Kenya's unemployment rate: Case of when numbers lie?

A man holds a placard in search of work on a Nairobi street. Could it be that any kind of work is counted as employment?  [Boniface Okendo, Standard]

Data puts Kenya’s unemployment rate below 10 per cent. Checking unemployment in a few developed countries casts doubt on our data.

Could our unemployment rate be that low? In 2021, the World Bank data gave the unemployment rate in European Union at 7.0 per cent, Kenya at 5.6 per cent, the US at 5.3 per cent, South Africa at 28.8 per cent, Tanzania at 2.7 per cent and Rwanda at 13.3 per cent.

We could extrapolate this data to the present. Conventional wisdom contradicts the available data. Why are the numbers so low?  

Joblessness is a big issue in the country. The number of those seeking jobs is quite high.

Add the number of Kenyans seeking to immigrate to other countries in search of jobs is on the rise.

It also takes years to get a formal job unlike in the past when fresh graduates easily got into the job market.  

The low numbers could mean a few things. Could it be that many stopped looking for jobs and are removed from the database? 

Two, the data could mean that any job will do. Or as they say, kazi ni kazi. Everyone is engaged in something, which is counted as work.

It does not matter if it is part-time or full-time, temporary or permanent. That would include domestic workers, jua kali artisans, brokers, and even those who sit in public service vehicles at bus stops to make it appear as if they are full.

We should add all those who work online.  

If we asked individuals if they are employed, the data would be different. A job should be salaried, have a pension and have a physical location.  

There is another reason why these numbers are contestable. The unemployment rate goes down when the economy is growing fast.

We have averaged around five per cent in the last 10 years, which is not so spectacular as to reduce the unemployment rate.  

Economists could argue that if unemployment is that low, inflation should be higher unless we have become very productive.

The current inflation is driven by external factors value such as rising interest rates in the US, the war in Ukraine and drought. 

Has post-Covid-19 recovery been that strong? What of the job losses as we adopt more technology?  More interesting is that interest rates have been on an upward trajectory, which often raises unemployment. 

Simply put, the current unemployment rate defies the fundamentals or is the Kenyan economy peculiar? Why is the data so rosy? 

The reality on the ground is that we need more jobs. How do we create them? 

One, ensure political certainty. Investors and consumers create jobs if there is certainty. They dislike shocks. 

Two, goods and services must be of high quality. Why do we buy Japanese cars or visit Indian hospitals?

Why do we send our children abroad for higher education? Quality ensures a constant demand and jobs thereof. High-quality goods and services do better with good branding.  

Three, we must keep improving the quality of education. High-level skills and knowledge produce quality goods and services and keep improving them through innovations.  

Four, we need to see the world as our market, away from the counties. Our banks have led the way.

Can other sectors do the same?  Multinational corporations create jobs in their countries by reaching out to a global market.

Think of Ndarugu Stones or Safaricom becoming global firms. We are too obsessed with local issues and forget the world.

And we let politics cloud our views. We hope the importance of economics in the 2022 polls will be maintained.  

Five, we must tame corruption and its cousin - tribalism. They gnaw at the national spirit and ethos.

How can we create jobs when meritocracy never counts for anything? One reason why some countries create so many jobs is that they attract the best and the brightest; tribe and nationality are muted. Think of Silicon Valley, which we are trying to imitate. 

Six, we must love work. Jobs are created when we work and create value. We dislike work but love the pay. When are we importing protestant work ethic? 

Seven, reward those who do real work not “brokers.”  Think of the maize or potato supply chains. The person who does the real work, the farmer, gets the least. Brokerage or arbitrage for the sophisticated is often more profitable than the real work.  

Eight, avail information so that job creators make better decisions. Kenya National Bureau of Statistics should publicize its work more.

A vibrant media and a curious society can make information available to the public and investors. 

Nine, ride on capitalism. We create jobs as we pursue our interests in a well-regulated economy. Regulation should be a facilitator not a hindrance to investment. 

Ten, job creation is for all of us, not the governments. Most jobs, over 80 per cent are created by the private sector, including the informal sector.

Finally, we must wean the country off pessimism and inject it with boundless optimism, seeing possibilities both within and beyond the borders. Have you created any jobs? 

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