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In 2013, Kenya embarked on radical changes to its governance structure by devolving significant national government functions to 47 county governments.
The 2014/2015 budget speech presented the Cabinet Secretary for National Treasury with an opportunity to review government performance over the last year and introduce interventions to fine-tune the economy to achieve higher and more equitable growth.
Kenya experienced a real GDP growth rate of 4.7% during the year, a marginal increase over the 4.6% growth in 2012. The growth is largely attributable to strong performance in transport and communication which contributed 15.9% to overall growth compared to 12.9% in 2012. While the contribution of the wholesale, retail trade and agriculture sectors declined when compared to the previous year, they remained significant pillars of growth in 2013. Other sectors which made significant contribution include manufacturing and construction which posted 9.7% and 4.1%, respectively.
The government investment in social services increased by 7.1% from USD 4.3 billion to USD 4.60 billion. 83% of this expenditure was allocated to payment of salaries
for teachers. During the year, the government increased the expenditure on vulnerable persons to cushion them against the rising cost of living the number of households covered increased to 164,000 compared to 49,000 in 2012.
Many businesses are facing difficulties getting skilled labour especially craftsmen jobs due to neglect of technical training institutions and conversion of mid-level colleges into constituent colleges of universities. To address this concern, the government increased investment in youth polytechnics and technical training institutions resulting in an increase in enrollment from 127,000 in 2012 to 148,000 in 2013.
In 2013, over 748,000 jobs were created bringing the total number of persons employed in the formal and informal sector to 13.5 million. 83% of the workers work in the informal sector which is characterized by opacity and limited regulation that makes it difficult to authenticate the employment figures.
Only 32% of the population is employed resulting in a higher dependency ratio which is reflected in the poverty index. With a significant number of people out of employment, the Government is forced to increase spending on health, social security and education. The large number of unemployed youth presents a mob of discontent persons that is available for mobilization and is partly the reason for the sense of social instabilities perceptible in the country.