By Neville Otuki
Kenyan workers are less productive than their counterparts in Uganda and Ethiopia, a World Bank report says.
The report indicates that the average output of Kenya’s workers stood at $3,400 in 2014 compared to Ethiopia’s $5,000 and $3,800 for Uganda.
Kenya’s lower gross domestic product (GDP) per person employed – the country’s GDP divided by the number of people in employment – has been blamed for slowing economic growth.
“Set in international comparison, GDP per employed person is lower in Kenya than in many African peers and has been increasing at a slower rate than in other countries, both poorer (Ethiopia) and richer countries (Ghana, Burkina Faso and Cambodia),” says the report released last week.
“Productivity growth is held back by limited growth in formal wage jobs,” added the World Bank, signalling that the employee output in the informal sector is lower than those on formal jobs.
The economy created 128,000 new formal sector jobs or 15.2 per cent of total employment generated last year, official data shows.
The informal sector created 713,600 new openings last year, accounting for 84.7 per cent of the 841,600 total jobs.
At 343,400, Kenya’s value of output per worker has grown $600 from $2,800 in 2006. Ethiopia’s output over the period has grown by $1,200.
The Kenyan annual output is much lower than the average take home pay per employee. Official data shows Kenyan workers earned an average of Ksh553,137 ($5,477) in 2014 and Sh604,255 ($5,983) last year, which is nearly double their output.
The World Bank uses GDP per person employed to measure worker productivity levels in the economy.
“While many people work, most jobs are not sufficiently productive: they are not likely to offer significant earnings opportunities or income security,” the report says.
“Kenya’s labour markets are characterised by a much smaller formal wage sector, and much more work in the form of self-employment or informal wage work than is typical of more advanced economies.”
At $5,000, Ethiopia’s output per worker is $1,600 higher than that of Kenya.
Ethiopia has posted growth of more than 10 per cent in the past decade while Kenya’s growth has averaged at about five per cent.
Burkina Faso leads the pack with $6,600 as the value of output per worker while Ghana lags behind with $2,300.
The report, dubbed ‘Kenya – Jobs for Youth,’ says that young people have been hard hit by unemployment and suffer from rampant skills mismatch due to limited opportunities.
AllAfrica Global Media