OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 1

Opportunity Assessment and Identification

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Author Note
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 2

Executive Summary

The analysis report will focus on the problem of unemployment in Kenya which has contributed

to increased poverty levels in the country. The paper will identify the various major factors

which have contributed to the increased unemployment rates in the country and some of the

challenges graduates face in the labor market. Also the paper analysis some of the statistical

information by the world bank which will help in assessing the situation in the country. In this

analysis evidence on the unemployment challenge will provide and also analyze the most

vulnerable group and how it has contributed to the increased poverty levels in the country. In

addition, the analysis will identify the link between the population growth rate and the increase

in the unemployment rate. Also, since education forms an essential part of employment, the

report will analyze the education system in Kenya to identify if it has the potential to equip

learners with the necessary skills to ensure that they are competitive in the labor market. There

are various possible solutions to unemployment which a country can implement to boosting its

economy. The report recommends some of the effective solutions to the high unemployment rate

in Kenya and thus if implemented they can make a great difference with time.
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 3

Table of Contents

Executive Summary.........................................................................................................................2

Introduction......................................................................................................................................4

Outlook of Kenyan Labor Market...................................................................................................4

Unemployment Drivers...................................................................................................................5

High Rate of Corruption..............................................................................................................5

Low Quality of Education............................................................................................................6

High Population Growth Rate.....................................................................................................7

Solution to the Problem...................................................................................................................8

Increasing Employment Opportunities........................................................................................8

Transforming the Education Sector.............................................................................................8

Labor Exportation.......................................................................................................................9

Conclusion.......................................................................................................................................9

Further Recommendation..............................................................................................................10

References......................................................................................................................................11

Appendices 1.................................................................................................................................13

Appendices 2.................................................................................................................................14
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 4

Introduction

The Kenyan economy is the largest in east Africa, however, the country still remains in

the third world category. After independence, Kenya focused on economic growth through

public investments and encouraged both small agricultural and industrial investment by

providing incentives to even foreign investors (Caporale & Gil‐Alana, 2018). Most of the

industries in the country are owned by an Indian community which is also recognized as an extra

tribe within the country with full rights as they can also participate in the election of their

leaders. According to demographic data between 2017 to 2020 26.3% of Kenya workers are said

to living below USD1.90. the country has shown effort in eradicating poverty whereby the

national poverty line fell from 46.8% in 2005/06 to 36.1% in 2015/16 (World Bank, 2021). The

decline in poverty in Kenya is also attributed to the developments made in rural areas whereby

the government has been working towards achieving a sustainable development through the

provision of electricity, water supply and healthcare services in the interior parts. With the

growing population, the number of people living below the poverty in urban and in the north-

eastern counties increased by 2.3 to 3.8 million and from 2.4 to 3.2 million respectively (World

Bank, 2021). The data shows that with the population growth, the number of people falling

below the poverty is also increasing despite the countries effort to improve the standards of

living to even the people residing within the rural areas. This report focuses on the causes of the

increasing poverty and the driving forces. Employment will be the centre of the assessment to

identify the unequal chances of economic opportunity.

Outlook of Kenyan Labor Market

The majority of the Kenya workforce operates in the informal sector which takes a total

of 83% (World Bank, 2021). The informal sector is shaded by non-compliance to the country’s
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 5

employment laws and thus the majority of those working there are unable to adequately cater for

their daily needs. An increase in the living cost has also made the growth of the middle class

sluggish whereby it reached 20% in 2020 (World Bank, 2021). The country in the past few years

has implemented laws that govern the labor market, however, many employers have not

implemented any and thus a contributing factor to the slow growth of the middle-class. despite

the increasing cost of living, most employers do not offer a salary increase to their employees

and thus most of them falling below the poverty line (Caporale & Gil‐Alana, 2018). In the urban

areas, 80% of the urban areas are underemployed while 18% are unemployed therefore this

means only 2% of them are within the middle class. Kenya has a high out-immigration than in-

migration with most of the immigrants moving to the middle east whereby the majority work as

domestic workers. Some of the Kenyan migrants to the middle east working as domestic workers

have faced abuse and others have died as a result of abuse (Nyerere, 2018). Despite the Kenyan

government has taken several actions to protect its citizens in the middle east, however, they

have not worked as the situation does not seem to change. Due to the current financial crisis, the

unemployment rate was 2.98% in 2020 before the financial crisis (World Bank, 2021). However,

since the beginning of covid-19, the unemployment rate has increased steadily as many

companies were closed which offer employment to the largest number of Kenyan youths see

appendices 1.

Unemployment Drivers

High Rate of Corruption

Kenya despite having thousands of graduates each year in the labour market, most of

them are still unemployed. One of the major drivers of unemployment in the country is

corruption. Employment opportunities in the country are awarded mostly not based on merit but
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 6

on the amount of connection that one has within an organization (Farah & Ali, 2018). Also, most

youths admit to having paid a certain amount of money to the human resource manager of a

certain organisation to guarantee them an employment opportunity. this vice has seen most of the

qualified Kenyan youths with necessary skills miss on employment opportunities which they

apply. The corruption index rate increased to 31points in 2020 from 28points in 2019 (World

Bank, 2021). The corruption index rate is majorly focused on the country’s public sector. This

means, getting an employment opportunity in the public sector requires one to be able to bribe

the officials. However, most graduates from poor families do not have even the money to bribe

and thus most of the opportunities are given to candidates from middle-class families and also in

the higher social-economic class.

Low Quality of Education

Most Kenyans have gone to school, however, not most of them have been able to acquire

high-quality education due to financial constraints. Therefore, some of the young people lack the

necessary knowledge and skills to get employment both within the country or as immigrant

workers in developed countries. Despite having a literacy rate of 81.5%, those who have been

able to access tertiary education which equips one with the necessary employment skills is 3.5%

(World Bank, 2021). However, most of those with tertiary education levels are unable to get a

job since they are not well equipped at the university with the necessary skills and thus many

opting to start small business enterprises to cater for their basics and also ensure they keep up

with the increasing cost of living. The emergence of non-certified universities and colleges in the

country has greatly impacted the quality of education offered and thus the major reason why

most graduates do not have the necessary skills required for their profession (McCowan, 2018).

Also, graduates from non-certified tertiary institutions are likely to face discrimination in the job
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 7

market despite possessing the required skills and knowledge. Therefore, low education quality

has been a major setback in increasing the employment rates in Kenya (Khamala, Makori &

Njiraine, 2018). Most people graduate from university but they lack the necessary skills that

would help them secure employment (Caporale & Gil‐Alana, 2018). In most cases, some

employers are forced to replace some of their graduate employees often since they are unable to

meet the goals set. At times getting an employer may be easy for a graduate, however, to be able

to keep the opportunity requires one to deliver based on the standards set by the organization. it

may be difficult to keep an employee who fails to achieve what is required as that amounts to a

loss within the organization.

High Population Growth Rate

The population in Kenya is growing at a rapid rate, however, the job opportunities are not

increasing at the same rate thus increase the number of unemployed citizens. Also, the

government prefers giving contracts to foreigners hence limiting the number of opportunities the

growing population need to fight for aggravating the rate of joblessness. Kenya experienced a

population increase annual change of 2.3% which means and thus meaning the number of people

is increasing (World Bank, 2021). Also, the majority of the Kenyans are youths who need

employment and thus making the competition much higher in the job market. Job market growth

in Kenya is decreasing against the growing population and thus the country risks having more

unemployed youths in the future (see appendices 2). It is estimated that in 2020 alone over 1

million Kenyans lost their job since the number of those employed dropped from approximately

18.1 to 17.4 (World Bank, 2021). therefore, despite the population growth, the number of job

opportunities are also decreasing and thus the risk of increased unemployment rates in the

country.
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 8

A solution to the Problem

Increasing Employment Opportunities

Kenya has several collapsed industries which used to offer employment to a large number

of people. For instance, Mumias sugar company used to offer employment to the locals and also

provide a market for sugarcane farmers within its locality. Reviving the industry would create

more opportunities for all Kenyans with different education levels (Chigunta, 2017). The other

way the country would tackle the issue of unemployment is by encouraging the informal sector

to promote self-employment. The county governments in Kenya have development funds set

aside to tackle the issue of unemployment, however, the money ends up being embezzled by the

few leaders who are in control (Chigunta, 2017). Ensuring that the development funds are

utilized in the right would ensure that most people especially the youth have established

themselves through self-employment and also create more opportunities for others.

Transforming the Education Sector

From various sources, it is clear that the education sector in Kenya has weaknesses that

need to be addressed hence improve the employment rates. The education system should be

transformed in such a way that it will equip students with the necessary knowledge and skills

required in the job market (Khamala et al., 2018). ensuring that the education system focuses on

ensuring that the learners are equipped with skills and not just theory learning will ensure that

they can compete favorably even in foreign job markets. Most of the graduates in the country

miss employment due to a lack of the necessary skills (Kiiru & Barasa, 2020). Also, encouraging

graduates with the potential to focus on self-employment will ensure that the country job market

increases hence giving opportunities to more other people which will be a great strategy for

dealing with unemployment in Kenya.

OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 9

Labor Exportation

Assisting unemployed people to get jobs in labor deficient countries would also play a

role in reducing the rate in the country. Most young people with skills who have failed to secure

a job in the country are willing to work in other countries (The Guardian, 2013). however, the

government should be keen to ensure that the country in which they are exporting labor have

well-structured labor laws which will ensure that their citizens are protected. Cases of foreign

employees being mistreated especially in Arab countries have increased and at times requiring

the intervention of the origin country to intervene and rescue their citizens (Lutomia, 2017).

Also, the country can put in place a strategic plan to attract foreign investors who would provide

extra job opportunities for the country growing skilled personnel. Previously the country has

made it hard for foreign investors to carry out their business due to the increased cases of

corruption and also unfair policies. Foreign investors in Kenya are highly taxed and thus most of

them opt for other countries which have foreign business-friendly policies (Waruguru, Bwisa &

Kihoro, 2017). Therefore, Kenya needs to ensure that it creates policies that encourage foreign

investors who would in turn create more job opportunities for the increasing population hence

alleviate the problem of unemployment.

Conclusion

Employment is one of the essential factors that contribute to the improvement of a

country’s economy. When the employment rate is high in a country, the poverty levels are

reduced and thus most people live within healthy standards. Most third world countries like

Kenya are facing a serious problem of unemployment. Every year, several thousands of

graduates enter the Kenya market to compete for the few job vacancies. However, some of the

graduates do not possess the necessary skills for their position and therefore end up not giving
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 10

their employers the value they need leading to termination of their contract a few after a few

months. Focusing on ensuring that the education system offers skills to the students would play

an essential role in ensuring they compete favourably even in foreign job markets. According to

World Bank statistics, the Kenyan population is still rapidly increasing, however, the job market

is diminishing and therefore unable to accommodate the growing population. Several measures

need to be put in place to reduce the rates of unemployment. Reviving already closed industries

would help in creating more opportunities in the country. Exporting labor has been a major

strategy used by third world countries especially Kenya, however, the government needs to

ensure the rights of their citizens in foreign countries are respected.

Further Recommendation

The population size in Kenya has been growing at an approximate rate of 2.5%.

developing a population policy to control growth would ensure that the country has a labour

force that the economy can absorb. For instance, regulating the number of children that one can

have and also sensitizing the population on the importance of family planning will ensure that

the country population is sustainable hence be able to boost its economy since there will be

minimal poverty rates as most of the population will be absorbed in the labor market.
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 11

References

World Bank (2021). Unemployment, total (% of total labor force) (modeled ILO estimate) –

Kenya. https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?

end=2020&locations=KE&start=2020&view=bar

World bank (2021).

Literacy rate, adult total (% of people ages 15 and above) – Kenya.

https://data.worldbank.org/indicator/SE.ADT.LITR.ZS?locations=KE

Farah, S. A., & Ali, H. A. (2018). A Study on the Causes of Unemployment among University

Graduates in Kenya: A Case of Garissa County, Kenya. European Journal of Social

Sciences Studies. https://oapub.org/soc/index.php/EJSSS/article/viewFile/400/979

Caporale, G. M., & Gil‐Alana, L. A. (2018). Unemployment in Africa: a fractional integration

approach. South African Journal of Economics, 86(1), 76-81.

Nyerere, J. (2018). Youth Unemployment in Kenya: Incorporating Entrepreneurial and

Transferable Skills in Education. Youth Entrepreneurship and Africa’s Sustainable

Industrialization, 125. https://books.google.com/books?

hl=en&lr=&id=3Gl2DwAAQBAJ&oi=fnd&pg=PA125&dq=unemployment+in+kenya+a

nd+population+growth&ots=LI9F0momvi&sig=euWRgC-ycfdnn75RCtK-WA6vwvQ

The Guardian (2013). Africa's rising population and youth unemployment challenge.

https://www.theguardian.com/global-development-professionals-network/2013/jul/11/

africa-kenya-population-youth-unemployment

Lutomia, A. N. (2017). Tracing the Rights of Domestic and International Kenyan House

Helps. Handbook of Research on Women's Issues and Rights in the Developing World, 1.

https://books.google.com/books?
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 12

hl=en&lr=&id=34Q0DwAAQBAJ&oi=fnd&pg=PA1&dq=kenyan+workers+in+saudi+ar

abia&ots=Vpnbds00Ts&sig=iJW_LmC-fab3fsFumJ_skJE9iLk

McCowan, T. (2018). Quality of higher education in Kenya: Addressing the

conundrum. International Journal of Educational Development, 60, 128-137.

https://discovery.ucl.ac.uk/id/eprint/10043348/1/Quality%20of%20HE%20in%20Kenya,

%20author%20version.pdf

Khamala, D. F., Makori, E. O., & Njiraine, D. M. (2018). Webometrics ranking and its

relationship to quality education and research inAcademic institutions in Kenya. Library

Philosophy and Practice, 0_1. https://core.ac.uk/download/pdf/189484086.pdf

Chigunta, F. (2017). Entrepreneurship as a possible solution to youth unemployment in

Africa. Laboring and learning, 10, 433-451.

Kiiru, J. M., & Barasa, L. N. (2020). Securing Inclusive Growth: Mentorship and Youth

Employment in Kenya. In Africa and the Sustainable Development Goals (pp. 145-154).

Springer, Cham.

Waruguru, M., Bwisa, H., & Kihoro, J. (2017). An Assessment of the Opportunity Component of

Entrepreneurship Policy in the Youth, Women, and Uwezo Funds in

Kenya. International Journal of Academic Research in Business and Social

Sciences, 7(1), 283-305.
OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 13

Appendices 1

Source: (The world Bank, 2021)

OPPORTUNITY ASSESMENT AND IDENTIFICATION: KENYA 14

Appendices 2

Source: (World Bank, 2021)