Agriculture, Manufacturing employees least paid in Kenya – Report reveals


Agriculture, Manufacturing employees least paid in Kenya - Report reveals

In Summary

  • In spite of holding the majority share of GDP at 34.2 percent in 2018, agriculture only held a mere 12 percent of all formal jobs while manufacturing held an 11 percent stake  against a GDP stock of 7.7 percent.
  • Like agriculture, the performance of manufacturing which is tied with farm production at the hip remains barely a step up from the floor with the cost of production entailing the processors biggest headache.
  • However, of the Ksh.8.9 trillion in output recorded across 2018, Agriculture carried the year with earnings from the sector topping Ksh.3 trillion while manufacturing churned out a market priced output of Ksh.689.3 billion

Employees in the Agriculture and Manufacturing sectors are the least paid in the Kenyan job market, a new report by asset manager ICEA Lion shows.

According to the report, the two sectors which are the key GDP contributors, are lying on sinking ground and remain heavily under-resourced.

An analysis of the formal employment dynamics in the two segments over a period of five years by ICEA Lion shows a disproportionate high number of employees in the lesser social services even as employees in the greater segments emerge as the least remunerated.

In spite of holding the majority share of Gross Domestic Product (GDP) at 34.2 percent in 2018, agriculture only held a mere 12 percent of all formal jobs while manufacturing held an 11 percent stake against a GDP stock of 7.7 percent.

Meanwhile, segments such as real estate whose account on employment creation barely held a near average 10 percent of formal jobs across the review period.

Basic

While giving an attribution to the survey, ICEA Research Analyst Judd Murigi linked the miniature share of jobs for manufacturers and agriculture-based producers to the culmination of the industries regressive competitiveness under the cloud of minimal value addition and technical expertise.

“We have spoken about the lack of competitiveness in the sector, lack of access to markets and intermediaries and the lack of value addition,” he said.

“It now becomes more urgent than ever to address the structural challenges that have faced these sectors as a means to close the gap.”

Agriculture, which makes for the country’s economic main stay, bounced back in 2018 from the drought perils and pair of elections in 2017 to record a 6.6 percent growth mainly on an account of improving weather conditions.

The correction in output has however been criticized widely for being ‘automatic’, this as the attribution of the recovery is derived merely from just improved rains without there being a distinct turn in policy.

Stakeholders in the industry meanwhile remain riddled by an ever evolving murk which has left sub-sectors such as cane production, coffee farming and maize grain cultivation on the ground.

“We are dealing with very basic commodities and fail to handle the full value chain. I would challenge one to trace the movement of the coffee berry from when its picked to when it lands in your cup, despite the fact that we grow it, what percentage comes to as in terms of is final pricing,” posed ICEA Lion Chief Executive Officer Einstein Kihanda.

Wages

Like agriculture, the performance of manufacturing which is tied with farm production at the hip remains barely a step up from the floor with the cost of production entailing the processors biggest headache.

The cost of power has defined Kenyan manufacturers bother as higher electricity pricing renders Kenyan goods noncompetitive in comparison to its peers in the greater Eastern African market.

The misery for agri-producers and manufacturers has been compounded by meager wages in comparison to the market’s average return for employees on work undertaken with the pair average annual earnings falling massively behind segments such as hospitality, energy and financial services.

Average wage earnings in agriculture and manufacturing within the public sector have only risen by an average 23 percent in five years on the back of a formal jobs growth of less than one percent over the period.

Meanwhile, growth in wages for the public sector food & accommodation employees has risen by over 79 percent in spite of a mere 14.3 percent and nil growth in jobs for the segment in half a decade and over the last year, respectively.

Real average earnings recorded by the Kenya National Bureau of Statistics (KNBS) in what makes for a measure of gross pay adjusted for inflation further paints the bleak picture on earnings for the pair of key output contributors.

In the private sector the average employee in agriculture and manufacturing took home an average Ksh.14,389 and Ksh.22,496 every month in 2018 respectively, against a mean Ksh.31,530 monthly stipend even as individuals from extraterritorial activities took home a massive Ksh. 156,860 pack.

Within the public sector, the average agriculture based role paid out remunerations totaling Ksh.18,631 every month with manufacturing paying out an adjusted Ksh.39,355 salary, while jobs in food and accommodation paid out a weightier Ksh.76,493 average.

Moreover, the Labor and Social Protection Ministry dictated monthly-minimum wage for agriculture workers registered a marginal five percent increase in five years to sit at Ksh.9014

However, of the Ksh.8.9 trillion in output recorded across 2018, Agriculture carried the year with earnings from the sector topping Ksh.3 trillion.

Manufacturing churned out a market priced output of Ksh.689.3 billion to be rivaled only by the transport and storage sector with a marginally greater output of an eight percent share of GDP.

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Story By Kepha Muiruri
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