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New hires slow down in key sectors - report

In Summary

•Agriculture manufacturing and real estate cumulatively contributed 44 per cent to the economy.

•The three key sectors only accounted for 20 per cent of jobs in Kenya.

KPA workers at the Port of Mombasa
KPA workers at the Port of Mombasa
Image: FILE

Kenya’s largest sectors in terms of GDP contribution currently account for the least share of jobs in the country’s formal sector.

A report by ICEA LION Asset Management shows while agriculture manufacturing and real estate cumulatively contributed 44 per cent to the economy, the three key sectors only accounted for 20 per cent of jobs in Kenya.

This while education, which accounted for eight per cent of GDP contributed 21 per cent of formal jobs.

The firm’s head of research, Judd Murigi attributed the poor job distribution to a lack of value addition systems in place as well as high production costs which have been stunting the need for jobs in these sectors.

“We have seen companies moving their operations to Egypt because it was too costly to do business in Kenya, these are hundreds of jobs in the formal sector we have lost,” he said.

The report shows agriculture, manufacturing, and real estate lagged in terms of job growth in 2018 contributing 12, 11 and 0.2 per cent of formal jobs respectively.

Data by the Kenya National Bureau of Statistics shows last year, a total 840,000 new jobs were created.

Of these 83.6 per cent of the new jobs were created in the informal sector and 16.4 per cent in the formal sector.

Judd said annual average private-sector wages since 2013 increased at eight per cent, exceeding the average inflation rate of 6.5 per cent over the same period.

On the other hand, the average increase in annual private-sector wages stood at 5.5 per cent.

‘This is a clear indicator the government is working to control the public wage bill,” he said.

The report published by the Kenya National Bureau of Statistics noted that Education, Agriculture, and manufacturing sectors were leading employers accounting for over 43 per cent in all jobs.