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Labour and Employment in Kenya

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“Youth unemployment continues to be the Government’s priority. The latest initiative to address this problem in Kenya is the launch of the Uwezo Fund set to offer interest-free loans to enterprises set up by youth groups.”

Recent initiatives aimed at addressing youth unemployment include a public works programme known as Kazi Kwa Vijana (KKV). The programme, launched in March 2009 on a pilot basis, unemployed youths in menial work involving mostly rehabilitation and maintenance of urban environments.

Earlier in 2006, the Government had established a Youth Enterprise Development Fund to promote entrepreneurship among young people. The fund was set up to provide loans in form of seed capital to initiate or boost businesses established by youth groups.

The latest initiative is Uwezo Fund, which is aimed at encouraging young people to improve their living standards by starting businesses.

In 2008, the Government introduced a policy document titled Labour, Youth and Human Resource Development Sector (2008-2012). This policy was crafted out of the knowledge that to a large extent, youth unemployment was caused by the lack of necessary education and training to give work skills.

The policy thus sought to increase access to basic education and improve opportunities for technical and vocational training, which had previously suffered a blow after village polytechnics ground to a halt or were taken over by expanding universities. This particular trend is being reversed by refurbishing and re-equipping of some of the surviving polytechnics through a partnership with the Government of China.

Emphasis On Youth Employment in Kenya

Youth unemployment continued to haunt the Government. The youth accounted for 67 per cent of the unemployed population, forcing the Government to look for short—term measures to engage the large number of unemployed youths.

The Kshs6 billion Uwezo Fund is latest government initiative aimed at generating jobs for youth and women through grants and interest-free loans, as Well as mentorship opportunities to enable them take advantage of the 30 per cent government procurement preference for youth, women and persons with disabilities.

The fund’s genesis in the pledge President Uhuru Kenyatta made to allocate the Kshs 6 billion that was meant for the presidential run- off to youth and women groups.

The recently launched Uwezo Fund aims at expanding access to finance through grants and credit to promote youth and Women businesses and enterprises at the constituency level.

The fund hopes to generate gainful self – employment for Kenyan youth and Women, and model an alternative framework in funding community driven development.

Earlier youth employment initiatives include the public works programme known as Kazi Kwa Vijana In this programme, launched in March 2009 on a pilot basis, unemployed youths were engaged in menial Work involving mostly rehabilitation and maintenance of urban environments.

Earlier in 2006, the Government had established the Youth Enterprise Development Fund to promote entrepreneurship among young people in the face of low availability of formal jobs. The fund was set up to provide loans in form of seed capital to initiate or boost businesses established by youth groups. In essence, it was set up to promote the development of the micro and small enterprise sector through wider involvement of young and enterprising people.

The Labour Youth and Human Resource Development Sector (2008-2012) also sought to change the attitude of the youth on agriculture. To do so, the policy suggested the transformation of agricultural and informal sector activities into modern and technology oriented enterprises to attract the youth.

To reduce the skills mismatch among fresh graduates, the policy further proposed closer interaction and collaboration between higher learning institutions and industry.

The issue of youth employment dates back to the independence days.

Kenyanisation of labour (1964-1984)

Immediately after independence, Kenya embarked on aggressive policies to create employment for citizens, developing human capital and combating poverty. The Government decided it would achieve these through education, economic growth and development.

The Kenyanisation policy, introduced in 1964, stands out. It was aimed at reorganising the public service to have more Kenyans working for government departments and state corporations. The process entailed deliberate replacement of non-citizens in the public sector With Kenyans. At that time, British administrators dominated key positions in the public service. To Kenyanise the country’s labour force even beyond the public sector, the Government introduced work permits to regulate the employment of non-citizens.

The other measures included limiting participation of non-citizens in rural enterprise and agriculture and boosting local human capital development.

Investments were made in technical and vocational training to promote the development of technical and vocational skills among Kenyans, and also to encourage growth in the micro and small enterprise sector as Well as the cooperative movement. The Government’s development plan for 1964-1970 emphasised the promotion of a labour force that was productive and disciplined.

The Kenyanisation of labour policy resulted in an annual average growth of wage employment of 2.8 per cent. Much of this growth was in the public sector. Nonetheless, the target of the Kenyanisation policy was not quite to expand the public service sector, but more to reorganise and replace the non- Kenyan Whites and Asians with Kenyans.

By 1971, the percentage of Africans in the public sector had grown from about 15 per cent to 97 per cent. And by 1981, the private sector labour force was 95 per cent African.

Between 1964 and 1979, the Government signed labour agreements with employers in the private sector and trade unions. The tripartite pacts were short—term measures entered into by the three institutions (government, employers, and Workers) to boost employment levels. Employers were required to increase employee numbers by 10 per cent per annum. In exchange, trade unions would neither demand wages increase nor go on strike for the agreed period of time. The tripartite agreements were signed in 1964, 1970, and 1979.

While it was not easy for employers to commit to the annual 10 per cent growth in employees, as this would depend largely on economic performance, many of them put their casual workers on permanent employment.

Meanwhile, by 1970, the Government had identified more issues to deal with to realign and expand employment opportunities. A sure vey had indicated that the major causes of unemployment included rapid growth in the labour force following increase in school enrollment and rural – urban migration. Thus, through Sessional Paper No. 10 of 1973, the Government pursued policies focusing on developing the rural infrastructure and improving labour market information and administration.

Active labour market policies (1975-1985)

Ten years after independence, Kenya was still looking for solutions to its unemployment problem. In 1983, the Presidential Committee on Unemployment, which had been created the year before, presented its report.

The report pointed out that the rapid expansion of the labour force was particularly a problem because of the low economic growth, which meant that industries were not able to expand fast enough to absorb the growing size of the skilled labour force. There had also been a failure to align developmental programmes with areas of higher employment potential, such as agriculture and manufacturing.

And so it was that Sessional Paper No 2 of 1985 formalised government focus on promoting these two sectors — agriculture and manufacturing – in addition to continued investment in education and training.

This was part of the active labour policies that the Government had designed to create enabling environments for the expansion of employment opportunities. Others involved promoting growth in the private sector by investing in supportive systems and infrastructure.

Some of the policies pursued during the 1975-1985 period also sought to resolve problems such as jobs mismatch and employment selectiveness among the youths.

Within the period, formal employment increased by an average annual rate of about 4 per cent from just over 800,000 in 1975 to about 1.2 million people in 1985.

The informal sector experienced twice the percentage growth in employment at an annual average of 8.4 per cent.

SAPs and liberalisation (1986-1996)

Exiting Articles

In 1986, the Government established the National Employment Bureau (NEB) within the Labour Ministry. The bureau was mandated to collect, analyse and disseminate labour market information, and to also offer direct employment services by connecting job seekers with employers. NEB’s came with the requirement that employing organisations promptly supply it with information about the vacancies.

This did not quite take off, partly owing to reluctance by players in the private sector to cooperate and also as a result of poor enforcement. Moreover, the advent of the IMF / World Bank imposed Structural Adjustment Programmes (SAPs) and liberalisation policies within this period led to a shift in focus as the Government concentrated on implementing macroeconomic policies aimed at fulfilling the wishes of the Bretton Woods Institutions. The SAPs created a strain in the economy, making it difficult for both public and private sectors to create jobs. Unemployment rate rose rapidly. By 1996, it was heading to 25 per cent, up from 6.7 per cent in 1978.

Employment patterns also changed as the GDP growth slumped to 0.4 per cent in 1993, having experienced a rapid down-Ward spiral after 1990. People lost jobs as companies and state corporations embarked on massive retrenchment of employees to stay afloat. Thus, from 1993, the informal sector employment rapidly expanded and surpassed that of the formal sector as those who had suffered retrenchment moved to jua Kali practice.

In 1993, the informal sector was responsible for 50.2 per cent of the total employment, while the fore mal sector accounted for 49.8 per cent. By 1996, the informal sector employment accounted for 62.7 per cent of the total. The employment proportions have remained in favour of the informal sector since, with the formal sector losing out as the years progressed.

In this period, total number of people in employment grew from 1.5 million in 1986 to 4.3 million in 1996.

Recovery policies (1991-2008)

The massive losses led the Government to embark on direct interventions to return the country on the path of wealth and job creation by igniting economic growth to attract private sector investment and expansion.

Of note in this period was the Government’s Economic Recovery Strategy for Wealth and Employment Creation (2003-2007). The five-year development strategy was anchored on the of productive macroeconomic policies to boost economic growth and encourage private and foreign investments and to increase investment in human capital development.

The strategy included opening up avenues for the micro and small enterprises (MSEs) to become sound and generate more jobs.

A popular intervention involved giving MSEs access to credit facilities by enabling the expansion of micro—finance institutions. The banks also became more accommodating in their credit services.

The Economic Recovery Strategy for Wealth and Employment Creation did well to stir up economic growth. Kenya’s real GDP grew from 2.9 per cent in 2003 to 7.1 per cent in 2007. However, this growth did not result in a corresponding expansion ‘m employment. It was because of a drastic reduction in employment elasticity, caused by a combination of a high level of surplus labour and a high labour force growth rate.

In 1996, a growth in the GDP by one per cent resulted in more than one per cent improvement in employment. In 2008, such a growth ‘m GDP triggered only about 0.5 improvement in employment levels. This happened because the six to seven per cent growth rate in GDP between 2005 and 2007 was short-lived, crudely disrupted by the post-election violence from December 2007 to February 2008.

Automatic employment of university graduates (1963-1993)

Until the mid-1980s, one would get a junior to mid-level clerical job with a Form Four or Form Six certificate respectively. A college certificate or diploma would lead to a senior clerical, supervisory or administrative job, with promising possibilities of quickly advancing to management.

In that period, and all the way to 1993, a university degree would guarantee one a fairly senior job in the public service. It was government policy to automatically post graduates to relevant departments upon their completion of studies.

Further, especially in first two decades after independence, the Government absorbed the cost of university education. These factors created more interest in university education.

The University of Nairobi, which had existed as a constituent college of the University of London, attained a full university status in 1970, and in the same year assumed control of Kenyatta College as a constituent institute.

The population of university students began to grow steadily at about 15 per cent per annum from the original 500 students. The rising cost of educating the increasing population of university students led to the introduction of a revolving bursary advanced to university students as soft loans.

To ensure recovery of these loans, the Government introduced bonding in the early 1980s. In this arrangement, university graduates would have to serve the public service for a minimum period of three years, during which they would be required to repay their university tuition loans through a check-off system. Thereafter, they would be free to move on to the private sector if they so Wished. However, many opted to stay in government for better job security.

Private sector in Kenya competes for public universities graduates

The automatic employment of graduates in public service and the three—year bonding programme collapsed in 1994, when it became apparent that the Government did not have the capacity to employ all graduates. At that time, public universities had increased to five, namely the University of Nairobi, Kenyatta University, Egerton University, Moi University and Maseno University. The Jomo Kenyatta College of Agriculture and Technology Would attain full university status from a constituent college of Kenyatta University in December 1994.

In 1995, the Government created the Higher Education Loans Board (HELB) to manage university education bursary. HELB gives study loans to students who cannot fund their university education.

Automatic employment in public had stopped and the Government had resorted to employing graduates on a need basis, giving room to the private sector to compete for university graduates. The latter became more attractive because of better entry perks compared to the salaries offered by the Government.

Employers in the private sector were thus encouraged to help the Government to recover study loans through a monthly check-off system. As the numbers of university students continued to swell, competition for limited jobs intensified, pushing many graduates to pursue further studies.

Today, it is fashionable for university graduates to go back to school for post- graduate diplomas in a professional discipline, such as marketing, accounting, purchasing and supplies, and the like. University graduates with additional professional diplomas and certificates have an upper hand in employment.

In 1998, the Government introduced parallel degree programmes in public universities, known also as Module 2, to enable self—sponsored students to study for degrees.

This exponentially raised the intake of students into public universities.

Competition for jobs intensifies

In 2004, the number of fresh students joining university education for undergraduate studies had grown to about 91,500, from 59,200 in 2000. By 2012, that number had risen to about 200,000, growing further into 2013.

This was occasioned by a rapid – expansion of university education over the last decade in response to rising demand for higher studies. The expansion has been both in terms of enrolment levels and physical infrastructure through acquisition and conversion of some colleges and rural polytechnics into constituent universities.

The number of fully accredited public universities rose from seven in 2004 to 22 in 2013. Out of the 22, 15 were awarded charters in early 2013. There are nine public university constituent colleges. A further 17 private universities and five constituent colleges in this category offer chances for diverse degree studies in both undergraduate and graduate levels.

While the minimum entry requirement for a junior corporate office job in Kenya is still at least a Bachelor’s degree, the pressure to find decent employment has pushed more to pursue advanced degrees, such as Master of Business Administration, popularly known as MBA.

In an increasingly competitive job market, those with MBA qualifications are presumed to have an advantage over those with only a first degree.

In 2011, attention grew in a fairly new advanced degree, called Master’s in Public Administration (MPA), or as referred to in some universities, Master’s in Public Policy and Administration (MPPA). The interest in the study was occasioned by the foreseen emergence of fresh public service jobs in county governments to be formed after elections in March 2013, as stipulated in the Constitution.

Those holding these qualifications have had an upper hand in contesting for senior government jobs in the counties, as Well as in the various commissions that have been formed under the Constitution. The Kenya School of Government is on the frontline in the provision of the studies in collaboration with the University of Nairobi.

Kenyatta University also offers the degree.

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