Kenya eyes 1.7 million job creation through economic transformation agenda

Kenya could generate over 1.7 million new jobs by 2027 if the Bottom-up Economic Transformation Agenda (BETA) pillars achieve their 2024 growth targets.

A recent study by the Kenya Institute for Public Policy Research and Analysis (KIPPRA) forecasts the creation of 1,788,881 jobs, comprising 407,732 direct and 1,381,149 indirect positions.

The BETA agenda rests on five key pillars: agriculture; the micro, small, and medium enterprises (MSME) economy; affordable housing and settlement; healthcare; and the digital superhighway and creative economy. The study examined 17 sub-sectors spread across these pillars.

Notably, the infrastructure pillar is expected to be the largest contributor, creating 697,809 jobs. Within this pillar, the transport and storage sub-sector could generate 309,538 jobs, while ICT is projected to add 24,407. These projections assume a targeted 5.1 per cent growth rate.

KIPPRA emphasises the need for targeted investments in logistics hubs, broadband expansion, and energy access reforms to fully unlock this pillar’s job creation potential, particularly in support of digital connectivity and innovation-led growth.

The finance and production pillar is projected to create 500,101 jobs if it achieves the 7.3 per cent growth target. Key sub-sectors include construction, expected to generate 373,816 jobs, and tea, which could create 152,552. Under a “business-as-usual” scenario based on 2023 growth rates, this pillar would produce a lower total of 402,843 jobs, highlighting the risks of underperformance.

The study also underscores the importance of public-private partnerships, better market access for agro-products, and reduced dependence on rain-fed agriculture to strengthen growth in this pillar. The textile and apparel sub-sector shows strong potential as well, with a projected 78,935 jobs if growth targets are met.

Social pillar

Under the social pillar, which covers education and health, the total number of jobs created could reach 431,877, mostly indirect. The education sub-sector alone would account for 40,010 direct and 82,938 indirect jobs if the 5.1 per cent growth target is achieved.

However, the study flags concerning trends of direct job losses in education and health due to attrition, retirements, migration of skilled workers, hiring freezes, and low pay. KIPPRA warns:

“These combined factors mean that unless there are ongoing efforts to recruit, hold and support professionals in education and healthcare, these sectors may continue to face workforce instability.”

The environment and natural resources pillar, targeted to grow at 8.1 per cent, is projected to contribute 236,209 jobs, led by accommodation and food services with 59,497 jobs and forestry and logging with 23,528. If current growth trends continue, however, job creation in this pillar could drop to 153,487, underscoring the need to meet the higher growth benchmark.

In contrast, the public administration pillar is expected to see a decline. Both under targeted growth and prevailing growth rates, total employment in this pillar is projected to fall by 77,115 and 77,885 jobs, respectively, with only 2,276 indirect jobs created.

Employment generation under BETA is a key priority for President Ruto’s government. Yet over the years, Kenya has experienced mixed labour market outcomes. While the labour force and total employment have expanded, the country still faces underemployment, inactivity, and unemployment.

Overall, the study concludes that Kenya has undergone limited structural change:

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“Nevertheless, there has been a shift in the relative importance of sectors in creating employment, with the role of industry diminishing while the service sector has grown.”