Number of unemployed youth in Kenya increased by 7.22 million since 2006

The Youth Enterprise Development Fund was set up in December 2006 with a prime objective of dealing with youth unemployment, who, according to YEDF website, constitute 61% of unemployed Kenyans. The cause of youth unemployment, among other things, is lack of skills (experience) due to poverty. As a quick solution, the government has sought to empower the youth (and women and disabled), by giving them funds through programmes such as the YEDF.

When the fund was established back in December 2006 (technically 2007), the country’s rate of unemployment stood at 12.7%; that is according to Trading Economics. With a population of 42 million by then, one can calculate that the number of unemployed Kenyans was 5.37 million giving us a figure of about 3.28 million unemployed youth.

The population has since grown to about 43 million whereas rate of unemployment, by January 2013, has risen from 12.7% to 40% meaning that the number of unemployed youth have risen from 3.28 million to 10.5 million, a 220% rise.

But the Youth Enterprise Development Fund has been successful. Here is what The Standard reports:

“I have been meeting many people who are praising and thanking me for making the Youth Fund cash easily available to youth groups and all I want to tell them is that this is not my doing, thank your president for making it a dream come true. The government is simply ensuring that its pledges to the youth are fulfilled. Indeed, the youth are the biggest beneficiaries in this government,” remarked Gor Semelang’o, the CEO of YEDF.

So the YEDF is now easy to access thanks to His Excellency the President. Without current statistics covering up to May 2014, it is not easy to judge whether the fund has been successful in reducing the number of unemployed youth from 10.5 million to any significantly lower figure ever since the President took office, but over the years the fund has been successful in not prevent the increase of the number of unemployed youth. The number of unemployed youth in Kenya have increased, from December 2006 to January 2013, by 7.22 million.

It is high time economists who draft policy papers for the country went back to the drawing table and thought deep.They should ask themselves important questions and advise the politicians about the youth, women and Uwezo funds. They should answer this question, “what do these funds really do?”

Are they given so that a bunch of unprepared and inexperienced youth can risk them in startups? Is the overall economy capable of supporting and sustaining the numerous startups the government is trying to generate by these funds?

If we imagine the overall economy as a sugar processing factory (which ought to be shut down in Kenya) that depends on sugarcane availability, then it doesn’t matter how much you give to a factory as grant or loan if the factory’s source of sugarcane is dead; such a factory will never be in business in the same sector no matter how big the grant is – unless the factory uses the grant in re-invent sugarcane availability.

Likewise, giving the youth grants or loans to do business in an economy that does not generate resources for feeding the economy is meaningless. What will the youth use the money for? Import goods and sell? Sell to who?

Those who would buy from these enterprises by the youth must have disposable income. The cost of living is such that the general population does not have this disposable income, which in turn means the small monies poured by the government in form of youth, women, and uwezo funds simply diffuse in the economy without a trace.

For any government to have a steady growing employment rate (hence effectively fight poverty), it must structure an economy to depend on local addition of value to either locally available resources or imported resources (e.g. raw materials). The process of value addition must also be in such a manner as to satisfy local demand by using localized cost effective solutions. By the way trying to establish a factory in Kenya that depends on imported raw materials is a nightmare.

The government should stop fighting the symptoms of poverty and chose to live, in the short run, with ugly faces like youth unemployment. The funds the government is using to fight the symptoms can be used in developing sustainable well performing agri, mineral, oil, service, and other industries that will automatically generate jobs to everybody. Thereafter, the government won’t need to worry about funds like the Uwezo Fund etc.

Or, it will be after creating sustainable economically viable industries that the government will rightly worry about unemployment, if only 10% of the already wealthy Kenyans will be the ones who benefited from the industries. By that time, if the youth will be given Shs 6 billion each year to start enterprises meant to alleviate them from poverty and unemployment, the money won’t disappear in thin air.

In short, Kenya needs to create her own source of wealth – real wealth. These other noises are fighting the symptoms of poverty, yet she needs to address the cause.

PS. If Kenya won’t ever fight corruption then just forget I ever said anything up there.