Informal work is absorbing most of East Africa’s young jobseekers as economic growth fails to generate enough formal employment for a fast-expanding labour force.

New data underline the scale of the strain. By the end of 2026, 2.3 million people aged 15–35 are projected to find jobs across the region, but most will enter low-paying, low-productivity informal work, according to research by World Data Lab, the MasterCard Foundation and the University of Cape Town’s Development Policy Research Unit (DPRU).“As we enter 2026, the labour markets of most African countries remain unbalanced, with economic growth failing to translate into sufficient job creation for youth,” the study says.

This year, only 282,693 — about 12 percent — of new jobs in East Africa will be formal. Yet nearly 10 times as many young people will enter the labour market.

Most jobs, for young and old alike, are already informal, marked by low wages, limited social protection and poor working conditions. Rather than shrinking, informality is rising as the youth population grows. Several countries are expected to post higher informality rates than two years ago.

On average, 92 percent of employed youth in the region work in the informal sector, compared with a global average of 60 percent. Formal employment accounts for just 8 percent, even as overall youth employment averages 57 percent.

Conversion failureThe trend is expected to persist as growth continues to underperform. Economists argue that Africa’s expansion is concentrated in sectors that generate few stable, well-paid jobs.“The conversion rate from growth to employment is lower and for the same amount of growth, we create fewer jobs relative to the rest of the world and for young people, that conversion rate is much lower,” says Haroon Bhorat, economics professor at the University of Cape Town and director of DPRU.“This is because the nature of growth we have is not the type of growth that generates large numbers of wage jobs or even low-skill wage jobs. Most of the jobs that are created are actually low-productivity informal sector jobs.”Across East Africa and the continent, one percent economic growth yields just 0.4 percent growth in youth employment. Globally, the same growth rate produces up to 0.7 percent job growth, the report says.

Somalia and the Democratic Republic of Congo will see 23 percent and 20 percent of new jobs, respectively, in the formal sector, despite high baseline informality.

In the remaining five countries, formal roles will account for less than 10 percent of new jobs. Kenya, Burundi and Tanzania are at the bottom, at three percent, four percent and five percent respectively.

Working poorHigh informality correlates with working poverty. In Tanzania, at least one-third of working youth are extremely poor, and more than 70 percent are moderately poor, despite one of the region’s highest employment rates.“In countries with higher youth employment rates, the share of employed young people living in extreme poverty is higher, and the link between high employment and high working poverty is particularly strong for young women,” the researchers say.“While some informal jobs, such as small-scale entrepreneurship, provide flexibility and autonomy, an overwhelming share of informal workers lack contracts, social protection, income stability, and prospects for career advancement.”

Demographic pressureEconomists also point to weak human capital. Only nine percent of Africa’s youth have completed tertiary education, leaving many ill-equipped for a changing labour market.

Large numbers of school-age youth are already working in low-paid informal jobs. This depresses educational attainment and skills, reinforcing a cycle of precarious employment.“Low educational attainment, poverty, and a lack of social protection accelerate the school-to-work transition in low-income countries, a transition that risks undermining long-term employment in more formal higher-paying jobs,” the study says.

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