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Posted on July 11, 2017

With great opportunity comes great risk: Keeping up with Kenya’s population boom

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Kenya doubled its population over the last 25 years

Africa’s population is growing faster than anywhere else in the world. More than half of global population growth between now and 2050 is expected to occur in Africa and of the additional 2.4 billion people projected to be added to the global population between now and 2050, 1.3 billion will be in Africa.

Today, on World Population Day, Kenya is no different. Kenya doubled its population over the last 25 years, to about 40 million people. And it’s not slowing down: Kenya’s population is projected to grow by around 1 million per year, or 3,000 people every day, over the next 40 years, reaching about 85 million by 2050.

This growth represents both risk and opportunity. For Kenya to take advantage of the opportunity, it is going to needs jobs. A lot more jobs.

“If you just think about the population growth and the growth of the country, the population growth is far outstripping economic growth,” said James Kashangaki, The Head of Inclusive Growth at FSD Kenya.

The reality is that in Kenya, there already aren’t enough formal jobs for the number of people entering the job market. One of the ways to support job-creation is to better support the country’s vibrant informal sector which represents a whopping 82.7% of employment.

“The reality is that if you’re not in farming you’re in entrepreneurship because the employment market is so small,” said Kashangaki.

The total number of persons enrolled in both formal and informal sectors increased from 13.5 million in 2013 to 14.3 million in 2014 in Kenya. Of the 799,700 new jobs, 700,000 were created by the informal sector.

Employment in the informal sector is associated with significantly lower levels of poverty than those experienced in farming. But a lot of these businesses are stuck because their informality means they don’t have access to finance. When they do, it’s often not access to finance that serves them.

Almost two-thirds of informal enterprises in Kenya cited access to finance as their top obstacle in a study by The World Bank. Without access to finance a company can’t grow, strangling a majority of Kenya’s economy.

As outlined in FSD’s 2016 Annual Report, the informal sector is the key to unlocking Kenya’s growth. And unlocking Kenya’s growth is the key to ensuring that Kenya’s population boom is a risk that pays off.