Unlike in much of the developed world, the promise of manufacturing to spur economic growth and jobs in Africa has remained elusive, with most of the continent’s economies facing deindustrialization. This trend is characterized by declining share of manufacturing in gross domestic product (GDP) and wage employment. All is, however, not lost considering emerging structural shifts, with services and other non-manufacturing industries promising economic transformations. These promising nonmanufacturing industries, termed “industries without smokestacks” (IWOSS), demonstrate key features of manufacturing such as high productivity, agglomeration, and job opportunities. The IWOSS sectors are diverse, cutting across financial services, horticulture, information and communication technology (ICT), tourism, transit trade, and wholesale trade. As part of a broader research project, the Brookings Institution’s Africa Growth Initiative partnered with the Kenya Institute for Public Policy Research and Analysis (KIPPRA) to assess which of these IWOSS might be best poised to unlock jobs in Kenya.

Right now, the country faces significant labor-market challenges in the form of unemployment, time-related underemployment, and inactivity—all of which are more severe for the youth and women. Between 2009 and 2019, the country’s population grew by an average of 2.2 percent annually, but the labor force expanded by an even higher rate of 3.1 percent per annum over the same period, rising from 15.8 million people to 20.7 million people. Unemployment is high: In 2016, the overall unemployment rate of the working-age group (15 to 64 years) was estimated at 7.4 percent, that of women was 9.6 percent, and that of the youth (15 to 24 years) was 17.7 percent. Time-related underemployment was estimated at 20.4 percent for the working-age population, and 26 percent and 35.9 percent for the women and youth, respectively. In addition, despite Kenya’s long prioritization of industrialization as an avenue for mass employment creation and economic growth, the manufacturing sector contribution to GDP has declined from 11.3 percent in 2010 to 7.5 percent in 2019. The formal sector wage employment contribution of manufacturing has also remained stagnant, averaging 13.0 percent over the last two decades.

Read the full article about job creation for youth in Kenya by Adan Shibia, Eldah Onsomu, and Boaz Munga at Brookings.