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Worrying trend: Thousands of Kenyans lose jobs as firms close shop

While seeking his second term in 2017, Uhuru outlined tangible programmes for youth employment.

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by kevin cheruiyot

Big-read03 October 2019 - 17:08
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In Summary


• In September 2018, the government launched Ajira Digital Club, which was tabbed as a premier online platform that would unlock thousands of jobs for the youths.

• Little has come out from the government's effort as more youths remain jobless, opting to create their own employment using their talents and skills.

Men advertise their skills.

Many Kenyans who are employed by the government and private companies have reason to be worried about the security of their jobs.

This is based on the latest trend where companies are closing and some are resorting to retrenching staff in order to survive the harsh working environment.

In the last three years, many companies have closed, while others have moved their businesses to neighbouring countries which they say have favourable policies.

President Uhuru Kenyatta, in July this year, promised to cut the cost of energy for manufacturers.

During the launch of Bidco Industrial Park, Uhuru said that his government was in the process of rolling out a 30 per cent electricity cost reduction.

He further announced that special requests for further cutbacks were to be extended to the textile and steel mill sub-sectors before the year ends.

The government has frequently engaged with the private sector in a bid to create more job opportunities for the ever-growing demand for jobs, more so from the graduands.

Little has come out from the government's effort as more youths remain jobless, opting to create their own employment using their talents and skills.

In September 2018, the government launched 'Ajira Digital Club', which was tipped as a premier online platform that would unlock thousands of jobs for the youth.

Labour Cabinet Secretary Ukur Yatani launched another agency in May - the National Employment Authority - which was to open employment opportunities to all Kenyans.

 
 
 

During this year's Labour Day Celebrations, Yatani said that the government was planning to create one million jobs in a year, which he said would raise the GDP contribution from 8.5% to 15%.

While seeking his second term in 2017, Uhuru outlined programmes for youth employment.

State House spokesperson Kanze Dena said in July that the government jointly created more than 840,000 new jobs.

She had earlier alleged that the jobs had been created by the government alone, before clarifying later that both informal and formal sectors, including SMEs, contributed to it.

Despite the efforts to create more jobs, more and more Kenyans are losing their jobs daily.

An economic survey released by the Kenya National Bureau of Statistics for the year 2018 indicated that 83.6 per cent of the new jobs were created in the informal sector and 16.4 per cent in the formal sector.

The survey noted that there was a drop from the 2017 survey where 897,000 jobs were created. In 2016, 832,900 new jobs were created.

The latest companies to exit the Kenya market include SportPesa and Betin.

SportPesa announced last week that it was shutting down its operations in Kenya because of 'hostile regulations' from the government.

The firm said it would resume operations when Kenya puts in place "adequate taxation and non-hostile regulatory environment."

The announcement came after the second-largest betting firm, Betin, announced that it was declaring its staff redundant.

SportPesa CEO Ronald Karauri defended the company's decision to lay off 400 of their staff, saying it could not support them anymore.

"We've been keeping our employees for three months with no revenue so we had to do what we had to do. With the new taxation rules, the business has become tricky," Karauri said on Thursday while speaking to Kiss FM.

They followed the footsteps of a telecommunications firm, Telkom Kenya, which had given notice to more than 500 employees as the company sought to merge with Airtel in order to survive the current market environment.

These are some of the companies and government entities that have been forced to close down or have retrenched staff due to poor conditions of doing business here in the country.

Struggling retail chains such as Nakumatt and Uchumi have been forced to close some of their branches in the country.

East African Portland Cement Company (EAPCC), Telkom Kenya, Stanbic Bank of Kenya, East African Breweries Limited (EABL), Sanlam Kenya, Ola Energy, Bank of Africa, Sameer Africa and East African Portland Cement Company and Postal Corporation of Kenya have trimmed their staff numbers due to shrinking business and  tough competition in the market.

Others include Mumias Sugar Company, Kenya Airways and Kenya Meat Commission.

Eveready East Africa (Nakuru-based battery factory) and chocolate maker Cadbury are among companies that exited Kenya's market.

Last month, Kenya Airways reported a Sh8.6 billion loss in a period of six months to June 30, sinking deeper in the red as increased operating costs came back to haunt the national carrier.

The net loss doubled compared to Sh4billion loss reported in a similar period last year.

Teaching institutions have not been spared. 

The 2019 economic survey showed that more than 50 campuses had been closed as they failed to meet accreditation requirements.

Moi University closed its satellite campuses in Kericho, Mombasa and Nakuru.

Mount Kenya also closed its branch in Kericho.

Apart from the government's policies that determine the survival of a firm, employees face another precarious future from technology.

Machines have reduced the labour force in many companies as work previously done by employees is replaced by the daily improving technology.

The government has put in measures to help the youth discover their potential when it comes to job creation.

Through technical and vocational training institutions, the government said the youths will be provided with quality education and training which is critical in equipping Kenyans with skills for development.

Treasury tripled the amount allocated to technical and vocational training institutions in the 2018-19 budget from last year’s Sh6 billion to Sh16 billion.

Deputy President William Ruto at one point urged Kenyans to stop their obsession with white-collar jobs and go for lucrative technical skills.

He said the demand for university education has diminished the importance of middle-level colleges, leading to a high number of jobless people.

The famous Jua Kali sector in the country is booming as youths with skills, semi-skilled and those without skills find their way in.

The 2014 Economic Survey indicated that 80 per cent of the 800,000 jobs created were in the informal/Jua Kali sector, which is dominated by small and medium enterprises.



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