The number of new jobs created last year dropped by 108,300 compared to the previous year, fresh data by the Kenya National Bureau of Statistics (KNBS) shows, even as the country’s economy grew slower at 4.8 per cent in 2022.
Kenya’s economy continued with a steady, but slower recovery from multiple shocks to create at least 816,600 jobs last year. Agriculture, often touted as the backbone of the economy, pulled other sectors down.
The Gross Domestic Product (GDP) grew 4.8 per cent to hit Sh13.368 trillion in 2022, lower than the 7.6 per cent growth recorded in 2021. The growth last year was largely supported by service and other sectors such as construction and manufacturing, the Economic Survey 2023 shows.
“Employment in the modern and informal sectors went up from 18.3 million in 2021 to 19.1 million in 2022. Employment in the modern sector recorded a growth of 3.7 per cent in 2022 compared to an increase of 5.9 per cent in 2021,” the survey states.
Informal sector jobs grew by 702,900 to hit 15.9 million, with KNBS noting that the sector constituted 86.1 per cent of all new jobs created.
While 2022 continued to exhibit economic recovery from multiple shocks, including the Covid-19 pandemic and the Russia-Ukraine war, the pace was slower.
“That year was covered by so many negative shocks and they were all coming from the supply side. The peculiar characteristic was that they were persistent,” noted National Treasury Cabinet Secretary Njuguna Ndung’u.
Among the sectors that recorded improved performance were information and communication technology (ICT) and financial and insurance services. The Economic Survey shows that a 9.9 per cent growth was recorded in ICT, up from a growth of 6.1 per cent in 2021. The financial and insurance sector on the other hand grew by 12.8 per cent, up from a growth of 11.5 per cent in 2021.
Growth in the ICT sector was largely supported by enhanced mobile money activities where Sh7.9 trillion was transferred, while the financial services improved as they advanced more credit to the private sector, with commercial banks lending out a total of Sh4.2 trillion, the KNBS report shows.
Economy boosters
While their growth rates slowed down compared to 2021, the manufacturing, construction, transport, and accommodation sectors also boosted the country’s economy last year. The accommodation and food sector, which was one of the worst hit during the Covid-19 pandemic, last year grew by 26.2 per cent, recording a 7 million bed occupancy, up from 5.5 million in 2021. The sector had the highest rate of new jobs created—from 61,700 in 2021 to 75,900 wage employees in 2022.
The transport sector, which recorded a 5.6 per cent growth in 2022, was also largely supported by increased rail and air transport operations, with the standard gauge railway recording 6.09 million metric tonnes of cargo and 2.39 million passenger rides. Air passengers also increased by 52.2 per cent to 10.2 million.
The construction sector recorded a 4.1 per cent growth, which was lower than the 6.7 per cent growth recorded in 2021. Jobs in the private construction sector also increased slightly from 217,300 to 222,200.
Increased manufacture of sugar, production of basic metals, and increased local vehicle assembly also saw Kenya’s manufacturing sector record a 2.7 per cent growth, which was slower than the 7.3 per cent growth in 2021. People employed in private manufacturing increased by 5.1 per cent to 329,600.
“The decelerated growth was partly attributed to low agricultural production especially food crops that are the main inputs to agro-processing,” the report states.
This was just one of the many implications of poor performance by the agriculture sector, which continued with a dismal performance in 2022. During the period when the country faced drought and suffered high prices of agricultural inputs, the sector’s performance went from negative 0.3 per cent in 2021 to negative 1.9 per cent.
“Estimated maize production decreased from 36.7 million bags in 2021 to 34.3 million bags in 2022. Similarly, tea production decreased from 537.8 thousand tonnes in 2021 to 535.0 thousand tonnes in 2022 on account of depressed rainfall in tea growing areas,” KNBS states.
Noting the sector’s role in pulling down the economy, Prof Ndung’u said that there have been serious structural problems and hinted at tighter regulation.
Agriculture’s contribution to GDP dropped to 21.2 per cent from 21.5 per cent in 2021. BY DAILY NATION