More Youth Left Jobless As Private Sector Suffers

  • Jobseekers queue on Wabera Street, Nairobi, as they wait to be interviewed by The Sarova Stanley on May 26, 2018.
    Jobseekers queue on Wabera Street, Nairobi, as they wait to be interviewed by The Sarova Stanley on May 26, 2018.
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  • A survey by the Federation of Kenya Employers (FKE) released on Friday, September 25, indicated that 80% of all jobs created in the modern private sector since 2015, have been wiped out in the wake of the Covid-19 pandemic.

    This is a huge loss considering that for the last 5 years since 2015, only 218,800 jobs had been created in the sector.

     According to the Kenya National Bureau of Statistics (KNBS) Economic Survey 2020, the formal private sector wage employment in 2019 stood at 2.06M and grew by 2.3%.

    Jobseekers wait to hand in their documents during recruitment at County Hall in Nairobi, 2019.
    Jobseekers wait to hand in their documents during recruitment at County Hall in Nairobi, 2019.
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    What that means, then, is that 173,743 jobs had been lost in the formal private sector in five months, from March to July.

    The survey established that 51% of the private sector enterprises did not have enough resources to meet their staff costs in the next six months.

    "Only 30% of the companies studied indicated that they had enough resources to meet their wage obligations in the next six months. This indicates that more job losses are expected.

    "If the government does not intervene in helping enterprises in improving their cash flows, then more than a million formal sector
    workers are at risk of losing their current incomes on jobs," reads an excerpt of the report.

    In addition, 71% of the respondents indicated that  labour costs and employment entitlements benefits constrained their recruitment decisions.

    In order to grapple with the youth unemployment challenge, the respondents stated that greater collaborative work among the Social Partners to stabilize the work environment and maintain competitive labour costs was required.

    "Businesses are in dire need of support to help them access and generate finances to help their cash flow. This includes linking loans repayment and credit facilities to cashflow projections.

    "The Government needs to implement measures that impact positively on business operations and supply chains. This includes strengthening internal markets and access to regional markets," the report states.