Unemployment in Kenya

The rising rate of unemployment in Kenya has been a concerning issue for the past couple of years. A number of structural, economic, and social factors have been outlined as major causes of the problem. The Federation of Kenya Employers report indicates that currently, the youth unemployment level is 67%. Factors driving the rising trend of unemployment include:

Economic Global Challenges

Global economic forces have pushed more people into unemployment concerning affordability and availability of basic necessities. The Value Added Taxes have raised basic needs costs beyond many ordinary Kenyans. 

Global Pandemic 2020

Kenya faced high economic effects from the pandemic. This resulted in increased unemployment in the informal economy, particularly for the people working in blue-collar jobs, and was accompanied by food shortages. Managing Director of the IMF Kristalina Georgieva termed Kenya as an "innocent bystander" whose status within the economy was affected through externality.

Long-Standing Depressed Economic Growth and Debt Distress

This protracted period of weak economic growth and increasing burden of debt has resulted in fewer net additions to employment. Below-average export performance and decelerating economic growth have added to Kenya's budgetary deficit further increasing in depth as well. However, the debt is considered fundamentally sustainable both by the World Bank as well as the IMF on the grounds that Kenya is a regular payer of its dues. Kenya has paid its debt, which amounts to about $1.18 billion that it owes China for the Mombasa Port, with a majority of that paid being interest charges.

Crop Issues

Agriculture is the biggest employer in Kenya. It has been facing productivity decline resulting from factors such as climate change, land degradation, and inadequate support from the government. Such problems have resulted in low incomes and low employment opportunities in rural areas.

No Support for Entrepreneurship

Despite having a strong entrepreneurship culture, only limited access to affordable credit and mentorship besides market opportunities is left to prevent SMEs from flourishing. Much of the job-creating capacity lies in these small enterprises that are constrained by these structural bottlenecks. Learn more about the minimum wages in Kenya