Introduction and Context

This policy brief explores how Kenya can harness its youth demographic dividend for economic development. It contributes to debates around fit-for- purpose interventions to enhance and tap into their potential. Whereas the context is slightly different, Kenya Sessional Paper No 10 on African Socialism and its Application to Planning in in 1965 underscored among others the value of skilled manpower with calls for expansion of educational, training and apprentice programs. Other cited interventions in the sessional paper relates to the potential of the agricultural and private sector in spurring economic growth in a then envisaged rapid population¹. This plan was later updated with the sessional paper 1 of 1986 on Economic Management for Renewed Growth². This sessional paper explored further strategies to grow the economy while forecasting rapid population growth that would require job creation with key sectors such as agriculture considered relevant. Kenya’s Vision 2030, the country’s development blue print outlines in the economic pillar the need for investments in key sectors such as agriculture, manufacturing, and IT enabled services as frontiers for economic growth. In this brief, these concerns building up from Kenya’s independence remain relevant in conversations around harnessing the demographic dividend.

From the 2019 census, Kenya has a rapidly young population with about 80% of the population being under 35, a majority of them being below the age of 17.

1 Cf. Sessional Paper No.10 of 1965 ‘African Socialism and its Application to Planning in Kenya’.
2 Cf. Sessional Paper No. 1 Of 1986 Economic Management for Renewed Growth

This young population can be a potential for a demographic dividend or a time bomb. The recent Generation Z (Gen Z) led protests in mid-June 2024 centered initially on the 2024 Finance Bill, which has increasingly morphed into other areas of political accountability present the time bomb challenges. This challenge is not unique to Kenya and therefore presents a reflection point for how to harness this demographic dividend for economic development. How then should policymakers respond to this demographic dividend as a force for good in economic development?

In policy conversations at the African Union (AU), there has been a call to harness this demographic dividend in several areas. In light of this, AU member states have been urged to address areas of employment and entrepreneurship, education and skills development, health and well-being, rights, governance, and employment. The required policy actions to harness this demographic dividend are however limited by global and regional dynamics that have exacerbated economic distress. The economic shocks from the COVID-19 pandemic and the resultant global economic downturn and climate shocks have compressed Kenya’s economic development presenting several political and economic downturns. Youth unemployment remains a challenge across a rapidly expanding population. Interventions are needed to address the growing unemployment by innovating on decent jobs and entrepreneurship. Kenya’s economic growth has in the last 4 years been on a slowed growth trajectory. Policy interventions, including a review of existing ones, are needed in efforts to harness this demographic dividend. This policy brief finds that increased investments in education and skills development, creating employment opportunities, and incentivizing entrepreneurship can unlock this potential. The insights of this brief are based on a review of secondary data and a survey tool administered in July 2024 that received 191 responses across 40 counties in Kenya. The survey tool was disseminated across social media platforms and online groups with potentials of snowballing. The survey collected data on various issues including how to harness youth bulge for economic growth and development. The brief provides practical recommendations on how to harness this potential.

According to the National Council for Population and Development (NCPD), youth bulge occurs when more than 20% of the population in a country is comprised of youth (NCPD, 2017). Article 260 of Kenya’s 2010 Constitution defines a youth as one between the age of 18 and 35 years.

Hope Sr (2012) observes that the youth bulge in Kenya is a great asset and carries with it risks and challenges that if not mitigated have socio-politico-economic and cultural consequences. Engaging the youth in the development process is no longer a luxury but a necessity because while youth bulge could become a demographic dividend when tapped, it can equally be a ticking time bomb when neglected. There is therefore a need for the government to focus on youth education, empowerment, and employment as a remedy.

A demographic dividend occurs when countries can productively engage the youth hence stimulating economic growth and development. The youth population could also bring about innovative ideas, good governance, and political reforms (Agbor et al 2012). Indeed, the recent tax demonstration in Kenya by the Gen Zs demonstrates that youths are a political force to reckon with in the coming years and could lead to better governance if their new innovative ideals are infused into the affairs of the state through robust leadership. They have among other areas called for political accountability, ethics, and transparency in leadership.

While in theory youth bulge could be a demographic dividend, in practice, states with fragile institutions and high levels of corruption may not be able to create adequate jobs in society (Schwartz& Yalbir, 2019), partly because of their politics that tend to be exclusivist. Indeed, job creation requires deliberate and strategic long-term public policy interventions. Failure to productively engage the youth in gainful employment leads to several socio-politico- economic shocks, and may in some instances drive some to radicalization as has been documented in Kenya (Githigaro, 2023). In neo-patrimonial societies, these employment opportunities are skewed towards elites, hence not inclusive in distribution and access. A demographic dividend is however not automatic (Osei-Appaw & Christian, 2022), and a youth bulge that is supposed to bring a demographic dividend could be problematic, considering the risky behaviors associated with being a youth.

Other countries like Zimbabwe also experience the challenge of youth bulge occasioned by inadequate job opportunities and there is a need to interrogate youth empowerment strategies that could help create employment and mitigate unemployed youths as a destabilizing force (Yingi, 2023). Similarly, Nigeria is grappling with a youth bulge yet to be fully tapped, which manifest as high poverty levels, youth unemployment, and lack of adequate educational opportunities/ (Omoju & Abraham, 2014).

The UN Sustainable Development Goal 8 (SDG8) aims to attain inclusive and sustained economic growth, employment, and decent work for all. To achieve this, the United Nations urges various stakeholders to provide youth with high- quality education and training that meets market demands and provides social protection to employees regardless of the nature of their contracts. Although the Sustainable Development target 8.6 was missed and reset, tremendous progress has been made in Europe regarding minimizing youth not in education, employment, and training (NEET). Unfortunately, this is not the case in Sub- Saharan Africa, where involvement of NEET has worsened in the past ten years (Cieslik, Barford & Vira, 2022), an indication that attempts at addressing the problem of youth NEET have not been successful.

Kenya’s Demographic Dividend and Key Issues

The African Union (AU) Roadmap on Harnessing the Demographic Dividend through Investments in Youths, domesticated in Kenya through Kenya’s Demographic Dividend Roadmap (2020-2030) has proposed four (4) pillars that could help Kenya harness her demographic dividend. This brief explores three

(3) of these pillars, namely employment and entrepreneurship, education and skills development, rights, governance, and empowerment. These discussions are also referenced in the Kenya Youth Development Policy of 2019, which in sum underscores the need to tap into youth talent while addressing systemic and structural barriers that impact their productivity.

Employment and entrepreneurship

Enhancing employment and entrepreneurship opportunities is a fundamental step in harnessing Kenya’s demographic dividend. As provided for in the African Union and Kenya’s roadmap for harnessing this dividend, the interventions are geared towards the reduction of youth unemployment. Plans include accessible and affordable credit facilities for business start-ups. Additionally, to enhance the absorption capacity of youths, it stresses the need to promote internship and on- the-job training. It also provides for the promotion of access to government procurement and the promotion of innovative and entrepreneurial ideas of youth. This would include investment in sectors with high job-multiplier effects like manufacturing, ICT, and agriculture. Indeed, Ogbonna et al (2023) have particularly argued that ICT use in Africa could greatly reduce youth unemployment.

Young people’s views expressed in this survey a call to progressively address their economic needs through several interventions. These interventions range from jobs to business capital for entrepreneurs. A key finding from our survey is that young people favor the creation of a conducive business environment, including lowering the cost of doing business  as a strategy to create employment. From our survey with 191 responses, 26.2 percent or 50 participants agreed with this perspective. This is represented below:

Figure 1: Tapping the youth bulge to create employment opportunities

It points to the fact that the majority want the government to maintain its regulatory role, hence enabling the private sector to attract adequate investment and create job opportunities.

From the perspectives of some of the study participants, there should be deliberate policy interventions for new enterprises to spur, for instance, nascent entrepreneurs. As this participant opined: ‘Access to capital and financial services, and microfinance initiatives is a worthwhile policy measure’³.

Agriculture is another viable sector that promise youth employment opportunities. According to Economic Survey of 2024, Kenya’s real gross domestic product grew by 5.6 % compared to 4.9% percent in 2023. The rise in growth was linked to a rebound of growth in the agricultural sector with this sector occupying 21.8 % of the share of the GDP (KNBS, 2024). Moreover, from this survey, in the private sector job creation in the agricultural sector comprising agriculture, forestry and fishing created 302,400 jobs which demonstrates the potential in this sector (KNBS, 2024).

Indeed, the Kenya Youth Agribusiness Strategy (2018-2022) outlines that agribusiness has great potential in addressing youth unemployment. This potential is however limited by youths’ negative attitude towards agricultural activities, limited access to land, inadequate credit facilities, unfavourable agri- preneurship, including negative impacts of climate change.

While this pillar has helped address youth unemployment and boosted their entrepreneurial ventures, youths continue to be relegated to the periphery by several factors. Drawing on the survey findings, these include; inexperience and limited business knowledge and skills, inadequate capital and limited credit facilities, high cost of doing business, and, in general, an economy that is unable to generate adequate jobs. Although Kenya’s economic outlook has shown a positive trajectory growing between 4% and 8% in the last 5 years according to the World Bank, it is subject to elevated uncertainty, and not keeping pace with about one million youths joining the labor market annually. A KIPPRA (2024) study estimates that this figure could be between 500000 and 800000 youths.

The Kenyan government has over the years put in place several opportunities for youth. These included the Ajira digital program that seeks to build young people’s digital skills to enhance their livelihoods. While this program has helped improve digital literacy skills, enrolment levels remain low as indicated by training statistics at universities, technical and vocational training institutions, Ajira Youth Empowerment Centres, and among collaborators (Ajira Digital, 2024). Online training, however, showed 100% enrolment, indicating a preference for online training among them. It is also not clear how many had gotten employment through Ajira since applicants apply for jobs individually. Limited access to the internet, inadequate digital literacy skills, and lack of awareness of online opportunities are among the challenges identified in the program (KIPPRA, 2024). There is therefore need to sensitize youth on the available opportunities in the Ajira Digital platforms. When participants were asked about their preferred work environment, it is instructive to note that only 15.2 percent preferred remote working. It can be inferred therefore that remote working has yet to gain traction even though there was a higher preference for hybrid working. There is therefore potential to increasingly sensitize the opportunities available for remote work. For this intervention to work, skills and infrastructure gaps such as poor internet connectivity would need to be closed.

The following figure is illustrative.

3 Survey participant perspective, July 22, 2024

Figure 2: Ideal Work Environment

Public service internships were also inadequate and were biased towards non- degree holders while the National Youth Service had been undermined by mismanagement of funds (KIPPRA, 2024).

Other interventions have included short-term engagements such as the Kazi Kwa Vijana and Kazi Mtaani programs. An evaluation of such programs relates to their sustainability with their halting leaving beneficiaries without an income. The Kenya Kwanza administration further innovated the Hustler Fund to provide micro-credit in the digital space, as well as offering a savings program. Its sustainability has remained in doubt given the high default rates. In employment matters, the public service is dominated by aging populations, with half the staff being more than 50 years old as of 2024 (Madichie, 2024). The replacement of an aging workforce is relatively slow and is not proportional to hundreds of thousands of youths entering the job market.

Education and skills development

A critical area worth intervention for harnessing the demographic dividend lies in education and skills development. This is particularly so in the context of a rapidly globalizing world, that needs to be reflective of the changing nature of work beyond the traditional structure. The changing world of work includes remote work and the realities of a gig economy. Skills development and continuous capacity building would be critical in positioning youth for the future of work. Whereas artificial intelligence and technology adoption in the context of the fourth industrial revolution are likely to alter the future of work, it is prudent that such adaptations also fit into policy interventions.

To enhance skills and development, Kenya’s Roadmap emphasized the need to reform the education curriculum, by aligning competence and labor market demands with a greater focus on Science, Technology, Engineering, and Mathematics (STEM). Indeed, Kenya’s Competency Based Curriculum (CBC) which is currently in its early phase of implementation is geared towards strengthening this pillar. There is also an emphasis on vocational education and training aimed at bridging the practical skills deficit. To enhance access to inclusive education, regional educational institutions that promote the exchange of students for greater experience and exposure are emphasized.

There also exists a mismatch between the knowledge and skills of graduates and market labor demands. The weak economic growth and limited employment opportunities leave graduates with no place to practice their newly acquired knowledge and skills. From our Survey, participants expressed an increase in the rollout of internship opportunities to help bridge the mismatch between the world of work and employment. As part of bridging these gaps, employers and training institutions should collaborate in curriculum development. Indeed, Kenya’s Demographic Dividend Roadmap (2020-2030) in the short term calls for the strengthening of curriculum centralized bodies such as the Kenya Institute of Curriculum Development (KICD). There is therefore need to expand these opportunities by incentivizing employers, investors, and entrepreneurs to take in interns for on-the-job training opportunities. A framework for closer collaboration between training institutions and industry is also needed to adequately prepare trainees for the job market.

Rights, governance, and empowerment

As part of enhancing economic development for youth, the issue of rights, governance, and empowerment remains critical. The youth have a pivotal role to play in the nation’s governance and therefore should be empowered robustly to participate in the nation-building project. Youth engagement in governance processes remains hampered by several barriers that need to be mitigated. One has been their minimal involvement in electoral processes in the past owing to voter apathy, financial constraints in seeking elective posts, and generally a disillusionment in political processes owing to corruption, nepotism, and bad governance⁴ Other factors can be considered systemic including inadequate civic education, and minimal involvement in government structures. From our survey, participants suggested several policy governance-related suggestions. They are summarized in the table below.

Figure 3: Suggested governance reforms

Area	Intervention(s)
Good governance	Address   corruption,   rule    of    law, policies accountability
Skills development	Curricula review of education programs. Strategies to increase productivity, education- industry linkages
Entrepreneurship support	Training, mentoring seed capital, and tax breaks
Health	Mental health interventions
Strategic sectors investments	Structured support to key sectors such as     agriculture,     technology,     and manufacturing
Social protection	Stipend for unemployed youth
Research and innovation	Funding     allocation,     government- private sector collaboration

Source: Authors compilation from survey findings, July 2024.

4 Cf, https://www.afrobarometer.org/wp-content/uploads/2023/10/AD710-Dissatisfaction-and-disengagement-mark-young-Kenyans-outlook-Afrobarometer-3oct23.pdf  (accessed 27 July 2024).

To ensure youths actively participate in governance, this pillar proposed to have the African Youth Charter (AYC) and the African Charter on Democracy, Elections and Governance (ACDEG) fully domesticated and implemented. The two charters have progressively sought to eradicate barriers to youths’ involvement in nation-building in various organs of government by removing discriminatory laws. Additionally, they emphasize the need for civic education to engage productively in political processes. In Kenya, there is a need for more robust engagement in the coordination and advocacy of youth issues by the National Youth Council.

While youths contribute to nation-building, this participation is still marginal, compared to their proportional population. Although youths in Kenya have not been politically very active, there are indications that this trend could change considering the massive anti-Finance Bill Gen Z-led protests held in June 2024. There are projections that youths are likely to be more active in forthcoming elections, including pushing for favorable youth policies into the future. A robust youthful participation at the policy-making level of government will promote more innovative ways and policy initiatives that could help unlock youth unemployment.

There is however need to ensure that these youth-led protests and demonstrations are not infiltrated by criminals seeking to destabilize public peace and order. As argued by Kimari, Melchiorre, and Rasmussen (2020), the state should not quickly securitize youth demands, which risks delegitimizing legitimate grievances by glossing over them using the securitization narrative. There is a need to listen to their grievances to address them and leverage their potential in nation-building.

Conclusion

Harnessing Kenya’s demographic dividend for economic development is critical to securing Kenya’s future. Policy interventions are required in the areas of education and skills development, employment and entrepreneurship good governance. These interventions would help to turn the youth bulge into an opportunity. The Kenya Youth Development Policy of 2019 speaks to these areas meant to enhance youth meaningful participation in the economy. These interventions require meaningful engagement and partnership of multiple stakeholders across intergovernmental agencies, the national and county governments in Kenya, and the private sector.

Policy Recommendations:

To the Ministry of Youth Affairs, Creative Economy and Sports:

• Scaling entrepreneurship and skills development training for young people to better prepare them for the world of entrepreneurship.
• Enhance meaningful participation of young people in governance and decision-making processes to find prudent solutions for their economic development.
• Revitalize the National Youth Council to better articulate the needs and concerns of young people geared towards enhancing their economic potential.

To The National Treasury and Economic Planning:

• Provision of tax incentives such as tax breaks and reduction of bureaucratic red tape and hurdles for youth business start-ups. This will reduce the cost and ease of doing business.
• Rethink the tax regime envisaged in Finance Bills for consistency and predictability, to promote investor confidence and enable appropriate planning. Radical and new taxes should be avoided and introduced progressively only when necessary.
• Enhancing tax incentives for foreign direct investments in Kenya in strategic sectors such as agriculture and digital technologies which have the potential to create jobs for young people.
• Improving on governance and accountability mechanisms broadly across government to improve investor confidence and minimize capital flight.
• Periodic monitoring and review of existing economic development policy interventions for lessons learning and calibration of approaches to enhance impact. As a strategy to spur economic growth, enhance the buy Kenya build Kenya policy which in turn would support local manufacturing.

The Ministry of Labour:

• Continuously review existing labor laws and regulations to ensure that they are fit for purpose with a young demographic such as the gig economy.
• Source for quality and decent jobs for young people abroad. This should be strategic and informed to avoid brain drain, especially for critical sectors like healthcare and education.

• Provide regular updates on the opportunities and requirements for online/remote work.
• Better regulate recruitment bureaus and agents, to minimize fraud and exploitation of job seekers.

The Ministry of Education:

• To address jobs and education course mismatch, universities, colleges, and vocational training centers should conduct periodic need assessments to ensure curricula that meet market needs. A closer collaboration and partnership with industry is necessary for this to be achieved.
• Negotiate with universities and colleges abroad, for favourable admission criteria for Kenyan students, such as exemption from English language requirements. This will ease the cost for Kenyans seeking to study and work abroad.

Private Sector

• Mobilize resources for entrepreneurship training and skills development.
• Advocate for meaningful involvement of young people in governance and decision-making processes.
• Enhance civic education, especially among young people.

County Governments:

• Offer tax incentives and eliminate non-tariff barriers for business start- ups and investments in key sectors such as agriculture, creative and digital economy among others.
• Simplify the cost of doing business by reducing licenses and levies charged for small, micro and medium enterprises.

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