Economy adds a million jobs but firms fail to recover

Members of the public along Muindi Mbingu Street, Nairobi. [Elvis Ogina, Standard]

The economy last year created an additional 926,100 jobs mainly from the informal sector as the number of salaried jobs failed to recover to pre-Covid-19 levels.

Government data released by the Kenya National Bureau of Statistics (KNBS) yesterday showed the number of Kenyans in employment rose to 18.33 million in 2021 from 17.41 million in the preceding year.

The rise means that the economy, which in 2020 shed 736,000 jobs on the back of Covid-19 disruptions, has recovered these jobs and created an additional 190,100 more during the period under review.

However, salaried jobs failed to return to pre-pandemic levels, forcing thousands of job seekers to turn to the informal sector.

Jobs in the informal sector recovered from a contraction of 543,800 in 2020 to increase by 753,800 and close the year at 15.26 million—being above the pre-pandemic level of 15.05 million.

But jobs in modern establishments—made up of wage employees and self-employed and unpaid family workers—rose by 172,300 last year, failing to recover all the 192,400 jobs that were lost the previous year.

Specifically, the number of wage employees recovered by 164,700 to close the year at 2.91 million.

At 2.91 million, the number of wage employees is still below the 2.93 million employees recorded in 2019, meaning that modern establishments are still reeling from Covid-19 economic disruptions.

The KNBS data showed that the private sector added 126,200 salaried jobs to close the year with 1.98 million jobs—below the 2.06 million jobs recorded in 2019.

The private sector, which added wage employment at a faster pace, included accommodation and food services (23.9 per cent rise), followed by administrative and support services (20.8 per cent) and education (16.3 per cent).

“Employment in accommodation and food activities industry has been on a recovery mode from the drastic decline at the height of the Covid-19 pandemic,” said KNBS.

“The easing of the pandemic restrictions impacted positively on the employment in the industry as well as the bed occupancy rate, hence increasing employment in the sector.”

The public sector added 38,500 salaried jobs last year to take the total to 923,100 despite job cuts in electricity, gas, steam and air conditioning supply and financial and insurance activities.

KNBS said the increase in salaried jobs in the public sector was mainly attributed to recruitment in the civil service for essential services.

In public administration and defence, compulsory social security registered the highest growth of 5.9 per cent or 18,500 jobs last year.

Enrolment in Technical and Vocational Education and Training (TVET) institutions rose by 10.4 per cent to 498,326 in 2021, while university enrolment is expected to grow from 546,700 in 2020/21 to 562,100 in the 2021/22 academic year.

The increasing enrolment will eventually add to the growing number of job seekers—a number that has been growing at a faster pace than that of employment opportunities.