Growth in employment expected this year as businesses pick up
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The Kenyan economy is likely to create new jobs this year as more businesses resume operations, company executives and economists have predicted.
Those who spoke to Financial Fortune Media said that the expected growth in the labor market will take place despite a surge in the new wave in coronavirus cases.
Employment in the Kenyan private sector increased for the third consecutive month in December, following a seven-month downturn due to the COVID-19 pandemic, according the latest Stanbic Bank Kenya Purchasing Managers Index (PMI) Survey – which also showed that despite the rate of expansion quickening from November, it remained softer than October’s recent high, and marginal.
Experts now believe that owing to the economic trend being witnessed in the private sector buoyed by positive sentiments from employers, more companies will likely hire and extend contracts this year compared to last year – the period that was heavily hampered by the coronavirus pandemic.
“As bad as 2020 was, we did not do badly ourselves, and judging by the ongoing reforms in the agricultural sector we operate in and the political will, I am expecting to see the rate of employment picking this year,” said Lydia Kibara, the Chief executive of Muungano Microfinance Bank Plc.
Muungano is a community-based microfinance banking business granted an operational license by the Central Bank of Kenya (CBK) in November 2019 whose flagship products are designed to enable farmers to purchase assets such as dairy cow breeds, quality feeds, and appropriate storage facilities.
In a telephone interview, Ms. Kibara noted that recent reforms in the tea and coffee and well as dairy sector will play a pivotal role in the agricultural sector – a key sector with about 75 per cent of Kenyans earning all or part of their income from.
Agriculture accounts for 33 per cent of the nation’s gross domestic product (GDP) but despite the continuous population growth, agricultural productivity has stagnated in recent years.
“I am also expecting to see more companies hire this year, particularly for those that had been forced to put such plans on hold due to the pandemic,” she says.
The National Assembly in December passed Tea Bill which will see the revival of Tea Board of Kenya and adoption of new regulations to govern the cartel-soaked sector, while President Uhuru Kenyatta in 2019 announced the establishment of a 30 million dollar revolving fund to cushion more than 700,000 small-holder coffee farmers from bottlenecks like delayed payments and high cost of production.
Abdalla Abdulkhalik, the CEO of Gulf African Bank (GAB) also in a telephone interview expects more companies to hire this year.
“Companies are ready to pick up from where they left in 2020 after a bad period that was affected by the virus. You will see more firms putting out job adverts to fill new positions or extend contracts to employees whose jobs were at risk last year. At GAB we have already put out a job advertisement seeking a branch manager in Mombasa,” he said.
Economic experts had for most part of last year anticipated high joblessness persisting into the year 2021 – a prediction that at the time doused hopes for a quick, post-pandemic return to normalcy.
While such prospects were widely projected due to the sharp drop in the country’s economy over the last 9 months, specialists believe that labor market will begin to pick up in the second quarter of the year – a period that medical physicians also expect to begin the roll-out of the Covid-19 vaccination process to a selected countries.
First-time steps are being taken to ensure roll-out of the vaccine is global. But there have been concerns that the race to get one will be won by the richest countries, at the expense of the most vulnerable ones, Kenya being one of those.
“The last few months have been very tough for most Kenyans, the majority of whom lost their jobs because of the pandemic. I could see this trend drag into the first few months of 2021 but could change on a number of factors,” commented Peter Macharia, an independent financial expert and a Kenyan banker.