Economy

Census: 39pc of Kenya youth are unemployed

unemployed

Kenyans gathered at a past public function. FILE PHOTO | NMG

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Summary

  • Census data released on Friday shows that 5,341,182 or 38.9 percent of the 13,777,600 young Kenyans are jobless, further widening the gulf between the rich and the poor.
  • This backs World Bank data on Kenya which indicates that the country had the highest rate of youth joblessness in East Africa in 2015 with 17 percent of all young people eligible for work lacked jobs.
  • Neighbouring Tanzania and Uganda had comparable rates of 5.5 percent and 6.8 percent respectively, and the latest census data points to worsening unemployment for the youth aged between 18 and 34.
  • Kenya’s years of strong economic growth have created jobs, but they are mostly low-paying, informal and coming at a rate that economists say is too low to absorb the rapidly growing population.

More than a third of Kenya’s youth eligible for work have no jobs in a business environment where the government is struggling to tackle the country’s acute unemployment problem.

Census data released on Friday shows that 5,341,182 or 38.9 percent of the 13,777,600 young Kenyans are jobless, further widening the gulf between the rich and the poor.

This backs World Bank data on Kenya which indicates that the country had the highest rate of youth joblessness in East Africa in 2015 with 17 percent of all young people eligible for work lacked jobs.

Neighbouring Tanzania and Uganda had comparable rates of 5.5 percent and 6.8 percent respectively, and the latest census data points to worsening unemployment for the youth aged between 18 and 34.

Kenya’s years of strong economic growth have created jobs, but they are mostly low-paying, informal and coming at a rate that economists say is too low to absorb the rapidly growing population.

The youth are the hardest hit by joblessness compared to their counterparts above 35 years in an economic setting that is plagued by job cuts and hiring freezes on the back of sluggish corporate earnings.

About 91 percent of the 10.862 million Kenyans aged 35 years and above are in employment, according to the Census results, which point to a growing dependency burden.

"The conventional population of youth aged 18 to 34 was 13.7 million, out of which 61 percent were working while 1.6 million were seeking work or indicated that there was no work available," stated KNBS Director-General Zachary Mwangi during the release of the findings.

This means that more 3.7 million people between the ages of 18 and 34 years who are outside employment are not looking for work.

Mr Mwangi said the country has 18.9 million people not involved in any economic activity, out of which 16.1 million were full time students while 1.5 million were home-makers. 22.9 million or 48.2 percent of the population are below 17 years, pointing to a wave of millions of jobseekers joining the market.

The US Bureau of Labour Statistics defines the unemployed as people who do not have a job and have actively been looking for employment in the past four weeks.

In Kenya, about 762,200 jobs were created in 2018 while the economy expanded by 6.3 percent, well outperforming the global and regional averages. But 90 percent of the new jobs are in the poorly-paid informal sector.

Official data shows that 78,400 new formal jobs were created in the economy in 2018 compared to 114,400 in 2017, Economic Survey 2019 data shows.

This is the slowest pace of formal job growth since 2012 when the economy churned out 75,000, adding to the crisis of youth unemployment. The data does not capture job cuts and net employment.

By contrast, more than 560,000 students enrolled in university last year, worsening the plight of school leavers.

Economic inequality

Central Bank of Kenya (CBK) Governor Patrick Njoroge recently faulted the structure of Kenya’s economy for delivering economic growth without jobs and a rise in income, arguing that increased infrastructure spending has not spread wealth among working Kenyans.

"It is true you have GDP numbers but you can’t eat GDP. At the end of the day, what is needed is specific income. That is what anybody else wants plus jobs," said Dr Njoroge.

Kenya has since 2013 embarked on major infrastructure projects to make up for decades of under-investment that stunted economic growth.

This is underlined by the construction of the standard gauge railway line from Mombasa to Naivasha using nearly Sh500 billion of Chinese loans in a borrowing binge that economists say is saddling future generations with too much debt.

While Kenya’s economy expanded 6.3 percent last year from 4.8 percent in 2017, private sector activity — which translates to jobs and higher pay -- has remained muted.

"If you look at employment index (in the PMI) since the beginning of 2017, it’s been quite neutral, meaning it’s not like there has been improvement in new jobs," said Jibran Qureishi, regional economist for East Africa at Stanbic Bank — which tracks company performance monthly through the Purchasing Managers’ Index (PMI).

The drop in new jobs and stagnant wages raises queries over equitable distribution of the growth dividend among Kenyans considering the economic growth expansion witnessed recently.

A recent report by Mauritius-based AfrAsia Bank revealed that about 356 billionaires were living in Kenya in 2018, placing the country at number four in a ranking of top African cities based on the super-wealthy persons.