TOUGHER TIMES?

Kenya's unemployment rate to rise– World Bank

The Trading Economics projects unemployment rate in Kenya to rise to 10.5 per cent this year before slowing to 10 per cent in 2020

In Summary

• Nine million individuals are expected to enter the labor force in a decade between 2015 and 2025.

• According to the Kenya Economic Survey 2019,  840,600 new jobs were created last year compared to 909,800 reported in 2017.

Analysts polled by Reuters expected the unemployment rate to edge up to 25.3 per cent in the first quarter
UNEMPLOYMENT Analysts polled by Reuters expected the unemployment rate to edge up to 25.3 per cent in the first quarter
Image: REUTERS

Kenya has to create at least 900,000 jobs annually between now and 2025 to absorb the high number of youths joining the job market, according to the latest World Bank report.

Dubbed ‘Kenya Social Protection and Job Programmes Public Expenditure Review’, shows the country's job creation has failed to keep pace with new job entrants. 

According to the report, nine million individuals are expected to enter the labor force in a decade between 2015 and 2025, further pushing up the country’s unemployment rate which stood at 9.3 per cent last year, according to Kenya Economic Survey 2019.

 
 

The ten year World Bank  survey projects unemployment rate  in Kenya to rise to 10.5 per cent this year before slowing to 10 per cent in 2020. 

"This will contribute to a growing job deficit in the labor market in the future. Moreover, urban jobs are needed due to added pressure on urban labor markets from increasing urbanization,’’ the report says.

In April, the government claimed that the economy grew by 6.3 per cent last year, yielding some 840,600 new jobs. This was a 69,400 decline from 909,800 reported in 2017.

According to World Bank, 60 percent of the working age population in Kenya was employed in 2005, and this has increased significantly to 76 per cent, in 2015.

Despite the growth in jobs creation, the lender said the country is producing low quality jobs.

"In Kenya, only six per cent of total employment is in the formal non-agricultural sector. Almost half of total employment, 49 per cent, is informal non-agricultural employment, with the remaining 45 per cent employed in agriculture,’’ the report says.

It explains that agriculture is a low-productivity sector with high rates of underemployment.

 

Although the global lender has praised Kenya for increasing expenditure on job programmes every year, It said, the amount is still a very small share of GDP and overall government expenditure.

"Spending on job programmes in Kenya amounts to 0.3 per cent of government expenditure. Spending has stagnated at 0.1 per cent of GDP in recent years, limiting the reach of job programs,’’ World Bank said.

The rate is low compared to that of other lower middle income countries like Brazil and Ghana that have dedicated at least 1.2 per cent of GDP to such programmes.

It has also called for inclusivity in government job programmes, saying wealthier individuals are potential beneficiaries for the training and attachments, amounting to over 50 per cent of overall potential beneficiaries for industrial training.

Furthermore, men are more often potential beneficiaries than women for training.