•Agriculture absorbed 1.6 million additional workers, increasing its share of employment from 47 per cent to 54 per cent in one year, the report indicates.
•During the release of the Economic Survey 2021 in September, Treasury CS Ukur Yatani announced over 740,000 jobs were lost due to the pandemic.
Massive job losses occasioned by the Covid-19 pandemic has driven a significant number of Kenya's urban population to the rural areas, a report by World Bank indicates.
According to the report, the pandemic has had a huge impact on the labour market and some of the scarring will have longer-term implications.
Unemployment increased in urban areas while employment increased in rural areas, with agriculture being the top option.
“Workers lost jobs and moved into agriculture to survive,” the global lender says in the latest Kenya Economic Update Edition 24 titled 'From Recovery to Better Jobs.'
The services sectors in urban areas was among those affected with the share of employment in services declining by seven percentage points, reversing almost all the gains since 2005.
Agriculture absorbed 1.6 million additional workers, increasing its share of employment from 47 per cent to 54 per cent in one year, the report indicates.
Prior to the pandemic, Kenya saw strong growth in employment among the higher-skilled services sub-sectors.
Employment in the global innovator sub-sectors grew by 10 per cent between 2015/16 and 2019, largely led by the finance and insurance sub-sectors.
Employment in the skill-intensive social sub-sector, that is education and health, increased by an even larger 23 per cent.
Job creation was concentrated in the services sector. For instance, the number of formal firms in the retail sector increased five fold–from around 700 in 2013 to 3,500 in 2018.
This outpaced the growth of formal firms in the manufacturing sector, the number of which roughly doubled over this period, from 336 to 714.
The pandemic which struck in March last year however affected more than 5.9 million jobs within a period of three months alone, private sector data indicates.
Data compiled by the Kenya Private Sector Alliance, and shared with the government, indicates at least 5,991,768 direct and indirect jobs were either lost or workers sent home on unpaid leave, as companies and businesses mitigated effects of the pandemic.
This was seven fold the 846,300 new jobs created the previous year.
During the release of the Economic Survey 2021 in September, Treasury CS Ukur Yatani announced over 740,000 jobs were lost due to the pandemic.
Yatani said the number of employed people fell to 17.4 million from 18.1 million at the end of 2020.
The reopening of the economy especially the lifting of the nation-wide curfew in October has however shown signs of an improving labour market.
“The incipient rebound in employment in more recent months suggest that with appropriate measures, Kenya could recover and surpass these losses,” World Bank says in its report.
World Bank notes Kenya has a dynamic private sector, with a relatively high entry rate of new firms, in comparison to other countries with similar levels of per capita income.
However, these firms face challenges in terms of scaling up–most firms in Kenya are small, largely based in Nairobi, and operate in the informal sector, according to the report.
The country has over 138,000 formal establishments and 7.4 million micro, small and medium enterprises (MSMEs).
Among formal firms, only three per cent have 50 or more employees, and only one per cent of firms have 150 or more employees.
The majority of MSMEs, 94 per cent, are unlicensed micro firms with fewer than five employees.
Nairobi hosts 36 per cent of formal firms and 14 per cent of MSMEs. The services sector dominates the firm landscape with 84 per cent of formal firms and 83 per cent of MSMEs in the services sector.
“Improving conditions in Kenya to support the ability of new firms to scale up and innovate is important to support the creation of better jobs at a large scale,” said Keith Hansen, World Bank Country Director for Kenya.