WB paints a bleak image for Kenya’s labour market

WB paints a bleak image for Kenya’s labour market

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The World Bank has painted a stark image for Kenya’s labour market in 2024, forecasting an escalation in unemployment resulting from ongoing financial challenges.

In a report, the financial institution attributes this anticipated improve in joblessness to a number of elements, together with sluggish financial development, persistently excessive infla-tion, and coverage uncertainty, compounded by world financial headwinds.

These challenges have been exacerbated by shifts within the training system, which have immediately impacted over 500,000 non-teaching employees in second-ary faculties.

The employees, together with lab technicians, cleaners, cooks, and secretaries, misplaced their jobs as a result of transition to the Competency-Based Curriculum (CBC) and the introduction of Junior Secondary Schools (JSS).

According to Albert Njeru, the Secretary General of the Kenya Union of Domestic Hotels, Educational Institutions, Hospitals, and Allied Workers (KUDHEIHA), the redundant employees have been served notices by their respective Boards of Management (BOM) final month, with the layoffs taking impact on January 1, 2025.  He has referred to as on the federal government to rethink the choice, suggesting that the affected employees must be redeployed inside the new junior secondary college system.

He stated the affected employees, having served at varied ranges, perceive the system and will nonetheless contribute successfully to the transition.

The shift away from the 8-4-4 system to the CBC mannequin has additionally disrupted the livelihoods of merchants who dealt in secondary college equipment, resembling textbooks, metallic bins, and uniforms. As demand for these merchandise has dropped, merchants at the moment are left grappling with the monetary influence.  The widespread layoffs and disrupted enterprise have pressured many people into the streets in the hunt for new employment alternatives, additional compound-ing the nation’s rising unemployment figures. The scenario paints a bleak image of Kenya’s labour market, which had seen some optimistic development only a yr earlier.

According to the Economic Survey 2024, the variety of jobs within the formal and casual sectors elevated by 848,200 in 2023, reaching a complete of 20 million jobs.

However, with the rise of coverage and structural challenges, a lot of this progress seems to be in jeopardy. The survey indicated that wage employ-ment within the fashionable sector grew by 4.1 per cent, creating 122,800 new jobs.

Yet, the World Bank’s projections sign a grim reversal because the nation faces rising challenges to keep up financial stability and employment crea-tion. In addition to the training sector disruptions, Kenya is grappling with a troublesome enterprise surroundings.

A CEOs survey performed by the Central Bank of Kenya (CBK) has proven that many employers are reluctant to rent in 2024, citing the rising value of doing enterprise, excessive taxation, and different world elements as important obstacles.

The survey revealed that many corporations are specializing in mitigating prices, managing dangers, diversifying operations, and rising their advertising efforts as a substitute of increasing their workforce.

The excessive tax regime, compounded by diminished client demand, continues to stifle financial development, and companies are feeling the pressure.

As if to strengthen the awful outlook, a gazette discover dated January 3, 2024, revealed that roughly 200 firms had been shut down by the Registrar of Companies.

The discover offered no particular causes for the dissolution of the businesses, however it provides to the rising uncertainty within the labour market, deepening the unemployment hole and leaving many Kenyans in limbo.

Kenya’s economic system, closely reliant on agriculture, tourism, and providers, has additionally struggled to get better from the aftereffects of the Covid-19 pandemic and the disruptions attributable to world occasions such because the Ukraine-Russia battle.

The battle has pushed world commodity costs greater, exacerbating inflation and eroding customers’ buying energy. Meanwhile, excessive rates of interest have made it tough for companies to entry credit score, stifling funding alternatives.

The pressure on the formal sector, which has been unable to soak up the rising variety of job seekers, has pressured many people into the casual sector.

While the casual sector accounts for over 80 per cent of Kenya’s employment, it too has been underneath strain resulting from diminished demand for items and providers as family budgets tighten.

This leaves many Kenyans dealing with restricted alternatives, significantly the youth, who’re anticipated to bear the brunt of the worsening job market.