Why 90 per cent of new jobs in Kenya are informal

At least 848,200 new jobs were created in 2024, raising the total employment to 20.8 million, an Economic Survey released by the Kenya National Bureau of Statistics (KNBS) has revealed.

The informal sector remained the dominant driver of employment, accounting for 90 per cent of all new jobs excluding small-scale agriculture with 703,700 new positions.

This was, however, a slight drop from 720,900 informal jobs created in 2023.

“...this constituted 90 per cent of all new jobs created with the exclusion of small-scale agriculture,” the report reads in part.

President William Ruto’s move to prioritise policies aimed at supporting those in the bottom of the pyramid commonly referred to as ‘hustlers’ could be seen as the main driver.

Among the sectors which have created more jobs are the affordable housing, MSMES and manufacturing.

According to the report, employment in both formal and informal sectors grew from 20 million in 2023 to 20.8 million in 2024.

Wage employment in the modern sector increased by 2.4 per cent to 3.21 million workers, while the number of self-employed and unpaid family workers in the modern sector rose 1.8 per cent to 175,500.

In the private sector, manufacturing, agriculture, forestry and fishing, and wholesale and retail trade were the top employers, accounting for 15.9 per cent, 14.1 per cent, and 12.6 per cent of private sector jobs, respectively.

Employment in accommodation and food services rose by 6.1 per cent to 102,900 workers.

Other notable gains were recorded in other service activities (4.8 per cent), education (3.4 per cent), and administrative support (3.4 per cent).

Public sector wage employment grew 3.1 per cent in 2024, slower than the 5.9 per cent recorded in 2023.

Electricity, gas, steam and air conditioning supply posted the highest growth at 6.9 per cent, followed by human health and social work activities (5.5 per cent) and education (3.8 per cent).

Education and public administration remained the largest public employers, accounting for 45.2 per cent and 34.4 per cent of government jobs, respectively.

On the contrary, the Teachers Service Commission (TSC), which is the largest public employer, is said to have expanded its workforce by 5.2 per cent.

Ministries and extra-budgetary institutions recorded a 1.3 per cent rise in employment, while county governments posted a 2.3 per cent increase.

Employment in state corporations and parastatals each grew by 1.2 per cent.

The nominal wage bill rose by 7.2 per cent to Sh2.9 trillion in 2024, driven in part by increased employment in education and public administration.

The private sector accounted for 70.6 per cent of total wage payments, with its wage bill growing 7.7 per cent to Sh2.12 trillion.

The public sector wage bill rose by 5.8 per cent, representing 29.4 per cent of total wage expenditures.

The TSC’s wage bill alone increased by 6.7 per cent to Sh304.1 billion, making up 34.5 per cent of total public sector wages.

Annual inflation, as measured by the Consumer Price Index, eased to 4.5 per cent in 2024 from 7.9 per cent in 2023, offering some relief amid wage gains.

The Economic Survey report is an annual publication prepared by the KNBS that provides socio-economic information covering a five-year period.

Statistics presented in survey reports are produced in line with internationally sound and scientific methods that are anchored on the fundamental principles of producing official statistics.

In particular, the report presents information on all sectors of the economy based on the Kenya Standard Industrial classification of all Economic Activities (KESIC), as well as information on other emerging topical issues.

Data quality is expressed in terms of dimensions in line with international best practices and recommendations.