In 2024, the World Bank projected that the overall unemployment rate of the youth in Kenya was at 5.7 per cent.

The Federation of Kenya (FKE) says that the youth account for over 35 per cent of the Kenyan population and experience the highest unemployment rates as over a million young people enter into the labor market annually without any skill set or defined profession.

The government of Kenya has a broad-based implicit policy on creating employment for its people that focusses at both the formal and informal sectors.

It seeks to increase job opportunities particularly among youth through a combination of approaches such as funding for small-scale traders, skills development programs, and targeted support for women and youth entrepreneurs. 

The Kenya Kwanza government has also lately turned outwards to actively place Kenyan job seekers in low cadre international jobs.

4.7 per cent economic growth

The 2025 Economic Survey by the Kenya National Bureau of Statistics (KNBS) is a mixed basket of varied performance, looking at Kenya’s multi-faceted economy. The report indicates that in 2024, Kenya’s real Gross Domestic Product (GDP) grew by 4.7 per cent, a downward revision from 5.7 percent, forecast earlier.

In 2024, the Sub-Saharan Africa (SSA) real GDP grew by 3.8 per cent, while that of the East African Community (EAC-5) region grew by 5.4 per cent. The Global real GDP grew by 3.2 per cent in 2024 compared to 3.3 per cent in 2023.

In Kenya, the year-on-year inflation for 2024 eased to 4.5 per cent from 7.7 per cent in 2023. The inflation registered in 2024 was the lowest in the last five years.

Leading sectors in growth

The 2025 Economic Survey says the Agriculture, Forestry and Fishing sector was one of the leading growth sectors. It grew by 4.6 per cent, a lower growth as compared to 6.6 per cent growth in 2023.

The other sectors that registered growth include the Financial & Insurance Activities sector (7.6%), Transportation and Storage sector (4.4%) and Real Estate sector (5.3%).

Construction, however, recorded a contraction of 0.7 per cent down from a growth of 3.0 per cent in 2023. 

This is despite President William Ruto presenting a positive outlook in the sector, which he alluded to the affordable housing project. 

Similarly, mining and quarrying recorded a contraction of 9.2 per cent compared to a 2023 contraction of 6.5 per cent as evidenced in the reduced production of key minerals, which include construction materials, titanium, crude salt, and gemstones.

Manufacturing and construction sectors slump

The manufacturing sector realized an increase of 4.4% due to the volume of output in the sector in 2024, compared to 2.1 percent in 2023. 

Still in 2024, there was an increase of 9.8 percent in the Growth of agro-based Industries, largely driven by a rebound in sugar production, which rose by 72.5 percent.

There was a marked decline, however, of 7.9 percent in the production of cement. It declined to 8,852.6 thousand tons in production in 2024 from 9,616 thousand tons in 2023.

Cement consumption decreased by 7.2 per cent to 8,537.0 thousand metric tons, over the same period. Private employment in the sector registered a downward trend decreasing from 226.3 thousand employees in 2023 to 223.4 thousand employees in 2024.

However, public employment in the construction sector increased from 9.7 thousand employees in 2023 to 9.9 thousand employees in 2024.

The construction industry was further pummeled by declining loans and advances from the commercial banks which declined from Ksh.602.7 billion in 2023 to Ksh.528 billion in 2024.

The result was a slump in the consumption of cement which at 8.5 million tons, decreased by 7.2 percent in 2024 as compared to 2023. Overall, the construction sector declined by 0.7 per cent in 2024 as compared to 3.0 per cent growth registered in 2023.

The average annual inflation for construction materials such as cement, tiles and reinforcement steel plus other construction inputs rose to 2.83 per cent in 2024, up from 2.30 per cent in 2023.

Employment looking down on the formal front

The survey says that employment, earnings and consumer prices realized within the modern and informal sectors, excluding small-scale agriculture, went up from 20 million in 2023 to 20.8 million in 2024.

KNBS indicates that a total of 782, 300 new jobs were created in the economy in 2024. The formal sector created a total of 78, 600 jobs in 2024, reflecting a growth of 2.4 per cent.

Indicative of an employment slump, the informal sector created 703, 700 new jobs compared to 720, 900 in 2023, accounting for 90.0 per cent of all new jobs.

Employment in Kenya is categorized into three sectors, namely: formal (modern), informal, and small-scale agriculture.

The total number of self-employed and unpaid family workers in the modern sector was estimated to have increased from 172, 400 in 2023 to 175, 500 in 2024.

The leading industries 

The report also documents the leading industries in the private sector in 2024. These are the industries providing the highest employment numbers such as the Manufacturing; Agriculture Forestry and Fishing; and Wholesale and Retail Trade, accounting for 15.9, 14.1, and 12.6 per cent of the total private sector employment, respectively.

KNBS details private sector employment made available within the accommodation and food service activities increased by 6.1 per cent to 102, 900 employees in 2024.

The leading industries in the private sector in 2024 providing the highest employment numbers were Manufacturing; and Agriculture, Forestry and Fishing, accounting for 15.9 per cent and 14.1 per cent, respectively.

The Kenya Kwanza government has said it is prioritizing the growth of the manufacturing sector as a key driver of economic transformation and job creation. The government intends to focus on value chains, leveraging public procurement, and promoting investment in areas like health products, energy, and infrastructure.

The government’s objective is to increase the sector's contribution to GDP, aiming for 15% by 2027 and 20% by 2030. However very little has been implemented towards actualizing this vision and a lot remains on paper.

Diminishing real wage earnings 

In the Agriculture, forestry and fishing sector, the real wage earning per employee in 2020 was 347,598.7; in 2021 it was 328,059.4; in 2022 it was 321,034.0; in 2023 it was 302,572.0 and in 2024 it was 300,081.7.

As evidenced here, employment earnings have been on a five-year unrestrained slide and this has dented the purchasing power of many workers.

The same kind of pattern in other sectors such as manufacturing, construction, wholesale and retail trade; repair of motor vehicles and motorcycles, transportation and storage, accommodation and food service activities, information and communication, financial and insurance activities, and real estate activities among other numerous sectors paint a grim picture of the dented holes in workers’ pockets.

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For a majority of the employed, wages have failed to keep up with the cost of living as salary increases trail the rate of inflation on average, leaving Kenyans struggling to maintain their lifestyles.

Statutory deductions raiding pockets 

The reduced purchasing power of Kenyan workers has been further worsened by higher deductions to the National Social Security Fund (NSSF) and the Social Health Insurance Fund (SHIF) and which to the later fund has seen many Kenyans suffer rejection as they cannot use the facility for treatment many times when in need and have to go back to their pockets to receive treatment.

Above all, the report indicates Kenya’s economy is projected to remain resilient and stable in 2025. The projected growth is expected to be driven by a strong services sector, enhanced agricultural productivity supported by favorable weather and distribution of subsidized fertilizer and seeds by the Government.

The reality on the table also is the disruptive new world trade order orchestrated by the Trump administration through tariffs. The shock already has many countries looking inward and cancelling preferential trade agreements with developing countries like Kenya.

There is very little chance the African Growth and Opportunity Act (AGOA) with the United States will stand after its expiry within the year. AGOA is a US trade preference program that grants eligible sub-Saharan African countries duty-free access to the US market for over 1,800 products. 

The US, under President Trump, has said it wants its pound of flesh in fair tariffs. Is Kenya getting ready to trade in the open market for its AGOA products or the apparel industries will fold up and expose more Kenyan employees to the pain of joblessness?