The recent launch of the National Employment Authority (NEA) is a good ground for revisiting the question of how to tackle the ever-rising rate of unemployment in Kenya. Although NEA rides on noble objectives, its creation is like putting the cart before the horse.
Granted, the economy should first generate employment before an institution queues potential employees to take up the available jobs. Some of the key factors that were overlooked in the formation of NEA are covered below.
Unsupportive Business Environment: The local business environment has the potential to create more jobs if the government develops and implements policies that promote a conducive playing ground. Some pieces of legislation do not support not only business start-ups but also the expansion and growth of enterprises.
The taxation regime favours large enterprises at the expense of small and medium operations that comparatively create more jobs. To promote job creation initiatives, policymakers should focus on developing policies that are sensitive to the needs of the small medium enterprises sector.
Underdeveloped Enterprise Culture: South East Asian countries that have rapidly gained middle-income status promoted enterprise cultures that have driven enterprise development and growth. Large corporations source inputs from small enterprises through subcontracting arrangements. Creating an enterprise culture should begin during the formative years of young people. Hence, the urgency to introduce entrepreneurship units in the primary school curriculum and other levels of education.
Irrelevant Curricula: There was a hue and cry when the Commission for University Education (CUE) scrapped some degree courses whose curriculum did not impart employment-relevant knowledge and skills. Recently, there was no intake for some university courses some of which were topics in major courses. So long as the curriculum development process in universities will not involve players from the industry, irrelevant courses will continue to be offered.
What will NEA do with unemployed graduates with HELB loans who do not have employable skills?
Chasing Foreign Investments: Rwanda, which trailed Kenya a few years ago is now marketing itself as a foreign investment destination of choice. The country has dismantled structures that blocked the free flow of foreign investments. Our county risks becoming the largest supermarket of foreign goods if foreign investments are turned away especially those that are manufacturing-oriented. Regular review of business legislation and stringent rules on visas and work permits should be undertaken to accommodate and attract foreign investments.
Lack of Intra-Infrastructure: The implementation of the Standard Gauge Railway (SGR) and Super Highway projects are laudable except that the infrastructure that feeds into them is deplorable. The development of intra-infrastructure within major urban areas and their hinterlands will promote business activities.
How will NEA create employment when the installation of critical infrastructure has either been ignored or not undertaken?
Inaccessible Cheap Credit: Credit programmes such as Youth Fund and Women Enterprise have enabled both the youth and women to access credit for business start-up and expansion. Some commercial and micro-finance banks are offering credit products for small enterprise owners. These commendable initiatives are a drop in the ocean considering the myriad credit needs of small enterprises. Commercial interest rates should be tilted to offer cheap credit to the small enterprises’ sector that is an incubator for both medium and large businesses.
Instead of strengthening existing institutions that support job creation, the architects of NEA may want to collect unemployment statistics for non-existing jobs. The overhaul of legislation and policies that impede small and medium enterprise development will be a good start towards solving the unemployment problem.