Over 4m youths out of work, new KNBS data reveals

Job seekers queue to submit their applications. FILE PHOTO | NMG  

By CONSTANT MUNDA
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Summary

• More than four million of Kenya’s youth eligible for work have no jobs, according to the maiden quarterly labour data released yesterday by the Kenya National Bureau of Statistics (KNBS).
• The report shows that 4,066,362 - or 34.27 percent of the 11.8 million young Kenyans — were jobless as at December when the data was collected, highlighting income inequality across age demographics.
• Young people are the hardest hit by joblessness compared to their counterparts who are above 35 years in an economic setting that is plagued by a hiring freezes on the back of sluggish corporate earnings.

More than four million of Kenya’s youth eligible for work have no jobs, according to the maiden quarterly labour data released Tuesday by the Kenya National Bureau of Statistics (KNBS).

The report shows that 4,066,362 - or 34.27 percent of the 11.8 million young Kenyans — were jobless as at December when the data was collected, highlighting income inequality across age demographics.

Young people are the hardest hit by joblessness compared to their counterparts who are above 35 years in an economic setting that is plagued by a hiring freezes on the back of sluggish corporate earnings.

“The youth aged 20-34 had the highest proportion (14.2 percent) of the unemployed. On the other hand, those aged 60-64 years had negligible unemployment rates,” KNBS says in the Quarterly Labour Force Report.

The employment report will be released quarterly, a departure from the past when KNBS only published annual job reports.

Kenya’s years of strong economic growth have created jobs, but they are mostly low-paying, informal and coming at a rate that economists say is too low to absorb the rapidly growing youth population. However, the State defines the unemployed as people who do not have a job and have actively been looking for employment in recent weeks. Under this definition, the government puts the number of the unemployed youth at 706,859, or 5.96 percent of those who were aged between 20 and 34 years in the last quarter of 2019. This was an improvement from 830,202 youths or 7.14 percent of the young people who were seeking work in the January-March 2019 period.

The State’s definition of unemployment means that about 3.3 million people between the ages of 18 and 34, who are outside employment, are not actively looking for work.

KNBS data also shows that 86.52 percent of 9,115,152 Kenyans aged between 35 and 60 were in employment during the October-December 2019 period.

Formal jobs

About 762,200 jobs were created in 2018 when the economy expanded by 6.3 percent, well outperforming the global and regional averages. However, about 90 percent of the new jobs are in the informal sector where pay is not clearly structured.

Official data shows that 78,400 new formal jobs were created in the economy in 2018 compared to 114,400 in 2017, Economic Survey 2019 data shows. Incomes from such jobs are clearly structured as these workers also fall in the income tax bracket.

Job creation in 2017 represented the slowest pace of formal job growth since 2012 when the economy churned out 75,000 new formal job opportunities. 2017 was also an election year. The previous election was held in March 2013. Economic Survey data does not capture either job cuts or net employment. For context, over 560,000 students enrolled in university last year.

“If you look at the employment index (in the PMI) since the beginning of 2017, it’s been quite neutral, meaning it’s not like there has been improvement in new jobs,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank — which tracks company performance monthly through the Purchasing Managers’ Index (PMI).

The full year 2019 growth figures are yet to be released.

Figures for this year will likely be hit by the effects of Coronavirus, which has led to a slowdown in the business environment, including a reduction in tourist numbers and depressed exports of flowers, tea and horticultural products, all critical income earners for the country. On the other hand, the country is also set to record reduced imports. Kenya has so far confirmed 59 cases of the Covid-19, the fever caused by the virus.

The State has imposed restrictions including cancellation all flights save for cargo planes among other measures aimed at reducing the spread of the virus. As a result, CBK has cut its 2020 growth forecast from an initial estimate of 6.2 percent to 3.4 percent — the lowest in 12 years.