Kenya misses out on Sh125b World Bank project

Kenya has been excluded from a new, ambitious $972 million (Sh125.38 billion) regional World Bank programme designed to tackle youth unemployment.

This is a significant blow to an administration already facing mounting pressure from a restless young population demanding economic opportunities.

The newly rolled out Skills for Economic Transformation and Jobs Programme (SET4Jobs) is backed by the World Bank’s International Development Association (IDA).

It was launched on February 26 to equip 18 million young people across Eastern and Southern Africa with education and job-ready skills by 2034. 

The programme targets seven countries for initial investment projects, namely Comoros, the Democratic Republic of Congo, Madagascar, Mozambique, São Tomé and Príncipe, Tanzania, and Zambia.

Kenya’s absence from the list of direct beneficiaries is striking, given that the country faces a severe youth employment crisis. 

According to the World Bank, about eight million young people enter the regional labour market annually, yet fewer than one million secure waged employment. 

In Kenya, the situation is acute, with nearly 80 per cent of the population under 35 working in informal, low-quality jobs.

The SET4Jobs initiative is designed to drive large-scale job creation by aligning skills training with fast-growing sectors such as agribusiness, energy, healthcare, tourism, and manufacturing. 

“SET4Jobs is a transformative investment in Africa's greatest resource – its youth,” said Ndiamé Diop, World Bank Vice President for Eastern and Southern Africa, in a statement accompanying the launch.

 “Working closely with the private sector, we will help align training with growing industries… The goal is to equip millions of young people with the skills needed to get good jobs and drive regional prosperity”.

The country’s exclusion comes as Kenya’s Gen Z population grows increasingly vocal about limited formal employment opportunities and declining real incomes. 

Recent World Bank data shows that while total employment has grown at an average of 3.9 per cent over the past decade, almost all this growth has been in informal, lower-quality jobs. 

Formal wage employment grew at less than one per cent annually over the same period, while the average real wage per worker has plummeted by 10.7 per cent in the last ten years.

Kenya has, however, been a major beneficiary of a separate, controversial World Bank-funded initiative dubbed the National Youth Opportunities Towards Advancement (NYOTA) project.

Launched as a flagship youth empowerment program valued at over Sh5 billion, NYOTA aims to support youth with business grants, skills training, and certification.

The programme provides successful applicants with Sh22,000 as an initial disbursement, followed by a second tranche of Sh25,000 after assessment, bringing the total support to Sh50,000 per beneficiary. 

Additionally, Sh3,000 is deposited into a Haba na Haba savings account managed by the National Social Security Fund (NSSF). 

The government has disbursed funds to tens of thousands of young entrepreneurs across multiple counties, with President William Ruto personally presiding over public ceremonies to popularise the initiative.

However, NYOTA has faced significant criticism over its implementation and sustainability. Government projections indicate that approximately 20 per cent of the targeted 120,000 youth-run businesses will fail, potentially putting at least Sh1.06 billion of the Sh5.28 billion allocated for business grants at risk.

The projection reflects the harsh reality that thousands of small businesses in Kenya collapse within their first five years due to poor financial management, high operating costs, and limited access to affordable credit.

The programme’s predecessor, the Kenya Youth Employment and Opportunities Project (KYEOP), which ended in 2024, faced similar challenges. 

An audit of KYEOP revealed that about half of the 553 beneficiaries sampled on business performance “were either unreachable on phone or non-cooperative,” while some indicated their businesses had failed. Out of 91 youth businesses physically verified, 16 had been wound up.

Further controversy emerged with revelations that the government spent Sh1 billion under NYOTA on consultancies and administrative expenses in the financial year ending June 2025. 

The Micro and Small Enterprises Authority (MSEA) reported receiving Sh1.032 billion for NYOTA during the 2024/25 fiscal year, which was “absorbed 100 per cent… on administrative activities and consultancy services”.

World Bank Country Director for Kenya, Keith Hansen, speaking at a recent NYOTA disbursement event, emphasised that the programme’s success would be measured by tangible outcomes. 

“The success of NYOTA will be measured by how employable the beneficiaries become and how many individuals are able to create businesses to not only employ themselves but employ millions of others,” Hansen said.

“Ultimately, its success is defined by how many decent jobs can be created within the country, a journey in which the World Bank will continue to provide support.” 

Despite the challenges, the government remains committed to expanding NYOTA. Deputy President Kithure Kindiki announced on February 18 that the programme would be scaled up to support 2 million youth, with phase two targeting an additional one million beneficiaries even after the current World Bank partnership expires.

Kenya’s exclusion from SET4Jobs comes at a politically sensitive time, with the August 2027 general election looming. 

President Ruto’s administration has made youth empowerment a central pillar of its Bottom-Up Economic Transformation Agenda, with NYOTA featuring prominently in the government’s messaging ahead of the polls.

The 2026/27 Budget Policy Statement, unveiled in February, prioritises spending on jobs, youth, and small businesses, marking a pivot from years of painful austerity toward targeted interventions designed to win over restless Gen Z voters. 

Opinion polls show the cost of living and unemployment as the defining issues for voters, with 46 per cent ranking the cost of living as the top factor deciding their choice in 2027, followed by youth unemployment at 25 per cent.

The World Bank has consistently urged Kenya to implement deeper structural reforms to address the disconnect between economic growth and job creation.

“The real question that we’re trying to ask ourselves here is if growth is translating to improved living conditions for Kenyans, more and better jobs, and rising incomes,” said Jorge Tudela Pye, the World Bank’s Country Economist for Kenya, during the launch of the Kenya Economic Update in late 2025. The data suggests it is not.

SET4Jobs, which will run until 2034, adopts a multi-phase approach designed to stimulate large-scale job creation by linking skills investments directly to value chains with strong job growth potential.

The programme will also establish a regional knowledge-exchange platform to facilitate the sharing of best practices among participating countries.

For Kenya, the exclusion raises questions about what opportunities were missed and whether the country’s existing youth programmes are sufficient to address the scale of the unemployment crisis.