Ministry of Labour has drafted a National Productivity Council Bill whose success should go a long way towards realising the country’s dream of becoming an economic powerhouse producing goods and services for the regional and global markets.
The proposed law seeks to inculcate a culture of competitiveness into the labour market.
Although Kenya improved 10 places in this year’s global competitiveness rankings to 96 out of 148, it still lags behind Tunisia, South Africa, Mauritius, Egypt, Morocco, Namibia, Gambia, Libya and Senegal.
Some of these countries, particularly South Africa and Egypt are Kenya’s fierce competitors. Whereas the planned increases in electric power generation and the expected drop in cost will improve Kenya’s competitiveness, local producers and exporters will only have a fighting chance if worker productivity can be drastically stepped up.
Inflationary spiral
The need for increased labour productivity is all the more urgent given the realisation that the creeping rise in inflation pressure will soon lead to demands for higher salaries in the public and private sectors. And the only way these demands can be met without setting off an inflationary spiral will be to increase productivity.
A look at just how low the country’s productivity is compared to other emerging economies gives a clue as to why foreign direct investors cannot quite decide whether to drop anchor or set sail to more profitable shores, despite the very attractive incentives on offer.
For example, Kenya’s annual labour productivity stands at 1.32 per cent compared to China at 10.5 per cent, India at 6.2 per cent and Indonesia at 3.6 per cent. Among industrialised countries, Japan enjoys a yearly labour efficiency of 7.5 per cent while the USA is perched at 12.5 per cent.
The bottom line is that the country has no choice but to increase its labour productivity fast.
And this is yet another area where employers and the labour movement leadership has to come together, even in the absence of a law, and implement the necessary policies.
If this requires additional on and off-the-job training so be it. But clearly, there is no time to lose.
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