NAIROBI, Kenya, May 1 – President Uhuru Kenyatta has raised the minimum wage by 18 per cent, in a move that will see Kenya’s lowest paid worker earn Sh14,868 from Sh12,600.
President Kenyatta said the move is aimed at cushioning workers from inflation that hit 11.48 percent in April.
He also increased the non-taxable bonuses and overtime to Sh100,000.
“I understand that you want to have more disposable income to be able to meet your families’ needs. I am aware the workers on the lower income bracket are struggling to afford basic necessities,” said the President when he addressed the Labour Day celebrations at Uhuru Park, Nairobi.
The move comes even as the Federation of Kenya Employers had cautioned that increasing minimum wages for workers could push employers to relocate to neighbouring countries as it will increase the costs of production and slow down growth.
FKE has earlier stated that the cost of doing business in the country has gone up by 30 per cent, forcing many companies to move to Ethiopia, Egypt, Tanzania, Uganda, Malawi and Rwanda where wages are more sustainable.
For instance, minimum wages in countries such as Egypt are Sh6,500 and Sh5,000 in Ethiopia.
President Kenyatta however directed the Cabinet Secretary for Industrialisation, Adan Mohamed, to urgently convene a meeting with employers to explore measures to cushion them from costs associated with non-labour factors.
For the past two years, the government has not increased minimum wages but has progressively increased tax brackets and has cut tax rates for workers on lower income levels.
Currently, the minimum taxable income is Sh13,475.
Central Organisation of Trade Unions (COTU) Secretary General Francis Atwoli had asked for a 22 per cent increase in the minimum wages.
Speaking at the event, Atwoli urged the government to invest in projects that will spur economic growth create new and many jobs for Kenyans.
“For starters, we need a post independent city, Mr President, your government needs to heavily invest in Konza city, it has potential of creating substantial number of jobs,” he noted.