UNDP warns that soaring unemployment in the region, especially in Kenya, risks breeding runaway crime and violence. PHOTO | BD GRAPHIC
East Africa’s largest economy, Kenya,
holds the dubious distinction of having the region’s highest
unemployment rate, the United Nations says in its latest assessment of
human development that throws a huge policy-making challenge at Nairobi.
The
2017 Human Development Index (HDI) shows that Kenya’s rate of
unemployment is now equal to those of neighbouring Ethiopia and Rwanda
combined, highlighting the paradox of economic policies that have
sustained growth without generating jobs — culminating to poor
distribution of the benefits of growth.
The United
Nations Development Programme (UNDP) report says that nearly four in
every 10 Kenyans of working age have no jobs — the worst level of
unemployment in the region.
The report says 39.1 per
cent of the Kenyan population of working age are unemployed compared to
Tanzania’s 24 per cent, Ethiopia’s 21.6 per cent, Uganda’s 18.1 per cent
and Rwanda’s 17.1 per cent.
The UN agency warns that soaring unemployment in the region, especially in Kenya, risks breeding runaway crime and violence.
“While
Kenya has shown progress in promotion of human development — in
improving access to education, health and sanitation, with more people
rising out of extreme poverty — several groups remain disadvantaged,”
the UN says in the report that was released yesterday.
Mass joblessness is a drag on the economy because
it forces unemployed adults to depend on the small number of working
relatives and stretches family resources, making it difficult for them
to save or invest.
The high level of unemployment has also left Kenya with
one of the highest dependency ratios in the world at 75.4 per cent
arising from the large number of youths (children under 15 years) in
every family.
Kenya’s
unemployment crisis has also been blamed on sluggish growth of formal
sector jobs even as the country continues to produce thousands of
university graduates every year.
As a result, the
country’s economy is missing out on the labour dividend it should be
reaping from the bulge in its youthful population in terms of foregone
productivity, innovation and consumer market growth.
The
report shows Kenya’s labour market has deteriorated from 2011 when
unemployment touched a low of 24.1 per cent, with 75.9 per cent of the
population aged 25 years and above having been found to have had jobs.
The UN now says the number of job holders has dropped to 60.9 per cent.
This
state of affairs has the potential to slow down the efforts to
eradicate extreme poverty and improve peoples’ welfare as part of the
UN’s sustainable development goals (SDGs).
Good news
The
report, however, has some good news for Kenya; the population living
below the income poverty line of Sh195 ($1.90) a day now stands at 33.6
per cent from 45.9 per cent in 2012.
The UN recommends
increased investment in high-quality education and youth training
programmes to boost entrepreneurship among the youth.
The
latest UN findings are in line with the World Bank’s report last year
that East Africa’s largest economy holds the dubious distinction of
having the largest number of unemployed youth in the region.
Unemployment
among Kenya’s youth is estimated to stand at 17.6 per cent compared to
6.3 per cent for Tanzania, Uganda (six per cent) and 7.6 per cent for
Ethiopia.
Rwanda was found to have the lowest number of unemployed youth at three per cent.
Kenya’s
joblessness among the youth has also been fanned by the view among
companies that fresh graduates lack the specialised skills and
experience needed to perform tasks.
Labour squeeze despite economic growth
It
has not helped that the Kenyan economy last year lost its job creation
momentum for the first time in four years, having churned 832,900 new
formal and informal sector jobs compared to 841,600 a year earlier.
The labour market squeeze came despite the economy growing at a robust rate of 5.8 per cent compared to 5.7 per cent in 2015.
Out
of the 832,900 new jobs, only 85,600 were formal, accounting for a
paltry 10.2 per cent, which continues a long-running trend where the
informal sector accounts for the bulk of new jobs.
The slowdown has been blamed on a tough economic climate that saw hundreds of formal sector workers lose jobs in retrenchments.
The
HDI is a measure of a country’s socio-economic wellbeing based on three
parameters — a long and healthy life, education and standards of
living.
Kenya is ranked position 146 out of 188 nations
globally on the human development score, ahead of Tanzania (151),
Uganda (163) and Ethiopia’s 174.
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