Misallocation of workspaces for MSEs in Kenya: Lessons and models
Discussion Paper No. 53
Abstract
One of Kenya’s development goals is to provide an enabling environment for both local and foreign investors. An important element of such an environment is the physical infrastructure especially land and workspaces. An effective and functional physical infrastructure, is critical for productivity and competitiveness of both small and large enterprises. This paper examines the theories and practices of micro and small enterprises (MSEs) workspaces provision in Kenya and elsewhere and distils some lessons. These lessons have been used to design a framework for workspaces provision. Review of theories and practices reveal that state institutions, both central and local, continue to marginalise and exclude the sector from mainstream policy and regulatory framework, viewing it as a temporary phenomenon. Provision of land and workspaces are the two main infrastructural concerns for micro and small Enterprises in Kenya, which continue to act as a constraint to the growth of the sector. Even where MSEs have had access to worksites, lack of properly defined property rights has meant a perpetual insecurity of tenure problems in their workspaces. This is especially so within the urban centres where there is intensive competition for land and other infrastructural facilities. Local authorities, which are mandated to provide MSE workspaces, are yet to appreciate the role and potential of MSEs in local socio-economic development. Overall, development and provision of MSE worksites has been constrained by poor institutional and policy framework that results in conflicting roles, governance problems and sub-optimal land uses. Past efforts to provide workspaces for MSEs have lacked comprehensiveness and continuity. Recognising that the MSE sector is a very heterogeneous sector with varied workspace requirement, the paper attempts to categorize workspace by broad categories of manufacturing, trade and service categories The proposed model aims at achieving a coherence institutional framework that is decentralised as well as demand-led. Finally, the paper acknowledges that the implementability of such a theoretical model is dependent on other reforms, especially within the local authorities.
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