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Can entrepreneurship cure the chronic unemployment in Kenya?

UREPORT
By HARRISON IKUNDA | August 19th 2016

Kenya is one of the relatively peaceful countries in the world facing unemployment crisis. The World Bank in its report mentions Kenya as among the worst affected by unemployment levels in Africa. Just recently a would be graduate of Chuka University Patrick Muthomi carried a placard in Muthaiga area  pleading for people to offer him a job, highlighting the challenges Kenyan graduates are facing in getting jobs. It’s even worse for the non-graduates or the many that are unable to get good education for the many reasons there are. Several people some of relatively high profile have propagated the idea of entrepreneurship as a cure for this malady. I both agree and disagree at the same time and for very good reasons.

Entrepreneurship is a very good thing. It drives relationships in terms of trade and economic growth that has impacts on other pillars of the economy. Entrepreneurs create all sets of industries and create lots of jobs. In any decent economy the biggest employment is to be found in private enterprises of all manners in kind and sizes.  This is usually as a result of entrepreneurial minds and physical efforts to set up. Nonetheless, it is futile just to imagine that entrepreneurship just come up in any form of space or operate in vacuum.

Entrepreneurship or setting any form of business has factors that influence the numbers, extent and nature much as there are many similarities across the globe. One influencing factor is the size of the economy and the other associated issues that include the population, income levels, productive activities and scope of the government ability to create an enabling business environment. The willingness to spur enterprise could be there as is the case in Kenya at the moment, but there are other inhibiting factors that include widespread poverty and constraints in incomes. In a nutshell, for an enterprise to thrive, it needs customers who are willing and have the ability to spend. This means like in our case in Kenya you can only have say a certain number of MPESA outlets, Bodabodas, pubs, restaurants, salons, matatus, greenhouses production and so on to a certain level based on the economy for them to be sustainable.

The idea to push youth to enterprise is noble and should be encouraged as you never know who will end up succeeding. What we should never be oblivious to is that there will be limits to numbers that can be sustainable across different industries or sectors for that matter based on our limited size of economy and development. In essence we have a huge responsibility and task of growing the economy. It is not just straight forward that everyone or many who will start the enterprises that they will survive even in the short term. There are already indicators with the huge default rate among the youth funds and even the growing problem of bad debts in the banking sector.

Yet still we are blessed with a population boom coupled with rising levels of education which in itself is a harbinger for a huge economic take off if only we devise a mechanism to tap into the various opportunities and resources. We should engage into entrepreneurial activities and should be vigorously encouraged but there is plenty of input required to re-invent the Kenyan economy. Entrepreneurial activities won’t just succeed without supportive structures and systems. It is the environment that should be engineered to naturally inspire the spirit and pull in the entrepreneurial minds able to tap the opportunities.  Without the right environment you can be sure the results won’t be encouraging and the cycle of unemployment and poverty can only make the future more uncertain and risky. The ominous trend can be reversed and quite quickly.  We need to sort out the many barriers that put Kenya backward such as corruption, tribalism, bad politics and the numerous self-sabotage activities.

I strongly believe Kenya is a giant that needs to be woken up. It is a tiger that needs to start walking. All indications are that Kenya can be one of the star economies sooner.

 

Harrison  Mwirigi  Ikunda

Nairobi.

The writer is a researcher and consultant

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