The World Bank has sounded the alarm on a potential jobs crisis in the country as one million Kenyans now seek jobs every year.
This in it’s latest economic update on Kenya whose special focus delves into the growing labor force and the jobs challenge.
According to the report which bases its data on the Kenya Integrated Household Budget Survey (KIHBS) and the Kenya Continuous Household Survey (KCHS) series, the number of new graduates has risen from 800,000 annually at the start of the new decade.
This is as the largest age cohort enters the working age.
However, Kenya is seeing its largest labor supply against a deceleration in economic expansion and a steady decline in high quality jobs.
“If this increase in labor force can be marked by a corresponding increase in good quality jobs, then average household and per capita incomes will increase,” read the World Bank report in part.
“However, unlocking this first potential demographic dividend will depend on sufficiently increasing good economic opportunities, especially for youthful labor entrants. Failure to so could increase the risk of social unrest as large incoming youth cohorts are faced with limited opportunities.”
The looming jobs crisis according to the report was triggered long before the advent of the COVID-19 pandemic with the pace of economic transformation seemingly cooling off after 2016.
“Only a small proportion of new labor entrants find formal jobs. The vast majority find work in the informal sector. As the annual number of entrants’ increases in line with the demographic transition, both quality job creation and informal sector productivity need to be boosted to generate sufficient quality jobs,” the report added.
The services sector is however expected to take center stage in job creation having contributed to more than half the value created in 2019. The sector has nevertheless suffered the most under the fallout from the pandemic with the hospitality and tourism sub-sector seeing the worst from the health crisis.
Industrial jobs have meanwhile shrunk despite the sector being the most productive of all.
According to an analysis of employment by sector as of 2019, agriculture jobs represent about 47 of all available roles having grown by five per cent over the last three years.
Meanwhile industrial jobs have shrunk by 9 per cent over the same period to 1.9 million.
In the three years, the economy only added 561,820 jobs with the total number of jobs standing at 17.8 million.
Persons aged 35-44 have the highest rate of labor force participation at 88 per cent in comparison to 38 percent for 15 to 24 year old persons despite the latter being more in the general population.
The rate of unemployment more than halved between 2006 and 2016 to a near three per cent but has begun to gradually rise having exceeded five per cent in 2019.
According to the latest available data from the Kenya National Bureau of Statistics (KNBS), the country’s unemployment rate stood at 7.2 per cent in September last year after doubling to 10.4 per cent in June when more than 1.7 million Kenyans lost their jobs to the pandemic.
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