Nairobi — Kenya created approximately 716,800 new jobs in 2025, with the vast majority coming from the informal sector, underscoring the economy's continued dependence on small-scale and often vulnerable employment even as overall GDP growth slowed to 4.6 percent from 4.7 percent in 2024.
According to the 2026 Economic Survey by the Kenya National Bureau of Statistics (KNBS), total informal sector employment rose by 4.1 percent to 18.1 million workers in 2025, up from 17.4 million the previous year.
This accounted for nearly all new opportunities created during the period. By contrast, modern sector wage employment grew at a slower 2.8 percent to 3.3 million jobs.
"The number of persons engaged in the informal sector grew by 4.1 per cent to 18.1 million in 2025," KNBS said.
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"Wage employment experienced a growth rate of 2.8 per cent, an improvement from the previous year's growth of 2.4 per cent."
The data paints a picture of a labor market where job creation remains resilient but heavily tilted toward the jua kali economy, where earnings are often unstable and social protections limited.
Wholesale and retail trade, hotels, and restaurants remained the largest informal employers, accounting for more than half of all informal jobs at 10.7 million workers.
Manufacturing also remained a major source of livelihoods, employing 3.6 million people informally, while construction posted the fastest informal growth rate at 6.7 percent.
In the formal economy, education remained Kenya's largest wage employer with 731,300 jobs, followed by manufacturing at 388,564 and public administration at 375,100.
The manufacturing sector emerged as one of the strongest formal job creators, expanding employment by 5.2 percent despite broader production pressures, including a sharp 24.8 percent decline in sugar output.
KNBS data also showed real average earnings recovered modestly by 2 percent in 2025 as inflation eased to 3.8 percent, offering some relief to workers after years of declining purchasing power.
However, the dominance of informal jobs signals persistent structural weaknesses in Kenya's labor market, where economic expansion is not yet translating into sufficient high-quality formal employment.
