An estimated 926,000 new jobs were created last year, the national statistics office has said, underpinning a 7.5 per cent rebound in Kenya’s economic growth as transportation, accommodation, and food services sectors started to recover from the Covid-19 pandemic.
This marks a remarkable upturn for the country’s economy, which fell into its first contraction in nearly three decades in 2020 as the pandemic ravaged key sectors like tourism and education. It’s also the fastest economic growth in 11 years since the country achieved a real gross domestic product (GDP) growth rate of 8.1 per cent in 2010.
The Economic Survey 2022 released yesterday by the Kenya National Bureau of Statistics (KNBS) shows total employment outside small-scale agriculture and pastoralist activities grew 5.3 per cent to hit 18.33 million last year, up from 17.4 million driven by sharp growth in key sectors of the economy especially trade, manufacturing, tourism, construction, and transport.
This has, for the first time, pushed employment levels in the country above the pre-pandemic level of 18.14 million in 2019. The pandemic wiped out nearly a million jobs on the back of trade and movement restrictions.
Real annual average earnings by workers, however, reduced by 3.8 per cent to Sh718,800 during the year even as the rise in the annual inflation rate to 6.1 per cent up from 5.4 per cent in 2020 pile pressure on households as the cost of goods went up.
The education sector recorded the highest increase in new jobs at 8.2 per cent to 609,200 buoyed by the resumption of learning in schools to beat manufacturing, which posted a 6.3 per cent growth to 336,800 in creating new jobs following the resumption of manufacturing activities.
Other sectors that drove employment creation are agriculture, which created 4.6 per cent more new jobs to 337,175, public administration and defence by 5.9 per cent (329,800), and wholesale and retail by 2.6 per cent (258,500).
The financial and insurance sector recorded the highest 12.5 per cent growth last year, partly reflecting the record Sh51.7 billion dividend payout by the listed banks for 2021 after a 73 per cent growth in cumulative gross profit for the sector to Sh194.8 billion.
The survey shows the manufacturing sector recovered from a negative 0.4 per cent growth in 2020 to grow by 6.9 per cent last year to grow its output value to Sh876.4 billion supported by the resumption of manufacturing activities that have stimulated the creation of new jobs.
The wholesale and retail trade sector also recovered from a recession of 0.5 per cent to grow by 7.9 per cent last year even as the total volume of trade rose to Sh2.895 trillion from Sh2.287 trillion.
Meanwhile, the transport and storage sector, which was heavily hit by movement restrictions that were imposed in 2020, overturned a negative 7.8 percent growth in that year to jump to 7.2 per cent growth last year.
“All the sectors registered positive growth apart from agriculture,” Macdonald Obudho, KNBS director-general said.
The transport and storage sector’s growth was driven by higher earnings from standard gauge railway cargo transport revenue, which grew by 24 per cent to Sh13 billion and Madaraka Express revenue more than doubled to Sh2.2 billion.
Cargo throughput at sea also grew from 34.1 million metric tonnes to 35.4 million tonnes, container traffic rose by 5.6 per cent to 1.43 million twenty-foot equivalent units in 2021 while passenger traffic at airports grew 46.7 per cent to 6.6 million up from 4.5 million in 2020.
Tourism also recorded strong growth as international visitor arrivals increased from 579,600 in 2020 to 871,300 after the international travel bans were lifted, boosting bed-night occupancy by 45.1 per cent to 5.5 million while visitors to national parks and game reserves increased from 1 million to 1.5 million.
Meanwhile, the overall share of credit advanced to the public sector at the end of December 2021 increased to 36.4 per cent while that advanced to the private sector decreased to 50.6 per cent with construction leading in credit advanced to the private sector (21.3 per cent) followed by trade (21.1 per cent) and other businesses (20.4 per cent).
However, last year’s economic growth was watered down by a recession of 0.2 per cent in the agriculture sector, which has been attributed to poor rains that muted crop production in a blow to a sector that significantly anchored the fragile economy in 2020 through a 4.6 per cent growth.
As a result, the country saw dismal production quantities of its major cash crops with maize production falling by 12.8 per cent, wheat production by 39.4 per cent, tea by 5.6 per cent, and coffee by 6.6 per cent.
The sector that contributed to about 22.4 per cent of the 2021 GDP, is expected to continue its under-performance this year owing to poor weather conditions following a biting drought that has disrupted the annual planting season.
