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Industrial unrest bad for our economy

By Sarah Serem | Updated Thu, March 9th 2017 at 00:00 GMT +3

The current climate of industrial unrest in the public sector comes at a challenging time when the country is facing drought and famine, heightened insecurity and political competition, among other challenges.

This does not augur well for an economy seeking to hit the double-digit growth rate. Prolonged strikes by public sector workers not only disrupt essential services desired by wananchi but can, in the short and long-term, harm the country’s international investment reputation.

This is costly and detrimental to the country’s economy.

As Kenya grapples with the strikes, the role of the Salaries and Remuneration Commission has been questioned, including the legality of its formation.

Some have claimed that the commission is an impediment to justified demands by workers, therefore willfully denying them wage increases. The latest accusation levelled against SRC is that it has overstepped its mandate and become a tool to quell trade union activities in the country. Do these accusations have any basis?

The commission was established, in article 230 of the Constitution, with the objective of bringing sanity and order in the management of public wage bill.

Teachers, doctors and lecturers, among others, have in the recent past demanded salary increments in the region of 300 per cent. This is coupled with salary increase demands by public officers in State corporations and the political class push for send-off packages, which have put pressure on the Government.

Even if the Government would loosen the purse strings in the face of such an onslaught, it would have absolutely little room for maneuver.

Currently, the Government is spending Sh627 billion (approximately 50 per cent) of the total revenue on wage bill, thereby, the single largest Government’s expenditure item. Let’s pause and ask ourselves; in the wake of huge salary demands, how would the situation be like today if the salaries increase demands were to be met?

Assuming we settled for a 100 per cent increase across the board for all public officers, this would translate to more than Sh1 trillion.

This, against Kenya’s revenue of Sh1.3 trillion, is not only unsustainable, but a recipe for the economy’s collapse. Is this the direction Kenya wants to go? Becoming a consuming society? Do we want Kenya to go the Greece or the Democratic Republic of Congo way?

Do we want to live beyond our means? Do we want to accumulate further debts, suffer uncontrollable inflation, and devalue the currency in the name of enhancing remuneration and benefits to unprecedented percentages? Just what was on  Wanjiku’s mind when the country voted for a new Constitution that saw the establishment of SRC as one of the Chapter 15 commissions?

Wanjiku yearned for development; good roads, hospitals, education and other amenities. This is only possible through a sustainable wage bill. Granted that salary is emotive and can become quite a volatile issue, the prescription lies in embracing healthy industrial relations.

At a time when the country is going through socio-political and economic transformation, the need of the hour is to walk and work together. Looking at approximately 700,000 public workers, we cannot have less than 1 per cent of the population consuming 50 per cent of the revenue.