Economy

Dependants up 435,369 after Covid-19 job cuts

youth

National Hygiene Programme youth workers in Eastleigh wait to be deployed in parts of Nairobi on May 20. PHOTO | JEFF ANGOTE

Summary

  • The data further shows the number of employed people dropped by 287,481 from 18.10 million to 17.81 million for the period before the full impact of coronavirus on the economy.
  • Overall, the dependency ratio rose to 47.9 percent compared to 44.7 percent over the quarters.
  • The economic strains have seen the Treasury set the economic growth rate to 2.5 percent this year from a previous forecast of 5.4 percent.

A sustained cutback in employment numbers in the wake of Covid-19 outbreak is fast churning out a disproportionately large group of dependants in a struggling economy.

Kenya National Bureau of Statistics data shows the number of people not in the active labour force increased by 5.1 percent (or 435,369 people) to 8.53 million in the first quarter of this year, worsening the dependency ratio. In the previous quarter, 8.09 million people were not in the active labour force.

The data further shows the number of employed people dropped by 287,481 from 18.10 million to 17.81 million for the period before the full impact of coronavirus on the economy.

Overall, the dependency ratio rose to 47.9 percent compared to 44.7 percent over the quarters.

This is expected to lead to increased strain on the current working population already feeling pressures from job losses and pay cuts due to the collapse in demand, disrupted supply chains and restrictive measures.

The economic strains have seen the Treasury set the economic growth rate to 2.5 percent this year from a previous forecast of 5.4 percent.

The World Bank has also projected a fall in per capita gross domestic product likely causing millions in the region to fall back into extreme poverty.

“This shows people won’t be able to support their food and healthcare needs. And with the pandemic, the social distancing directives are set to see the ratio even rise further,” economist Tony Watima said.

The KNBS report also stated that unemployed people increased to 2.82 million from 2.56 million. This is out of population aged between 16 to 64 increased from 27.13 million to 27.26 million during the periods.

The total labour force — people working and unemployed but looking for jobs — has dropped by 302,369 to 18.73 million over the quarters to 19.03 million in the three months to December 2019.

The Covid-19 pandemic is expected to further fuel job losses.

The Economic Survey 2020 showed the economy created 846,300 jobs last year, a majority of which were in the informal sector that created 767,900 jobs.