In a bid to address growing unrest among the youth, the International Monetary Fund (IMF) has advised Kenya and other African nations to prioritise job creation.
With a significant portion of the population grappling with high unemployment —particularly among Generation Z — the IMF’s recommendations aim to reduce discontent and boost sustainable growth.
Kenya’s youth, nearly 75 per cent of whom are employed informally, face an uphill battle in an economy that is not generating enough jobs.
The current economic landscape is characterised by sluggish growth and an overwhelming reliance on informal employment, which often lacks stability and benefits.
IMF experts therefore see this as a stark warning about the urgent need for job creation in sub-Saharan Africa, where the youth population is rapidly growing.
Economists Athene Laws and Faten Saliba of the IMF’s African Department highlighted the challenges faced by young people in the region, who often struggle to find formal employment despite having the necessary qualifications.
Their report at the ongoing IMF forum in the US identifies three major challenges that must be addressed to improve job prospects in Kenya.
First, they note an urgent need to transform informal jobs into viable pathways for formal employment.
Informal work constitutes a significant portion of the Kenyan labour market, yet only a small fraction of informal workers transition to formal roles.
Second, the IMF underscores the necessity of breaking down barriers to private sector growth.
While Kenya boasts a vibrant startup culture, many of these businesses remain small and struggle to scale due to a lack of access to financing and essential infrastructure.
“Enhancing investment in basic services such as electricity and internet connectivity could significantly bolster firm growth and job creation,” the IMF experts noted.
“Without these fundamentals, growth will remain stunted.”
Lastly, the report emphasises the need for structural transformation of the economy.
As the global landscape evolves, the IMF reckons Kenya must diversify its economic activities, moving beyond traditional sectors like agriculture to high-productivity industries such as manufacturing and technology.
“By 2030, sub-Saharan Africa will need to create up to 15 million jobs annually just to keep pace with population growth,” they stated.
The recommendations come at a critical time for Kenya, where youth disillusionment has manifested in protests against government policies perceived as detrimental to their future.
“This shift is crucial for generating quality jobs that can support the aspirations of young people,” they stated.
Many young people, the IMF says, find it difficult to transition from informal to formal employment due to a lack of skills, access to finance and social networks.
“Policies aimed at improving skills training and access to finance could help elevate these workers and enhance productivity.”
To address these challenges, the IMF reckons investing in education and training can help young people acquire the skills they need to find good jobs. It recommends support for young entrepreneurs to create new businesses and jobs while simplifying regulations can make it easier for businesses to start and grow.
Improving infrastructure, such as roads, electricity and water can also help create jobs and attract investment.
The IMF emphasised that the time for action is now. “Africa is the future workforce of the world. Failure to act can exacerbate poverty, fuel instability and drive migration.
