Around two-thirds of jobless Kenyans have given up looking for work or starting businesses, disheartened by lower opportunities in a tough economy that has seen many firms freeze hiring to survive.
The Kenya National Bureau of Statistics (KNBS) data covering the quarter that ended December show that 2.01 million out of the total of 2.97 million jobless Kenyans aged between 15 and 64 — and who qualify for the labour force — were not actively looking for employment.
The number of graduates or retrenched workers who have given up looking for work has increased from 1.33 million in the quarter to June 2020 when businesses shed jobs and froze hiring at the peak of Covid-19 economic hardships.
They accounted for 67.71 percent of the people without jobs, from 65.08 percent in September and 54.1 percent in June 2020.
The majority of those who have given up on employment are aged between 20 and 24 at 580,281, followed by 25 to 29-year-olds at 351,125.
The 20-24-year-old demographic consists mostly of fresh graduates whose job-seeking efforts are hurt by a lack of experience and a mismatch between skills and job openings.
The large number of new entrants into the job market every year has also led to limited opportunities, forcing many to seek alternatives such as setting up small businesses.
Since March 2020, many businesses have been reluctant to take more workers as they recover from the economic problems caused by the Covid-19 pandemic, which triggered lay-offs and wage cuts to survive.
“This can be attributed to a combination of both cyclical unemployment and structural unemployment,” said Ken Gichinga, chief economist at Mentoria Economics.
“Cyclical unemployment occurs when the business cycle is facing an economic downturn and there is reduced demand for goods and services, while structural unemployment exists when there is a mismatch between the jobs that are available and the people for work.”
The government considers as unemployed people who do not have a job and have actively been looking for employment in recent weeks and are currently available for work.
These people numbered 960,001 in the review period, out of the total of 2.97 million people who were out of work.
The remaining 2.01 million are classified as potential labour force, meaning they are people of working age who either did not make any effort to seek employment even though they are available and willing to work or had sought employment but were not available to take up jobs even if the opportunity arose.
The KNBS data suggest the number of unemployed persons aged between 35 and 49 not actively seeking work increased 37.48 percent to 390,386 in three months through December 2022 compared with the prior quarter.
This means 76 percent of 513,692 jobless persons in this age bracket were not actively looking for jobs, a rise from 65.4 percent of 434,180 unemployed persons in the previous quarter.
On the contrary, the number of unemployed people aged 50 to 64 who had quit the active search for jobs dropped to 120,742 in the quarter that ended last December from 139,981 three months earlier.
Kenya’s years of strong economic growth have created jobs, but they are mostly low-paying, and informal and come at a rate that economists say is too low to absorb the rapidly growing youth population.
“In Kenya, what we are facing is dwindling employment opportunities which is pushing people into informal work,” Federation of Kenya Employers executive director Jacqueline Mugo told the Business Daily in a past interview.
“On average, in Kenya, people are staying out of employment for seven years.”
Latest estimates by the International Labour Organisation show Kenya has one of the highest rates of unemployment in the seven-nation East African Community bloc, only dwarfed by South Sudan and Rwanda.
The ILO estimates, collated by the World Bank Group, put the unemployment rate in Kenya at 5.6 percent of the total labour force in 2021 going by the strict definition of unemployed persons being those who do not have a job and are actively searching.
That is higher than Tanzania’s 2.7 percent, Uganda’s 4.3 percent, DR Congo’s 5.1 percent and Burundi’s 1.1 percent.