Total employment in formal and informal sectors in Kenya 2015-2023

In 2023, around 20 million people were employed in Kenya, this was an increase of some 900,000 individuals from the previous year. The employees belonged mostly to the informal sector. Roughly 16.7 million worked in informal conditions, whereas close to 3.3 million were employed in the formal sector. The informal sector constitutes an important part of the Kenyan economy, being related to employment creation, production, and income generation. 

Trends in the informal labor market and economic sectors

The largest employment activities for people in the informal sector were in wholesale and retail trade, as well as hotels and restaurants, with 9.32 million people employed in these areas in 2022. Moreover, the hospitality sector in the country was the fastest-growing economic sector with a quarterly growth rate of 21.5 percent of the GDP. However, the largest economic sector as an added value to the GDP was the agricultural sector.

Navigating unemployment challenges in Kenya

Kenya’s unemployment rate is following a decreasing trend, which dropped below five percent at the end of 2022. However, unemployment among the youth in the same period was fairly high at 13.4 percent. The cohort with the highest level of unemployment was among the age group between 20 to 24 years old, with an unemployment rate of over 15 percent.