July 17, 2012
Nairobi's immigrant community has created a 24-hour economy in Eastleigh, helping to elevate the capital city's busiest area into a major business hub.
Economists and merchants say Eastleigh can offer vital lessons to the rest of the country on how a major city can be decongested by creating trading zones outside the traditional model of a condensed central business district.
Nairobi Central Business District (CBD) Association chairman Timothy Muriuki said the success of Eastleigh has inspired merchants and developers who are looking to re-create business hubs in other parts of Kenya.
Nairobi was originally planned to have most shops concentrated in the city centre near government and private offices, thus creating congestion in the CBD, he told Sabahi.
Now, in distant towns such as Kisumu, shopping malls have started to emerge away from busy town centres, easing congestion in the central business district.
Merchants from across the country have also started replicating another aspect of the Eastleigh business model -- dividing big shops into small stalls for several vendors to sell their products. This apportionment helps budding entrepreneurs cut down on overhead costs such as rent and electricity.
In addition to decongesting the city and helping budding entrepreneurs, Eastleigh merchants have also been credited with introducing Kenya to the 24-hour business model, Muriuki said.
Clyde Mutsotso, a Nairobi-based economist, said Eastleigh hosts a few large businesses, but many small and medium ones.
"I estimate Eastleigh accounts for a third of all business done in Nairobi," Mutsotso said. "This means that since Nairobi city accounts for 740 billion shillings ($8.8 billion) in annual turnover, Eastleigh has a turnover of 246 billion shillings ($2.9 billion)."
Statistics from the Eastleigh Business Community, which has 20,000 registered members, show registered businesses paid 780 million shillings ($9.3 million) in taxes in 2011.
Eastleigh's transformation into a business hub can be traced to the early 1990s when the first wave of Somali refugees, fleeing civil war, began arriving in noticeable numbers, according to Peter Githinji, a 50-year-old merchant who said he has always lived in Eastleigh.
He told Sabahi that in just a few years, he witnessed his old neighbourhood change into a melting pot, with immigrants from neighbouring countries trading from their rooms in the Garissa Lodge, a boarding house that has become a shopping centre.
"I have seen the Eastleigh bars and entertainment spots replaced by shopping malls," he said. "In the 1990s, there were many bars and guesthouses, but nearly all of them have been replaced by shopping malls and apartments."
Safi Musa, a 38-year-old Ethiopian, told Sabahi he migrated to Eastleigh in 2006 and was able to start a clothing and footwear business in the Amal Shopping Plaza with the help of the immigrant community.
"When I started the business, I had no money. Being a foreign immigrant with no legal status, commercial banks could not offer me a loan," he said. "Fellow immigrants pooled $2,000, which I invested. I have repaid the loan from my sales."
Today, Musa's business is thriving, attracting suppliers from as far away as Kampala and Arusha to his shop. Mohammed Sheikh Hussein, a 45-year-old Somali immigrant who sells shoes imported from Ethiopia, has a similar story.
"When I came to Kenya in 2005, I did not know how to speak the local language. It took me a long time, but now I can speak Swahili. This has enabled me to expand my business," he said.
Hussein, who also has a shop at the Amal Shopping Plaza, says business was very good at the beginning, but Eastleigh's success has also meant more entrepreneurs are jumping into the mix, increasing competition.
Hussein said he misses the early days when he had customers from around the country and abroad lining up for his goods. "These days, the competition is very stiff. Some merchants imitate genuine brands and sell the fakes at very low prices. This has eaten our profit margin," he said.
Despite the challenges of competition, Hussein is content with what Eastleigh has been able to provide him.
"Some of the malls have mosques, which makes it easy for [Muslim immigrants] to pray," he said.
Hussein and other business owners said Eastleigh's transformation has attracted merchants from all over the country, and has helped people of different backgrounds learn more about each other and thrive as a community.
Eva Nyambura, a 35-year-old businesswoman who travels once a week from Meru to Eastleigh, told Sabahi she has learnt about the various cultures and customs that govern businesses in the hub.
"When Eastleigh prays at midday and at 4:00 pm, business grinds to a halt as stalls have to be closed," she said. "If by that time I have not bought my stock, I have to wait until 2:00 pm when the stalls reopen."
"At first, I could not understand why all stalls were closed during prayers," she said. "I am a Christian and only go to church on Sunday, but now I understand."
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