In Summary:
- Cotu’s study shows Kenyan workers are cutting spending due to soaring prices, high taxes, and persistent unemployment, with job losses reaching 70,000.
- The report underscores workers’ worries about corruption impacting the economy, urging the government to restore investor trust and adopt a zero-tolerance stance with increased surveillance.
January 24, (TopNews) – A recent survey conducted by the Central Organisation of Trade Unions (Cotu) sheds light on the economic struggles faced by the majority of workers in the country, attributing their hardship to the relentless rise in the cost of living.
Released on Wednesday, the report titled ‘Turning The Tide On Kenya’s Economy: Recovery and Prosperity Through The Workers’ Lenses’ underscores the impact of the steady increase in prices of essential commodities, such as electricity and fuel, forcing workers to make significant cutbacks in their purchasing power.
The findings align with a separate Infotrack survey, where 70 percent of Kenyans expressed their challenges in making ends meet. Cotu’s report emphasizes that the current taxation levels have left many employed workers with minimal disposable income, citing factors like the recently introduced Affordable Housing Levy (AHL) and the 2.75 percent contribution to the Social Health Insurance Fund.
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Of particular concern is the persistent unemployment over the past year, leading to several companies relocating to neighboring countries due to the high taxation rates imposed by the government to boost revenue.
Cotu Secretary General Francis Atwoli states in the report, “Unemployment has persisted over the past year and continues to rise with several companies closing shop from Kenya and moving to other neighboring countries like Tanzania due to the increasing cost of doing business as the government imposes more taxes in its attempt to raise revenue.”
The report highlights increased redundancies, estimating approximately 70,000 formal jobs lost in Kenya between October 2022 and November 2023, with further job losses expected as employers consider downsizing to cope with rising operating costs.
Corruption also takes center stage in the report, with workers expressing dismay at the significant impact it has on the economy, potentially surpassing the annual national budget. The report connects corruption to the warning issued by the European Union in February 2023, indicating the possibility of Kenya being blacklisted by foreign investors due to corruption and money laundering.
The workers argue that corruption obstructs foreign direct investments, raising costs for businesses in Kenya and limiting employment opportunities. The report also raises concerns about corruption influencing public procurement processes, leading to inefficiencies in the market.
Furthermore, the report underscores the country’s deepening debt crisis, attributing it to excessive borrowing by the government, especially from the IMF and the World Bank. Workers believe that strict conditions accompanying these loans hinder the much-needed economic growth.
Cotu’s report calls on the government to urgently restore investor trust, emphasizing the need for a zero-tolerance approach to corruption. The recommendations include investing in human, physical, and financial resources for effective corruption surveillance and crackdowns.