Informal sector to create 1.6m jobs in 3 years

By James Anyanzwa

KENYA: The informal sector is expected to create more job opportunities during the current financial year (2013/14).

According to a report by the Parliamentary Budget Office the sector is poised to cumulatively generate an estimated 1.6 million jobs over the next three financial years.

The report, however, notes that employment in the private sector will grow at a lacklustre pace owing to difficulties in the manufacturing sector.

Employment in the private sector is expected to grow by 26,286 persons in the financial year 2013/14, 30,696 persons in 2014/15 and 35,742 persons in 2015/16. “The slow trend in the private sector is occasioned by the difficulties in the manufacturing sector,” says report

The manufacturing sector decelerated from an expansion of 3.4 per cent in 2011 to 3.1 per cent in 2012 mainly due to higher production costs, stiff competition from imported goods, higher cost of credit and political uncertainty in the run up to March 4 general elections.

Slowly shrinking

Over the period between 2011 and 2012, the employment index in the private sector shrunk by 0.4 percentage points, implying that production in the sector is slowly shrinking.

On the other hand, public sector employment is forecast to increase by 17,123 persons, 17,551 persons, and 17,989 persons over a similar period.

When compared to the formal sector, the informal sector is likely to generate a higher number of jobs. “The high employment level in the informal sector implies that the sector will continue to play an important role in job creation,” reads report.

Last year, the labour market recorded 659,400 new jobs representing an increase of 5.5 per cent over the previous year.

In total, 68,000 new jobs were created in the modern sector in 2012, compared to 74,200 in 2011.

The bulk of the new jobs in the modern sector was created in the building and construction, information and communication, education and health industries. The informal sector which constituted 89.7 per cent of total employment created an additional 591,400 jobs.