About 10 million people will be employed in Kenya over the next ten years.
This will be a major challenge for a country whose industries struggled to create jobs even before the pre-coronavirus pandemic era.
A new World Bank report finds that over a million young people will enter the labor market every year for the next decade, between 2020 and 2029.
This is happening even as Kenya struggles to create more jobs as many sectors cut jobs between 2015 and 2019.
That challenge was exacerbated by Covid-19 as companies in various industries suffered a sharp decline over the past year, forcing them to lay off, with many of the jobs still to be restored.
While the majority of Kenya’s young and growing population represents an opportunity that the World Bank calls the “demographic dividend”, it can only be realized “if job creation can keep up”.
“Between 2020 and 2029, the working-age population (18-64) will increase by one million people annually,” the World Bank said in its latest report on the Kenya Economic Update.
“The demographic change as this“ youth bulge ”cohort reaches working age will lead to a decrease in the dependency ratio (the average number of people of non-working age supported by a person of working age) while the labor supply will increase significantly . ”
According to the 2019 Kenya National Bureau of Statistics (KNBS) census report, Kenya had a population of 47.6 million with an annual population growth rate of 2.2 percent. About 39 percent of the population are younger than 15 years and four percent of the population are over 65 years old.
“The largest age cohort is between 10 and 14 years of age and will enter the labor market over the next decade,” the World Bank report said.
“If this increase in labor supply can be offset by a corresponding increase in quality jobs, then average household and per capita incomes will rise. The development of this first potential demographic dividend, however, depends on the good economic opportunities, especially for young people entering the labor market, being sufficiently increased.
“If this does not happen, the risk of social unrest could be increased as large incoming youth cohorts face limited opportunities. Kenya’s employment rate needs to increase to take advantage of the potential benefits of demographic change, ”the report said.
The World Bank also expressed doubts as to whether the Kenyan economy can cope with the demand for jobs as many young people enter the labor market.
It found that many sectors failed to maintain jobs between 2016 and 2019, with mining shedding 36 percent of jobs.
Other sectors that saw huge job losses over the period are ICT (16 percent), housing (15 percent), utilities and construction (10 percent), and manufacturing (3 percent).
This was before Covid-19 struck and made the situation worse.
The few sectors in which the number of employees has increased include agriculture (five percent), finance and real estate (130 percent), and education, health and social services (26 percent).
Jobs in the service sector
“Kenya’s economy is currently not on track to create enough jobs to benefit from its demographic dividend, as workers entering the labor market are likely to move into low productivity jobs in agriculture or services “Said the World Bank.
“To earn a demographic dividend, the economy needs to create more quality jobs by accelerating economic change. The Covid-19 pandemic has exacerbated this challenge by disrupting economic activity and causing job losses. ”
The Kenyan Employers’ Association (FKE) recently estimated that more than five million jobs were lost in the country in the first few days after the Covid-19 outbreak.
Micro-businesses, which employ a majority of Kenyans at around 15 million, have lost an estimated 5.1 million jobs.
These very small businesses can be seen across the country and sometimes have few employees, often even one.
The formal sector, which creates quality jobs that could enable Kenya to reap the demographic dividend and employs around 2.4 million people, lost 173,000 jobs in the first few months after March 2020.
The number of formal jobs lost in this short period equals the number created in the past three years, with the economy creating 70,000 such jobs annually.
Some of the jobs were regained as the economy reopened and the demand for goods and services slowly began to grow.