Economic Ingenuity among Nairobi’s Poor

A recent story in the The Standard details the various ways Nairobi’s low-income earners maximize their earning potential and spending power. The article, “How Thriving ‘Reject Economy’ is Allowing the Poor to Live High Life of the Rich,” by Dominic Omondi looks beyond the “Dollar a Day” trope to reveal the economic ingenuity of Nairobi’s underclass. A few of the examples:

• Getting discounted prices for cracked eggs, bruised vegetables, misshapen bread, and defective clothing
• Finding deals from street vendors and informal markets
• Recovering and washing discarded, but still trendy, hair weaves
• Selling old newspapers by the page to butchers and shopkeepers
• Buying scrap electronics for pennies, fixing them, and selling them for a sizable profit

During my fieldwork, I became fascinated by the economics of Kibera. Inside Kibera, there are lots of people struggling to afford food and rent, but there are also plenty of working televisions, stylish dressers, and fresh fruits and vegetables.

Last summer, I learned about the cracked egg discount when helping a friend sell eggs at the market. It’s not surprising that this same logic holds true for a number of different products and services in the informal economy. You just have to know how to navigate the system.

Needless to say, I was captivated by the stories Omondi recounts in this article.

But here’s the problem.

While I saw this as a story about economic ingenuity, Omondi frames it as a morality tale about the frivolity and irrationality of the poor. For instance, he opens the article by introducing a man whose “love for all things luxurious” and his “life of extravagance” belies his “tiny, mud-walled shack in the squalid Korogocho slum.”

Later, Omondi interviews a University of Nairobi economist and a Moi University sociologist who both cast these efforts by the poor as foolish attempts to live symbolically above their means.

Dr XN Iraki, an Economics lecturer at the University of Nairobi, says: “People in slums and poor people in general aspire to be better than they are economically. In reality, that would take a long time, maybe even a generation.”

As such, Dr Iraki adds, the poor go through shortcuts by using symbolism like clothing labels or other visible signs of affluence.

“This provides a great market for fakes, making the business very profitable.”

Moses Mutua, a Sociology lecturer at Moi University, adds that this situation is further fuelled by what he terms “comparative need” — wanting to have a TV set in your house because your neighbour or someone you know has one.

…

“They [the poor] also want to show that they are in a class of their own. They suffer false consciousness; they are low-income earners, but would not want to show their predicament to their neighbours, children or extended family.”

The implication is clear: the poor should act poor.

I don’t want to completely dismiss the influence of social comparison. At the same time, why should we interpret someone making stew with chicken scraps or fixing a broken TV as false consciousness? Why not see this as an example of resourcefulness?

If the characters in this story have discovered ways to maximize their spending power, why view their consumption desires as any less valid than anyone else’s?

While I appreciate Omondi’s final point that the best way to improve living standards is to increase jobs and wages, he takes an unfortunate detour to get there. The takeaway from this story should be that Nairobi’s underclass has developed tactics (in the de Certaeu sense) to navigate an economic system that is structured around their marginalization.

This is worthy of our admiration, not our contempt.