Kenya job­less­ness re­mains de­spite growth

Kuwait Times - - BUSINESS -

At last count, un­em­ploy­ment in Kenya was run­ning at around 11 per­cent of the work­force; for the young, those aged 15-24, it was twice that.

Kenya’s years of strong eco­nomic growth-a key fac­tor in Pres­i­dent Uhuru Keny­atta’s re­elec­tion cam­paign-has cre­ated jobs. But they are mostly low-pay­ing, in­for­mal and com­ing at a rate econ­o­mists say is too low to ab­sorb the rapidly grow­ing pop­u­la­tion. That has not gone un­no­ticed by the vot­ers and has left Keny­atta, seek­ing a sec­ond and fi­nal five-year term in of­fice on Aug 8, try­ing to make the most of re­cent im­prove­ments.

It is also why his Jubilee party is pledg­ing to cre­ate year-long paid in­tern­ships to all grad­u­ates in the fu­ture. Around 800,000 jobs were cre­ated last year, while the econ­omy ex­panded by 5.8 per­cent, well out­per­form­ing the global and re­gional av­er­ages. But 90 per­cent of the new jobs are in the poorly-paid in­for­mal sec­tor, ac­cord­ing to Ji­bran Qureishi, East Africa econ­o­mist at Stan­bic Bank.

“That is the chal­lenge that pol­i­cy­mak­ers need to ad­dress,” he said. The num­ber of new for­mal jobs is small. Terry Ryan, who has served on the cen­tral bank’s mone­tary pol­icy com­mit­tee, said just 15,000 of them were cre­ated in the econ­omy an­nu­ally.

By con­trast, more than 560,000 stu­dents en­rolled in univer­sity last year. “We are not cre­at­ing for­mal sec­tor jobs at any­thing like the rate of the sup­ply of for­mal sec­tor po­ten­tial em­ploy­ees,” Ryan told Reuters. That means no jobs for peo­ple like 25-year-old Ce­cilia Awuor, who earned a de­gree in busi­ness in­for­ma­tion tech­nol­ogy last year.

She is work­ing as a maid at $50 a month. She is skep­ti­cal of politi­cians and doesn’t plan to vote next week even though she is a reg­is­tered voter. “I can’t waste my time queue­ing to vote for a politi­cian who just wants to en­rich him­self,” Awuor said.

Most Kenyans share her con­cerns, ac­cord­ing to a na­tional sur­vey re­leased by global polling com­pany Ip­sos last month. Sixty-one per­cent of re­spon­dents said the coun­try was go­ing in the wrong direction; un­em­ploy­ment and in­fla­tion were some of their key wor­ries.

De­mand for work, mean­while is ris­ing. Kenya’s 44 mil­lion-strong pop­u­la­tion is grow­ing by 2.5 per­cent per year, and 9 mil­lion more job­seek­ers will join the mar­ket by 2025, the World Bank said in a re­port last year.

The gov­ern­ment has built new roads and a rail­way and in­vested in en­ergy gen­er­a­tion to at­tract new man­u­fac­tur­ers. The ef­forts have yielded mod­est re­sults. Kenya’s stand­ing in the World Bank’s an­nual Ease of Do­ing Busi­ness rank­ings climbed 45 places since Keny­atta took over, up to po­si­tion 92 last year.

In­vestors like Sri Lanka’s tex­tiles firm Hela In­ti­mates have re­sponded. Hela opened an $8 mil­lion factory last year, em­ploy­ing 4,000 work­ers who pro­duce un­der­wear for brands like Calvin Klein, Nau­tica and Tommy Hil­figer.

CEO Was­an­tha Per­era said Hela were at­tracted by a large, eas­ily trained work force, in­fra­struc­ture and gov­ern­ment in­cen­tives. “Set­ting up a factory, be­sides reg­is­tra­tion, was pretty straight­for­ward,” he told Reuters in his of­fice, over­look­ing a brightly lit factory floor where thou­sands of work­ers sewed gar­ments on pro­duc­tion lines while mu­sic blared in the back­ground. But there are not enough in­vestors like Hela. The head of the state-run ex­port pro­cess­ing zone, set up to en­tice for­eign firms, said the 111 firms based there have ex­panded slowly, now em­ploy­ing 53,000 work­ers, up from 39,000 in 2012. —Reuters

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