New data from Stanbic Bank Kenya’s Purchasing Managers’ Index (PMI) showed companies reduced staffing levels during the month, ending a stretch of continuous job creation that had lasted since the start of 2025. 

Many businesses said the reductions mainly affected temporary workers as lower demand eased pressure on capacity.

The PMI fell to 46.6 in May from 49.4 in April, the steepest deterioration in business conditions since July 2024. A reading below 50 signals a contraction in activity.

The downturn reveals a strong slowdown across the private sector. New orders declined for a third consecutive month and at their fastest pace since mid-2025 as customers cut spending and tightened household budgets. 

Business activity also weakened further, with firms linking the decline to lower sales and softer demand.

Construction and services companies reported falls in both output and new orders during the month. Manufacturing was the only sector to record growth in production, while declines were recorded elsewhere. Agriculture and retail businesses were among those that reduced staff numbers.

Private sector employment fell after firms reported they had enough capacity to handle current workloads. Backlogs of work also declined for a third straight month, reducing the need for additional hiring.

Christopher Legilisho, economist at Standard Bank, said: “The Stanbic Bank PMI data for May reflects a deterioration of business activity by private sector firms. Inventory purchases slowed, from being expansive, because of weakening sales, cash flow concerns, and rising costs. 

“Consumer resistance to spend, alongside rising costs, contributed to contractions in new orders and output. These declines may stem from the week-long disruption to business activity because of nationwide protests by transportation sector players that constrained movement.”

High costs added to the challenges facing businesses and, ultimately, jobs in Kenya. The survey showed overall input price inflation accelerated to its strongest level since November 2023, driven largely by higher purchase costs, fuel expenses and transportation charges.

Although wage costs continually increase, businesses kept salary growth moderate. Many firms also slowed inventory purchases and held back spending as they sought to preserve cash due to weaker sales and tighter margins.

At the same time, companies passed part of the higher costs on to customers. Selling prices rose at the fastest pace in two and a half years, with all five monitored sectors reporting increases.

The weaker business conditions will likely lead to concerns about employment prospects, particularly as thousands of young Kenyans enter the labour market every month. Consumer-facing businesses, including startups and technology firms that depend on household spending, could also face softer demand if spending remains subdued.

Despite the difficult operating environment, firms were optimistic about the year ahead. Business confidence climbed to its highest level since February 2023, supported by plans to increase advertising, introduce new products and expand digital sales channels.

Legilisho added: “Inflationary pressures have intensified, constraining demand conditions, with input prices, purchase costs and output prices driven up by higher fuel and transportation costs. Still, despite subdued business momentum, firms remain optimistic about future conditions.”

An economy that’s driven by technology, data and AI and expected to displace upwards of 92 million jobs. Of course, it’s also expected to create 170 million more, but where do these new roles come from? And what are employers looking for when it comes to filling them?

Since 2024, skills-based hiring has become a definitive trend with up to 52% of companies not requiring that candidates have a formal education in their job specifications.

The Indeed survey also found that companies mentioning college degrees have dropped across 87% of industries.

According to the World Economic Forum’s report, companies in South Africa (more than 60%), have identified skills as a core challenge, inhibiting their ability to benefit from next-generation technologies and business transformation.

As a result, 34% are removing the need for a degree as a requirement of employment so pathways to career development are easier and more accessible.

This is accompanied by upskilling and skills development programmes designed to create a talent pool built on cognitive skills and capabilities.

And yet, even though degrees are becoming less central to employment, the expectations placed on early-career employees have increased.

With so many entry-level tasks now handled by automation, juniors are no longer hired to learn by doing the basics, they are hired with the intention of having them contribute from the outset.

This means they need to learn how to work without perfect information, manage competing deadlines and communicate effectively in a team. They also need to know how to apply judgement when nobody is available to provide step-by-step instructions.

These cognitive skills are rarely taught. The ability to adapt, prioritise, clarify and take ownership typically developed through practice, especially in environments where expectations are high.

Employers are focusing on what a candidate has done and not just on what they’ve studied because they need people who can step into their roles and get their hands dirty from day one.

This is also why integration models, where learners work inside delivery teams with defined outputs, are becoming more influential than legacy internship structures.

This integration works because it demands actual input from learners and doesn’t treat them like they’re passengers. In a technical environment, for example, these learners are expected to complete tickets, meet standards, present outcomes and take feedback from real managers and technical leads while still in an internship role.

Employers can see these learners working through complexity and engaging with feedback in a real setting and it allows them to evaluate individuals based on how they work and improve over time. It’s a more realistic view of a learner’s real skillsets than traditional qualifications and routes to employment.

The value extends to those learners who take a different route to their careers. They can confidently answer questions around their understanding of the role and what’s expected of them.

They know if they are capable of moving independently, how they handle accountability, and what it’s like to work to tight deadlines.

It’s a value proposition that also supports learners at a time when AI is accelerating the rate of career and opportunity change.

It is reducing the space for passive contributions with tools that can generate summaries, test code, flag errors and automate basic processes.

Juniors don’t have a lot of room left to find their niche or prove their value. Which explains the change in company approaches to skills development and hiring.

They’re under pressure to hire people who can deliver immediately and can’t afford long onboarding curves or high turnover at the junior level. And many have found that traditional graduate pipelines often fail to produce work-ready candidates.

The result is that companies are moving their investment away from generic programmes towards more structured, performance-linked alternatives that give them access to candidates who have already built their skills on strong cognitive foundations.

Who have already been exposed to the tools and environments they will be expected to navigate in the working environment.

In the end, cognitive capability has become a litmus test for candidate hiring and is invaluable as a demonstrated, tested and recognised skill that ensures young learners are easily integrated into real teams from the outset. It saves time and money, and learners enter the workforce with more confidence.

On a more positive note, firms raised employment at the fastest pace since June 2018 as part of efforts to complete work on time.

On the price front, rates of inflation of input costs and output prices softened in January, but remained elevated. Analysis by Stanbic IBTC Bank showed that the headline figure derived from the survey is the Purchasing Managers’ IndexTM (PMI®).

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Readings above 50.0 signal an improvement in business conditions in the previous month, while readings below 50.0 show a deterioration.

The headline PMI dipped to 53.5 in January from 54.6 in December. Although still signaling a solid monthly strengthening of the private sector and the thirty-first in consecutive months, the rate of improvement was the softest since August 2022.

Business activity increased at a much slower pace at the start of the year, despite the rate of growth remaining marked. The latest rise was the weakest in five months.

Demand continued to improve, but some firms reported a moderation in customer numbers. Activity increased across each of the four broad sectors covered by the survey.

The rate of expansion in new business also softened in January, but remained sharp nonetheless, again reflecting higher demand from customers. A desire to try and complete projects on time led companies to ramp up their hiring activities at the start of the year.

Employment increased at a solid pace that was the fastest since June 2018. Despite expanded staffing levels, backlogs of work increased for the first time in three months. Firms reported having been hindered by issues with machinery and power supply.

Higher workloads and positive expectations regarding the outlook for activity led companies to expand their purchasing activity sharply again, with the rate of growth unchanged from December.

In turn, stocks of purchases also rose further. Efforts to secure inputs were helped by improving supplier performance.

Competition among vendors, quiet road conditions and prompt payments all contributed to a shortening of delivery times, and one that was the most pronounced in four months.

The rate of input cost inflation softened for the second month running in January and was at a one-year low. The slowdown in overall cost inflation largely reflected a softer rise in purchase prices, albeit one that was still substantial. Purchase costs increased on the back of rising fuel and raw material costs, exacerbated by currency weakness.

Meanwhile, staff costs rose at the fastest pace in 11 months as companies increased pay in line with higher living costs. Output price inflation also remained elevated as higher cost burdens were passed on to customers.

This information can be found in a statement made by Ezekiel Chukwuemeka of the Nigeria Country Department of the AfDB Group.

According to Chukwuemeka, the project will assist young farmers who are drawn to urban farming in Nigeria, the Democratic Republic of the Congo, and Uganda.

Creating Sustainable Youth Micro Small and Medium Enterprises Through Urban Farming, or SYMUF, is another name for the initiative.

The SYMUF project received 937,000 dollars in grant funding from the Fund for African Private Sector Assistance, a multi-donor trust fund managed by the AfDB.

He said the bank was partnering with a consortium of incubation centers in participating countries to implement the project.

They are the Africa Projects Development Centre, APDC, in Nigeria, the International Institute of Tropical Agriculture, IITA-Bukavu, in the DRC, and the African Agribusiness Incubation Network in Uganda.

Speaking at the inauguration in Abuja, Lamin Barrow, the Director-General, AfDB Nigeria Country Department said the bank was committed to promoting entrepreneurship.

Barrow was represented by Orison Amu, the bank’s Country Operations Manager for Nigeria.

“The bank is committed to creating jobs and providing incomes for African youths, who are attracted to urban agriculture but do not get jobs, capital, or credit to operate their agribusinesses.”

Barrow said the project would address unemployed youths and those in the early start-up stage who had not gained traction due to limited skills and financial resources.

Also, Alex Ariho, Chief Executive Officer of the African Agribusiness Incubation Network in Uganda, said the SYMUF project would help young African ‘agripreneurs’ overcome start-up incubation and management challenges.

“Working together with all the partners, we are committed to making the SYMUF Project one of the best projects sponsored by the African Development Bank,” Ariho said.

IITA-Bukavu’s Project Coordinator, Noel Mulinganya, however, said the bank has been “an important and tremendous partner over the years.”

Also speaking, Chiji Ojukwu, the Managing Director of APDC, Nigeria, said, “we are grateful to the African Development Bank for believing in the consortium.

“We are also grateful for giving us the opportunity to deploy our expertise in urban farming to develop young agripreneurs in these select African countries.”

Also, Edson Mpyisi, AfDB’s Coordinator for the ENABLE Youth Programme, said, “this program is designed to empower youth at each stage of the agribusiness value chain as ‘agripreneurs’ by harnessing new skills, technologies, and financing approaches.”

At this stage, they have the capacity and tenacity to pursue their dreams and attain great heights, however, guidance is important to how this creativity is unlocked. In Africa, young people face a number of challenges, including high levels of youth unemployment.

Youth unemployment inhibits sustained economic growth and development especially in developing countries. In the report on “Global Employment Trends for Youth” by the  International Labor Organization (ILO) published in 2015,  over 169 million working young people earn less than US$2 per day in developing countries. Africa’s youth population is the youngest in the world and is expected to double within the next decade. This will pose a major problem in Africa if nothing drastic is done to tackle the high unemployment rate and its dire consequences.

The African Development Bank (AfDB, ) in its report, Jobs for the Youth in Africa(2016), predicted that 263 million young people will lack an economic stake in the system by 2025. The World Bank in its April 2022 “Update on Global Poverty and Inequality Platform” states that sub-Saharan Africa accounts for 61.3% of the global poor population, that is, those that live on $1.90 per day.

Youth unemployment has contributed immensely to a rise in poverty, terrorism, insecurity, banditry, kidnappings, political thuggery, civil unrest, cyber-crime and many social vices we witness in Africa today. These challenges slow the pace of development and the achievement of the Sustainable Development Goals on the continent.

Entrepreneurship has been shown to be the only sustainable path to resolving this situation. Young people in Africa mostly operate within the micro to small business space and Entrepreneurship provides young people with the necessary skills and experiences to thrive economically and contribute to development of the continent.

However, to achieve this noble continental goal, they need to be groomed to acquire entrepreneurship skills to build and most importantly to scale their businesses across Africa, taking advantage of the consolidated over one-billion-persons market and beyond. 

This is exactly the objective of the GAIN Entrepreneurship Masterclass by Grand Africa Initiative (GAIN).

This Masterclass, now in its second year, has been able to reach young Africans in thirteen countries. To ensure an all- round practical entrepreneurship training, the 2021 edition focused on business ideation, design thinking, business modeling, pitching, business finance, investment, forecast, leadership, communication marketing etc and had facilitators drawn from across the globe. Partners included ExxonMobil, TYSYS Capital Group, Country Hill Attorneys & Solicitors, Vurin Group, Strickland Services Limited, Nextzon Limited and Weltek Limited.

The success of this novel approach is already on display. Over the past six months, we have received testimonials on how the program has impacted the businesses of the pioneer participants.

With feedback ranging from clarity of ideas, ideas conception, boosted confidence, actual startups, expansion, more revenue etc. It has been a harvest of positive testimonials from almost 95% of the pool.

One other critical component of the GAIN Entrepreneurship Masterclass was the “tool box” support provided by collaborating partners to the participants by way of IT starterpacks and/or business grants.

Clearly, with the high level of  youth unemployment and underemployment, Africa is on the verge of a major developmental crises, the effects are already here with us-banditary, illegal migration, political thuggery, and terrorism.

Prior to now, African youths who do not have the privilege of attending high-brow business schools on the continent and abroad have largely struggled, leading to a very high mortality rate of micro to small businesses led by young Africans.

GAIN identified this gap and launched the GAIN Entrepreneurship Masterclass solving the twin problems of lack of entrepreneurship knowledge and business support grant.

The program is already showing a lot of promise and is growing into a major continent-wide pipeline for churning out properly groomed young African Entrepreneurs.

Grand Africa Initiative – GAIN is a pan-African non-governmental organization empowering the youth for success in education, employment, entrepreneurship and innovation through capacity building programs, mentorship and high-level annual youth summits.

With her fast-growing network of forward-thinking youths across Africa, GAIN’s programs are designed to empower and develop the youths.

GAIN also partners with well-meaning individuals and organizations who share the same goals and objectives.