Summary
- The Kenyan labour market is characterised by inadequate employment opportunities especially for the fast growing youth population.
- According to the United Nations Human Development Index (HDI) 2017 report, Kenya recorded 39.1 percent unemployment rate.
- The statistics show that Kenya for the last 30 years has not had its economy expand enough, and the progression has been correspondingly inconsistent to consolidate any gains made in job creation.
The Kenyan labour market is characterised by inadequate
employment opportunities especially for the fast growing youth
population.
According to the United Nations Human Development Index (HDI) 2017 report, Kenya recorded 39.1 percent unemployment rate.
The
statistics show that Kenya for the last 30 years has not had its
economy expand enough, and the progression has been correspondingly
inconsistent to consolidate any gains made in job creation. This is
exacerbated by Kenya’s population that surges by one million people each
year.
Widespread joblessness, particularly among the
large youth population, is a strain on the economy because it forces
unemployed adults to depend on the small working class, stretching
family resources and consuming savings for future investments.
How
can we address the unemployment question? Of the many ways that exist,
harnessing the power of the micro small and medium enterprises, commonly
referred to as MSMEs, holds the key.
While, the MSME sector in Kenya has over the years been
appreciated for its role in the provision of goods and services,
enhancing competition, fostering innovation, and in effect, alleviation
of poverty, generation of employment has been the most significant.
The
critical role of MSMEs is highlighted in the Vision 2030 development
blueprint, which strives to transform Kenya into an industrialised
middle-income country, providing a high-quality life to all its citizens
in the next 10 years.
According to 2016 National MSME
survey, the sector engaged about 14. 9 million persons in 2015, arguably
providing the highest number of employment opportunities in the
country.
The immense potential the sector holds must
have influenced the government to identify it as one of the key focus
areas in tackling the soaring unemployment rates.
To
fully exploit the potential of the MSMEs, the government can reinforce
its partnership with the private sector, encourage value-added services,
leverage on improved skills and know-how (indigenous and universal),
and fortify coordination among various State entities dealing with MSMEs
such as Kenya Industrial Estates, Micro, Small and Enterprises
Authority (MSEA), the Kenya Bureau of Standards (Kebs), Industrial &
Commercial Development Corporation (ICDC) and Kenya Research
Development Institute (KIRDI) to stimulate quick adoption of the
emerging technology, set computable targets and monitor development of
the sector.
To
further intensify the growth and development of the MSME sector, the
government can progressively build on the existing SME sector framework
ranging from regulatory to policy formulation. Specific areas
incorporating this include policy development, industrial incubation,
capacity building and access to finance and markets.
In
addition, accessible credit should be made available to the MSMEs. Low
credit availability to the sector was attributed to the interest rate
capping in 2016, prompting commercial banks to deliberately avoid
channelling funds to businesses considered as risky ventures.
Moreover,
credit providers should adopt inventive and innovative strategies of
lending. These fresh strategies should give consideration to the
uniqueness of various businesses especially start-ups that often lack
tangible collateral to access credit.
More importantly, credit services should be made available to rural areas to foster entrepreneurship.
KIE,
as a government agency in charge of advancing the MSME agenda and
promotion of industrialisation, is playing a critical role in this
sector by providing affordable industrial credit, relevant
entrepreneurship trainings and industrial sheds.
It
strives to support the sector and help solve the unemployment problem,
leveraging on its collaboration with the government and 50-year
experience working towards industrialisation of this country, a 37
branch office network across the country equipped with staff and modern
IT infrastructure.
Doyo is the Head of Marketing and Communications at Kenya Industrial Estates.
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