Kenya | 12th July 2021 | Virtual Wire
The unemployment rate in Kenya and other countries is defined as the number of unemployed people per cent of the labour force. The labour force includes the people who are either employed or unemployed, i.e. who don't have a job but are actively looking for one.
The labour force does not include people who are not looking for work, children, and the retired. The unemployment rate seldom declines below 4-5 per cent even during boom times.
There are always people who move between different sectors of the economy or between cities. When the economy goes into recession, then unemployment can reach much higher numbers, sometimes even in the double digits.
Unemployment refers to the share of the labour force that is without work but available for and seeking employment Kenya’s economy has been hurt by the COVID–19 pandemic. In 2020, GDP growth decelerates to 1.4% from 5.4% in 2019.
Growth was supported by agriculture, while weaknesses in services and industry have had a dampening effect. Domestic demand is subdued while external demand has neither helped nor hurt growth.
Expansionary fiscal, monetary, and financial policy measures were introduced to mitigate the impact of the coronavirus on businesses and households. The local currency weakened by 8.9% to KSH 110 to the US dollar at the end of November 2020 from KSH 101 to the dollar a year earlier.
The financial sector was affected by spillover effects from major sectors; the capital market was the hardest hit. The Nairobi Securities Exchange share index fell 20% between 30 September 2019 and September 2020, and market capitalization fell 2% over the same period.
The pandemic did serious social damage. Nearly 2 million people are estimated to have fallen into poverty, and nearly 900,000 lost their jobs.
In 2021, the economy is projected to grow by 5.0% 2021 and 5.9% in 2022. The rebound assumes that economic activity will normalize due to a full reopening of the economy, the Economic Recovery Strategy being successfully implemented, and Kenya capitalizing on an expected improvement in external liquidity and benefiting from initiatives to meet its external financing needs.
The external initiatives could include debt refinancing, restructuring and debt service relief, and additional concessional loans. Inflation is projected to remain within the Central Bank of Kenya’s target range of 2.5% to 7.5%, and fiscal and current account deficits are forecast to narrow as a result of improved revenue collection and exports.