Discussion Paper No. 192 of 2017 An Input-Output Table for Kenya and its Application to Development Planning

Abstract

This study investigates the effects of population dynamics as Kenya strives to reap from demographic dividend arising from accelerated economic growth as the population changes. Now, 78 per cent of Kenya’s population is aged below 35 years mainly due to high fertility, leading to a high dependency ratio that limits savings to invest. As a result, the government is committing more resources to non-productive sectors in the provision of education, health and other facilities for children. The high population growth is not in tandem with job creation, leading to high unemployment levels mostly affecting the youth aged 15-35 years. In the recent past, the country has experienced a rise in cases of insecurity, youth radicalization, terrorism, drug abuse and alcoholism, which are partly blamed on youth unemployment and frustrations. Through the Economic Recovery Strategy and Medium-Term Plans, although without much success, the government has made several interventions to create jobs through Kazi Kwa Vijana, Uwezo Fund, Women Enterprise Fund, Youth Enterprise Fund and Access to Government Procurement Opportunities. But unemployment remains a major challenge against the ever-increasing population, culminating into a large unemployed working age population. These are the basis that motivated this study which uses data for the period 1970-2012, and employed an economic growth model.