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Economy

Youth unemployment threatens Kenya's role as regional powerhouse

George Odhiambo, a car washer in Kisumu. While Kenya has the highest unemployment rate in East Africa, the country has the least population growth rate in the region. FILE PHOTO | NMG
George Odhiambo, a car washer in Kisumu. While Kenya has the highest unemployment rate in East Africa, the country has the least population growth rate in the region. FILE PHOTO | NMG 

Youth unemployment in Kenya has risen to 22.2 per cent, significantly higher than in neighbouring Tanzania, Uganda and Ethiopia.

The latest United Nations Human Development report reveals that as at the end of last year, youth unemployment in Tanzania stood at 5.2 per cent and 4.0 per cent in Uganda

In Rwanda and Burundi, the unemployment rate was at 3.3 per cent and 3.1 per cent respectively.

For Kenya, the figure is slightly higher than that recently disclosed by the US-based Population Reference Bureau (PRB), which put joblessness among those aged between 15 and 24 years at 20.3 per cent.

The UN report indicates that Kenya’s rate of unemployment is now equal to those in neighbouring Ethiopia and Rwanda combined.

The huge figures of youth unemployment in Kenya is seen as threatening the country’s future role as the East Africa’s economic powerhouse, even though the issue has been on the election agenda of many local politicians, especially the presidential candidates.

Experts have proposed that the country improve infrastructure to lower business costs in order to raise demand for labour and also upgrade skills of young people.

High population growth

Youth unemployment in Kenya challenges have often been associated with high population growth rate.

Based on the United Nations estimates, the current population of Kenya is 48,609,428, ranking number 29 in the list of top countries by population.

This means that the population has increased by 10 million people from 2009 (a period of seven years) when the last census was showed that the country had 38.6 million people.

While Kenya has the highest unemployment rate in East Africa, the country has the least population growth rate in the region.

The correlation between population growth and unemployment is not always direct as other issues specific to individual countries plays part as well.

For instance, despite having a large population of 192.4 million and ranking number seven in the world, Nigeria’s 13 per cent youth unemployment is well below that of Kenya.

Experts reckon that though Kenya’s rising population is alarming, it cannot fully explain unemployment figures in the country.

Former World Bank chief economist for Kenya Apurva Sanghi has postulated that Kenya’s high unemployment rate is mainly attributable to the fact that Kenya’s ability to create new jobs has lagged behind the population growth, thinning formal opportunities.

Sanghi holds that aside from the government providing a conducive business climate for private companies to thrive and create jobs, Kenya must channel more resources towards developing its human capital to boost productivity.

“There is need to step up the quality of education to align it with market needs and to keep the growth engine running, driven by innovation,” said Mr Sanghi, a position shared even by fellow economists at the Bank’s headquarters in Washington.

Informal employment

World Bank’s chief economist for Africa region Shantayanan Devarajan - who is based in Washington - says that in many African countries, the youth are left to do with informal employment where it is available.

Oftentimes across the continent, Dr Devarajan notes, the youth are not qualified for the jobs that are available.

“Some of these young people are not qualified for the wage jobs that are available. As a result, most young people will end up working in the same place as their parents — small farms or household enterprises,” he says.

The economist says that the challenge of youth employment in Africa “is not just to create more wage and salary jobs — important as this may be — but to increase the productivity, and hence earnings, of the majority of young people who will be employed in informal farms and household enterprises.”

Dr Devarajan say that workers’ productivity can be increased by “demand-side” measures such as better infrastructure and business climate that lower the costs of production and thus increase the demand for labour.

On the “supply-side” it can be done through measures that improve the skills of workers.

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