In 1962, Thomas Joseph Mboya left his role as secretary general of the Kenya Federation of Labour to become Labour Minister. Unwittingly, the mercurial workers’ rights leader began Kenya’s unholy alliance between the government and the premier workers’ union.
On his departure, Mboya left the Central Organisation of Trade Unions (Cotu) in the hands of his ally Clement Lubembe. In the early days of independence, Cotu worked with the government to set up a dispute resolution system. The Industrial Court (Employment and Labour Relations Court), which was an arbitration system of final resort, stands as one of the achievements of Kenya’s trade union movement.
While the early gains coincided with the general improvement of workers’ rights, the 1980s heralded a steep decline. Arguably, the draconian Structural Adjustment Programmes pushed by the IMF simultaneously coincided with the erosion of democracy and workers’ rights.
The Kanu government took advantage of unions weakened by brutal retrenchment measures to co-opt Cotu as part of the ruling party. This marked a steep departure from the de facto cooperation agreement between the government and Cotu, effectively killing it.
Individual union leaders have carved out political careers for themselves. This has not translated to a bigger voice for workers in Parliament or government. On the contrary, workers face an uncertain future as the government accedes to another round of IMF-driven structural adjustment.
In its haste to attract IMF and World Bank funding, the government appears to have secretly embarked on the devaluation of the Kenya shilling. The slide of the shilling against the dollar cannot be explained by trends in the market alone. The value of imports has fallen from a high of nearly $2.0 billion in August 2022 to $1.3 billion in July 2023 according to ceicdata.com quoting Central Bank data.
Likewise, with the exception of April 2023 when exports plunged to $526 million, they averaged above $580 million since August 2022. Exports are actually up 9.4 per cent compared to 2022 and imports are 10 per cent down. Despite seasonal fluctuations, remittances are also steady compared to 2022 according to tradingeconomics.com.
Inflows to June 2023 remained steady at $4.017 billion compared to $4.012 billion in the same period in 2022. There is no compelling reason why the shilling should fall from sh.123 to the dollar in August 2022 to Sh149.50 on Monday 16 October 2023.
- National Taxpayers Association calls for heavy taxation on e-cigarette
- State set to publish new health insurance charges
- Taking care of you: Mental well-being in a constantly changing world
- Time to reform ineffective tobacco excise tax policy
While the question of the rising cost of living was briefly the subject of an opportunistic campaign by Azimio during its weekly demonstrations, the matter fizzled out after the rival parties agreed to a dialogue.
Interestingly, the cost of living issue appears to have shifted to the backwaters in the National Dialogue Committee discussions. Missing from the discussion on the cost of living is the entire trade union movement. The falling purchasing power of workers driven by the effective devaluation and inflation is impacting businesses threatening jobs. Citing official data, Business Daily reported on October 3, 2023 that fuel consumption has fallen to the lowest levels in five years excluding the Covid-19 pandemic. Fuel consumption is a major indicator of economic activity. Falling fuel usage indicates falling economic activity.
Meanwhile, global petroleum prices have actually fallen from a peak of $123 per barrel in August 2022 to $87 in October 2023. The price has averaged below $75 for most of the year peaking in October.
Therefore, the high fuel prices appear driven by the devaluation of the shilling which is not driven by any fundamentals. It is plausible that the IMF is forcing countries to devalue their currencies to discourage imports thereby cooling the global economy and effectively reducing inflation for the global north.
In effect, the IMF is exporting inflation from the developed countries to the global south.
Trade unions should enter the debate to query the government’s economic policies which are increasingly detrimental to workers. This comes on the backdrop of the 4 per cent Housing Levy which effectively reduces workers’ incomes.
With no tangible benefit, workers took a 4 per cent pay cut. Employers too have taken a hit, forced to contribute a like amount. These punitive measures should not go unquestioned. Unions must rise to defend workers’ incomes and welfare. Cotu’s infatuation with government must end.
-Dr Kingi is a senior lecturer at the Technical University of Mombasa and former Mombasa deputy governor. [email protected]