Joblessness in Kenya a threat to President Ruto’s taxation plan
Kenya will have to reckon with unemployment as it seeks to raise more revenue from more income tax with proposals to adjust the tax rate for the highest bracket pay as high as 35 percent, housing levy and health insurance.
Both employers and workers’ unions have warned of the ever shrinking employment space.
The latest data from the Kenya National Bureau of Statistics Quarterly Labour Force report for October –December 2022 that was released February reveals Kenya’s unemployment fell to 960,001 (4.9 percent in October-December 2022 period from 1,055,816 (5.6 percent in the corresponding quarter in 2021.
“Kenya witnessed a shrink in the formal wage employment opportunities as only 333,502 jobs were created in Quarter 4 of 2022, a decline from 444,046 jobs created in Quarter 3 as reported in the KNBS labour force survey,” said Jacqueline Mugo, executive director of the Federation of Kenya Employers.
Kenya’s labour force
Out of a population of 29 million aged 15 to 64 years, Kenya’s labour force stood at 19.3 million by December 2022.
According to the KNBS report, Kenyans aged between 40 and 44 witnessed the highest growth in joblessness, with the number of the unemployed growing by 58,702, in the quarter to 175,578 persons.
“The structure of our economy is such that only 15 percent of wage employment is in the formal sector. About 84 percent is in the informal economy. These numbers continue to change as many youth opt to not look for jobs after several failed attempts,” said Ms Mugo.
“The steps to address some of these challenges include looking at the regulatory environment which employers feel is heavy. We call upon the government to remove the red-tape and barriers to business competitiveness, productivity and growth to address these challenges.”
The government has proposed a raft of measures that will eat into employees’ salaries, but what is worrying employers is lack of a clear job creation policy.
“The number of existing jobs sustained, the number of new jobs created, and the quality of jobs in the country should be at the centre of public policy decisions and actions. Any policy action that is detrimental to jobs both in the short-term and in the long-term, no matter how well intentioned may be, should be avoided,” said Ms Mugo.