This archive report was first published on 5 October 2021.
Kenya's economy is slowly recovering from the pandemic-induced slump, with the private sector jobs expanding at the fastest pace since January.
According to a monthly survey by Stanbic Bank Kenya, companies increased their workforce for the fifth consecutive month, with salaries growing at the fastest rate in three months.
The survey, which tracks performance in key economic sectors such as agriculture, manufacturing, construction, wholesale and retail, services, and mining, found that all five sectors added to their workforces during the month, with particularly sharp increases seen in construction and agriculture.
Capacity pressures led firms to increase their staffing levels at the strongest rate since January, analysts at Stanbic Bank and UK researcher, IHS Markit, wrote in the PMI report released on October 5, 2021.
However, the survey also showed that growth in business deals in September was slowest since private sector activity started picking up after a decline that followed the last round of stiffer containment measures in April.
The overall PMI reading, which gauges month-on-month private sector activity, dropped to 50.4 last month from 51.1 in August, suggesting that economic recovery just stayed above the 50 mark, which separates growth from contraction.
Business conditions continued to improve in September, but at the slowest pace in the past five months due to rising inflation, Mr Kuria Kamau, a fixed income and currency strategist at Stanbic Bank, wrote in the PMI report.
Companies have cited increased cost of inputs such as raw materials due to constraints in global supply chains and July taxation measures as reasons for the slowdown in economic recovery.
The expenses were exacerbated by a bump in fuel prices in September, with petrol and diesel prices raised to historic highs of Sh134.72 and Sh115.6 per litre in Nairobi from September 15.
The Treasury rejected a Sh5 billion request from the Petroleum ministry to extend a fuel subsidy, which had been in place since April, to compensate oil marketers and cushion consumers, arguing the Petroleum Development Levy Fund was nearly depleted.
Kenya's central bank held its benchmark lending rate at 7.0 percent in late September, and its monetary policy committee said it had taken note of emerging local and global inflationary pressures.
The Kenya Revenue Authority (KRA) reported the country was experiencing a gradual growth in employment in three months through September, a sign that the economy was recovering from pandemic knocks.
Pay As You Earn (PAYE) tax receipts for the review period jumped 50.63 percent to Sh107.79 billion compared to a similar period a year ago, a boost to jobseekers, especially the more than one million young people who graduate from colleges and secondary schools in search of low-cadre positions like clerks.
Nearly 730,000 jobs were lost in last year when Kenya imposed coronavirus-induced lockdowns that led to layoffs and pay cuts.
The return to hiring indicates the employment market is following the ongoing economic recovery.
The World Bank expects Kenya's economy to grow by 4.5 percent this year, as vaccinations and easing of restrictions help it recover from a coronavirus-induced slump last year.
