the contribution of informal sector on poverty …

i

THE CONTRIBUTION OF INFORMAL SECTOR ON POVERTY

REDUCTION: A CASE OF STREET VENDORS IN ILALA

MUNICIPALITY, DAR ES SALAAM

By

Gloria Stewart Mlang’a

A Dissertation Submitted in Partial Fulfillment of the Requirements for the

Award of the Degree of Master of Public Administration (MPA) of Mzumbe

University.

2019

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CERTIFICATION

The undersigned certifies that he has read and hereby recommends for acceptance by

the University of Mzumbe a dissertation entitled The Contribution of Informal

Sector on Poverty Reduction: A Case of Street Vendors of Ilala Municipality in

partial fulfillment of the requirement of the degree of Master of Public

Administration of the University of Mzumbe.

……………………

Major supervisor

…………………..

Internal Examiner

Accepted for the Board of………………….

__________________________________________________________

DEAN DIRECTOR /FACULTY/DOCTORATE/SCHOOL/BOARD

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DECLARATION

AND

COPYRIGHT

I, Gloria Stewart Mlang’a, solemnly declare that this dissertation does not

incorporate without due acknowledgement any material previously submitted for a

degree or diploma certificate to any Higher Learning Institution, and that to the best

of my knowledge, belief and understanding, it does not contain material previously

published or written by another person except when due reference is clearly

exemplified in the text.

Signature……………………………………..

Date …………………………………………

© 2019

This Dissertation is copyright material protected under the Berne Convention, the

Copyright Act 1999 and other international and national enactments, in that behalf,

on intellectual property. It may not be reproduced by any means in full or in part,

except for short extracts in fair dealings, for research or private study, critical

scholarly review or discourse with an acknowledgement, without the written

permission of Mzumbe University, on behalf of the author.

iii

ACKNOWLEDGEMENT

I, Gloria S Mlang’a wishes to express my profound appreciation to Dr Cliford Ringo

my supervisor, who supervised my work, encouraged my efforts and displayed a

great deal of patience and understanding during the period of writing this thesis.

Sincerely, appreciation should be also extended to my lovely husband Mr Innocent

Deus, for being supportive. I further thank my dear father and friends for their

support and guidance to complete my report. I feel indebted to Ilala Municipality

street vendors who took part in this study. Their participation greatly facilitated

completion of this report. Great thanks are also extended to my family and siblings

and my house maid who helped me to take care of my sons during my studies.

I am also indebted to all Mzumbe staff for their academic and social contributions

during my stay at their campus.

Should there be any shortcomings in this report, I alone deserve accountability.

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DEDICATION

I dedicate this study to my lovely parents, Mr and Mrs Stewart Mlang’a for their

tireless tender love and prayers, moral and financial support during my study,

without forgetting my husband Mr Innocent Deus for his encouragement and

financial support, my two brilliant sons Ian and Ivan Innocent Deus, I love you both,

God bless you.

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LIST OF ABREVIATIONS AND ACRONYMS

CSOs - Civil Society Organizations

GDP - Gross Domestic Product

ILO - International Labour Organization

LDC - Less Developed Countries

MDC - Mbarali District Council

MKURABITA - Mpango wa Kurasimisha Rasilimali na

Biashara (Swahili version of “Tanzania Property and

Business Formalization Program”)

MSMEs - Micro, Small and Medium Enterprises

NGOs - Non-Governmental Organization

Ms - Microsoft

SVB - Street Vending Business

TZS - Tanzania Shilling

URT - United Republic of Tanzania

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ABSTRACT

This study was about the contribution of informal sector on poverty reduction in

Tanzania paying specific attention on street vendors in Ilala Municipal Council. The

study was guided by four (4) specific objectives, namely: To find out types of

informal sector activities performed by street vendors of Ilala Municipal Council; to

determine the average income that street vendors in Ilala Municipal Council set; to

explore the extent to which street vending business contributes to poverty alleviation

among the street vendors in Ilala Municipal Council and to identify factors that limit

street vending activities.

Case study research design was employed in this study and the sample of 99

respondents was selected using purposive and accidental sampling techniques.

Questionnaires, interviews and documentary reviews were used as data collection

methods. Analysis was done using descriptive statistics for quantitative data with the

aid of both SPSS and MS-Excel while for qualitative data, content analysis was used.

The findings indicated that, several types of informal sector activities were

performed by the street vendors in Ilala Municipality ranging from selling of second

hand clothes, second hand shoes and other items such as bags, plates, glasses,

spoons and alike. With regards to average income, it was found that, most of street

vendors earn between TZS 5000 and TZS 10,000 per day through street vending

business. The study further showed that, street vending business contributed to

poverty reduction through self-employment. Moreover, factors which limited street

vending activities include lack of financial support, lack of entrepreneur skills, lack

of government support and lack of policy related to informal sector.

The study concludes that despite the fact that the informal sector has often been

described as economically stagnant and unproductive, but to some extent has positive

impact on poverty reduction. It is therefore recommended that government should

encourage NGOs, financial and microfinance institutions to provide credit and

financial support to the street vendors so as to expand their businesses

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Table of Contents

CERTIFICATION ...................................................................................................... i DECLARATION ........................................................................................................ ii AND ............................................................................................................................. ii

COPYRIGHT ............................................................................................................. ii ACKNOWLEDGEMENTS ...................................................................................... iii DEDICATION ........................................................................................................... iv LIST OF ABREVIATIONS ...................................................................................... v

ABSTRACT ............................................................................................................... vi LIST OF TABLES .................................................................................................... ix LIST OF FIGURES ................................................................................................... x

CHAPTER ONE ...................................................................................................... 11 INTRODUCTION AND BACKGROUND TO THE PROBLEM ................ Error!

Bookmark not defined. 1.0 Introduction ............................................................................................. 11 1.1 Background to the problem ..................................................................... 11

1.2 Statement of the problem ........................................................................ 13 1.3 Research objectives ................................................................................. 13

1.3.1 General objective..................................................................................... 13

1.3.2 Specific objectives................................................................................... 13

1.4 Research questions .................................................................................. 14 1.5 Significance of the study ......................................................................... 14

1.6 Scope of the study ............................................................................................ 14 CHAPTER TWO ....................................................................................................... 16 LITERATURE REVIEW........................................................................................... 16

2.0 Introduction ...................................................................................................... 16 2.1 Theoretical literature review ............................................................................ 16

2.2 Empirical literature review ............................................................................... 22

2.3 Research gap .................................................................................................... 26 2.4 Conceptual framework ..................................................................................... 26

CHAPTER THREE ................................................................................................. 28 RESEARCH METHODOLOGY ........................................................................... 28

3.0 Introduction ............................................................................................. 28 3.1 Research design ................................................................................................ 28 3.2 Area of the study .............................................................................................. 28

3.3 Population of the study..................................................................................... 28 3.4 Sample size and sampling procedure ............................................................... 29

3.5 Sources of data ................................................................................................. 30 3.6 Methods of data collection ............................................................................... 30 3.7 Data Analysis procedure ......................................................................... 31

3.7 Data validity and reliability .............................................................................. 31

3.8 Ethical consideration ........................................................................................ 31

CHAPTER FOUR .................................................................................................... 32 FINDINGS, ANALYSIS AND DISCUSSION ........... Error! Bookmark not defined.

4.0 Introduction ...................................................................................................... 32 4.1 Respondents general information ..................................................................... 32

viii

4.2 Types of informal sector activities performed by street vendors of Ilala

Municipal Council. .................................................................................. 35

4.3 The average income that informal sector provides to the street vendors of Ilala

Municipal Council ................................................................................... 39 4.4 The extent to which street vending business contributes to poverty reduction

among the street vendors of Ilala Municipal Council. ............................ 46 4.5 Factors that limit these activities ...................................................................... 48

CHAPTER FIVE ...................................................................................................... 55

SUMMARY, CONCLUSION AND RECOMMENDATIONS ............................ 59 5.0 Introduction ...................................................................................................... 59

5.1 Summary of the study findings ........................................................................ 59 5.2 Conclusion........................................................................................................ 60 5.3 Recommendations ............................................................................................ 61 5.4 Area for further studies .................................................................................... 62

REFERENCES ......................................................................................................... 63 APPENDICIES ......................................................................................................... 68

Appendix I:............................................................................................................. 68 Appendix II: ........................................................................................................... 74 Appendix III: .......................................................................................................... 80

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LIST OF TABLES

Table 3.1: Population and sample size distribution …………………...……………21

Table 3.2: Sample size distribution ………………………….……………………...22

Table 4.1: Gender of respondents ………………………………………………..…29

Table 4.2: Age of respondents …………………………………………….………..30

Table 4.3: Marital status of respondents…………………………………………….30

Table 4.4: Number of children of respondents …………………………………..…31

Table 4.5: Number of dependents of respondents …………………...……………..32

Table 4.6: Level of education of respondents ……………...……………………....33

Table 4.7: Business engaged by street vendors …………………………………….34

Table 4.8: Duration of activity (business)…………………………………..………36

Table 4.9: Major source of initial capital to start business ……………….….……..37

Table 4.10: Source of savings to start business ……………………………….……38

Table 4.11: Satisfaction of business ………………………………………………..39

Table 4.12: The average income earned per day ………………………..………….40

Table 4.13: Sufficiency of the income earned per day………………………….…..41

Table 4.14: Effort made to increase income ………………………………..………42

x

LIST OF FIGURES

Figure 2.1 Conceptual framework…………………………………………………..19

Figure 4.1: Vending activities taking place at ILALA …………………………..…35

Figure 4.2: Help to access basic needs …………………………………….………..43

Figure 4.3: To take care of family/relatives/parents ………………………….…….44

Figure 4.4: To pay for rent, water bills and electricity ……………….…….………46

Figure 4.5: Help in life sustaining in general ……………………..…...……..……..47

Figure 4.6: The extent the income generated help to run street vendors’ lives …....48

Figure 4.7: Income generation ……………………………………..……………….49

Figure 4.8: Self –employment…………………………………………………….... 50

Figure 4.9: Life capability ……………………………………………………...…...51

Figure 4.10: Lack of financial support ……………………………..………….……52

Figure 4.11: Lack of entrepreneur skills …………………………………………....53

Figure 4.12: Unfriendly government law enforcement mechanisms ……………….54

Figure 4.13: Street vendor ‘machinga’ confronts with police militia ‘mgambo’.…..55

Figure 4.14: Lack of government support …………………………………..………56

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CHAPTER ONE

PROBLEM SETTING

1.0 Introduction

The informal sector has regularly been depicted as monetarily dormant and inefficient,

including the incompetent, uneducated and politically latent individual from the network

(Sibhat, 2016). This examination is an endeavor to look at road distributing business as a

feature of casual part to build up the degree it adds to neediness annihilation. Therefore, this

chapter provides introduction and background to the problem, statement of the problem,

objectives, research questions, significance of the study, scope, limitations of the study and

organization of the report.

1.1 Background to the problem

The informal sector refers to the part of the economy that falls outside the domain of

monetary economy (Magehema, 2014). Verifiably, casual area can be followed back in the

late 1970s; a huge segment of the populace in the creating nations was all the while

experiencing destitution and as yet working outside the composed division in exercises that

were later extensively named as "casual". Monetary development was not permeating down

to the majority quick enough. Because of populace development and urban relocation, the

dynamic work power was developing at a quicker rate than the accessibility of employments

in the composed part. The focal point of advancement arrangements was continuously

moving from unadulterated monetary development to development with value and the

destruction of destitution. Intrigue was along these lines produced in areas outside the sorted

out economy that was giving a vocation to a huge segment of poor people. Subsequently, the

idea of the casual part was conceived (Sibhat, 2016).

At worldwide dimension, casual segment has been assuming a noteworthy job in destitution

mitigation. For example, it gives occupations and diminishes joblessness and

underemployment, however by and large the employments are low-paid and the professional

stability is poor. It supports innovative action, yet at the impediment of state guidelines

consistence, especially with respect to assessment and work guidelines (Mwakabonga, 2015).

It is approximated that, about 85% of all new work open doors around the globe are made in

the casual part (ILO Report, 2016). In North Africa, casual economy gives 48% of non-

farming work; 51% in Latin America; 65% in Asia; 72% in Sub-Saharan Africa and 27% in

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Rwanda. The 2015 Kenya financial overview report affirms that the casual division had the

biggest offer of work representing 82.7% of the all-out business (Uwitije, 2016). The casual

economy division does not just give work to the low-salary gathering, yet it likewise

contributes to a great extent to the general GDP development in various nations. For example,

in 2015, it contributed up to 35.5% of GDP in South Asia, 41.5 % in Latino America and

Caribbean, about 42.3% in Sub-Saharan Africa and 34.3% in Kenya (UN-Habitat, 2017).

In Tanzania, the acknowledgment of the monetary estimation of the casual part came not long

after the financial hardships in the mid-1980s. The monetary hardships constrained the

administration to reappraise its recognitions and arrangements towards nearby, indigenous

innovations and ventures (Maliyamkono and Bagachwa, 1990). Paschal (2011) demonstrates

that, the division gives business chances to countless individuals and furthermore it is a

system to create and redistribute development in Tanzania.

Much the same as different types of casual area, in Tanzania, sustenance distributing frames a

standout amongst the most obvious portions of casual part and speaks to a huge offer of the

urban casual workforce after locally situated laborers in creating nations (Luberki, 2015).

Road distributing is not just observed as one of the alternatives for gaining a living even with

expanding destitution, yet it is likewise seen as having an immense ability to balance urban

joblessness and neediness mitigation (Jimu, 2014).

Although, reduction of unemployment and poverty seems to be justification among others of

embracing informal sector particularly street vending, the range of activities, the average

earnings in each line and the extent to which it alleviates poverty of the street vendors in

Tanzania have remained elusive. Despite the growing importance of the informal sector, the

sector particularly street vendors still face a lot of problems hindering its growth. According

to Paschal (2011), people working under informal sector such as street vendors are often not

registered in official statistics/censuses, and they have limited access to organized markets

and credit organizations, as well as to formal education and training. This call for looking on

the ways in which street vending could be improved. All these have been at the centre of this

study.

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1.2 Statement of the problem

More often the significant role of street vending business has received little attention, as most

of the scholars focused on its negative effects such as use of public space, congestion, health

and safety risks, issues related to the tax evasion and fighting with local authorities

(Magehema, 2014). Despite the fact that other similar studies were conducted outside

Tanzania geographical boundaries (for instance: Uwitije, 2016; Matenge, 2013), some critical

informal sector insights are lacking within the country. For instance; In Tanzania it is not

clearly known how much street vendors earn in a day on average. This is of immense

importance because it may help in understanding the trend of informal sector in Tanzania

based on income generated since fighting against poverty is greatly influenced by income.

Moreover, the extent to which street vending business contributes to poverty reduction

among the street vendors was not ascertained. Ascertaining the extent to which it reduced

poverty would expose how instrumental street vending business is in the economy of our

country. Knowing all these aspects prompt for insights into the types of street vending

activities carried in some particular locality.

Therefore, in the light of above information, this study intended to explore the contribution of

informal sector in poverty reduction based on street vending business. Ilala Municipal

Council located in Dar Es Salaam Region was considered as a case.

1.3 Research Objectives

1.3.1 General objective

The general objective of the study was to explore the contribution of informal sector

particularly street vending in poverty reduction.

1.3.2 Specific objectives

The specific objectives were:-

(a) To find out types of informal sector activities performed by street vendors in Ilala

Municipal Council.

(b) To determine the average income that informal sector provides to the street vendors in

Ilala Municipal Council.

(c) To explore the extent to which street vending business contributes to poverty

reduction among the street vendors in Ilala Municipal Council.

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(d) To identify factors that limit street vending activities in Ilala Municipal Council

1.4 Research Questions

1.4.1 General research question

What are the contributions of informal sector particularly street vending in poverty reduction

in Tanzania?

1.4.2 Specific research questions

The specific research questions were:-

(a) What are the types of informal sector activities performed by street vendors in Ilala

Municipal Council?

(b) What is the average income that informal sector provides to the street vendors in

Ilala Municipal Council?

(c) To what extent vending business contributes to poverty reduction among the street

vendors in Ilala Municipal Council?

(d) What are the factors limiting street vending activities in Ilala Municipal Council?

1.5 Significance of the Study

The study is significant in the following ways: -

(a) The study may add value and knowledge on the informal sector.

(b) It may be a starting point for various stakeholders who wish to take an analytical

study on the informal sector.

(c) Moreover, findings of this study would inform other researchers and academicians

on specific contribution associated with street vending activities in the informal sector

operations.

(d) The study may also be used as a source of reference for policy reforms processes

on matters regarding informal sector development in Tanzania. It could as well be

used as source of information by other members of the community.

(e) The study serves as the requirement to be awarded the masters of public

administration of Mzumbe University.

1.6 Scope of the Study

The research explored the contribution of informal sector in poverty reduction of street

vendors. Street vendors in Dar es Salaam operate their businesses in Kinondoni, Ilala,

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Temeke and Ubungo. However, the study was based on street vendors who operated their

businesses in Ilala Municipality. The areas in which the study much focused are to find out

types of informal sector activities performed by street vendors, to determine the average

income that informal sector provides to the street vendors and to explore the extent to which

income generated improved lives of street vendors.

1.7 Limitations of the Study

The study was limited by two main issues: first, the study employed case study design as

such generalization of the findings could not be done. Apart from that, in information

gathering process, there were challenges in acquiring data such that some respondents were

not quick in responding which required patience until all questionnaires were collected.

1.8 Organization of the Study

The study has been grouped into five chapters: the first one consists of the description of the

study problem and its overview. The second chapter presents the literature review of the

study. Chapter three presents the research methods. Chapter four presents the findings.

Chapter five analyzes and discusses the findings. The last chapter presents the summary of

the findings, the conclusion and recommendations.

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CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter reviews both theoretical literature and empirical literature. The research gap is

set apparent and conceptual framework devised in this chapter.

2.1 Theoretical literature

2.1.1 Definitions of key words

Informal sector

Informal sector or informal economy comprehensively alludes to an economy which isn't

saddled, observed by any type of government, or incorporated into any gross national item

(GNP), in contrast to the formal economy (Friedrich, 2014). Nonetheless, Tanzania National

Employment Policy 2008 characterize casual division as non-ranch, little scale and

independently employed salary producing exercises dependent on low dimension of

association, low capital and low innovation (URT, 2008). With that, this fits well with the

setting the examination is embraced so far as that is concerned.

Poverty

Poverty is the circumstance that exudes from the absence of important capacities and

qualification to fulfill human needs. Additionally Tanzania characterizes poverty as a

condition of hardship of a not too bad human life (Milanzi, 2013). Poverty is an aftereffect of

numerous and commonly fortifying elements, including absence of beneficial assets to create

material riches, lack of education, and commonness of maladies, discriminative financial and

political frameworks and characteristic catastrophes, for example, floods, dry season and

man-made cataclysms, for example, wars (Mramba, 2015).

Poverty reduction

Poverty reduction alludes to the mitigation of destitution. Neediness decrease is here and

there known as assaulting destitution. There are two methodologies towards destitution

decrease that have gotten the consideration of those worried about neediness issues. One is

neediness decrease through development and second is however redistribution (Chidoko and

Makuyana, 2012). In the development approach it has been expected that legislature should

focus on development strategies and the aftereffects of development will "stream down" to

17

the poor through essential and auxiliary pay subsequently lessen destitution. In the

redistribution approach neediness, will be decreased however uncommon projects and giver

ventures. With respect to the adequacy of the two methodologies, the handy issue of

development and its stream down impact makes the redistribution system to be progressively

handy for decreasing destitution (Milanzi, 2013).

Categories of poverty

Poverty can be grouped into two categories: absolute and relative poverty. A practical and

commonly used definition of absolute poverty is the inability to attain a specific (minimum)

standard of living (Dixon and Macarov, 2002). The definition focuses on the absolute

economic well-being of the poor in isolation from the welfare distribution of the entire

society. It implies knowledge of the minimum standard of living, commonly referred to as the

poverty line. The poverty line is commonly expressed in real terms, is normally held constant

in the short run, but is adjusted in the medium to long term to reflect changes in a country’s

priorities and level of development. The advantage of using the absolute poverty approach is

that changes in the welfare position of the poor can be traced and the extent of poverty

eradication can be measured. Thus many studies on poverty, have adopted this approach

(Jutting and Laiglesia, 2012).

The relative poverty approach focuses on the economic well-being of the poorest of the

population. It takes into account the welfare distribution of the entire society. The population

share of the poor is held constant, as the average level of welfare changes. This approach is

appealing, both socially and politically, because individuals related to others at all levels of

economic well-being, implying that poverty is dynamic concept which changes with time and

space as well as the level of education and communication (Kachere, 2014). Improved

education and communication expand the poor’s reference group by raising awareness of the

standard of living in the societies. And the poor may refuse to live on the basic minimum

necessary for physical survival. However, the concept of relative poverty suffers from two

obvious weaknesses. It determines “priori” the extent of poverty and makes its elimination

impossible and ignores mobility into and out of poverty (Mramba, 2015).

Indicators of poverty

Various indicators have been used to measure the standard of living. When poverty is defined

in terms of a single broad indicator of economic resources two indicators can be used. The

18

standard of living can be measured by using total consumption/expenditure (including home

produced goods and services). Alternatively, total income can be used (Uwitije, 2016). There

are justifications for preferring income over consumption in measuring living standards.

Firstly, current consumption and income measuring may not necessary be the same. This may

arise if individuals decide to save, borrow or share consumption with others to avoid a

decline in consumption or; if the structure of the market forces individuals to reduce

consumption through rationing. The use of permanent income to avoid seasonal fluctuations

may minimize problem associated with the former difficulty. The second justification for

using income rather than consumption is based on the appropriateness of the former as an

indicator of resources. In dealing with measurement of poverty, it is more appropriate to

focus on the budget constraints and opportunities open to individuals rather than consumption

choices (Kachere, 2014).

Street vendor

According to Mramba (2015), a street vendor is an individual who offers merchandise

available to be purchased to the general population without having a changeless developed

structure from which to sell. Road merchant might be stationary as in they consume space on

the asphalt or other open/private spaces, or they might be versatile as in they move from spot

to put via conveying their products. Road merchants incorporate each one of those selling

products or administrations in open spaces with an impermanent developed structure. In

creating nations a large number of individuals rely upon road merchants for their everyday

prerequisite as the products are more practical than those accessible in the formal area.

Road merchants are known to assume a significant job in the urban economy by giving

business, pay and different things to general society. They sell various types of merchandise,

for example, second hand garments, vegetables, natural products, sustenance stuffs, plastic

merchandise, and different family necessities, which are made in little scale or locally

established enterprises. In numerous nations, the urban poor like to purchase garments and

extras from road merchants in light of the fact that the products that they sell are generally

less expensive and reasonable than those found in formal retail shops (Saha, 2014).

2.1.2 Characteristics of informal sector

As it is known that, the concept of the informal sector "emerged as a means of systematically

comprehending some aspects of the economic and social situation of Less Developed

19

Countries (LDCs), particularly the nature of unemployment and underemployment"

(Matenge, 2013). In this respect the informal sector has been viewed favorably, as a means of

income generation and an alternative to formal sector employment (Bemani, 2011).

In that regard, informal sector has number of characteristics which distinguish from the

formal sector. Among of these characteristics are low passage expenses, and general

simplicity of section, unregulated and aggressive markets, dependence on indigenous assets,

family responsibility for, little size of activity, work escalated and basic innovation and

abilities procured outside formal tutoring framework (Muller, 2014). Kekana (2009) fights

that, casual area monetary exercises are portrayed by little scale work serious tasks, reliance

on indigenous assets, family responsibility for and simplicity of section into the action

concerned.

Much of the time, road sellers work in locales that need foundation and administrations, for

example, cover, streets, toilets, water and sewerage, and trash accumulation. This opens them

to poor working conditions. While secure destinations for activities remains a noteworthy

pre-imperative of road exchange, inquire about from most African urban communities brings

up that not many urban communities have arranged locales for distributing (Msuya, 2017).

Most city experts anticipate that road merchants should move into business sectors, or quit

working wrongfully. This desire has not been satisfied and couple of creative urban

communities in South Africa, for example, Durban has started programs that coordinate road

sellers in urban improvement. Others, for example, Nairobi, have acknowledged the tasks of

road merchants by putting aside explicit paths outside the focal pieces of the city for sellers,

they be that as it may, are still to have explicit strategy identifying with the casual economy

and road exchange specific (Klu, 2012).

Despite the fact that migration of road merchants is a noteworthy advance, the locales still

need administrations, while others are found far from occupied regions and the sellers are

hesitant to move to them. The greater part of them had been crashed into the avenues due to

landlessness, conservation and neediness (Milanzi, 2013). Crosswise over Africa, road

merchants have shown a few reasons that have driven them into the avenues: absence of

room in the business sectors, absence of school charges, look for financial chance and salary,

key nature of road distributing, family impact in type of supporting relative, enterprise,

20

absence of account for bigger business, avoiding tax assessment, vagrant hood, widowhood,

low dimension of instruction and neediness (Mitullah, 2003).

2.1.3 Street vending business in Tanzania

The smaller scale exchange division (road exchange) is a significant piece of the economy,

since it utilizes countless less instructed individuals and goes about as a "safeguard" in the

occupation and profit of poor people (Mramba, 2015). As indicated by the ongoing study Dar

es Salaam City Council more than one million individuals are making living out of road

distributing business (SVB) in the city (URT, 2013). Besides, numerous road sellers are

significant providers in poor family units in creating nations (Kusakabe, 2006). In a setting of

monetary development, it is for all intents and purposes the main redistributive instrument for

spreading the advantages of development to enormous quantities of poor people. Be that as it

may, the present arrangements at national and nearby government levels undermine small

scale exchanging. The arrangements of expulsion, reallocation and illicitness are negative not

exclusively to sellers, yet in addition to nearby experts because of loss of exchanging

incomes and expenses of policing (Lyons and Msoka, 2012).

On the off chance that the small scale exchange segment will keep on being undermined, at

that point, it cannot work for poverty decrease and even the removed dealers can take part in

crimes. Road distributing is basic for enduring and destitution decrease in the creating scene.

Nonetheless, it is casual (as far as business exercises and business laws), trashed, difficult to

access money (for example capital and credit), and their business development and

maintainability is loomed (Mulwafu, 2004). It is contended that, the supposed Tanzania

Property and Business Formalization Program in Swahili Mkakati wa Uratibishaji Tanzania

(MKURABITA) have tended to halfway the difficulties of road distributing business. For

instance, the examination demonstrates that the cancelation of selling permit named in

Swahili 'Leseni za Nguvu Kazi' has declined the road distributing business activity

formalization (Mwakabonga, 2015).

While the casual part may possibly build administrators command over assets it is contended

that without institutional help, showcase powers are themselves unequipped for

understanding this dynamic potential. In this regard the more extensive arrangement and

institutional condition under which casual division undertakings work is basic to their

prosperity or disappointment somewhere else (Fapohunda, 2013). It has been noticed that

21

casual part administrators' capacity to react to new open doors relies upon various elements,

including their entrance to assets, for example, aptitudes and innovation. Those casual

segment administrators with low expertise levels and utilizing essential mechanical

instruments are the well on the way to fall into the 'non-versatile' class. They are unfit to react

to market powers and openings and subsequently stay at the lower size of casual division

movement where rivalry is at its most grounded and returns at their least (Klu, 2012).

2.1.4 Informal sector development and poverty alleviation

The salary age openings offered by the casual part gives a significant wellspring of work for

an enormous extent of the populace in the urban and provincial territories. This is showed by

the bigger number of individuals utilized in this division. As the "utilimate asylum" in

valuable monetary exercises it is a wellspring of salary without which wretched destitution,

expanded wrongdoing rate and social turmoil would have been the inescapable out comes

(Joseph, 2011). Current strategy issues and alternatives in salary levels in the casual area are

commonly low and the rate of neediness high, yet without this part poor people would be

crashed into desperation. While the casual part holds much potential to lighten neediness, its

proceeded with development is obliged by various issues. The real requirements incorporate

lawful and administrative obstructions and challenges in getting to capital (Mwakabonga,

2015). A portion of the limitations as including the accompanying: absence of capital,

absence of instruments and apparatus, deficient abilities and absence of offices to update

aptitudes, absence of premises to work from, poor advertising offices and an excessive

amount of rivalry, negative by – laws which lead to provocation of administrators; and

inaccessibility of crude materials (Chidoko and Makuyana, 2012). As Maliyamkono and

Bagachwa (1990) point out, the casual area has an extraordinary potential for fast extension

once openings and motivations are available. In perspective on the above imperatives and

others, the accompanying approaches and motivating forces went for expanding profitability

and wages and helping the casual undertaking to end up formal ones.

2.1.5 The underpinning theory

In any study, theory is very important as it describes the notion of the ideas or things that are

discussed in the subject matter. Therefore, for the nature of this study, since the researcher

aims at exploring the contribution of informal sector in income poverty alleviation in

Tanzania, liberal thought theory of informal sector is relevant.

22

According to Muller (2005), a liberal thought, held by authors such as Henrique De Soto,

suggests that the informal economy is an excellent example of a well-functioning market-

economy, based on the rules of supply and demand. Also, due to its flexible and highly

adaptive nature the informal sector is better able to respond to external shocks:

microenterprises and the informal sector can be among the most dynamic and healthy sectors

in developing countries. They fill an essential role in providing jobs for large numbers of

urban workers and adapting both to general patterns of economic growth and to negative

shocks. Not only do the informal sector entrepreneurs survive in the face of government

subsidized large scale industrialization, their flexibility and adaptability have allowed them to

provide essential goods and services. They provide these goods and services because of their

competitiveness, proximity to markets, and their low unit costs.

Henrique de Soto sees informal sector as a driving force for poverty reduction and economic

growth among the least developed countries. He further contends that this sector puts

downward pressure on wages in the formal labour market; it offers lower prices for goods

and services; it generates substantial personal income; the informal sector is characterized by

very low costs of labour; the low labor costs combined with the advantage of not bearing any

bureaucratic cost are thought to contribute to a higher productivity of capital in this sector;

the evidence from some transition countries indicates that the particularly large decline of the

official GDP that these countries experienced (especially in the beginning) was alleviated

through rapid growth of the informal sector.

This theory as propounded by Henrique de Soto corresponds to this study on the ground that,

it shows the relevance of the informal sector in the poverty alleviation. This theory describes

the key role played by informal sector in the course of alleviating poverty to the lower

income earners.

2.2 Empirical literature review

This section deals with reviewing various studies that have been done by other scholars

which are related to the current study. The purpose of doing so is to establish research gap

that can be filled by the current study. Therefore, this section reviews various researches that

were carried out inside and outside Tanzania.

23

Sibhat (2016) made a critical analysis on the circumstances and logical results of casual part:

the instance of road sellers in Addis Ababa, Ethiopia. The study explored reasons which

motivated individuals to become road sellers, it examined the significance of road merchants,

it explored obstructions and requirements of road distributing as well as distinguishing

negative outcome of road distribution. The examination uncovered casual areas was a

wellspring of pay for poor people or methods for business and furthermore it was a base of

formal division. In that case, this entails a gap to be envisaged in Tanzania on the

contribution of informal sector on poverty reduction which necessitated undertaking of this

particular study.

Mulwafu (2004) carried out the study on the job of the casual division in neediness decrease

and nourishment security in Malawi. The investigation was done to survey the commitment

that little scale undertakings make to family unit's nourishment security and neediness

decrease, to look at the primary wellspring of capital and to archive the sorts of organizations

kept running by people and to evaluate the structure of the use of salary from the little scale

business visionaries. It was seen that, the development of the casual segment could

enormously add to the accomplishment of destitution decrease and nourishment security. This

is along these lines, in light of the fact that there are more individuals participating in small

and medium undertakings (SMEs) in the nation. There is proof by the developing number of

organizations that are supporting the miniaturized scale, little and medium endeavors

(MSMEs) through preparing and credit offices. The administration also has expanded its

endeavors to empower the development of the MSMEs. The private area has kept on

assuming a significant job to invigorate the development of the MSMEs.

This study by Mulwafu (2004) is almost similar to the current study; however, it departs from

some of the specific objectives. For example, to examine the main source of capital and to

document, the kinds of businesses run by men and women and to assess the structure of the

expenditure of income from the small-scale entrepreneurs are not among of the specific

objectives of the current study. Findings showed that the businesses have had significant

contribution on income generation to sustain life and living. It is not clearly known whether

the income generated by street vendors in Ilala is significant to enable alleviation of their

poverty. The current study bridges the gap.

24

Another study was carried out by Chidoko and Makuyana (2012) with respect to the

commitment of the casual division to destitution mitigation in Zimbabwe. It was uncovered

that, high destitution levels constrained the jobless to join the informal sector which uses

work escalated techniques for creation. Indeed, even in the fallout of 10 years in length

monetary downturn, Zimbabwe's formal division is as yet contracting due to financial

elements that obstruct the neighborhood business full limit use. The saved are joining and

effectively taking part in the informal sector.

Although the study by Chidoko and Makuyana (2012) assessed the contribution of the

informal sector to poverty alleviation but they were limited to the issues they dealt with

which is contrary to the issues that this current study covered. In that case, this signifies a gap

as well to be filled in Tanzanian context along similar line which prompts the need to conduct

the study to fill the knowledge gap.

Meanwhile, Matenge (2013) conducted the study with respect to the assessment of challenges

faced by microenterprises in Botswana: a case of street food vendors in Gaborone. The

major findings of the study indicated that street food vending is mostly a source of income

and a way of creating employment for the urban poor. The study recommends that street food

vending needs to be legally recognized. The study inspires policy makers to come up with

specific legislation to promote street food vending business in Botswana. In that case, this

justifies the gap in Tanzania since majority of the enterprises lies within informal sector such

that it is necessary to assess its contribution on poverty reduction.

Moreover, Daudi (2015) made a basic examination on the difficulties confronting ladies

within the informal sector and the economy, an instance of ladies sustenance merchants in

Ilala District. This research was conducted for the purpose of determining the time spent by

women food vendors in operating their day to day business activities. The investigation

discoveries by Daudi (2015) demonstrated that, the procedures utilized by ladies nourishment

merchants to beat the difficulties incorporate getting cash from relatives (44%), advances

from credit establishments (32%) and utilizing cash from individual sparing or capital

(14%).This examination demonstrates that ladies face issue in adjusting their entrepreneurial

mindset and beneficial jobs. They burn through most hours in business than thinking about

their youngsters. Along these lines, the welfare of their kids is in peril because of truth that

they stand more odds of being in danger of absence of viable socialization. Subsequently,

25

survey of Child Development Policy, Child Law and authorization of laws are inescapable to

take care of the issue. Moreover Social Workers ought to effectively participate in backing

and campaigning, open sharpening and further research to turn out with maintainable answer

for the issue.

Magehema (2014) study was carried out to characterize the range of food types sold by

vendors in Songea Rural and Songea Urban Districts, to establish kinds and extents of

support extended to food vendors by Songea Rural and Urban Districts, to determine the net

profit of food vending services and monetary values of assets owned by food vendors. The

findings showed that the food types vended were those locally available like maize stiff

porridge, and rice served together with beans, meat, fish and green vegetables. The mean net

profit due to food vending services for the respondents who had received government support

ranged from TZS 17 295.75 to TZS 18 581.83 while among those who had not received any

support the net profit ranged from TZS 16 960.81 to TZS 18 707.54. The mean monetary

value of assets owned by the respondents who had received government support ranged from

TZS 4 255 686 to TZS 4 719 865, while the mean monetary values of assets for those who

had not received any support ranged from TZS 4 743 951 to TZS 4 931 400.

Mramba (2015) conducted study on the origination of street vending business (SVB) in salary

destitution decrease in Tanzania. The most fundamental finding from this examination is that

street vending is another informal business essential to the vocation of a lot less instructed

Tanzanians. It goes about as a substitute of work for the individuals who needed such open

door in formal segment because of low dimension of training or absence of adequate capital.

Be that as it may, the road sellers face numerous difficulties because of the non attendance of

steady laws, guidelines, and arrangements of the legislature; as a result their commitment to

the salary destitution decrease is insignificant. So as to fortify the job of road distributing

business in salary neediness decrease the Tanzanian government should create steady

approaches, laws, and guidelines that address the casualness and lawlessness of road

distributing business. This backings the sentimental perspective on casual economy that, road

distributing business is a similar like different types of formal business what are required are

valuable mediations.

Kessy (2013) study found that, the problems which faced revenue collection included: the

business areas were not improved through fees and other charges paid by taxpayers; failure

26

of the MDC to involve different stakeholders in public and private sector such as CSOs,

and the community i.e. they were not involved in revenue collection planning.

Also, it was found that entrepreneurs had small capitals. The study recommends the

government to improve mechanisms for revenue collection by supporting the informal sector,

specifically, introducing training programmes, empowering micro-financial institutions,

coordinating entrepreneurs groups and providing them with special places to conduct their

businesses. Basically the study was taken to ascertain on how informal sector can contribute

in revenue collection and not the contribution of informal sector in poverty reduction. This

entails the gap to be envisaged on the contribution of the informal sector as a whole on

poverty reduction since little has been observed to be undertaken along this line.

2.3 Synthesis

A lot of issues have been discussed with the reviewed studies in respect of the contribution of

informal sector in income poverty reduction in several contexts. However, little or less has

been conducted on the contribution of informal sector on poverty reduction in Tanzania

which is the gap to be filled.

2.4 Conceptual framework

It is asserted that job creation, income generation and life sustaining activities are very

important in alleviating poverty among street vendors. These are known as independent

variables as they contribute to the poverty alleviation. The presences of these variables have

significant impact to the informal sector (street vendors). The other side of the Figure 2.1 is

dependent variable which is poverty alleviation. This dependent variable is affected by

independent variables in the sense that on the battle toward poverty alleviation, job creation,

income generation and life sustaining activities are necessary tools for succeeding the battle

the absence of these affect poverty reduction.

Therefore, to sum up with the theory, the link between independent and dependent variables

is that, the poverty reduction among street vendors is highly influenced with what informal

business contributes to the street vendors. In that regard, the link between independent

variable and dependent variables is enhanced by liberal thought theory which regards

informal sector as a driving force for poverty reduction. This theory describes the key role

played by informal sector in the course of alleviating poverty to the lower income earners.

27

Independent variable

Dependent variable

Figure 2.1 Conceptual framework

Source: Constructed by the researcher (2019)

Creating job/self-employment

Income generation

Life sustaining activities

Poverty reduction

28

CHAPTER THREE

RESEARCH METHODS

3.0 Introduction

This chapter involves research design, area of the study, population of the study, sample and

sampling procedure, types of data, data collection methods, data validity and data reliability

and data analysis plan.

3.1 Research design

In this manner, this examination utilized contextual investigation structure. In this

investigation Ilala area filled in as contextual analysis. The utilization of contextual analysis

rests from the grounded reasons by Creswell (2009) who affirms that contextual analysis

gives inside and out comprehension of the case or cause.

3.2 Area of the study

The research took place at in Dar Es Salaam, Tanzania particularly at Ilala Municpality. The

selection of Ilala Municipality is because it is one of the municipalities where a lot of

informal sector activities take place including street vending businesses. Since the researcher

resides in Ilala Municipality, it was convenient to access data easily.

3.3 Population of the study

The population of the study was a group of people who conduct vending businesses along the

streets of Ilala Municipality. The area has approximation of about 490 street vendors which is

considered as the population of the study.

Table 3.1 Population of study

S/N Category of respondents Population

01 Street vendors 490

02 Municipal director 1

03 Ward executive Officers 5

04 District Market Officer 1

Total 497


29

3.4 Sample size and sampling procedure

3.4.1 Sample size

In this study, the sample size was 99 respondents, whereas street vendors were 94

respondents, Municipal director officer 1, Municipal market officer 1, as well as 4 Ward

Executive Officers. The idea of taking 99 respondents has been influenced by the narration

by Zikmund (2003) who contends that, for the population that counts more than 100 people,

and then the researcher could take the range of 10%-50% of the total population. This study

took 20% of the population which is 99 respondents.

Table 3.2 Sample size distribution

S/N Category of respondents Sample Size

01 Street vendor 93

02 Municipal director 1

03 Ward executive Officers 4

04 District Market Officer 1

Total 99


3.4.2 Sampling procedure

Purposive sampling technique

The researcher employed purposive sampling technique to select municipal director, ward

executive officer and district market officer. The use of purposive sampling facilitated the

researcher to access informed people for instance those who had in depth information about

the contribution of informal sector in poverty alleviation in Tanzania.

Municipal director, ward education officer and district market officer were purposively

selected based on their positions and powers to influence informal sectors. They all had data

and information about informal sectors and they are accountable in overseeing informal

sectors’ activities in the municipality.

Accidental sampling technique

Since the street vendors were roaming around the streets while others were stationed to some

points, hence the appropriate sampling technique to be employed was accidental sampling

technique.

30

3.5 Sources of data

3.5.1 Primary data

In this study, primary data were collected from respondents through questionnaires and

interview. Both questionnaires and interviews were specifically designed to answer research

questions and attain research objectives.

3.5.2 Secondary data

Secondary data are data obtained from literature sources or data collected by other people for

some other purposes. Thus secondary data provide second hand information and include both

raw data and published ones (Saunders, 2003). The study reviewed a number of related

literatures available to get an in depth information on issue at hand which is exploring

contribution of informal sector in income poverty alleviation in Tanzania.

3.6 Methods of data collection

3.6.1 Questionnaire

In this study, since the respondents did not stay at one place permanently, the researcher

waited for the respondents to fill in the questionnaires until they finished.

3.6.2 Interviews

Under this technique of data collection, there is a direct contact between a researcher and

respondents whereby the researcher and the respondent engage in oral questioning or

discussion (Adam and Kamuzora, 2008). The interview guide was applied so as to

supplement or support the questionnaires. In due regard, interview was conducted to

municipal director, and district marketing officer.

This method was included in this study because interview is the best data collecting method

that allows the interaction between the interviewer and interviewee. The interaction that

existed between the researcher and respondents enabled in-depth data collection because the

researcher was able to clarify the meaning of questions posed especially when respondents

did not understand the questions. In this aspect, the interview method enabled the researcher

to get complete responses because it was easy to seek clarification from the respondents.

Additionally each interview spent a maximum of 45 minutes.

31

3.6.3 Documentary

In this study, text documentary related to the contribution of informal sector in poverty

alleviation was collected from, internet, books, journals, research articles and any other

relevant secondary sources.

3.7 Data analysis procedure

Data analysis in this study was analyzed qualitatively and quantitatively through content

analysis for qualitative data and descriptive statistics for quantitative data with the aid of

SPSS.

3.7 Validity and reliability

Validity means measurement the right things through ensuring that there is consistency

between theory and practice (Saunders et al., 2009). Meanwhile, reliability refers to the

relative level of consistency, dependability, predictability and accuracy to construct (Kothari,

2004). Reliability and validity are important qualities of research and must always be taken

into consideration for effective data quality control.

In order to get consistent answers to the research questions, research instruments were

designed to collect data for the study. Prepared instruments were read and re-read to ensure

they were grammatically correct and that the language used was not ambigous. In order to

ensure reliability and validity, the research instruments were piloted and pre-tested for

appropriateness, clarity, completeness, consistency and relevance. The pretesting exercise did

not unfold any ambiguity or incompatibility of the instruments.

3.8 Ethical consideration

In adhering to the ethical issues, the researcher sought the necessary authorization from

relevant authorities and ensures respondents adequately understand the research they are

participating in. Openness and honesty in reporting research objectives, methods and results

were adhered in this research. All material references were acknowledged. All information

that were collected were treated with highest level of confidentiality.

32

CHAPTER FOUR

PRESENTATION OF THE FINDINGS

4.0 Introduction

This chapter presents the findings collected during the research study at Ilala Municipality. It

was aimed at presenting the findings and discussing the findings obtained when conducting

the study in the real environment of the study. This enabled the researcher to give suggestion

and recommendation based on the findings. Various methods of data collections were used

which included questionnaire, interview and document review. The study was guided by

exploring the contribution of informal sector in poverty alleviation in Tanzania. It was based

on providing the evidence of research carried out and finding answers to the research

questions.

4.1 Respondents general information

The respondents’ demographical profile was as follows:

4.1.1 Sex of respondents

Sex of those who were involved in the research was considered as about 62 equivalent to 66.7

percentage were male while 31 equivalent to 33.3 percentage were female as appearing in

Table 4.1 below.

Table 4.1 Sex of respondents

Sex Frequency Percent

Male 62 66.7

Female 31 33.3

Total 93 100.0

Source: Field information (2019)

Results from Table 4.1 indicated that, 66.7% of the study participants were males and 33.3%

of the respondents were females.

33

4.1.2 Age of respondents

Findings are described in table 4.2.

Table 4.2 Age of respondents

Age category Frequency Percent

18-25years 21 22.6

26-30 years 43 46.2

31-above years 29 31.2

Total 93 100.0


Table 4.2 shows that, 22.6% of the respondents fall in the age category of 18 -25 years old,

46.2% of the respondents fall in the age category of 26-30 years old and rest of respondents

fall in the age category of 31 years and above.

4.1.3 Marital status of respondents

The findings about marital status of respondents are presented in Table 4.3 below.

Table 4.3 Marital status of respondents

Marital status Frequency Percent

Single 29 31.2

Married 50 53.8

Widow 11 11.8

Divorced 3 3.2

Total 93 100.0


About 31.2% of the respondents were single, 53.8% of the respondents were married, 11.8%

of the respondents were widows and 3.2% of the respondents were divorced.

4.1.4 Number of children of respondents

Only 64 four respondents responded on the number of children they have. The findings are

presented in Table 4.4 below.

34

Table 4.4 Number of children of respondents

Number of children Frequency Percent

I child 21 32.8

2 children 7 10.9

3 children 23 35.9

4 children 2 3.1

More than 4 children 11 17.2

Total 64 100.0


The results from Table 4.4 show that 32.8% of the respondents had a single child, 10.9% had

two children while 35.9% had three children, but 3.1% had four children and 17.2% had more

than four children.

4.1.5 Number of dependents of respondents

With regards to the number of dependants, the findings are indicated in Table 4.5 below.

Table 4.5 Number of dependants of respondents

Number of dependants Frequency Percent

No dependant 19 20.4

Less than 4 dependants 14 15.1

Up to 4 dependants 11 11.8

Above 4 but less than 8dependants 38 40.8

More than 8 dependants 11 11.8

Total 93 100.0


Results from Table 4.5 show that 20.4% of the respondents had no dependants, 15.1% of the

respondents had less than 4 dependants, 11.8% of the respondents had up to 4 dependants and

40.8% of the respondents had above 4 but less than 8 dependants and 11.8% of the

respondents had more than 8 dependants. Therefore, large numbers of people who are

engaged in street vending business have the dependants of above 4 but less than 8

dependants.

4.1.6 Level of education of respondents

35

The findings on the educational level of the respondents are indicated in Table 4.6 below.

Table 4.6 Level of education of respondents

Level of education Frequency Percent

No education pursued 9 9.7

Primary education 57 61.3

Secondary education 20 21.5

Other trainings 7 7.5

Total 93 100.0


Table 4.6 above shows that, 9.7 per cent of the respondents had no education pursued, 61.3

percent of the respondents were educated up to primary education level, 21.5 per cent were

educated up to secondary education and 7.5 percent of the respondents did other trainings.

Majority of respondents had primary education.

4.2 Types of informal sector activities performed by street vendors in Ilala Municipal

Council.

The first objective of the study was to find out types of informal sector activities performed

by street vendors in Ilala Municipal Council.

It was found that, there were various business activities in which street vendors were engaged

in, however, this depends on area or place in which the street vendors did their businesses.

The results are given in Table 4.7:-

Table 4.7 Types of business activities in which street vendors were engaged.

Types of business activities Frequency Percent

Selling second hand clothes 37 39.8

Selling second hand shoes 30 32.3

Selling domestic items (e.g. bags) 14 15.1

Second hand clothes and shoes (mixed items) 12 12.9

Total 93 100.0


36

From Table 4.7, about 39.8% of the respondents were engaged in selling second hand clothes,

followed by 32.3% of the respondents who were engaged in selling second hand shoes and

15.1% of the respondents engaged in selling domestic items such as bags. The respondents

who were engaged in selling both second hand clothes and shoes were about (12.9%).

Figure 4.1 Vending activities taking place at ILALA


In an interview with district marketing officer, the following statement was made:-

Majority of street vendors sell second hand clothes, shoes, bags and

domestic items. But majority of street vendors in Ilala Municipal sell

second hand clothes and shoes.

On the other hand, in an interview with ward executive officer on whether the activities

performed by street vendors were permanent, the following statement was made:

Most of these activities performed by street vendors are permanent,

though some may change to seasonal businesses. For example during

the festival season some tend to change business by selling commodities

which are needed in festival season or during the rainy season, others

opt to sell umbrellas.

37

4.2.2 Duration of activity (business)

As indicated that street vendors of Ilala municipal were engaged in various business activities

like selling second hand clothes and shoes and domestic items. Moreover, the participants

were required to show the duration that they have been engaged in business and the findings

are summarized in Table 4.8:

Table 4.8 Duration in which respondents were engaged in business

Duration in business Frequency Percent

One year 4 4.3

Two years 15 16.1

Three years 21 22.6

Above three years 53 57.0

Total 93 100.0


It was shown that street vendors have been in the business for different duration. About 4.3%

of the respondents said one year while others with 16.1% of the respondents said two years.

However, 22.6% revealed that they have been doing the street vending business for three

years now. However, most of street vendors said they have been in the business for more than

three years which make them to have enough experience of doing street vending business.

4.2.3 Major source of initial capital to start business

The respondents were asked to state their major sources of initial capital to start the business.

The reason behind was to know the way they struggled to get the capital for business

purposes. Therefore Table 4.9 presents the findings:-

Table 4.9 Major source of initial capital to start business

Source of initial capital Frequency Percent

Own savings 66 71.0

Borrow from relative/friends 13 14.0

Bank loan 5 5.4

Microfinance 9 9.7

Total 93 100.0


38

Table 4.9 shows that 71.0% of the respondents said their major source of initial capital to

start business was own savings followed by 14.0% of the respondents who said they

borrowed from relatives/friends while 5.4% of the respondents said from bank loans and

9.7% of the respondents said from microfinance.

4.2.4 Source of savings to start business

The question as extracted from questionnaire asked the respondents to state the sources of

savings that pushed them to start business. The question was answered by 66 respondents

who said that their major source of initial capital to start business was own savings and this is

summarized in Table 4.10:-

Table 4.10 Source of savings to start business

Source of capital Frequency Percent

Sales of assets 40 60.6

Sales of crops/livestock 21 31.8

Inheritance 5 7.6

Total 66 100.0


About 60.6% of the respondents said their source of own savings that was used to start

business was by selling assets, 31.8% of the respondents said sales of crops/livestock and

7.6% of the respondents said through inheritance.

4.2.5 Satisfaction with the business

In this question, the respondents were asked if they are satisfied with the business they do.

The reason behind is to get to know if the street vending business as part of the informal

sector plays a significant role to the lives of street vendors at Ilala Municipal, and this is

summarized in Table 4.11:-

39

Table 4.11 Satisfaction with the business

Vendors’ responses Frequency Percent

Yes 41 44.1

No 19 20.4

Somehow 33 35.5

Total 93 100.0


About 44.1% of the respondents said YES that they are satisfied with the business they do

while 20.4% of the respondents said NO that they were not satisfied with the business. About

35.5% of the respondents said SOMEHOW that they are satisfied with the business they do.

4.3 The average income that informal sector provides to the street vendors in Ilala

Municipal Council

The second objective of the study was to determine the average income that informal sector

provides to the street vendors of Ilala Municipal Council. The findings were as follows:

4.3.1 The average income earned per day

In this question, the respondents were asked the average income earned per day through street

vending business and this is summarized in Table 4.12 as extracted from questionnaire’s

findings.

Table 4.12 The average income earned per day

Average income per day Frequency Percent

Less than TZS 5000 15 16.1

5000 to less than 10,000 40 43.0

10,000 to less than 15,000 30 32.3

15,000 and above 8 8.6

Total 93 100.0


About 16.1% of participants said they earn less than TZS 5000, 43.0% of the respondents

said they earn around TZS 5000 to less than TZS 10,000 while 32.3% of the respondents said

they earn around TZS 10,000 to less than TZS 15,000 and the 8.6% of the respondents said

that they earned around TZS 15,000 and above.

40

In an interview with district marketing officer, the following statement was made:

The amount they earn varies as they depend on area where they conduct

their businesses. But mostly, they earn around TZS 5000 and TZS

10,000, but sometimes other succeed to earn more than TZS 20,000 per

day if the business goes well

Furthermore, in an interview with municipal director to ascertain if street vendors pay levies,

the following statement was made:

Yes, all informal sector including street vendors pay levies. This is the

requirement of the government because they do business; they get profit

and therefore must pay levies. He added.

4.3.2 Sufficiency of the income earned per day

In this question, the respondents were asked if the income earned per day through street

vending business was sufficient and this is summarized in Table 4.13 as extracted from

questionnaire’s findings.

4.13 Sufficiency of the income earned per day

Sufficiency of income Frequency Percent

Yes 5 5.4

No 88 94.6

Total 93 100.0


From the findings, about 5.4% of the respondents said the income they earn per day was

sufficient while 94.6% of the respondents said the income they earned per day was not

sufficient. Due to the above findings, majority of the respondents said the income they earn

per day is not sufficient. In the reality of lives mostly in Dar es Salaam, the average of the

amount earned per day is not enough because most of these street vendors have extended

families that depend on them in running their day to day lives and hence it becomes a burden

to them.

41

4.3.3 Effort made to expand business to increase income earned per day

In this question, the respondents were asked if there was any effort made to expand business

so as to increase the income earned per day and this is summarized in Table 4.14 as extracted

from questionnaire’s findings.

4.14 Effort made to increase income

Any effort to increase income Frequency Percent

Yes 50 53.8

No 25 26.9

Somehow 18 19.4

Total 93 100.0


About 53.8% of the respondents said they make effort to expand business so as to increase

the income earned per day while 26.9% of the respondents said they do not make any effort

to expand business so as to increase the income earned per day and lastly which is 19.4% of

the respondents said somehow they make effort to expand business so as to increase the

income earned per day.

4.3.4 The extent to which income generated help street vendors to run their lives

The participants were supposed to state the extent to which income generated help street

vendors to run their lives. The respondents were required to rate using likert scale whereas:-

1= Strongly agree, 2= Agree, 3= Neutral, 4= Disagree and 5= Strongly disagree.

a) Accessing basic needs

The respondents were asked to rate their opinion as whether income generated help them to

access basic needs and this is given in Figure 4.2:

42

Figure 4.2 Help to access basic needs


According to Figure 4.2, about 78.5% of the respondents strongly agreed that the income

generated help to access basic needs while 21.5% of the respondents agreed that the income

generated help to access basic needs. Therefore, majority of the respondents strongly agreed

that the income generated help to access basic needs. These basic needs include water,

clothes and shelters which are necessary for human survival. It was found that majority of

these street vendors live in rented houses and therefore the amount they get help them to get

shelters (paying rent houses) so as to continue living in the house.

b) Caring of family/relatives/parents

The respondents were asked to rate their opinion as whether income generated help street

vendors to take care of family/relatives/parents and this is summarized in Figure 4.3:

43

Figure 4.3 To take care of family/relatives/parents


Figure 4.3 provides that about 48.4% of the respondents strongly agreed that the income

generated help to take care of family/relatives/parents while 51.6% of the respondents agreed

with the fact that the income generated help to take care of family/relatives/parents.

Therefore, majority of respondents agreed that the income generated help them to take care of

family/relatives/parents. As it was noticed that most of these street vendors support their

parents, relatives and family living as extended family and therefore the amount they earn

plays significant role to take care of all of them. This proves the significant role played by

informal sector (street vending business) in sustaining lives of street vendors.

c) Settling rent, water and electricity bills

The respondents were asked to rate their opinion as whether income generated help to pay for

rent, water bills and electricity and this is summarized in Figure 4.4:

44

Figure 4.4 To pay for rent, water and electricity bills


Figure 4.4 states that about 34.4% of the respondents strongly agreed that the income

generated help to pay for rent, water bills and electricity, 64.5% of the respondents agreed

with the fact that the income generated help to pay for rent, water bills and electricity and

1.1% of the respondents were neutral. Therefore, majority of respondents agreed that the

income generated help to pay for rent, water bills and electricity. That is to say street vending

business has positive impact in reducing poverty among the street vendors because if that is

not the case, they could not afford to pay for rent, water bills or electricity, but through street

vending, it has helped them to sustain their lives.

d) Life sustenance in general

In this question, the respondents were asked to rate their opinions as whether income

generated help in life sustenance in general and this is summarized in Figure 4.5:

45

Figure 4.5 To help in life sustenance in general


About 96.8% of the respondents strongly agreed that the income generated helped in life

sustenance in general while, 3.2% of the respondents agreed with the fact that the income

generated helped in life sustenance in general. Therefore, majority of the respondents

strongly agreed that the income generated helped in life sustenance in general. Moreover, the

respondents were asked as to what extent the income generated help them to run their lives

and this is summarized in Figure 4.6 as extracted from questionnaire’s findings.

Figure 4.6 The extent the income generated help to run street vendors’ lives

46


Figure 4.6 states that about 36.6% of the respondents said to a large extent the income

generate help street vendors to run their lives while 44.1% of the respondents said somewhat

extent the income generate help street vendors to run their lives and 19.4% of the respondents

said to a low extent the income generate help street vendors to run their lives. Hence, high

number of participants said somewhat extent the income generate help street vendors to run

their lives. This implies that at a certain point street vending business gives life sustaining of

the street vendors.

4.4 The extent to which street vending business contributes to poverty reduction among

the street vendors in Ilala Municipal Council.

The third objective of the study was to explore the extent to which street vending business

contributes to poverty reduction among the street vendors of Ilala Municipal Council. The

respondents were required to rate using likert scale whereas:- 1= Strongly agree, 2= Agree,

3= Neutral, 4= Disagree and 5= Strongly disagree.

4.4.1 Income generation

In this question, the respondents were required to state their opinions on whether street

vending business contributes to poverty reduction by generating income and this is

summarized in Figure 4.7:-

Figure 4.7 Income generation

47


It is provided that 86.0% of participants strongly agreed that street vending business

contributes to poverty reduction by generating income while 14.0% of the respondents agreed

that street vending business contributes to poverty reduction by generating income. Hence,

majority of the respondents strongly agreed that street vending business contributes to

poverty reduction by generating income.

4.4.2 Self employment

In this category of question the respondents were required to state their opinions on whether

street vending business contributes to poverty reduction through self-employment and this is

summarized in Figure 4.8:-

Figure 4.8 Self -employment


About 47.3% of participants strongly agreed that street vending business contributes to

poverty reduction through self-employment while 52.7% of the respondents agreed that street

vending business contributes to poverty reduction through self-employment. Hence, majority

of respondents agreed that street vending business contributes to poverty reduction through

self-employment. This implies that people employ themselves through street vending

business which helped them to sustain their lives and hence reducing household poverty.

48

4.4.3 Life sustainability

In this category of question the respondents were required to state their opinions on whether

street vending business ensures life sustainability of vendors. Figure 4.9 states findings:

Figure 4.9 Life capability


About 3.2% of the respondents strongly agreed that street vending business contributes to

poverty reduction by ensuring life capability while 96.8% of the respondents agreed that

street vending business contributes to poverty reduction by ensuring life capability to street

vendors. Hence, majority of the respondents agreed that street vending business contributes to

poverty reduction by ensuring life capability to street vendors.

4.5 Factors that limit street vending activities

The fourth objective of the study was to identify factors that limit these activities. The

findings were as follows:

4.5.1 Lack of financial support

The study was carried out to find out if lack of financial support is among of the factors that

limit street vending activities. The study findings are described in Figure 4.10:-

49

Figure 4.10 Lack of financial support


Figure 4.10 indicates that about 54.8% of the respondents strongly agreed that lack of

financial support are among of the factors that limited street vending activities followed by

36.6% of the respondents who agreed with the fact and 8.6% of the respondents were neutral.

Therefore, most of the respondents strongly agreed that lack of financial support is among of

the factors that limit street vending activities.

4.5.2 Lack of entrepreneur skills

The study was carried out to find out if lack of entrepreneur skills is among of the factors that

limited street vending activities. The study findings are described in Figure 4.11:-

50

Figure 4.11 Lack of entrepreneur skills


About 39.8% of participants strongly agreed that lack of entrepreneur skills is among of the

factors that limit street vending activities, 46.2% of participants who agreed with the fact,

4.3% of participants were neutral while 7.5% of participants disagreed with the fact and 2.2%

of participants strongly disagreed with the fact. Therefore, most of participants agreed that

lack of entrepreneur skills is among of the factors that limit street vending activities.

4.5.3 Unfriendly government law enforcement mechanisms

In this question, the respondents were required to state if unfriendly government law

enforcement mechanism is among of the factors that limit street vending activities. The study

findings are described in Figure 4.12:

51

Figure 4.12 Unfriendly government law enforcement mechanisms


About 65.6% of participants strongly agreed that unfriendly government law enforcement

mechanism is among of the factors that limited street vending activities followed by 22.6% of

the respondents who agreed with the fact, 5.4% of participants were neutral while 6.5% of

participants disagreed with the fact. Thus, most of participants strongly agreed that unfriendly

government law enforcement mechanism was among of the factors that limited street vending

activities.

52

Figure 4.13 Street vendor ‘machinga’ confronts with police militia ‘mgambo’


4.5.4 Lack of government support

In this question, the respondents were required to state if lack of government support was

among of the factors that limited street vending activities. The study findings are described in

Figure 4.14:

53

Figure 4.14 Lack of government support


About 48.4% of participants strongly agreed that lack of government is among of the factors

that limited street vending activities while 51.6% of participants agreed with the fact.

Therefore, most of the respondents agreed that lack of government support is among of the

factors that limited street vending activities.

4.5.5 Lack of policy related to informal sector

In this question, the respondents were required to state if lack of policy related to informal

sector was among of the factors that limited street vending activities. The study findings are

described in Figure 4.15:-

54

Figure 4.15 Lack of information and training on business regulations


About 34.4% of participants strongly agreed that lack of policy related to informal sector

(informal sector policy) is among of the factors that limited street vending activities, 40.9%

of participants agreed with the fact, 4.3% of participants were neutral, 11.8% participants

disagreed with the fact and 8.6% of participants strongly disagreed with the fact. Hence, most

of participants agreed that lack of policy related to inform sector is among of the factors that

limited street vending activities. This implies there is not comprehensive policy that only

deals with informal sector and hence that affect the informal sector businesses.

55

CHAPTER FIVE

DISCUSSION OF THE FINDINGS

5.0 Introduction

The chapter analyzes and discusses the study results. Analysis and discussion is made

sequentially based on the specific objectives.

5.1 Demographic characteristics of the respondents

The section comprised of the assessment on the profile of the respondents on age, gender,

marital status, number of dependants, level of education and number of children of the

respondents. Gender to start with the implication of the results is that most of male are highly

engaged in street vending businesses as compared to female. The findings are also affirmed

by Fapohunda (2013) who argued that informal sector, particularly street vending business is

highly dominated by men in large parts, however, in recent days, there is high increase of

female to dominate street vending business, but still their number does not equate that of

male.

Age on the other hand, the results imply that old people tend to be less active in economic

activities than those in the middle age (Rutasitara, 2002). This means that the respondents are

in the economically active group, whereby in this age people are very active, aggressive and

motivated by needs of their family and caring of their aged parents and grandparents. The

status of the respondents also implies that majority of street vendors are married men because

these are regarded as the source of income of their families and that is why they struggle to

ensure that they get something to feed their families and other dependents. The study findings

are similar to what Fapohunda (2013) said that married men are highly involved in informal

sector because they are the bread winners of their families.

With number of children, the results implied that most of the people who are engaged in

street vending business have children whom they depend on daily basis. This is also agreed

by Mulwafu (2004) who commented that most of people who are engaged in vending

activities have the children who they take care of them with the basic needs. Finally, on the

level of education the implication is that most of the street vendors have basic education and

that is why they perceive or consider street vending business as the only source of income.

56

This is also agreed by Mulwafu (2004) who asserts that informal sector is the refuge of most

of the least educated people because it does not require special skills to operate business.

5.2 Types of Informal Sector Activities Performed by Vendors in Ilala Municipality

It has been found that, informal sector activities performed by the vendors included: selling

of begs, second hand closes, second hand shoes and home domestics items such as tea cups,

spoons, bowls, glasses, pots (sufurias) and alike. The implication of the study results is that

there is high demand of these items and that is why most of street vendors are engaged in

selling them. Every day people buy clothes and shoes, and majority of buyers who buy

clothes and shoes from street vendors cannot afford to buy the classic and lavish clothes or

shoes from boutiques. Thus makes most of street vendors to opt selling second hand clothes

and shoes as well.

This is similar to what was stated by Mwakabonga (2015), that the most common activities

that are highly practiced by street vendors are selling second hand clothes and second hand

shoes. However, the study findings contravene with the study by Matenge (2013) which was

conducted in the city of Gaborone Botswana, that most of street vendors are highly engaged

with food followed by selling ornaments, clothes and shoes.

5.3 The average income that informal sector provides to the street vendors of Ilala

Municipal Council

Based on the findings, majority of respondents affirmed to earn around TZS 5000 to less than

TZS 10,000 per day through street vending business. This implies that the amount earned by

street vendors is average and this indicates that amount can help street vendors to sustain

their lives. But when looking at this amount to another angle, the amount may still seem not

to be enough to run day to day lives of street vendors. The study findings also go together

with the study by Mwakibonga (2015) who asserted that most of the income earned by street

vendors range between TZS 5000 to less than TZS 10,000, but this depends on day and day

as some days they jump to more than TZS 10,000.

This is also supported by Matenge (2013) who conducted the study in Botswana on the

challenges facing informal sectors based on street vendors. He concluded that Street vendors

create economic resources to sustain themselves because urban development efforts fail to

57

provide formal employment. Through informal sector, these people access their basic needs

such as water, shelters and clothes which help them to survive in the city.

5.4 The extent to which street vending business contributes to poverty reduction among

the street vendors of Ilala Municipal Council.

The study found that the income generated by street vendors make them to survive by paying

for rent, water bills, electricity if any, to support their dependents etc. This is found in

Mwakibonga (2015) who asserted that most of the income earned by street vendors range

between TZS 5000 to less than TZS 10,000 but this depends on the day as some days they

jump to more than TZS 10,000. The amounts or income earned help them to run their lives

and hence reducing household poverty. Moreover, income generated has significant impact in

reducing poverty among street vendors. The study findings look similar with the findings

obtained in the study by Milanzi (2011) who said that informal sector (mama lishe) has

sustained lives of women in general.

5.5 Factors that limit street vending activities

Respondents had perceptions that most of microfinance and financial institutions do not open

door to the street vendors to provide credit facilities for the purpose of expanding their

businesses. It is stated that for microfinance and financial institutions that provide credit

facilities, they provide that with difficult conditions which were not afforded by majority of

street vendors.

The study findings are similar to that of Mwakabonga (2015) who argued that access to credit

facilities is a major problem for most of informal sector such as street vendors as most of

them are denied this access and hence failing to expand their businesses at large.

This further implies that most of street vendors do not know how to manage the income

generated and their businesses in large in proper manner due to the lack of entrepreneur

skills. These skills are very important and necessary for business activities as they help to

manage the income generated through the business and to have a good use of the money or

income generated and how to run business. Most of these street vendors are not educated one

as most of them have primary education which does not help them to have entrepreneur skills

in running their businesses. These are agreed with Milanzi (2011) who said that majority of

informal sector business operators do not possess entrepreneur skills which hinder them to

58

run their business properly and even the income they generate as they fail how to manage

such income so as to increase more profits.

Moreover, this provides that majority of street vendors believe that the government law

enforcement mechanisms are not friendly and that is why the police militia ‘mgambo’ tend to

use that loophole to harass street vendors. This is also agreed with Pascal (2011) who said

that government law enforcement mechanism is not well structured in a manner of supporting

informal sector and that is why someone may find that informal business operators are swept

from one place to another and even beaten by police militia and their items are also taken.

The study findings imply that the government does not provide much effort in providing

support street vendors as most of them complain that the government does not provide even

credit facilities to support street vendors for their businesses. The study findings look alike

with the study by Mwakabonga (2015) who asserted that lack of government support is

considered to affect informal sector because the government has not taken initiative measures

to support street vendors at large.

59

CHAPTER SIX

SUMMARY, CONCLUSION AND RECOMMENDATIONS

6.0 Introduction

This chapter presents summary, conclusion and recommendations as well based on the study

findings that have been discussed in the previous chapter. Furthermore, the study also

suggests the areas for further studies.

6.1 Summary of the study findings

This study was carried out to explore the contribution of informal sector in poverty

alleviation in Tanzania. The specific objectives intended:

(a) To find out types of informal sector activities performed by street vendors of Ilala

Municipal Council.

(b) To determine the average income that informal sector provides to the street vendors of

Ilala Municipal Council.

(c) To explore the extent to which street vending business contributes to poverty

alleviation among the street vendors of Ilala Municipal Council.

(d) To identify factors that limits these activities

Case study was employed in this study whereas purposive and accidental sampling

techniques were used to select 99 respondents. On the other hand, questionnaire, interviews

and documentary reviews were used as data collection methods. Analysis was done using

descriptive statistics for quantitative data with the aid of SPSS and MS-Excel while for

qualitative data, content analysis was used.

The findings indicated that most of street vendors were engaged in selling second hand

clothes and second hand shoes unlike domestic items. The study findings also provided that

most of street vendors said they have been in the business for more than three years which

made them to have enough experience of doing street vending business. Most of the

respondents stated that the major source of initial capital to start business was own savings.

On the other hand, majority of respondents said their source of own saving that was used to

start business was by selling assets.

60

Moreover, it was found that most of street vendors earned around TZS 5000 to less than TZS

10,000 per day through street vending business. However, they confessed that the income

they earned per day was not sufficient. Although most of them said the income they earned

was not sufficient but on the other hand they strongly agreed that the income generated help

to access basic needs, help to take care of family/relatives/parents and help to pay for rent,

water bills and electricity.

Additionally, the study show that majority of the respondents strongly agreed that street

vending business contributes to poverty reduction by generating income, majority of the

respondents agreed that street vending business contributed to poverty reduction through self-

employment and majority of the respondents agreed that street vending business contributed

to poverty reduction by ensuring life sustainability.

The findings indicated that most of the respondents strongly agreed that lack of financial

support was among of the factors that limited street vending activities. Most of the

respondents agreed that lack of entrepreneur skills was among of the factors that limited

street vending activities. Most of the respondents strongly agreed that unfriendly government

law enforcement mechanisms were among of the factors that limit street vending activities.

Moreover, most of the respondents agreed that lack of government support is among of the

factors that limit street vending activities and most of the respondents agreed that lack of

policy related to inform sector is among of the factors that limit street vending activities.

6.2 Conclusion

Despite the fact that the informal sector has often been described as economically stagnant

and unproductive as encompassing the unskilled and the uneducated and politically inactive,

but to some extent has positive impact on poverty reduction among the majority of people

who are out of formal sector. Therefore, it should be given the same priority as the formal

sector as per as the policy governing informal sector provides so since most of the street

vendors lack of financial support from microfinance and financial institutions, have no

entrepreneur skills as most of them do not know how to manage the income they generate and

how run the business in proper manner, lack of policy related to informal sector, unfriendly

government law enforcement mechanisms to business and lack of government support.

61

6.3 Policy implications

6.3.1 To the theory

To the theory, the study generates the findings that, in one way or another, the informal sector

have positive contribution to poverty reduction. This is also acknowledged by liberal thought

theory which regards informal sector as a driving force for poverty reduction. This theory

describes the key role played by informal sector in the course of alleviating poverty to the

lower income earners.

6.3.2 To the policy

Despite the significant role played by informal sector in the area of street vending business,

there are still some factors that limit such activities. Therefore, the study accordingly makes

the following policy implications:-

(a) Given the fact that the study found credit and financial support to be the major

challenges facing street vendors, there is a need for the policy makers to ensure that the

policy governing informal sector provides a means on how informal sector can access

credits.

.

(b) The policy that exists which is employment policy does speak very little about

informal sector; hence, there is a need for formulation of policy that will only deal with

issues related to informal sector.

(c) There is a need for the policy makers to ensure that the rules that governs informal

sector are friendly so as to encourage the street vendors as most of them complained

about harsh treatments from police militia.

(d) It was revealed that, most of the street vendors have entrepreneurship skills that could

help them to manage their business and the money they generate through the business.

Hence, there is a need for policy makers to ensure that there is a requirement or

compliance that compel those who are engaged in informal sector to acquire at least the

basic knowledge on how they can manage their businesses.

(d) Above all the government should provide support in all spheres such as poverty

alleviation/reduction policies should be implemented effectively to enable street vending

62

business to promote their development that in turn promotes national economic

development.

6.4 Area for further studies

This study was conducted only in Ilala municipality, Dar es Salaam region. It is hereby

recommended that, the study be conducted in other municipals of Dar es Salaam or other

areas in Tanzania to confirm the findings. More research should be done in the following

areas:-

(a) Determining factors affecting women food vendors (mama lishe) business activities in

Tanzania

(b) Factors hindering unemployed graduates not to be engaged in informal sector as a

source of income.

(c) The role of informal sector in job creation

63

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APPENDICIES

Appendix I:

QUESTIONAIRE FOR STREET VENDORS

Dear respondent,

The main purpose of this questionnaire is to get information that will assist me in my research

on assessing the contribution of informal sector on poverty reduction in Tanzania at

Ilala Municipal.

PERSONAL INFORMATION

Please Tick one of the following categories: use √.

1. Your sex

(i) Male ( )

(ii) Female ( )

2. What is your age?

(i) 18 - 25 ( )

(ii) 26 - 30 ( )

(iii) 31-Above ( )

3. Marital status

(i) Single ( )

(ii) Married ( )

(iii) Widow ( )

(iv) Divorced ( )

4. How many children do you have

(i) 1 child ( )

(ii) 2 children ( )

(iii) 3 children ( )

(iv) 4 children ( )

(v) More than 4 children ( )

69

5. How many dependents do you have at home

(i) No dependent ( )

(ii) Less than 4 dependents ( )

(iii) Up to 4 dependents ( )

(iv) Above 4 but less than 8 dependents ( )

(v) More than 8 dependents ( )

6. What is the level of your education?

(i) No education pursued ( )

(ii) Primary educations ( )

(iii)Secondary education ( )

(iv) Other training ( )

GENERAL QUESTIONS

(i) Types of informal sector activities performed by street vendors of Ilala Municipal

Council.

1. What activity are you engaged with?

(a) Selling second hand clothes ( )

(b) Selling second hand shoes ( )

(c) Selling domestic items ( )

(d) Selling second hand closes and shoes ( )

Mention other activities if any---------------------------

2. For how long have you been doing this activity?

Mention --------------------------------

3. What was the major source of your initial capital to start this activity?

(a) Own savings ( )

70

(b) Borrow from relative/ friends ( )

(c) Government institution ( )

Mention-----------------------------

(d) Bank loan ( )

(e) Other micro finance, NGOs ( )

Mention other sources if any------------------------------

4. If own savings, what was the source of savings?

(a) Sale of assets ( )

(b) Sales of crops/ livestock ( )

(c) Inheritance ( )

Mention other if any-----------------------

5. Are you satisfied with this activity?

(a) Yes ( )

(b) No ( )

6. If the answer is YES, why are you satisfied with this activity?

----------------------------------------------------------------

---------------------------------------------------------------

---------------------------------------------------------------

7. If the answer is NO, why are you not satisfied with this activity?

----------------------------------------------------------------

---------------------------------------------------------------

---------------------------------------------------------------

(ii) The average income that informal sector provides to the street vendors of Ilala

Municipal Council.

8. What is your average income per day?

(a) Less than 5,000/= ( )

(b) 5,000/= to less than 10,000/= ( )

71

(c) 10,000/= to less than 15,000/= ( )

(d) 15,000/= and above ( )

9. Does that income/amount sufficient to you?

(a) Yes ( )

(b) No ( )

10. Do you make any effort to expand your business so as to increase your average

income that you get through this business?

(a) Yes ( )

(b) No ( )

11. If the answer is YES, what effort(s) do you make?

-----------------------------------------------------------

-----------------------------------------------------------

12. To explore the extent to which income generated help street vendors to run their lives

This question requires you to indicate on the extent income generated help street

vendors to run their lives. Put a cycle where you think it is the right answer.

Key note: 1= Strongly agree, 2= Agree, 3= Neutral, 4= Disagree, 5= Strongly

disagree

Strongly

agree

Agree Neutral Disagree Strongly

disagree

To access basic needs

To take care of my

family/relatives/parents

To pay for rent, water bills,

electricity

Life sustaining in general

72

13. To what extent does the income generated help street vendors to run their lives?

(a) Large extent ( )

(b) Somewhat extent ( )

(c) Low extent ( )

(iii)To explore the extent to which street vending business contributes to poverty

reduction among the street vendors of Ilala Municipal Council.

14. This question requires you to explore the extent to which street vending business

contributes to poverty alleviation among the street vendors of Ilala Municipal

Council. Put a cycle where you think it is the right answer.


disagree

Strongly

agree


disagree

Income generation

Self-employment

Life capability

(iv) To identify challenges that limit these activities

This question requires you to indicate your perception regarding challenges that limit

these activities. Put a cycle where you think it is the right answer.


disagree

Strongly

agree


disagree

Lack of financial support

Lack of entrepreneur skills

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Unfriendly government law

enforcement mechanism

Lack of government support

Lack of policy related to

informal sector

74

Appendix II:

FOMU YA MASWALI

MASWALI YA TAARIFA BINAFSI

Weka vema sehemu yenye jibu sahihi { √ }

1. Eleza jinsia yako

(i) Mume { }

(ii) Mke { }

2. Una umri gani?

18 – 25 { }, 26 – 30 { }, 31 - Above { }

3. Onyesha sifa ya Ndoa

(i.) Umeolewa { }

(ii.) Umeachika { }

(iii.) Mjane { }

(iv.) Nimeachika/nimeachwa { }

4. Una watoto wangapi?

(i) Mtoto mmoja { }

(ii) Watoto wawili { }

(iii)Watoto watatu { }

(iv) Watoto wane { }

(v) Zaidi ya watoto wane { }

5. Una ndugu tegemezi wangapi?

(i) Sina tegemezi ( )

(ii) Nina tegemezi chini ya wane (4) ( )

(iii) Nina tegemezi wanne (4) ( )

(iv) Nina tegemezi zaidi ya 4 lakini ni chini ya tegemezi 8 ( )

75

6. Una kiwango gani cha elimu?

(ii.) Hukupata elimu ya msingi. ( )

(iii.) Elimu ya msingi ( )

(iv.) Elimu ya sekondari ( )

(v.) Mafunzo mengine ( )

MASWALI YA TAARIFA ZA BIASHARA

A: Aina ya biashara inayofanywa

1. Ni aina gani ya biashara unayofanay?

(a) Kuuza nguo za mitumba ( )

(b) Kuuza viatu ( )

(c) Kuuza vyombo vya nyumbani ( )

(d) Kuuza nguo za mitumba na viatu ( )

Taja shughuli nyingine kama ipo---------------------------

2. Kwa muda gani umekuwa ukifanya biashara hii?

Taja --------------------------------

3. Nini kilikuwa chanzo cha mtaji wa kuanzisha biashara hii?

(a) Ni akiba zangu mwenyewe ( )

(b) Niliazima kutoka kwa ndugu na jamaa ( )

(c) Taasisi za kiserikali ( )

Taja-----------------------------

(d) Mkopo wa benki ( )

(e) Taasisi zingine za kifedha, asasi ( )

Taja vyanzo vingine kama vipo------------------------------

4. Kama ni akiba zako, hizi akiba zako zilitoka kwenye vyanzo gani?

(a) Kuuza samani ( )

76

(b) Kuuza mazao/mifugo ( )

(c) Uritthi ( )

Taja vyanzo vingine kama vipo-----------------------

5. Je unaridhika na hii shughuli?

(a) Ndiyo ( )

(b) Hapana ( )

6. Kama jibu ni NDIYO, kwa nini unaridhika nah ii biashara?

----------------------------------------------------------------

---------------------------------------------------------------

---------------------------------------------------------------

7. Kama jibu ni HAPANA, kwa nini huridhiki nah ii biashara?

----------------------------------------------------------------

---------------------------------------------------------------

---------------------------------------------------------------

B: Kiwango cha pesa kinachopatikana katika biashara ya machinga kwa siku.

8. Nini wastani wa pesa unayoingiza kwa siku?

(a) Chini ya shilingi 5,000/= ( )

(b) 5,000/= chini ya shilingi 10,000/= ( )

(c) 10,000/= chini ya shilingi 15,000/= ( )

(d) 15,000/= na kuendelea ( )

9. Hiki kiwango kinajitosheleza kwako?

(a) Ndiyo ( )

(b) Hapana ( )

77

10. Je unafanya juhudi yoyote kutanua/kuongeza biashara yako ili uweze kuongeza

kiwango cha pesa unachoingiza kwa siku?

(a) Ndiyo ( )

(b) Hapana ( )

11. Kama jibu ni NDIYO, unafanya juhudi zipi?

-----------------------------------------------------------

-----------------------------------------------------------

12. Kwa kiwango gani kipato unachopata kinasaidia kuendesha maisha yako

Weka tiki pale unapohisi ni jibu sahihi

Ufunguo: 1= Nakubali zaidi, 2= Nakubali, 3= Sipo upande wowote, 4= Sikubali, 5=

Sikubali kabisa

Nakubali

zaidi

Nakubali Sipo

upande

wowote

Sikubali Sikubali

kabisa

Huniwezesha kupata

mahitaji ya msingi kama

maji,mavazi na makazi

Kuhudumia familia yangu,

ndugu, wazazi n.k

Huniwezesha kulipa kodi,

bili za maji, umeme n.k

Kuendesha maisha yangu

kwa ujumla

13. Kwa kiwango gani kipato unachopata kinasaidia kuendesha maisha yako?

(a) Kwa kiwango kikubwa ( )

(b) Kwa kiwango cha kawaida/kati ( )

(c) Kwa kiwango kidogo ( )

78

C: Namna ambayo biashara hii inapunguza umaskini kwa machinga.

14. Weka tiki pale unapohisi ni jibu sahihi


Sikubali kabisa

Nakubali

zaidi

Nakubali Sipo

upande

wowote

Sikubali Sikubali

kabisa

Inaniingizia kipato

Inanipa ajira

Inaendesha maisha yangu

ya kila siku kwa ujumla

Taja sababu zingine kama zipo----------------------------------------------------------

-----------------------------------------------------------

15. Weka tiki pale unapohisi ni jibu sahihi


Sikubali kabisa

Nakubali

zaidi

Nakubali Sipo

upande

wowote

Sikubali Sikubali

kabisa

Ukosefu wa fedha za

kusapoti biashara

Ukosefu wa elimu ya

ujasiriamali

Sheria na kanuni zisizo

rafiki

Hakuna sapoti ya serikali

Ukosefu wa sera

inayojihusisha na sekta

isiyo rasmi tu

79

Taja sababu zingine kama zipo----------------------------------------------------------

-----------------------------------------------------------

ASANTE KWA USHIRIKIANO WAKO

80

Appendix III:

INTERVIEW GUIDE FOR MUNICIPAL DIRECTOR, WARD

EXECUTIVE OFFICERS AND DISTRICT MARKET OFFICER

1. What are common activities performed by street vendors of Ilala Municipal Council?

2. Are these activities permanent or seasonal businesses?

3. What are the average income do street vendors make per day?

4. Do street vendors pay levies?

81

APPENDIX IV

SWAHILI VERSION

1. Ni biashara zipi wanafanya machinga wa wilaya ya Ilala?

2. Je hizi biashara ni za kudumu?

3. Je huwa wanafanya biahsara za msimu? Kama za nyakati wa mvua, sikukuu n.k?

4. Wastani wanaingiza kiasi gani cha pesa kwa siku hawa machinga?

5. Je wanalipa kodi?

ASANTE KWA USHIRIKIANO WAKO

the contribution of informal sector on poverty …

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