1. Background
1.1 Physical characteristics
Kenya obtained her political independence from the British in
December 1963, after 65 years of colonial rule. Kenya is a multiethnic and
multiracial country with an elected government. Kenya straddles the equator and
is located on the East Coast of Africa. Only about 20 per cent of its land area
has the climatic condition to support agriculture. The rest of the land area is
semi-arid with little rainfall to support food crop production. This area is
sparsely populated by mostly nomadic communities. Its location on the Indian
Ocean and the provision of a deep-water harbour with adequate facilities to
handle large sea vessels has made it the gateway to many African countries such
as Uganda, Southern Sudan, Democratic Republic of Congo, Rwanda, and Burundi.
1.2 Economic characteristics
Economic performance has been inconsistent over the past three
decades since independence. The first decade after independence provided the
best sustained performance, averaging a Gross Domestic Product (GDP) growth of
6.7 per cent registered for the period 1964-1973. The next two decades resulted
in average net declines of 5.3 per cent and 3.6 per cent. The 1990s has
registered the most inconsistent performance, with the lowest performance ever
coming in 1993 at 0.2 per cent (GOK, 1996). After a minor temporary recovery in
the middle of the decade, the economy is once again on a downward trend and was
expected to reach only 1.5 per cent for 1999. It is therefore now clear that the
government target of 5.6 percent annual growth rate for the period between 1984
and the year 2000, as stipulated in Sessional Paper No. 1 of 1986 (GOK, 1986),
will not be achieved.
1.3 Demographic characteristics
The population of Kenya was projected at 27.5 million in 1995 at
an annual growth rate of 2.7 per cent (GOK, 1996). This is an improvement from
earlier rates that peaked at 4.1 per cent in the mid -1980s. About 80 per cent
of the population of Kenya live in the rural areas. This reflects the economic
activity of the country, which is mostly based in agricultural activities. It is
estimated that about 60 per cent of the population of Kenya are under the age of
20. Providing education and training therefore takes nearly 30 per cent of the
government's annual budget.
1.4 Labour force characteristics
In 1997, 4.7 million persons were employed outside of
small-scale agriculture and pastoral activities (GOK, 1998). This was an
increase of 8.7 per cent over 1996. The public sector has stagnated due to donor
pressures to reduce spending by the government. There has been virtually no
change in the number of public employees for the past five years, that now
stands at about 700,000 persons. The public sector's share in total wage
employment reduced from 49.6 per cent in 1991 to 42.5 per cent in 1997 (GOK,
1998). In the modern formal sector of the economy, growth has been fairly small.
The total number of employees in the modern formal sector grew by only 3.1 per
cent to 1,646,000 only in 1967, while the informal sector expanded by 18 per
cent in 1966 and 13 per cent in 1998 to stand at 2,986,900 persons. Thus more
and more school leavers now join the informal sector that is rapidly growing and
accounts for over 63.6 per cent of the labour force (GOK,
1998)