Kenya’s Informal Sector Leads in job Creation, Formal Jobs Shrunk 2.4pct in 2019

The establishment of an effective Common External Tariff in the East Africa region will lead to the exponential growth of the manufacturing sector.
  • The public sector registered a 2.6 per cent growth 
  • Private-sector employment remained at 70.5 per cent

Kenya’s economy generated a total 846,300 new jobs in 2019 according to the Economic Survey 2020 but marked a slowdown in the creation of formal jobs.

The Kenya National Bureau of Statistics found that jobs created in the modern sector decelerated to 2.4 percent from 2.8 percent, an equivalent 67,800 jobs.

The informal sector remains an important pillar for job creation adding 767,900 new jobs from 744,100 roles in 2018.

Jobs created in the public topped 2.6 percent while those in the private sector grew by a lesser 2.3 percent.

“Wage employment in the modern sector recorded a 2.4 per cent growth in 2019 compared to a 2.8 per cent growth in 2018, translating to 67.8 thousand new jobs in the same period,” read the report.

“During the period under review, the total number of self-employed and unpaid family workers within the modern sector was estimated to have increased from 152.2 thousand in 2018 to 162.7 thousand in 2019.”

The survey notes that nominal average earnings in the modern sector per person increased from KSh719,924.6 per annum in 2018 to KSh778,248.0 per annum in 2019.

The nominal wage bill for private and public sectors rose from KSh2.06 trillion in 2018 to KSh2.28 trillion in
2019, while private sector wage bill went up by 10.6 per cent to stand at KSh1.61 trillion in 2019, while the public
sector wage bill rose by 10.8 per cent.

Formal and Informal New Jobs created between 2015 -2019 in Kenya

Employment in the private sector flat

The statistics body also found out that the share of the private sector employment remained at 70.5 per cent as recorded in 2018. 

Overall, the private sector created 46.1 thousand jobs in 2019 compared to 57.6 thousand jobs created in 2018.

Leading industries include agriculture, forestry and fishing; and wholesale and retail trade and repair of motor vehicles, accounting for 15.9, 14.4 and 13.0 per cent of the total private sector employment, respectively.

“There was, however, a suppressed growth in agriculture, forestry and fishing industries at 0.8 per cent in 2019 compared to 1.6 per cent realized in 2018.”

The slower growth in agriculture, forestry and fishing industries mainly resulted from changing and unpredictable rain seasons, which greatly affected farming activities.

Employment in human health and social work activities recorded the highest growth at 6.1 per cent in 2019.

On the other hand, employment in the public sector registered a 2.6 per cent growth compared to an increase of 1.2 per cent recorded in 2018.

Leading activities that contributed to the increase in employment levels in the public sector were Education; and Public administration and defense; compulsory social security, which accounted for 42.7 per cent and 35.2 per cent, respectively. 

Human health and social work activities recorded the highest growth (6.4 per cent) in employment. This was followed by Arts, entertainment and recreation; and Education activities, which grew by 4.5 per cent and 4.0 per cent, respectively, in 2019.

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