New data exposes deepening crisis as only 8.6% of young Kenyans secure formal employment despite economic growth.

A damning new report has laid bare the crisis of youth unemployment in Kenya, revealing that the country lags significantly behind its smaller neighbor, Rwanda, in creating formal jobs.The Africa Youth Employment Outlook 2026 shows that a paltry 8.6% of employed Kenyan youth hold formal jobs, compared to Rwanda’s impressive 16.8%.

The "Working Poor" Paradox

The report, a collaboration between the World Data Lab and the Mastercard Foundation, highlights a disturbing trend: while many young Kenyans are "working," they remain trapped in poverty. 35% of employed youth in Kenya live in extreme poverty, a statistic that makes a mockery of the country’s GDP growth figures. "It is not just about having a job; it is about having a job that pays a living wage," said Ivy Kimani, the Africa Head of World Data Lab.

The disparity is stark. While Nairobi boasts skyscrapers and a tech-savvy population, the reality for the majority is precarious informal work—hawking, casual labor, and subsistence farming. In contrast, Kigali’s deliberate policy focus on formalization appears to be paying dividends.

• The Regional Ranking: Rwanda leads East Africa (16.8%), followed by Kenya (8.6%), Tanzania (5.4%), and Uganda (4.6%).
• The Gender Gap: Young women are disproportionately affected, accounting for 48% of the working poor.
• The Solution: The report urges a shift from "job creation" to "quality job creation," focusing on manufacturing and high-value services.

A Ticking Time Bomb

With over a million young people entering the labor market annually, Kenya’s inability to generate formal employment is a social time bomb. The informal sector, often hailed as the engine of the economy, is proving to be a survival trap rather than a ladder to prosperity.

Policymakers in Nairobi must read this report as a wake-up call. The comparison with Rwanda is not just a statistical embarrassment; it is an indictment of an economic model that prioritizes infrastructure over human capital development.