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Economy

Queries as State says only 7.4pc jobless

Jobseekers wait to hand in their documents during recruitment at County Hall in Nairobi last year. PHOTO | FILE
Jobseekers wait to hand in their documents during recruitment at County Hall in Nairobi last year. PHOTO | FILE 

The Kenya National Bureau of Statistics (KNBS) yesterday left the country in awe after it released a report showing that the unemployment rate declined steadily over the past 10 years to stand at 7.4 per cent at the end of 2016.

KNBS said a household survey it conducted in 2015/16 found that the proportion of the unemployed Kenyans shrunk to 7.4 per cent, placing the country among those with the lowest unemployment rates.

KNBS said it had sampled 24,000 households and considered the unemployed as those without work, were actively job hunting and available to take up a job.

“This data was produced in line with international standards and is robustly accurate,” KNBS director-general Zachary Mwangi said when asked about the efficacy of the methodology used.

“We used the strict definition of unemployment, which falls into three categories; having worked for at least one hour during the past one week when the survey was done; actively looking for a job and available to take up employment.”

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'Fooling ourselves'

But Bitange Ndemo, an associate professor at the University of Nairobi’s School of Business, punched holes in the KNBS data, arguing that a majority of youth sampled as not looking for jobs were “simply frustrated after endless job searches.”

“We will be fooling ourselves if we accepted that unemployment is 7.4 per cent. It is way higher than we would like to admit,” said Dr Ndemo.

The survey established that Kenya’s working age population (15-64) stood at 24.9 million in 2016, but only 19.3 million either had jobs or were looking for one.

The remaining 5.6 million of the working age group were considered inactive either because they were still in school, were discouraged to look for jobs or had family responsibilities like stay-at-home parents.

Of the 19.3 million active individuals in the labour market, 17.9 million had jobs in 2016, with the remaining 1.4 million being without, translating to an unemployment rate of 7.4 per cent, the report says.

“The survey revealed that 3.7 million or 20.4 per cent of the employed persons in the working age population were under-employed. This number refers to those who were engaged during the reference period and worked less hours than desired (in this case less than 28 hours), and were willing and available to work for longer time period,” the KNBS said.

Unemployment was found to be highest among the 15-24 age group, meaning focus should be placed in the demographic to cut joblessness.

'Not representative'

Dr Ndemo reckons that the decision to define unemployment as those actively in search of jobs had made the rate look much lower, without being representative of the reality on the ground.

“Many young people are frustrated and have stopped looking for jobs,” said the former ICT permanent secretary, adding that nearly a million young people fail to proceed to secondary and universities each year, along with jobless college graduates.

He said that 80 per cent of those considered to be in jobs were in informal sector (Jua Kali), which is characterised by low productivity levels and that Kenya’s hope of becoming an upper middle-income economy by 2030 cannot be achieved with such jobs.

The KNBS data is in stark contrast to the 2017 Human Development Index (HDI) report by UNDP which said that 39.1 per cent of the Kenyan population of working age were unemployed in 2016.

High unemployment often breeds runaway crime and violence.

Mass joblessness is a drag on the economy because it forces unemployed adults to depend on the small number of working relatives and stretches family resources, making it difficult for them to save or invest.

The International Labour Organisation (ILO), whose criteria the KNBS used to arrive at unemployment figures, puts Kenya’s unemployment at 11.5 per cent.

Kenya’s economy has been seen to be growing but with less formal jobs.

“About 85 per cent of the unemployed were aged below 35. The largest unemployment rate was recorded in the age cohort ‘20-24’ at 19.2 per cent. Females constituted 64.5 per cent of the unemployed,” the KNBS said.

Kenya’s joblessness among the youth has been fanned by the view among companies that fresh graduates lack the specialised skills and experience needed to perform tasks.

The economy in 2016 lost its job creation momentum for the first time in four years, having churned 832,900 new formal and informal sector jobs compared to 841,600 a year earlier.

The labour market squeeze came despite the economy growing at a robust rate of 5.8 per cent compared to 5.7 per cent in 2015.

Out of the 832,900 new jobs, only 85,600 were formal, accounting for a paltry 10.2 per cent, which continues a long-running trend where the informal sector accounts for the bulk of new jobs.

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