Kenya to raise minimum wages in May
NAIROBI-Kenyan manufacturers said on Thursday that government plans to increase the minimum wage next week are ill-advised because they will have to pass on the additional costs to consumers.
NAIROBI-Kenyan manufacturers said on Thursday that government plans to increase the minimum wage next week are ill-advised because they will have to pass on the additional costs to consumers.
Kenya’s prime minister Raila Odinga told parliament on Wednesday the government would raise the minimum wage and scrap all taxes on kerosene to help low-income families deal with soaring prices of basic commodities.
Kenya’s labour movement has demanded wage rises for workers in east Africa’s biggest economy, which has experienced widespread discontent after prices of bread, flour and fuel shot up, as well as transport and electricity costs.
“While we recognise that the cost of living has indeed gone up, a blanket wage increase is ill-advised,†Betty Maina, the chief executive officer of the Kenya Association of Manufacturers (KAM), said in a statement.
“This is because labour cost is a major production cost and an increase without considering how it will tip the scales could be a big mistake and a move in the wrong direction especially in the case of labour intensive industries and will impact on efforts to expand employment.â€
Maina said the government should try to reduce tax on fuel and re-work the country’s fuel pricing model as well as beefing up strategic oil reserves to prevent shocks when global oil prices soar.
The minimum wage increment would affect Kenya’s competitiveness, she said, expressing concern that the government could give a 10% across-the-board increase.
Prime Minister Raila Odinga, who also announced measures to remove import duty on wheat and maize imported by private millers to cushion consumers, did not indicate on Wednesday the likely size of the wage increase.
Kenya’s year-on-year inflation rate accelerated for the fifth straight month in March to 9.19% from 6.54% a month earlier, driven by food and fuel prices, and analysts say the rate is poised to rise to double-digits.
Maina said although manufacturers appreciated the government was trying to address the impact of rising inflation, its actions should not affect employment in the country or risk forcing companies to move abroad or close down.
She explained that the sector, which accounts for 1.7 million employees out of a population of 40 million, was already grappling with high fuel, electricity and transportation costs, and a high tax regime -- manufacturers pay 56% of their earnings as taxes and levies. Food and fuel prices have been rising across eastern Africa, and have become a flashpoint for anger in the region, stoking deadly protests in neighbouring Uganda.
Meanwhile, Kenya has scrapped all taxes on kerosene and will raise the minimum wage next week to help low-income families deal with soaring prices of basic commodities, its prime minister said on Wednesday.
Widespread discontent has gripped east Africa’s largest economy this year after prices of bread, flour and fuel shot up, driving up other costs like transport and electricity.
Prime Minister Raila Odinga told parliament that the government would also remove import duty on wheat and maize imported by private millers.
“Such increment (in the minimum wage) should have come after two years but we will do it now to address the high cost of living,†Odinga said, adding that details of the raise will be unveiled on May 1.
Kenya’s prime minister Raila Odinga told parliament on Wednesday the government would raise the minimum wage and scrap all taxes on kerosene to help low-income families deal with soaring prices of basic commodities.
Kenya’s labour movement has demanded wage rises for workers in east Africa’s biggest economy, which has experienced widespread discontent after prices of bread, flour and fuel shot up, as well as transport and electricity costs.
“While we recognise that the cost of living has indeed gone up, a blanket wage increase is ill-advised,†Betty Maina, the chief executive officer of the Kenya Association of Manufacturers (KAM), said in a statement.
“This is because labour cost is a major production cost and an increase without considering how it will tip the scales could be a big mistake and a move in the wrong direction especially in the case of labour intensive industries and will impact on efforts to expand employment.â€
Maina said the government should try to reduce tax on fuel and re-work the country’s fuel pricing model as well as beefing up strategic oil reserves to prevent shocks when global oil prices soar.
The minimum wage increment would affect Kenya’s competitiveness, she said, expressing concern that the government could give a 10% across-the-board increase.
Prime Minister Raila Odinga, who also announced measures to remove import duty on wheat and maize imported by private millers to cushion consumers, did not indicate on Wednesday the likely size of the wage increase.
Kenya’s year-on-year inflation rate accelerated for the fifth straight month in March to 9.19% from 6.54% a month earlier, driven by food and fuel prices, and analysts say the rate is poised to rise to double-digits.
Maina said although manufacturers appreciated the government was trying to address the impact of rising inflation, its actions should not affect employment in the country or risk forcing companies to move abroad or close down.
She explained that the sector, which accounts for 1.7 million employees out of a population of 40 million, was already grappling with high fuel, electricity and transportation costs, and a high tax regime -- manufacturers pay 56% of their earnings as taxes and levies. Food and fuel prices have been rising across eastern Africa, and have become a flashpoint for anger in the region, stoking deadly protests in neighbouring Uganda.
Meanwhile, Kenya has scrapped all taxes on kerosene and will raise the minimum wage next week to help low-income families deal with soaring prices of basic commodities, its prime minister said on Wednesday.
Widespread discontent has gripped east Africa’s largest economy this year after prices of bread, flour and fuel shot up, driving up other costs like transport and electricity.
Prime Minister Raila Odinga told parliament that the government would also remove import duty on wheat and maize imported by private millers.
“Such increment (in the minimum wage) should have come after two years but we will do it now to address the high cost of living,†Odinga said, adding that details of the raise will be unveiled on May 1.