Self-Help Groups and Income Generation in the Informal Settlements of Nairobi



3Thesetting

3.1 Informal settlements and self-help groups in Nairobi

It is estimated that in 1993 more than 55 percent of the population of Nairobi lived in ‘informal
settlements’, i.e. squatter communities where inhabitants have no legal right or at most a quasi-
legal right, in the form of temporary occupation right from the Local Authority or a letter from
the Chief.3 These informal settlements in turn cover less than 6 percent of Nairobi’s residential
area, which leads to an average density of 250 dwellings and 750 persons per hectare as compared to
about 10 to 30 dwellings and 50 to 180 persons per hectare in upper and middle income areas (Alder
et al. (1993)). Until the late 1970s the government policy was to demolish informal settlements
throughout the country, while since the early 1980s they gradually became tacitly accepted, with
occasional episodes of demolition and resettlement of the population to other areas (for example, in
Nairobi Muoroto and Kibagare in 1990, Mitumba in 1993). Uncertainty over basic property rights
adds to that over land tenure to generate a pattern of extreme insecurity where almost no investment
is made in infrastructure and local public goods. Dwellings are entirely made of temporary materials
such as mud, wattle and timber offcut, and waste disposal is done on the street and in the rivers.
Most sites have virtually no sewerage systems and hygienic conditions are extremely poor.

The inhabitants of squatter communities usually work in the informal sector. Most of them
are involved in hawking, are occasionally employed for the day, or operate small businesses without
licenses. A non-negligible fraction is also involved in illegal activities. Particular relevance have small
businesses known as “jua kali”, which encompass manufacturing activities, repair and services, and
employ a large number of mechanics, carpenters and construction workers that serve other areas of
Nairobi as well.4 The attitude of the City Council has historically been that of discouraging this type
of employment, but in recent years the o¢cial stand on this issue has shifted, possibly in recognition
that the lack of employment opportunities in the formal sector for many slum dwellers called for
3 Technically, when some form of legal rights exists these may not be viewed as “squatter communities”, but in this
paper that terms will be used interchangeably with “informal settlements” and “slum”.

4The term “jua kali” was originally created to indicate p eople who work “under the sun” with no permanent
structure, but has extended to represent the whole informal small business sector.



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