I recently spoke in Embu about Kenya’s various attempts to overcome the unemployment crisis and the relationship between lack of jobs and political intolerance.
Citing Kenya Revenue Authority’s recent experience, I explained that the bulk of jobs can only come from the private sector.
When our management advertised 200 positions of graduate trainees last month, 35,653 applied - testament of a well-regarded employer, but also the high number of graduates looking for solid careers.
Fifty-five years ago, a parliamentary select committee investigated the causes of unemployment, and examined all possible remedies. It received submissions from ministries, academia, and the Nairobi City Council.
The team concluded that high unemployment was caused by rapid population growth, rural-urban migration, capital intensive industrial production and poor agricultural policies.
It also pointed to the rapidly expanding, but inappropriate education, then producing school leavers without immediately applicable skills.
The committee recommended full implementation of the 1970-74 development plan, then expected to create 223,000 new jobs in the modern sector, leaving 449,000 persons to be absorbed by the traditional sector.
To deal with the latter, the committee recommended creation of a bureau of employment, a department for agricultural marketing and research, and the provision of credit. It suggested Sh200 million to be disbursed through the District Loans Boards.
That way “some 20,000 businessmen and farmers, who in turn would employ thousands, would be assisted”.
The committee also recommended re-jigging the education curricular, expansion of irrigation schemes, labour intensive rural road works, and expansion of the low-cost housing programme! Yes, in 1970!
Three commissions have worked on the education issue since then – The Gachathi Commission (1976), Mackay Commission (1981) and Odhiambo Taskforce (2012).
They have moved us from the 7-4-2-3 system to 8-4-4, and now 2-6-6-3 competency-based system, on the boil since 2017. The International Labor Organization (ILO) took a deeper dive in 1972.
The Employment, Incomes and Equality report took on a new lens, focusing on frustration of job seekers, low incomes of many farmers and producers, and low productivity of the work force. The labour force was growing faster than the overall economy could absorb, it found, and the structures of incomes and opportunities available did not match peoples’ aspirations and expectations of work.
The diagnostic showed that an informal sector had emerged despite debilitating restrictions. Government, therefore, rather than taking a pejorative view of informal enterprises, should embrace and support them.
The informal sector is a way of doing things, characterised by ease of entry, reliance on indigenous resources, family ownership of enterprises, small scale operations, labour-intensive and adapted technology, skills acquired outside the formal school system and unregulated and competitive markets.
It was, in 1972, “largely ignored, rarely supported, often regulated and sometimes actively discouraged by the government”.
Compare that to darling of government policy, the formal-sector; difficult entry, frequent reliance on overseas resources, corporate ownership, large scale of operation, capital-intensive and often imported technology, formally acquired skills, often expatriate and protected markets (through tariffs, quotas and trade licenses). Sound familiar?
The ILO recommended redistribution from growth, to establish links between the formal and the informal sectors, that were lacking. “A transfer of incomes from the top income groups to the working poor would result in new types of labour-intensive investments in both urban and rural areas,” it argued.
“This would not only generate demand for the products of the informal sector but also encourage innovations in labor-intensive techniques,” it concluded.
The various policies recommended by the parliamentary committee and ILO were intended to reduce risk and uncertainty in the informal sector and create dynamic growth of this large segment.
This was to solve, or at least reduce, unemployment. But the problem persists.
Sadly, policy both at county and national levels is yet to fully embrace the informal sector. Mobile money services are moving more than three times the annual GDP, and all of it in small amounts.
The micro and small business sector is dominant economy, and there is nothing informal about how they transact.
Democracy assumes tolerance between neighbours, friends and siblings, to hold different views. It favours debate to canvass ideas, over brute fights for dominance. It is debate that brings out alternative policy ideas.
Blame game and finger pointing breeds intolerance.
Politics characterised by daily insults numbs the nation, blinding and robbing us the opportunity to find real solutions.
Ndiritu Muriithi is an economist and partner at Ecocapp Capital. He is also the chairman of KRA and former governor of Laikipia County. Email: [email protected]
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