NATION AGENDA: Unemployment is a drag on the economy
Job creation has dominated discourse at every election.
It will be same this year, in fact, more robustly than ever before.
This is because unemployment is a serious social, economic and political problem.
More particularly, it affects the youth – the productive segment of the society and who form a large voting bloc; which politicians aspire to lock into their camps.
Statistics vary, but a World Bank report published last year estimated youth unemployment at 17.3 per cent, adding that one in every five youth was out of job.
The figure could be higher given the fact that even the classification of youth varies.
Even so, considering that the youth constitutes 67 per cent of the population as captured in the Second Medium Term Plan 2013-17, this presents a grave challenge.
Youth unemployment is not a recent phenomenon.
It is perennial problem and has morphed over various political and economic periods.
At independence, the challenge was getting young qualified personnel to take over key and strategic positions in a new government as the colonial administrators exited.
There were jobs and although there were many unemployed youngsters; there was a mismatch between skills and opportunities.
Sessional Paper No. 10 of 1965, entitled: African Socialism and its Application to Kenya, captured the situation graphically: “The shortage of trained, educated and experienced [local] manpower is now so great that even the preparation of applications for foreign aid becomes a major and slow moving process and our ability to implement major projects is being brought into question by several sources of foreign aid.”
Unemployment challenge began to hurt in the second decade of independence.
And this is articulated in the first labour report of 1971/2, entitled, Employment, Incomes and Equality: A Strategy for Increasing Productive Employment in Kenya, which signalled that the country was headed for unemployment crisis unless the government revitalised its economy, managed population growth, revised its labour strategy and re-oriented its education and training programmes.
Matters were made worse by the oil shocks of 1973/4 that demolished world economies and stifled economic growth, such that Kenya’s, which erstwhile grew at an average of 6-7 per cent tumbled to 1.1 per cent in 1974.
Subsequent turbulence of the global prices of agri-products, the economic baseline of Kenya’s economy, coupled with further oil shocks in the late 1970s worsened the situation.
Such economic fluctuations impacted so badly on job creation and wage earnings – unemployment rose and incomes reduced in absolute terms – as captured in the Economic Survey of 1980.
Faced with the unpredictable economic indicators and ballooning wage bills, Kenya like other developing nations, found itself in the grip of stiff external conditionalities imposed by the World Bank and IMF in the 1980s and 1990s under the mantra of Structural Adjustment Programmes, whose rallying point was cost-cutting – reducing government subsidies to social sectors like education and health; retrenching workers under the camouflage of rightsizing and divesting from public corporates.
The net result was increased unemployment and underemployment.
Among the most affected were university graduates, who by the end of the 1980s found themselves tarmacking for long or lapping at the least suitable job that came their way.
So far, the government has developed 17 policies on job creation.
In recent years, employment policies are guided by the articulations of Vision 2030 and which are further extrapolated in two documents – First Medium Term Plan 2008-2013 and the Second Medium Term Plan, 2013-17.
In the First Medium Term, the coalition government pledged to create more than three million jobs.
However, at the end of the plan period, it had created just 2.7 million jobs.
More pertinently, the jobs pledged were largely in the informal sector, notably, Jua Kali, and which bring in meagre wages.
However, the formal sector, which has the advantage of predictable salaries and allowances as well as social benefits such as medical and housing, only generated few jobs.
Consequently, in the second Medium Term Plan that ends this year, the government opted to engage high gears and focus on creating more jobs in the formal rather than the informal sector; a definitely ambitious undertaking.
As the 2016 Economic Survey indicates, that has not been possible.
Between 2013 and 2015, new jobs in the formal employment only grew by about 9 per cent.
Informal sector remained the main employer, recording 12.6 million jobs up from 11.2 million in 2013.
Fewer jobs in the formal sector means increased graduate unemployment given the fact most of them are not trained and socialised to get into the informal jobs sector.
The challenge of graduate unemployment becomes grave when we consider the statistics of those leaving universities every year.
A report by the Commission for University Education published last year, recorded that between 2012 and 2015, the universities graduated more than 120,000 students, and in any particular year like 2015, when the number of the institutions increased, a total 60,861 students graduated, with the bulk in social sciences.
The implication is that the market is flooded with graduates unable to find jobs.
Consider, for example, that 22 per cent of the graduates – about 14,000 – did a Bachelor of Education, yet the government does not employ and private secondary schools are few and far apart, it means most of those graduates have no jobs.
In fact, a study conducted in four countries – Kenya, Ghana, Nigeria and South Africa – by the British Council and published into a publication entitled: Can higher education solve Africa’s problems, says that it takes five years for a Kenyan graduate to secure employment.
An equally difficult challenge is the mismatch between skills offered at university and what the market demands.
In a study by the Inter-University Council for East Africa (IUCEA), 47 per cent of Kenyan employers indicated that they have vacancies they could not fill because of lack of skills from graduates leaving universities.
It is due to graduate unemployment that the government has in recent times changed tact, re-orienting the youth to think about vocational and technical training, which offers ready job chances, as opposed to traditional degree programmes whose graduates stay out in the cold for lack of what to do.
Notably, the government has rolled out several initiatives in recent years targeting youth employment, among them, Kazi kwa Vijana under the Grand Coalition Government, but which came out as a cropper due to corruption and fraud.
Subsequently, the current administration set to follow a different path that involved revitalising and expanding the National Youth Service (NYS) to offer jobs to high school leavers; establish Youth Fund to provide capital to young people to venture into business; allocate 30 per cent of government tenders to youth and provide cash through the Uwezo Fund.
NYS turned into a poster signature for corruption having lost some Sh791 through fraud while Youth and Uwezo Fund reels under low uptake and returns.
In a nutshell, the political competitors must develop new strategies to tackle youth and particularly graduate unemployment.
This is because several previous attempts have not yielded desired results and doing the same thing or giving the same promises every election year is injudicious.