Kenya’s economic growth to be powered by women and diaspora remittances -Report

Kenya's economy has been projected to rebound above the global average of 3.2 percent this year, with the Gross Domestic Product expected to grow at a pace of 4.7 percent, according to a new report.

Dubbed the ‘Economic Outlook 2025’ by economic think-tank, Mastercard Economics Institute, the report touts women and Kenyans living abroad as the key drivers of the growth.

This arguably overshadows the conventional drivers of the country’s economic growth such as agriculture and infrastructure development.

It says the prospect will be supported by a robust remittance ecosystem from Kenyans living abroad and high female labour force participation, which continues to drive household incomes.

Mastercard’s chief economist Khatija Haque reiterated that Kenya’s economic outlook for 2025 highlights its potential for robust growth, underpinned by high remittance inflows, active female workforce participation and digital transformation.

“These trends position the country as a leader in fostering inclusive and sustainable development,” Haque said.

Kenyan women are reportedly making significant strides in labour force participation, with their involvement in the workforce increasing, as more employers adopt gender parity policies aimed at reducing the gender gap in employment.

In the country's modern sector, which employed just over three million people in 2022, an analysis of job data reveals that women's participation rose to 38.3 percent of the workforce, up from 35.9 percent in 2013.

Additionally, women accounted for nearly half, 48.45 percent, of all the jobs created over the past decade, closing the gap in labour force participation with their male counterparts.

From 2013 to 2022, a total of 1,101,500 jobs were created, of which 533,700 were filled by women.

Even in 2020, when Kenya's job market saw a significant downturn due to companies struggling, fewer women lost their jobs compared to men.

For every woman who lost a job in 2020, five men lost theirs. Over the decade, only 69,300 jobs held by women were lost, compared to 165,800 jobs held by men.

The Mastercard report echoes these findings saying in Kenya, female labour force participation rate stood at 72.5 percent in 2022, one of the highest rates globally.

“There are several potential explanations for this phenomenon. One, women’s labour force participation likely reflects the disproportionate job creation in female-dominated sectors, such as healthcare and education,” the report reads.

“In addition, the rise of remote work and the flexibility it brings tends to help women, who are often still the primary caregivers, as it makes it easier to raise children while working.”

Other Topics To Read

• Headlines
• Economy
• women
• diaspora remittances
• Mastercard Economics Institute
• Kenya’s economic growth to be powered by women and diaspora remittances -Report
• Business

Nevertheless, it says many of these dynamics will remain true in 2025, with positive implications for the economy due to driving consumption growth by increasing households’ disposable incomes.

On the remittance front, Mastercard’s economists say the last few years have seen significant movement in people and, by extension, capital.

“Migration, while resulting in a loss of human capital, also generates substantial remittances, which serve as a lifeline for low- and middle-income communities in developing economies,” reads the report.

According to the World Bank, global remittances surged from $128 billion (Sh16.6 trillion) in 2000 to $857 billion in 2023, with an estimated growth of three percent in 2024 and 2025.

This as the lender projects economic recovery and local reforms to sustain remittance growth through 2025.

In Kenya, the outlook report says migration continues to shape the country’s economic landscape, significantly contributing to remittance inflows.

“In 2023, remittances accounted for 3.9 percent of GDP, up from a pre-pandemic average of 2.3 percent, underscoring their critical role in supporting household incomes and economic resilience,” it reads.

“Kenya’s robust mobile money infrastructure, led by platforms like M-Pesa, further enhances the efficiency and accessibility of remittances. These platforms facilitate secure and convenient cross-border transactions, reducing costs and empowering underserved communities.”