FKE lauds move to plant trees to address climate change

The Federation of Kenya Employers (FKE) has commended the government's initiatives to support those affected by the ongoing drought.

Speaking during a press brief, FKE's first president Habil Olaka applauded president Ruto's commitment to scale up the country's forest cover.

"In order to reverse the effects of climate change that our nation is currently experiencing, we must plant trees," Olaka said.

He said this will address climate change which is destroying livelihoods, disrupting food security and aggravating conflicts over scarce resources in ASALs.

The country is currently facing several challenges that continue to dampen prospects of its economic recovery from the Covid-19 pandemic.

This includes food insecurity brought about by the ongoing severe drought and increased commodity prices.

FKE also weighed in on the continued rise in inflation month on month, driven by runaway costs of consumer products.

These include cooking gas, fuel, food and cooking oil.

Olaka said that the war in Ukraine and other global geopolitical developments continue to worsen the situation.

"The drought is indeed a catastrophe as our Arid and Semi-Arid Lands (ASAL) counties face the worst drought experienced in Kenya in 40 years," he said.

The drought has so far affected an estimated 4.5 million Kenyans who have witnessed four consecutive seasons of failed rains.

"As a result, our brothers and sisters currently face severe food shortages due to crop failure and loss of livestock," he added.

Olaka also said that the federation had recently launched the "Waajiri for Kenyans Initiative."

It seeks to bring employers together to raise funds to contribute towards the efforts to mitigate the effects of the drought.

FKE also noted the government's agenda to establish a universal social protection system stating that it is a noble goal.

The system includes Universal Health Coverage (UHC) and Universal Social Security Coverage (pension, occupational hazard and unemployment insurance).

Olaka, however, said that the challenge lies in establishing a viable funding mechanism that will not be harmful to the competitiveness of the labour market.

He also said that the financing requires a shared approach where no party is overburdened.

" It is not practical to expect formal employers and workers to bear the burden of Universal Social Protection System, as only 15% of the country’s wage employment is in the formal sector," Olaka said.

"The financing of NSSF, NHIF and Affordable Housing Scheme should be able live to this reality."

FKE has rallied support for the enhancement of NSSF's contribution to secure Kenyans in old age.

Olaka said that employers pointed out issues with the now nullified NSSF Act 2013 that needed to be addressed for the new rates to be implemented.

He said that the recent decision by the Court now gives all stakeholders the opportunity to go back to the drawing board by holding consultative engagements to reach win-win proposals.

"We look forward to engaging with the Government and other stakeholders to develop innovative models of financing these noble initiatives without hurting the workers and enterprises."

The Federation also said that jobs are a priority agenda for the country.

"Kenya’s employment situation is a ticking time bomb that requires close collaboration between the employers and government to defuse," Olaka said.

He said that Kenya needs a lot of investment into measures that improve productivity.

This includes skills development, adoption of modern technology, embracing productivity improvement practices, and inculcation of productivity work attitude, ethics, and culture.

According to the Ministry of Labour Economic Position Paper 2022, Kenya’s productivity remains low despite operating in a global market environment.

The country's products compete with products from countries such as China, Japan, India and the West among others.

For example, in 2021, the output per employed person in South Africa and Egypt was ($49,250) Sh 6.019 million and ($57,628) Sh 7.043 million respectively. In Kenya, it was ($ 12,340) Sh 1.508 million.

FKE said that Kenya’s productivity is not only low but also decreasing. In 2021, South Africa and Egypt's labour productivity grew by 3.4%and 1.6% respectively, it fell by 2.0% in Kenya.

"We cannot effectively compete with this low level and type of productivity," Olaka said.

According to FKE, 85% of Kenyans are underemployed in low-income, low-quality informal sectors.

Over 2 million workers lost their jobs in 2020 and 2021 due to the Covid-19 pandemic and many are not yet back to work.

Every year, 800,000 young Kenyans join the labour market after completing school, college and university.

The Federation said that a nation with a majority of its highly energetic and educated population idle is a country courting social crises.

"To create jobs in the country, we need to focus on reducing the labour costs and improving our productivity," Olaka said.

"The continued piecemeal amendments to the labour Laws and introduction of various social protection initiatives that all require employers to finance are raising the cost of labour in Kenya to a level that is unsustainable."

The cost of labour in Kenya has increased significantly since 2018.

Olaka said that some of the policies that have increased the cost of labour include the NHIF Amendment Act 2022, the NITA Amendment Act 2021, and various amendments to the Employment Act, among other policy initiatives.

"We often hear of companies from key sectors closing shop in Kenya and moving their operations to other countries," he said.  

He added that they are looking to work with the government and trade unions to reduce the cost of labour in the country.