Public service strikes threaten Kenya's economic growth

By Rajab Ramah in Nairobi

September 24, 2012

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Continuing nationwide strikes held by Kenya's educators, health professionals and police officers could cripple an already slowing economy, economists and government officials say.

  • Hundreds of nurses marched through Nairobi on March 9th in protest over better pay, even after the government sacked all 25,000 of them taking part in the action. [Simon Maina/AFP]

    Hundreds of nurses marched through Nairobi on March 9th in protest over better pay, even after the government sacked all 25,000 of them taking part in the action. [Simon Maina/AFP]

Union leaders say labour strikes are an effective way to pressure the government to meet workers' demands, but strikes over the past few months have disrupted vital services offered to citizens, while the government says it does not have the budget to appease strikers.

Teachers threatened to strike in June, but called it off after the government agreed to release funds to support free primary and secondary education.

Then, public school teachers went on strike September 3rd to demand a 300% pay hike. According to the Kenya National Union of Teachers (KNUT) and the Kenya Union of Post-Primary Education Teachers, the salary increase was part of the collective bargaining agreement signed with the government in 1997 and has not been fulfilled.

Public university lecturers and other support staff also went on strike September 6th to demand a 200% salary increase and a final decision on their 2010-2012 and 2012-2014 collective bargaining agreements.

On Monday (September 24th), KNUT got what it was hoping for. The government gave in to teachers' demands, offering to pay a lump sum of 13.5 billion shillings ($159.2 million) in exchange for calling off the strike.

The payoff will cover back salaries from July, with the payment released in October. Under the agreement, the lowest paid teachers will receive a basic salary of 19,000 ($224) shillings and the highest paid will take home 142,000 ($1,674) per month, according to KNUT chairman Wilson Sossion.

Strikes among healthcare workers are also ongoing. Tens of thousands of Kenyan nurses went on strike in March for two weeks, over remuneration previously agreed to. The Kenyan government responded by firing 25,000 nurses, which it later rescinded, promising to address the nurses' complaints.

Then, on September 18th, the National Nurses Association of Kenya issued a one-week strike notice to press for a salary increase agreed to in 2010, as well improved services in Kenya's public hospitals.

In late August, about 400 trainee doctors at Kenyatta National Hospital and Moi Teaching and Referral Hospital stopped work to pressure the government for better benefits. After the government suspended the trainee doctors, the Kenya Medical practitioners, Pharmacists and Dentists Union called for a nationwide strike to pressure the government to adhere to a pay deal signed in 2011 between the two parties.

On September 17th, junior police officers ended a weeklong "go-slow". During the go-slow, police officers purposely jammed the communication network used to co-ordinate traffic flow, causing gridlock on major roads in Nairobi and other towns in Kenya. Officers were protesting a delayed salary increase they had been promised in 2007. The government has since promised to implement the changes by next month.

High payroll costs mean higher taxes

Analysts say they worry that the strikes, which have no immediate solutions, could be too much to bear for the economy.

"[These] unresolved series of trade disputes are just making the investment climate and Kenya's labour market very hostile," Federation of Kenya Employers chairperson Jacqueline Mugo told Sabahi.

Kenya Private Sector Alliance chairman Patrick Obath said workers are justified to demand better pay, but increases must be realistic. "If the government agrees to the unrealistic demands of its employees, it will only mean that it has to find more resources to be able to pay the salaries," he told Sabahi.

"Increases in salaries in a few sectors will lead to increased disharmony in remuneration among public sector employees and [employees in] other sectors of the economy, resulting in an increase in the cost of production of goods and services through increased taxes, which Kenyans have already resisted," he said. "High payroll costs will also create an economic imbalance, making Kenya uncompetitive in the region."

The Union of Kenya Civil Servants (UKCS), an umbrella organisation that represents all public sector employees, said workers are holding strikes as a last resort.

"It is not that Kenyan workers are obsessed with strikes, but it is the only language that the government seems to understand," UKCS Secretary General Tom Odege told Sabahi. "If you look at what the workers are demanding, they are demands that emanate from promises made to them when the economy was doing well, which the government reneged on implementing, and the only way to have them addressed is by withdrawing their services."

Surging public debt

According to the May 2012 Kenya Economic Survey, economic growth is already showing signs of slowing. In 2011, real gross domestic product (GDP) dropped to 4.4% from 5.8% the previous year.

The survey revealed that public debt rose to about 1.3 trillion shillings ($15 billion) in June 2011, amid fears that it could become unmanageable if it grows past 50% of Kenya's GDP, which was $34 billion in 2011.

"There is every sign that the public debt might leap beyond the 50% mark," economist and former parliamentarian Billow Kerrow told Sabahi.

Sarah Serem, who chairs the Salaries and Remuneration Commission, which sets and reviews salaries for public employees, said salaries are already unsustainable and further demands could strain the already high government expenditure.

"We are living beyond our means," she told Sabahi. "Sixty percent of our total national income is used to pay salaries. As we speak, more than 45% of the national resources are allocated to the health and education sectors and more than 80% is utilised as recurrent expenditure, a scenario that can never enable any economic growth."

Revising wages of government employees in response to strikes without evaluating budget constraints and the impact on the economy will not help bring the public compensation expenditures to fiscal sustainability in the long run, she said.

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Reader's Comments

  • Prisca
    September 27, 2012 @ 07:46:31AM

    From the proffessional point of view it is a fact that the economy is adversly affected by increase in public salaries as demanded but to a lay man and one who understands little about economic policy it is not acceptable. I would rather want to see harmonisation of the incomes workers in this country not that different salaries commissions for different sectors not reading from the same script and yet the marginalized Public servants in terms of income are hard hit and can not make ends meet. Please note that the even the collective bargaining for civil servants is yet to be signed how then do you expect salaries to be reviewed without protests like strikes.

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