Nairobi County Seeks New Revenue with Plan to Formalize and Tax Informal Traders
NAIROBI — In a move aimed at expanding its tax base and formalizing a key part of the urban economy, the Nairobi City County Government has announced plans to introduce a structured revenue collection system targeting the city’s vast informal trading sector. The proposed initiative, detailed in the Nairobi City County Finance Bill 2025, seeks to register thousands of street vendors, market stall operators, and jua kali artisans to pay a daily or monthly fee, promising improved services and designated trading spaces in return. County officials project the plan could raise billions of shillings in additional revenue to fund city services and infrastructure.
The framework includes the rollout of a digital registration and payment platform, allowing traders to make standardized, small-value payments via mobile money. In exchange, the county has pledged to offer formalized, serviced trading zones with better security, sanitation, waste collection, and protection from arbitrary eviction. Governor Johnson Sakaja’s administration argues that the plan will replace the current opaque system of irregular, often coercive payments to county officers with a transparent, predictable levy that grants traders legal recognition and operational stability. We are bringing order, dignity, and a sense of mutual obligation to this critical sector, said a county finance executive.
Reaction from trader associations has been mixed, blending cautious hope with deep-seated skepticism. If the county can truly guarantee us a permanent, safe place to work and end the daily harassment, then a small, official fee is a fair trade, said Paul Ochieng, chair of a vendors’ association in Gikomba. However, many grassroots traders fear the plan is merely a revenue grab that will add to their financial burden without delivering tangible improvements. We already pay ‘fee’ every day just to operate. This feels like giving a receipt for harassment, voiced Amina Said, a food kiosk operator in Eastleigh. Economists warn that the implementation must be sensitive to avoid raising consumer prices or pushing the most vulnerable traders out of business.
The success of the ambitious plan hinges on a careful, transparent rollout and the county’s ability to deliver on its promises of improved services and trader protections. The coming months will see a critical phase of stakeholder engagement, registration drives, and the establishment of pilot trading zones. If managed with empathy and efficiency, the policy could mark a historic step toward integrating Nairobi’s informal economy into the formal fiscal structure. If mishandled, it risks exacerbating poverty and distrust. The initiative stands as a major test of governance for the county, balancing revenue needs with inclusive economic growth in a sector that employs millions.