No. 73/2023-2024 Assessing Labour Productivity for Makueni County By Cecilia Naeku and Esther Irungu Introduction Makueni County is a member of the South-Eastern Kenya Economic Bloc (SEKEB). The county is classified as a semi-arid county that experiences between 30-84 per cent aridity levels. The county land size is 8,009 km² and has nine sub-counties namely: Kathonzweni, Kibwezi, Kilungu, Makindu, Makueni, Mbooni East, Mbooni West, Mukaa, and Nzaui. Key Highlights The productivity of Makueni County is characterized by the following: (i) The service sector dominates the Gross Value Added (GVA) while the industry sector is the least and has been declining. The share of manufacturing has been declining while that of construction expanded during the period under review. The public administration and defence sub-sector – a non-market service – dominates the services sector. (ii) Quality of labour requires interventions to reduce stunting, teenage pregnancy, and child poverty. (iii) Essential infrastructure requires interventions to increase access to electricity, internet connectivity, rural, and improved water. (iv) Agriculture is the highest employer, with a majority in mixed farming. In manufacturing, the majority are employed in the textiles and repair and installation KIPPRA Policy Brief No. 73/2023-2024 1 of machinery and equipment industries. In wholesale and retail trade, the majority are working in the retail of food, beverages, and tobacco products. (v) Labour productivity is highest in the industry sector and lowest in the agriculture sector. The mining sub-sector has the highest labour productivity in the industry sector, while the real estate sub-sector has the highest in the service sector. To enhance productivity, there is a need to: (i) Build climate resilience in agriculture by encouraging drought-resistant and fast- maturing crops, increasing the uptake of crop insurance, using information from the early warning systems to inform crop production, and promote livestock value chains. (ii) Improve the quality of labour by implementing nutrition-sensitive programmes, creating awareness, and facilitating teenage mothers to go back to school. (iii) Invest in essential infrastructure to support private sector growth including an increase in access to electricity, internet connectivity, and access to improved water. (iv) Exploit the potential in mining to grow the industrial sector. Makueni County Economic Performance Makueni County contributes on average 1.1 per cent of the National Gross Value Added with an average GVA size of Ksh 82,1217 million. The GVA per capita for Makueni County is Ksh 164,922.2199 with an average population growth rate of 1.4 per cent and overall poverty levels at 39.70 per cent. Makueni County has shown steady growth in GVA with an average growth rate of 3.99 per cent from 2013-2022, which is below the national average growth of 4.37 per cent as shown in Figure 1. The highest growth rate was experienced in 2018 while the lowest growth rate was experienced in 2021. KIPPRA Policy Brief No. 73/2023-2024 2 Figure 1: Makueni County GVA growth rate 12.00 9.49 10.00 8.48 7.63 7.45 8.00 5.29 5.60 6.19 6.00 4.75 4.39 5.10 4.65 2.81 3.01 3.644.00 1.42 2.00 0.42 0.54 0.00 -2.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 -3.69 -4.00 First County Government Regime Second County Government Regime -6.00 Years Makueni National Average Data source: GCP 2023 Sectoral Analysis of Makueni County GVA The service sector is dominant in Makueni County with an average contribution to GVA of 62.67 per cent. The agriculture sector is second, contributing an average of 26.01 per cent to the GVA while the industry sector contributes about 11.55 per cent as shown in Figure 2. Figure 2: Contribution of broad sectors to Makueni County GVA 100% 90% 80% 70% 64.30 63.32 62.00 63.41 64.17 63.48 62.96 60.25 61.85 61.00 60% 50% 40% 30% 13.12 14.03 12.82 11.39 11.28 10.45 9.86 10.87 10.34 11.29 20% 10% 23.27 22.90 25.44 25.48 24.75 26.07 27.81 28.88 27.81 27.71 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 First County Regime Second County Regime Year Agriculture Industry Service Data source: GCP 2023 KIPPRA Policy Brief No. 73/2023-2024 3 Contribution of broad sectors to Overall GVA Growth Rate County GVA Agriculture Sector The average agriculture GVA growth rate (2013-2022) for Makueni County is 11.89 per cent, below the national average of 12.71 per cent as shown in Figure 3. Figure 3: Makueni County agriculture GVA growth rate 35.00 28.84 30.00 23.46 25.00 20.57 19.94 20.00 15.66 15.75 12.02 12.74 12.4215.00 8.92 8.60 9.94 8.00 10.39 10.00 6.60 5.30 5.10 5.00 -2.84 0.00 -5.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 First County Government Regime Second County Government Regime Years Makueni National Average Data source: GCP 2023 Maize, the main staple food in the country is also the main food crop produced in Makueni County. The area under maize production has been relatively constant except for 2013 and 2014, which were significantly higher. Maize production (metric tonnes) has been fluctuating, showing increments from 2012 to 2015 when it was the highest to sharply declining between 2016 to 2017, after which it recovered but remained lower than 2012 levels (Figure 4). Figure 4:Maize Production 150000 200000 150000 100000 100000 50000 50000 0 0 2012 2013 2014 2015 2016 2017 2018 2020 Axis Title Harvested Area (HA) Production (MT) Data source: NIPFN KIPPRA Policy Brief No. 73/2023-2024 4 Maize Production (metric Agriculture GVA Growth rate tonnes) Area under maize production (hectarage) Livestock production in Makueni County is on a smaller scale when compared to crop production. The most common livestock kept are meat goats and beef cattle. Poultry farming is comparatively high, with Indigenous chicken being the most popular poultry type. Beef, milk, and poultry meat have the highest economic value in the county (Figure 5). Eggs also have significant value indicating a potential in the poultry value chain. Although beehives were comparatively fewer, honey had a significant economic value, which is indicative of potential in honey production. Figure 5: Livestock production statistics 70.00 100.00 59.54 90.80 60.00 90.00 80.00 50.00 70.00 40.00 60.00 30.00 24.60 50.00 20.00 40.00 8.12 10.00 30.002.42 1.13 0.150.78 3.260.01 20.00 0.00 10.00 3.98 5.22 0.00 Broilers layers Indigenous chicken Livestock type Poultry type 2000.00 1896.18 1800.00 1545.25 1600.00 1400.00 1200.00 1000.00 821.81 910.92 800.00 553.41 600.00 426.44 400.00 200.00 120.77 12.16 10.56 0.00 Milk beef goat mutton poultry Honey eggs hides skins meat meat Livestock product Data source: NIPFN KIPPRA Policy Brief No. 73/2023-2024 5 Percentage of livestock Total Value (ksh.million) Percentage of poultry Industry Sector The average industry sector growth rate for Makueni County is 7.76 per cent, below the national average of 10.58 per cent as shown in Figure 6. Figure 6: Makueni County industry GVA growth rate 25.00 21.75 20.00 16.51 15.00 12.37 11.52 11.79 11.85 11.93 10.60 10.00 8.64 8.59 6.21 6.76 6.715.96 6.485.43 5.66 5.00 0.00 2014 2015 -230.1761 2017 2018 2019 2020 2021 2022 First County Government Regime Second County Government Regime -5.00 Years Makueni National Average Data source: GCP 2023 Manufacturing and construction are other important sectors in Makueni County as they dominate the industry sector. The share of manufacturing has been declining over the years while that of construction expanded and dominated (Figure 7). KIPPRA Policy Brief No. 73/2023-2024 6 Industry sector GVA growth rate Figure 7 : Contribution of industry sub-sectors to the overall sector GVA 100% 90% 25.47 26.38 29.78 80% 34.35 35.81 39.52 42.01 46.00 49.58 70% 52.788.70 7.54 1.24 1.22 8.20 60% 1.87 8.58 7.61 2.67 2.55 6.932.05 7.1250% 2.04 6.122.01 5.841.85 5.8740% 1.64 30% 64.58 64.86 60.15 54.40 54.03 51.50 48.83 20% 45.87 42.73 39.71 10% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year First County Regime Second County Regime Manufacturing Electricity supply Water supply; sewerage, waste management Construction Data source: GCP 2023 Services sector The average services sector growth rate is 8.94 per cent, below the national average of 11.13 per cent as shown in Figure 8. Figure 8: Makueni County services sector GVA growth rate 20.00 16.33 14.64 15.0613.60 13.64 15.00 12.40 13.26 1110..3187 10.81 13.0711.38 190..7892 10.39 10.00 5.00 0.90 0.00 -3.74 2014 2015 2016 2017 2018 2019 202-20.982021 2022 -5.00 First County Government Second County Government Regime Regime Years Makueni National Average Data source: GCP 2023 KIPPRA Policy Brief No. 73/2023-2024 7 Service sector GVA growth rate Contribution of sectors to Industry GVA The public administration and defence sub-sector, a non-market service dominates the services sector with the highest contribution to service GVA at 17.29 per cent. The transport and storage sector is the second highest contributor to services GVA at 17.47 per cent. The education sub-sector is third at an average of 15.86 per cent as shown in Figure 9. Figure 9: Contribution of services sub-sectors to the overall sector GVA 100% 80% 17.90 17.50 16.47 15.70 15.88 15.62 14.03 13.81 15.25 16.48 60% 14.78 14.68 18.16 19.04 19.29 17.16 17.32 18.76 16.14 17.56 7.78 8.50 7.92 40% 8.39 8.31 8.29 8.32 8.31 8.10 8.85 15.15 16.24 14.48 13.61 13.29 18.69 20.71 19.55 22.1920% 13.42 16.05 16.10 15.93 15.39 15.80 14.64 14.27 15.07 14.36 16.51 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 First County Regime Second County Regime Year Other service activities Human health and social work activities Education Public administration and defence Administrative and support service activities Data source: GCP 2023 Quantity and Quality of Labour Force for Makueni County Makueni County has a total working-age population of 576,714, which is about 58.39 per cent of the total county population. The majority of the working-age population is youthful (18-34 years) at 44.01 per cent as shown in Table 1. KIPPRA Policy Brief No. 73/2023-2024 8 Contribution of sectors to service GVA Table 1: Distribution of the working-age population by age categories Working age population Male Female Total Percentage of total working age population (%) 15-17 41,521 39,464 80,985 14.04 18 –24 63,669 57,980 121,649 21.09 25-34 64,518 67,625 132,143 22.91 35-64 117,843 124,094 241,937 41.95 Total 287,551 289,163 576,714 Data source: KPHC 2019 The majority of the population in Makueni sub-counties are persons in the working age categories. Makueni sub-county has the highest percentage of persons of working age at 61.32 per cent as shown in Table 2. Table 2: Sub-county distribution of working-age population by age category Sub-county Total population Working age population Working categories age population (15-64) as a 15-17 18 – 25 – 35-64 percentage 24 34 of the total sub-county population Kathonzweni 79,777 7,236 9,871 9,747 19,162 46,016 (15.72) (21.45) (21.18) (41.64) (57.68) Kibwezi 196,994 17,137 23,850 26,145 45,688 112,820 (15.19) (21.14) (23.17) (40.50) (57.27) Kilungu 60,951 5,111 7,193 6,856 14,518 33,678 KIPPRA Policy Brief No. 73/2023-2024 9 (15.18) (21.36) (20.36) (43.11) (55.25) Makindu 84,946 6,879 10,817 12,438 20,295 50,429 (13.64) (21.45) (24.66) (40.24) (59.37) Makueni 130,373 9,318 17,577 20,188 33,340 80,423 (11.59) (21.86) (25.10) (41.46) (61.69) Mbooni East 97,753 8,279 11,620 12,108 24,797 56,804 (14.57) (20.46) (21.32) (43.65) (58.11) Mbooni West 102,593 8,607 11,883 12,296 25,183 57,969 (14.85) (20.50) (21.21) (43.44) (56.50) Mukaa 107,549 7,928 13,048 15,228 27,918 64,122 (12.36) (20.35) (23.75) (43.54) (59.62) Nzaui 126,697 10,490 15,790 17,137 31,036 74,453 (14.09) (21.21) (23.02) (41.69) (58.76) Data source: KPHC 2019 Makueni County has high socioeconomic indicators that affect the quality of labour (Table 3). However, interventions are required to reduce stunting, teenage pregnancies, and child poverty. Table 3: Human capital indicators Human capital indicators County National average Literacy rate 82.30 78.41 Pre-primary net enrolment rate (2019) 75.96 67.51 Primary school net enrolment rate (2020) 97.10 77.72 Secondary school net enrolment rate (2020) 81.20 54.18 KIPPRA Policy Brief No. 73/2023-2024 10 Average years of schooling (2014) 7.90 7.78 Percentage of children (12-23 months) fully 89.70 74.97 vaccinated (%) Percentage of stunted children 19.80 19.75 Percentage of teenage pregnancy 11.10 15.79 Primary to secondary transition rates (2020) 90.90 86.13 Pupil-teacher ratio (primary school) 27.00 28.28 Food poverty headcount (%) 32.00 33.63 Child poverty headcount (%) 39.00 42.67 Data source: KDHS 2022, KPHC 2019, Basic Education Statistical Booklet, 2020, 2021 KNBS Kenya Poverty Report Majority of the essential infrastructure that supports the growth of Makueni County’s GVA is lower than the national average (Table 4). Interventions are needed to increase electricity and internet connectivity and access to improved water. Table 4: Essential infrastructure and capital indicators Essential infrastructure County National average indicators Percentage of households with 20.40 access to electricity (2019 38.52 Census) Distribution of population using 16.10 18.69 the internet (2019 census) Rural Access Index (2018) 73.15 63.72 Access to improved sanitation 88.00 59.04 (2018) Access to improved water (2018) 53.10 65.33 KIPPRA Policy Brief No. 73/2023-2024 11 Financial inclusion level (2021) 87.50 81.01 The proportion of primary schools 23.60 27.65 with internet Proportion of secondary schools 29.00 35.13 with functional internet Percentage of households by 87.26 housing material composite- 51.71 finished materials(adequate) (2019) Percentage of households using 35.20 bank usage 38.18 (overall) Percentage of households using 84.90 mobile 78.58 money) Data sources: KRB 2018, KPHC 2019, FinAccess 2021, KIHBS 2015/16, Basic Education Statistical Booklet, 2020 County Employment Statistics The employment-to-population ratio is at 67.57 per cent. The majority of those working is the non-youth working population (35-64 years) at 37.77 per cent while that of the youthful working age population (18- 34 years) is at 29.02 per cent (Table 5). The percentage of the employed by gender is 44.02 for males and 48.35 for females. The unemployment rate is at 5.32 per cent with unemployment being slightly higher for the youth (18-34 years) at 3.28 per cent and those between 35-64 years at 2.04 per cent. The percentage of persons between 5-17 years working is 2.17 per cent indicating that the county has low levels of child labour. The inactivity rates are higher for the youth category (15-24 years) at 22.58 per cent, which is expected as they are pursuing schooling while low for the persons of prime age (25-64 years) at 2.83 per cent. KIPPRA Policy Brief No. 73/2023-2024 12 Table 5: Makueni County employment statistics Employment statistics Youth Non-youth Employment to population ratio (%) 29.02 37.77 Unemployment rate 3.28 2.04 Percentage of persons between 5- 2.17 - 17 years old working Inactivity rate 22.58 2.83 Data source: KPHC 2019 Sectoral Employment The agriculture sector is the highest employer in Makueni County at 76.74 per cent followed by the services sector at 19.30 per cent. The industry sector is third at 3.96 per cent. Figure 10: Percentage of persons employed in the broad sectors 90.00 76.74 80.00 70.00 60.00 50.00 40.00 30.00 19.30 20.00 10.00 3.96 0.00 Agriculture Services Industry Broad sectors Data source: KCHS 2021 Agriculture Sector In agriculture, the majority are those practicing mixed farming as shown in Figure 11. KIPPRA Policy Brief No. 73/2023-2024 13 Percentage of persons employed in the broad sectors Figure 11: Percentage share of employment in agriculture sub-sectors 60 54.05 50 40 30 21.65 20 10 0.58 0.35 0.12 0 Mixed Farming Crop Production Livestock paid farm labour Fishing/fish production farming Agriculture sub-sectors Data source: KCHS 2021 Industry Sector The majority of those working in the industry sectors are in the construction sub-sector (Figure 12) with the construction of buildings being dominant. Figure 12: Percentage share of employment in the industry sector 60.00 53.52 50.00 43.12 40.00 30.00 20.00 10.00 3.36 0.00 Construction Manufacturing Mining Industry sectors Data source: KCHS 2021 A disaggregation of employment in manufacturing shows that the majority of those employed in the sector work in low-technology textiles and repair and installation of machinery and equipment industries as shown in Figure 13. KIPPRA Policy Brief No. 73/2023-2024 14 Percentage share of Percentage share of employment employment Figure 13 : Percentage share of employment in manufacturing sub-sectors 70.00 57.88 60.00 50.00 40.00 30.00 17.43 20.00 11.17 10.00 6.76 6.76 0.00 Textiles and Repair and Manufacture of Food, beverages Wood and wood wearing apparel installation of furniture and tobacco products machinery and products equipment Manufacturing sub-sectors Data source: KCHS 2021 Services Sector The majority of those working in the services sector are in wholesale and retail trade, and repair of motor vehicles and motorcycles as shown in Figure 14. KIPPRA Policy Brief No. 73/2023-2024 15 Percentage share of employment Figure 14 : Percentage share of employment in the service sector Real estate activities 0.63 Human health and social work activities 0.89 Professional, scientific and technical activities 1.20 Information and communication 1.36 Public administration, defense and compulsory… 2.93 Administration and support activities 5.51 Accomodation and food service activities 5.71 Other service activities 6.02 Activities of households as employer 9.56 Transportation and storage 11.60 Education 18.44 Wholesale and retail trade, and repair of motor… 36.15 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 Percentage share of employment Data source: KCHS 2021 In the wholesale and retail trade, and repair of motor vehicles and motorcycles sub-sectors, the majority work in the retail sale of food, beverages, and tobacco products as shown in Figure 15. KIPPRA Policy Brief No. 73/2023-2024 16 Service sectors Figure 15: Percentage of persons employed in the wholesale and retail trade, and repair of motor vehicle sub-sectors Non-specialized wholesale 3.17 Retail sale of other household equipment in specialized stores 5.83 Retail sale of other goods in specialized stores 7.24 other retail sale in specialized stores 17.86 Retail sale in non-specialized stores 25.77 Retail sale of food, beverages and tobacco 40.13 0.00 5.0010.0015.0020.0025.0030.0035.0040.0045.00 Percentage share of employment Data source: KCHS 2021 In the education sub-sector, the majority of those employed are in pre-primary and primary education as shown in Figure 16. Figure 16 : Percentage share of employment in education sub-sector 70.00 57.88 60.00 50.00 40.00 34.95 30.00 20.00 7.17 10.00 0.00 Pre-primary and primary General secondary education Technical and vocational education education Education sub-sectors KIPPRA Policy Brief No. 73/2023-2024 17 Percentage share of Wholesale and retail trade, and repair employment of motor vehicle and motorcycle sub- sectors Labour Productivity Labour productivity1 for Makueni County is lower than the national average labour (Figure 17). Figure 17: Labour productivity ratios (millions) 0.40 0.35 0.35 0.30 0.25 0.20 0.17 0.15 0.10 0.05 0.00 National Average Makueni County Data source: Author’s computation using KNBS GCP 2023 and KCHS 2021 data The industry sector had the highest productivity, followed by the services sector while the agriculture sector had the least labour productivity (Figure 18). Figure 18: Labour productivity by sectors 0.60 0.57 0.50 0.40 0.30 0.20 0.14 0.08 0.10 0.00 Industry Services Agriculture Broad Sectors Data source: Author’s computation using KNBS GCP 2023 and KCHS 2021 data 1 The measure used is the apparent labour productivity measured as gross value added per person employed. KIPPRA Policy Brief No. 73/2023-2024 18 Labour Productivity (millions) Labour Productivity (Millions) Agriculture Sector Maize productivity as measured by maize yield is low in Makueni County at an average yield of 0.53 MT/HA for the eight (8) years under review. Additionally, the yields have been fluctuating over the years with the highest being in 2015 and the lowest in 2017. Aridity, frequent drought shocks, and over-reliance on rainfed agriculture inhibit the realization of maize production potential in the county. Figure 19: Maize yield (MT/HA) 1.20 1.02 1.00 0.80 0.70 0.55 0.60 0.45 0.510.43 0.40 0.350.24 0.20 0.00 2012 2013 2014 2015 2016 2017 2018 2020 Year Data source: NIPFN Industry Sector The mining sub-sector has the highest labour productivity in the industry broad sector as shown in Figure 20. Figure 20: Labour productivity by industry sectors 1.40 1.17 1.20 1.00 0.80 0.60 0.52 0.49 0.40 0.20 0.00 Mining Manufacturing Construction Industry sectors Data source: Author’s computation using KNBS GCP 2023 and KCHS 2021 data KIPPRA Policy Brief No. 73/2023-2024 19 Labour Productivity Maize yield (MT/HA) (millions) Services Sector Real estate had relatively higher labour productivity when compared with others within the services sector as shown in Figure 21. Figure 21: Labour productivity in services sectors Administration and support activities 0.25 Wholesale and retail trade, and repair of motor vehicles and motorcycles 0.28 Accomodation and food service activities 0.31 Education 0.58 Other service activities 0.70 Transportation and storage 1.33 Information and communication 1.59 Professional, scientific and technical activities 2.26 Public administration, defense and compulsory social security 3.83 Human health and social work activities 4.32 Real estate activities 8.77 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 Labour Productivity (millions) Data source: Author’s computation using KNBS GCP 2023 and KCHS 2021 data Key Messages (i) The service sector dominates the shares of county GVA while the industry sector has been declining and the least. Although crop production is the main sub-sector in agriculture, its potential is hindered by aridity and drought shocks as production is rainfed. In livestock production, there is a potential in the poultry value chain and apiculture. Manufacturing and construction are other important activities in the county’s industry sector. However, the share of manufacturing has been declining over the years while that of construction expanded and dominated. The public administration and defence sector – a non-market service – dominates the services sector GVA. KIPPRA Policy Brief No. 73/2023-2024 20 Service Sectors (ii) The indicators of the quality of labour are within the national averages. However, interventions are required to reduce stunting, teenage pregnancies, and child poverty. (iii) The majority of the essential infrastructure that supports the growth of county GVA is within the national averages. Interventions are needed to increase electricity and internet connectivity, rural access, and access to improved water. (iv) The agriculture sector is the highest employer in the county. In agriculture, the majority are practicing mixed farming. Most of those working in the industry sectors are in the construction sub-sector while manufacturing has the second highest share of employment with the majority of employed in the textiles and repair and installation of machinery and equipment industries. The majority of those working in the service sector are in wholesale and retail trade, with the majority working in retail of food, beverages, and tobacco products. (v) Labour productivity in the county is lower than the national average labour. The industry sector had the highest productivity, followed by the services sector while the agriculture sector had the least labour productivity. The mining sub-sector has the highest labour productivity in the industry sector, while the real estate sub-sector has the highest in the services sector. Policy Recommendations (i) Build climate resilience in agriculture. This can be achieved by encouraging growing of drought-resistant and fast-maturing crops, facilitating the uptake of crop insurance, and optimizing the utilization of information from the early warning systems to inform crop production to improve agricultural productivity. Also, promote livestock production, especially the poultry value chain and apiculture, which uses more climate-smart agriculture. (ii) Improve the quality of labour by implementing nutrition-sensitive social protection programmes to address stunting and child poverty. Additionally prioritize reduction of teenage pregnancies by creating awareness and facilitating teenage mothers to go back to school. (iii) Invest in the provision of essential infrastructure and capital to support private sector growth and to attract investments to the county. Of priority are increasing electricity and internet connectivity, and access to improved water. (iv) Exploit the potential in mining to grow the industrial sector. KIPPRA Policy Brief No. 73/2023-2024 21 Acknowledgment The authors acknowledge the special contributions and guidance provided by Dr Rose Ngugi (Executive Director, KIPPRA) throughout the entire process of preparing the county brief. Appreciation also goes to Fridah Njiru for her assistance in compiling data for the brief. KIPPRA Policy Brief No. 73/2023-2024 22