Stakeholder Validation Workshop: A National Strategy on the Coordination of Kenya’s MSE Sector

Workshop Brief and Objectives

Kenya’s Micro, Small Enterprise (MSEs) sector consist of formal and informal enterprises that employs 1-49 workers. Over the years, the sector has been a notable source of employment. For example, based on the 1999 MSE National MSE Baseline Survey, MSEs employed half of working population. As at 2016, the MSME Baseline Survey estimates the sector employed 93% of the working population. Further, 75% for formal establishments in Kenya are MSEs.

Such contribution notwithstanding, the MSE sector vibrancy has been constrained by several factors including the policy implementation challenges and “unfavourable policy, legal and regulatory environment” as noted in Sessional Paper no. 2 of 2005 on Development of Micro and Small Enterprises for Wealth and Employment Creation for Poverty Reduction. The Sessional Paper recommended for the strengthening of the Institution that deals with MSEs in Kenya so as to strengthen policy coordination, implementation and monitoring and evaluation. Accordingly, the Micro and Small Enterprises (MSE) Act enacted in 2012 saw the establishment of Micro and Small Enterprise Authority (MSEA). MSEA was established with the statutory duty to coordinate, harmonize and facilitate the integration of various public and private sector activities, programmes and development plans relating to micro and small enterprises and other functions.

Although majority of enterprises in Kenya are MSEs employing majority of the country’s labour force, the sector is still largely under-developed. This is manifested in low survival rate of MSEs and low sector contribution to gross domestic product. The sector is further limited by skills, capital and workspace. Weak coordination among key players and duplication of activities remains a key policy challenge facing MSE sector growth and its contribution to the economy. For policy implementation to be effective therefore, coordination challenge needs to be addressed.

In view of this, MSEA contracted KIPPRA to review the situation analysis as relates to implementation and coordination of MSE support activities, review best practises of effective coordination practises in other countries and develop a strategy to coordinate, harmonize and facilitate the integration of various public and private sector activities, programmes, and development plans relating to MSE. The research team at KIPPRA has finalized the research and the draft coordination strategy. The research, analysis and recommendations were further informed by and benefited from valuable input from MSEA management and Board of Directors.

Objective of the Workshop

The upcoming National Stakeholder validation workshop is aimed at sharing the draft coordination strategy of the MSE sector with stakeholders for their input. The workshop will bring together key stakeholders to serve as a key step towards enriching the draft strategy through identification of gaps and other areas for improvement. The workshop will further present opportunity to stakeholders to deliberate on the views of stakeholders implementing MSE activities and programmes in Kenya as well as review effective evidence-based coordination mechanisms in different countries. Input received from the workshop will be used to finalize the draft coordination strategy.

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