ILO report calls for job-centred growth policies in Kenya

Kenya needs to adopt a coherent national employment strategy to achieve a more equitable economic growth, says the ILO.

News | 02 December 2013
ADDIS ABABA, Ethiopia (ILO News) – Kenya needs to adopt a coherent national employment strategy in order to achieve a more equitable economic growth, says a new report by the International Labour Organization (ILO).

According to the report , GDP growth in Kenya has increased in recent years, (it is expected to reach 5.7 per cent this year), but this has not translated into improved labour market conditions, especially for youth – a growing segment of the population.

In 2012, youth aged 15 to 24 made up over 35 per cent of the working-age population but they accounted for less than 19 per cent of total employment. The inactivity rate for young people reached a staggering 60.5 per cent that same year – an increase of five percentage points since 2000.

Many youth have begun to drop out of the labour market altogether but low employment and participation rates are not explained by increased school enrolment. In fact, the tertiary school enrolment rate, (which is the most direct substitute for youth employment), remained as low as 4 per cent – 3 percentage points below the average observed for Sub-Saharan Africa as a whole.

Young Kenyans are increasingly pessimistic about their employment prospects and their role in society more broadly. In 2011, less than 16 per cent of the population aged 15 to 34 in Kenya believed that economic conditions were improving and only one quarter believed it was a good time to find a job. These numbers were among the lowest in Africa.

“High and persistent inactivity rates can hamper future economic growth, while discouragement among workers – especially youth – can also have important social implications which could lead to discontent,” says Verónica Escudero, ILO economist and one of the authors of the report.

“It is important to note that considerable efforts have been put forth by the government in recent years to support the labour market, and especially the youth. However, a stronger link between growth, employment and equity would be necessary to boost job-rich growth and ensure that all Kenyans benefit equally from the country’s prosperity,” she adds.

The study, entitled “Kenya: Making quality employment the driver of development*”, proposes a three-pronged approach to achieve job-rich growth:

First, designing a national employment strategy that links employment and macroeconomic objectives.

Vision 2030 – Kenya’s long-term development plan – is a welcome move in this regard. Its inaugural five-year Medium-Term Plan (MTP) was completed in 2012 and the next leg of the process is taking place from 2013 to 2017. This would provide an excellent opportunity to mainstream labour market policies into development planning.

Second, diversifying Kenya’s export-base to tackle economic vulnerabilities, create an enabling environment for investment and promote the creation of decent work opportunities.

Third, facilitating transitions to the formal economy and improving the working conditions of vulnerable workers, in particular youth and workers engaged in informal-sector jobs. The Government has implemented a series of programmes, such as the Kenya Youth Empowerment Programme, to address the challenges confronting youth.

In addition to these efforts, the report recommends a series of measures:
  • Reducing entry barriers into the formal economy, therefore lessening the obstacles to more formal job creation;
  • Developing a social protection floor as a tool to improve the working conditions of informal-sector workers;
  • Encouraging the hiring of young people, through targeted subsidies and the promotion of entrepreneurship;
  • Improving skills-matching and school-to-work transitions;
  • Ensuring equity in the participation of existing youth programmes, especially for young women and youth in rural areas;
  • Promoting cohesion between adults and youth, so both groups can work together to fulfil their particular roles and to stop being considered mutual substitutes in the labour market.
“Attaining a more inclusive growth model is possible, provided that effective policies are put in place in a coherent and comprehensive manner,” concludes Elva López Mourelo, co- author of the report. “Effective social dialogue between the Government, employers and workers can not only lead to the best possible policies but also ensure that they are implemented effectively.”

*The Kenya Report is published under the series Studies on Growth with Equity. It has been jointly produced with the United Nations Department of Economic and Social Affairs (UN DESA).