Kenyans jobless in booming economy - Economic Survey

Millions of Kenyans remain jobless since President Uhuru Kenyatta came to power in 2013 despite the 'booming' and 'robust' economy recording its highest growth in five years.

The Economic Survey 2019 of the National Bureau of Statistics released Thursday is filled with ironies and seeming contradictions.

It reveals that the Jubilee government has only created 1.8 million jobs in six years.

This is equivalent to 360,000 new jobs per year, which is 64 per cent less than the one million jobs Jubilee promised when it took power.

In the last two years alone, 92,500 jobs were lost with the total number of employed Kenyans standing at 17.78 million.

As of 2016, there were 1.44 million unemployed Kenyans who formed part of the 19.31 million working-age population.

Of the same population, 5.64 million were inactive due to school and family responsibility.

Ironically, the economy has shot up from 4.9 per cent in 2017 to 6.3 per cent last year raising questions of how a jobless population is driving the economy and making it thrive.

“We have been spending in such a manner that the government can redistribute this growth to the pockets of Kenya,” Treasury Cs Henry Rotich said.

The government had projected a 6.1 per cent growth in the economy. It attributes the growth to increased agricultural production, accelerated manufacturing activities, sustained growth in transportation and vibrant service sector activities.

While the local economy grew by 6.3 per cent, the global economy experienced lower growth of 3.6 per cent in 2018 compared to 3.8 per cent in 2017.

Annual real average earnings per person increasing from Sh364, 313 to Sh 376,080.

Consequently, the cost of living improved significantly, with inflation dropping by almost a half from eight per cent in 2017 to 4.7 per cent in 2018.

Speaking at a local TV program on Wednesday, Safaricom CEO Bob Collymore dismissed projected economic growth of 6.1 per cent, saying that doesn't reflect true picture on the ground.

''Good GDP figures are just mere numbers of they are not felt by citizens. People are struggling to put food on the table. Talk to motorcycle operators and vegetable vendors....people are struggling,'' Collymore said.

Kenyans who spoke to the Star yesterday dismissed the KNBS findings as colourful figures that do not reflect the true picture of living condition. 

"Which economy has grown? A packet of maize flour is at Sh118, a half packet of milk is now expensive than sugar, power prices increasing daily not forgetting fuel prices. Actually, the economy is worse than 20 years ago,’’ said security guard Patrick Midega in Westlands.

His colleague James Simwa summed up the current economy in one word, "horrible".

Jane Muthoni, a fruit vendor in Westlands, asked the government to get out of "Wonderland" and seek reality from Kenyans who are reeling from tough economic times.

“There is no money in circulation. Our children are home after getting degrees. I have now six loans from Tala, Branch, Mshwari, Fuliza, Sacco and Chama. Life is tougher than before,” Muthoni said.

Even as Rotich admitted "the irony", the Central Bank of Kenya reported earlier this month that about 51 per cent of Kenyans are living hand to mouth.

In its report alongside FSD, the 2019 Fin Access Household Survey noted that this is a rise from 34.3 per cent in 2016. Acting director of research at CBK Raphael Otieno attributed the worsening financial health of households to poor microeconomics.

Further, the growth in the economy is in contrast of numbers reported in the well-being report that shows at least 16.4 million Kenyans currently live below the poverty line.

This means that they don’t spend more than Sh108.4 shillings per day. The most recent labour force report from KNBS indicates that there were at least 1.44 million unemployed Kenyans as of 2016 aged between 15-64 years.

At the same time, more than 500,000 graduates are released into the market from universities with hope of getting formal employment that has been declining. According to the survey, the number of new jobs created last year declined by 69,400 from 909,800 reported in 2017.

Meaning only 840, 600 jobs were created.

The formal sector recorded the lowest growth of new jobs from 137.9 thousand in 2014 to 78.4 thousand last year.

The growth was 31.46 per cent lower than the 114.4 thousand new jobs created in 2017 in the formal sector.

On the flipside, new jobs created in the informal sector dropped for the first time since 2014 to 762.2 thousand jobs.

However, as reported in the survey, this is not reflected in an economy where the manufacturing sector recorded the highest growth in the last five years from 0.5 per cent to 4.2 per cent last year.

The sector employed 281,100 people, a 1.5 per cent increase compared to 2017.

In the private sector, agriculture contributed to the bulk of Kenya’s employment force at 294,300 workers followed by wholesale and retail with 258,900 employees and Education with 223,900 workers.

In the public sector, Education had the largest workforce of 352,900 employees followed by Public Administration and Defence jobs at 295,000 workers.

“The Teachers Service Commission which is the largest employer in the public sector, registered a 3.5 per cent growth in employment in 2018,” the report stated.

Despite the growth slump in public sector hiring, the public wage bill grew 10.3 per cent last year to Sh2.02 trillion.

This was significantly larger than what private firms paid their employees at Sh1.41 trillion.

Even as the economy grows, the survey shows a parallel trend in vehicles purchased by 23 per cent to 102,036 vehicles.

This, however, is not a reflection of what Wanjiku is currently going through as the number of registered sedans has been on a gradual decline since 2014.

According to the report, only 10,504 sedans were registered last year, a 33.9 per cent decline over the past five years.

The decline can be largely attributed to poor credit access from banks as a result of the rate cap law making it harder for individuals to purchase cars, as well as low cash flow in the economy.

“We urgently need to deal with the challenge of interest rate capping,” Rotich said.

Most middle-income earners rely on loans to finance car purchases as they do not have sufficient cash flow to walk into a car dealership.

“The number of newly registered lorries, trucks, buses and coaches declined for the third year in a row to 5,514 and 1,065 units respectively,” the report stated.

The drop was largely on account of increased use of the Standard Gauge Railway to transport freight and passenger.

Despite rail transport coming out last of all transport modes in the country, it grew more than twofold to Sh11.37 billion, largely driven by freight services.

On the other hand, the registration of station wagons grew over the past three years to 64,179 vehicles.

More Kenyans are buying motorcycles either as a cheaper mode of transport or as a source of income, as the report indicated there were 195,253 units registered last year.

Over the past five years, motorcycle registration vehicle has been on a steady increase jumping 69.1 per cent from 115,451 units registered in 2014.

The total number of cars and motorcycles registered last year stood at 297,289 units.