Kenya Creates Over 800,000 Jobs in 2025 But Nine in Ten Remain Informal
Nairobi, 4 May 2026
Kenya’s employment landscape reveals a striking paradox as the country added 822,100 new jobs in 2025, yet 90% of these positions fell within the informal sector. Government data shows total employment rose from 20.8 million to 21.6 million, marking a recovery from 2024’s subdued job creation. The construction sector led growth at 6.7%, driven by affordable housing projects and resumed infrastructure works. However, formal wage employment expanded at just 2.8%, reaching only 3.3 million positions. This trend underscores Kenya’s persistent economic challenge where job creation occurs predominantly outside regulated employment structures, affecting workers’ access to social protections and benefits.
Construction Leads Employment Recovery
The construction sector emerged as Kenya’s fastest-growing employer in 2025, expanding by 6.7% after contracting in 2024 [1]. Government Spokesman Isaac Mwaura attributed this recovery to affordable housing projects and the resumption of road construction works during his appearance on Episode 26 of ‘Sema na Spox: Bonga na Gava’ in Nairobi [1]. This sectoral rebound provided crucial employment opportunities for both skilled and unskilled workers, though the majority of these positions remained within the informal economy. The construction boom particularly benefits refugees and host communities in areas like Turkana County, where infrastructure development creates immediate employment opportunities regardless of formal documentation status.
Formal Employment Growth Remains Limited
Formal wage employment grew at a modest 2.8% to reach 3.3 million jobs in 2025, with education remaining the largest formal employer at 731,300 positions [1]. The Kenya National Bureau of Statistics (KNBS) 2026 Economic Survey data reveals that informal sector jobs have accounted for nearly nine out of every ten new jobs created in Kenya over the last five years, a proportion that remains unchanged [1]. This persistent trend highlights the ongoing challenges refugees face in accessing formal employment, as most opportunities continue to exist outside regulated employment structures that typically require extensive documentation and work permits.
Economic Recovery After Challenging 2024
The 2025 employment figures mark a significant recovery from 2024, when Kenya created only 782,300 jobs—the lowest count since the Covid-19 pandemic [1]. The economy had struggled under costly credit conditions, street protests, and floods that destroyed agricultural areas [1]. Real average earnings rose from Sh665,400 in 2024 to Sh678,800 in 2025 as inflation eased to 3.8%, offering workers modest relief after years of declining purchasing power [1]. This improvement in purchasing power affects both host and refugee communities, particularly in regions like Turkana where economic conditions directly impact access to basic services and livelihood opportunities.
Ongoing Flood Warnings Threaten Economic Progress
Despite employment gains, Kenya faces immediate challenges from heavy downpours in the Aberdare and Mount Kenya regions, which have driven high inflows into major dams along the Tana River cascade [1]. As of Thursday morning, 2 May 2026, Kiambere Dam had spilt with water levels reaching 41 centimetres above maximum capacity [1]. Mwaura urged residents in Garissa and Tana River counties to move to higher ground for their safety [1]. These flood warnings pose particular risks to refugee settlements and host communities in affected areas, potentially disrupting the economic recovery and threatening newly created informal employment opportunities that many depend upon for survival.