Kenya raises minimum wage by 18%

President Uhuru Kenyatta

President Uhuru Kenyatta

Kenyan President Uhuru Kenyatta on Monday raised the minimum workers wage by 18 per cent to cushion low-income earners from high inflation, which hit a fresh 57-month high of 11.5 per cent in April.

Kenyatta, who presided over this year’s International Labour Day celebrations in Nairobi, said the raise is aimed at alleviating the plight of the lower strata of the Kenyan workforce.

Kenyatta also issued a directive to increase non-taxable bonuses and overtime pay to 1,000 U.S. dollars to help low-income earners.

“I understand that you want to have more disposable income to be able to meet your families’ needs. I am aware the workers on the lower income bracket are struggling to afford basic necessities,” he said. “It is not fair that they should be taxed heavily.”

Kenyatta directed cabinet secretary for Industrialisation, Adan Mohamed, to urgently convene a meeting with employers to explore measures to cushion low-income earners from costs associated with non-labour factors.

The government has over the last two years progressively increased tax brackets and has cut tax rates for workers on lower income levels. The current minimum taxable income is 135 dollars.

Kenyatta said Kenya has one of the best pools of skilled workers in the world and that is why many Kenyans have found employment overseas.

The president said the government has streamlined the registration and management of foreign employment agencies.

“I strongly urge every Kenyan going abroad, to use the approved agencies. You should also make sure that you register at the Kenyan Embassy serving the foreign country you are in,” said Kenyatta.

Kenyatta said wage employment grew by 11 per cent in the last full year and more jobs are on the way.

“My administration’s reforms and investments will make us even more attractive to domestic and foreign investors, which will, therefore, produce more jobs,” he said.

The president said his administration has been working to build on Kenya’s regional leadership in technology to open up the job market for Kenyan youth.

He said the government is attracting more international technology firms to Kenya while also encouraging startups and growth of local enterprises.

“World-class technology companies are establishing their regional and continental headquarters in Kenya,” Kenyatta said. “They are doing this because they know our people are by far the most competitive in the region, and are increasingly world-class in significant numbers.”

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