Ruto's government created 848,200 jobs in 2023 - KNBS

Monthly salaries for both government and private sector employees dropped on high tax regime.

In Summary
  • The average monthly salary for state workers dropped by 7.8% to Sh52,158.
  • Teachers in the country took the biggest pie of the public sector wage bill at Sh285 billion.
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At least 848,200 new jobs were generated in Kenya last year despite a tough economy that saw firms resort to retrenchment to cut operating costs.

The Kenya Economic Survey 2024 released today by the Kenya National Bureau of Statistics (KNBS) shows the informal sector contributed the majority of the jobs at 720,900 or 85 per cent.

Employment in the modern and informal sectors, excluding small-scale farming and pastoralist activities, went up from 19.1 million in 2022 to 20 million in 2023.

In the year under review, wage employment in the modern sector grew by 4.1 per cent, translating to 122,800 new jobs in the sector.

Public sector wage employment registered a growth of 5.9 per cent in 2023 compared to 1.6 per cent recorded in 2022.

The nominal wage bill rose by 7.3 per cent to Sh2.8.6 trillion in 2023.

The private sector wage on other hand went up by 8.2 per cent to Sh1.96 trillion, while the public sector wage bill increased by 5.3 per cent and accounted for 29.8 per cent of the total wage payments in the period under review.

Teachers in the country took the biggest pie of the public sector wage bill at Sh285 billion, a 6.5 per cent rise compared to the same period last year. This accounted for 34.2 per cent of the total public sector wage bill in 2023.

In the year under review, overall annual average earnings increased by 3.4 per cent to Sh894,232.8 compared to Sh864,750.1 in 2022.

Annual average earnings in the private sector increased by 5.4 per cent to Sh920,000, while those in the public sector decreased by 0.5 per cent to Sh838,000.

Overall, real annual average earnings per employee decreased by 4.1 per cent to Sh667,300, translating to Sh55,608 per month. 

Real annual average earnings per employee in the private sector declined by 2.5 per cent to Sh686,400 or Sh57,200 per month, while those in the public sector declined by 7.8 per cent to Sh625,900 (Sh52,158 per month) over the same period.

Although the report is mute on what contributed to a decline in salaries, experts are pointing it to a high tax regime, especially the introduction of a housing levy of 2.5 per cent of gross salary and an increase in social protection and national health cover charges. 

Even so, the average annual inflation rate as measured by the Consumer Price Index (CPI) maintained at 7.7 per cent in 2023 as was recorded in 2022.

The inflation was largely driven by an increase in prices of Transport (12.2 per cent); food and non-alcoholic beverages (9.7 per cent); and housing, water, electricity, gas and other fuels (8.1 per cent).

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