The 2026 Economic Survey reveals a growing informal sector in Kenya, with employment rising by 4.1% to 18.1 million people in 2025. Wage employment also saw an increase of 2.8%, indicating a gradual shift in the labor market dynamics. The introduction of the new ILO wage framework aims to address wage disparities and improve working conditions across various sectors.
Experts suggest that the framework could lead to more structured wage negotiations and better protection for workers. However, challenges remain, particularly in the informal sector where many workers lack formal contracts and benefits. The government is expected to monitor the impact of the new guidelines closely.
The survey highlights the need for policies that support both formal and informal workers. As the labor market evolves, the effectiveness of the ILO framework will depend on its implementation and the support provided to workers in transitioning to more stable employment.
