Industry, Trade and Cooperatives in conjunction with the Registrar of Companies, Kenya Revenue Authority, National Social Security Fund, National Hospital Insurance Fund and the National Treasury should review their procedures and flex regulations around acquisition of relevant documents for formalisation;

how the informal economy can gain access to social security coverage (how The National Social Security Fund and National Hospital Insurance Fund can develop, implement and promote hybrid social security and health insurance schemes with centralized management, oversight and risk-pooling

How can we increase our understanding of the demographics, motivations and experiences of players in the informal economy better and what should be done to promote an enabling policy and regulatory environment to address their specific needs.

The Objective of the Consultancy is:

To develop concrete policy advocacy asks around the research questions

Methodology

The researcher strategist needs to review relevant literature on the above research questions, identify locations of research for the target populations, develop research tools, undertake key informant interviews (KIIs) and focus group discussions (FGDs), develop a technical and financial proposal and a report as well as advocacy strategy for Oxfam in Kenya.

Timelines and Deliverables

The consultant shall deliver the following within 20 consultancy days between November 1 – 30, 2022:

An inception report comprising research tools and questions, target populations, research itinerary and literature review within eight (8) working days of contract signing

A verbal update/ status update meeting of all the field work within two (2) working days of their conclusion

A first draft within five (5) working days of the status update meeting comprising no more than 35 pages

Presentation of the draft report at a stakeholder validation meeting

A final draft within five (5) working days of feedback from Oxfam on the first draft

Presentation of the final report at the launch of the report

Consultancy Responsibilities and Management Arrangements

The consultant shall work under the supervision of the Tax Justice Strategist and Programme Officer.

Skills and Competencies

The desired specification and qualities of the consultant(s) are as hereunder:

Demonstrated knowledge and experience of development issues

At least 5 – 8 years experience of policy development and advocacy

High quality skills and demonstrated experience in similar pieces of work

Strong communication (verbal and written) skills in English. Proficiency in Kiswahili is an added advantage

Excellent research and strategy development skills

Selection Process and Expectations For the Proposal

The consultant who meets the above requirements should express their interest by submitting the following:

Suitability statement, including a CV and commitment to availability for the entire assignment in the month of October 2023.

Examples of previous similar work

A technical and financial proposal

Contacts of three referees that have recently contracted the consultant to carry out similar assignments.

Note: The entire bid should be a maximum ten (10) pages inclusive of the above.

This should be combined with informal economy association-based membership mobilization, collection and remission of premiums towards the social security and health insurance schemes).

How to apply

Consultant is expected to submit their bid by October 28, 2022, to kpconsultancyservices@oxfam.org.uk

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