The latest wave of retrenchments painfully demonstrates rising levels of joblessness arising from a depressed economy. Paradoxically, government statistics indicate the economy grew at 6.3 per cent last year. But there is not much to show for it. There is serious dissonance here. What appears on paper is at variance with the practical reality on the ground.
In the past one month, at least six companies have declared job redundancies, including the East African Portland Cement Company, Telkom Kenya, Stanbic Bank and East African Breweries. Precisely, companies are unable to operate profitably because the economic environment is unfavourable, compelling them to cut costs through staff lay-offs and other austerity measures.
Broadly, the country is staring at an unemployment crisis. Yet, there is no sense of urgency to tackle it. Besides policy statements and political rhetoric, the government has not put its mind to wealth creation to generate jobs and boost incomes. Too much preoccupation with politics undermines economic activities that guarantee secure livelihoods.
Unemployment is a consequence of multiple factors, starting with an enabling environment for doing business, policy formulations, security, infrastructure and tax regime. Although Kenya has been praised for creating an improved environment for doing business in recent years by the World Bank, the reality is that entrepreneurs are struggling. The cost of doing business remains rather high due to corruption, heavy taxation, political interference and poor enforcement of laws.
A few years ago, the government introduced specific programmes targeting job creation for the youth and women but they have nearly come a cropper. For example, the Kazi Kwa Vijana initiative, launched under the Mwai Kibaki administration, collapsed due to corruption. Moreover, funds set up for women and youth to enter into business have not benefitted the intended beneficiaries as they are marred with corruption, pilferage and wastefulness.
But it is not the business of the government to create jobs. Ideally, what it should do is to provide a conducive atmosphere where entrepreneurs and private establishments can operate profitably and create direct and indirect jobs. It should provide policies and physical infrastructure that promote growth. Other than managing strategic agencies such as Kenya Revenue Authority, the government should divest from corporations because it always does a poor job of it. So many State corporations have grounded or are struggling to remain afloat due to corruption and mismanagement.
To address the current jobs crunch, the leadership must be honest and committed to doing the right thing. The current situation is untenable. Rising numbers of jobless citizens is a time bomb that must be defused before it detonates, with catastrophic consequences.