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Many still jobless despite economy making gains

By | October 11th 2009

By Fatuma Fugicha

Kenya is yet to create sufficient job opportunities despite the economy recording growth in the last five years.

A report by the Institute of Economic Affairs, ‘The State of Employment in Kenya’, says the economy expanded between 2004 and 2007, but the growth did not translate into job opportunities.

The report shows that the gap between those searching for jobs and those in employment continues to widen.

"Out of the country’s working age population of 20 million, more than eight million are unemployed," it says.

The report attributes the employment crisis to weak industrial base, slow growth and development of micro and small enterprises.

Dependence on agriculture

The country’s low job creation record also results from high dependence on agriculture and poor implementation of strategies.

"The country’s development plans have not only failed in producing sustained economic growth, but have not created jobs," the IEA report says.

The youth bear the greatest brunt of unemployment, constituting 67 per cent of those unemployed as 90 per cent of the youth do not have appropriate vocational or professional training, thus limiting their chances of employment.

The report says the youth must also change their thinking and attitudes by being proactive and take charge of their economic destiny.

Poor enrolment rates in secondary schools and low number of students completing Form Four has also affected the quality of skills available in middle level positions and constrained opportunities for formal sector growth.

Informal sector

The trend has seen a decisive shift towards greater employment creation in Kenya’s informal sector. Subsequently, the informal sector now provides jobs three times more than the formal sector.

The paradox in Kenya’s labour market is that though there is a skills gap due to low secondary school completion rates, wages for unskilled labour are higher than in some countries.

For instance, urban wages for a Kenyan industrial worker is not only the highest in East Africa, but twice as high as India’s.

The manifestation of the employment crisis is mainly in the urban areas. This is due to a slow down in the manufacturing sector since the mid 1980s, when there was massive exodus of manufacturers from the country, due to the high cost of doing business.

"The industrial base in Kenya has remained very small relative to other sectors and its contribution to the Gross Domestic Product has fluctuated between 11 and 14 per cent, thus making little contribution to job market," the report says.

The report says the envisaged creation of 500,000 jobs annually as outlined in the Economic Recovery Paper of 2003-2007 was not realised.

If it were to be achieved it would not have been sufficient to absorb the increasing numbers of young Kenyans entering the job market annually.

Job creation

"As such the Government needs to create enough jobs to absorb new labour market entrants and absorb the existing backlog," it says.

The implementation of job creation proposals in the last budget, such as injection of Sh22 billion for economic stimulus programme, the construction of jua kali sheds in constituencies and allocation of Sh735 million equipment would help resolve unemployment.

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