Kenya joins the rest of the world in marking Labour Day today. The day is set aside to pay tribute to workers for their contribution to socio-economic development.
However, unlike before, this is a Labour Day with a difference. For two straight years, workers have marked the day against the backdrop of gloom. The coronavirus pandemic that struck at the end of 2019 has led to unprecedented disruption with resultant shocks and pain to workers and households.
The global economy has tanked. The International Monetary Fund’s World Economic Outlook indicates the global economy contracted last year, recording a -4.9 per cent decline. In Kenya, the economy shrunk to 0.3 per cent. Whereas there were early indications that economies would recover this year, the vicious resurgence of the virus and subsequent containment measures such as travel restrictions have dampened such hopes. In Kenya, five counties are under partial lockdown, slowing down economic recovery.
The consequence of all this is collapse of businesses and loss of jobs and incomes. In 2020, conservative estimates show 1.7 million people lost jobs in the country due to Covid-19.
Those retained in employment had to take pay cuts. More jobs are likely to be lost this year as organisations cut costs to survive the economic depression.
In the circumstances, the government should offer reliefs to citizens to enable them to survive the pandemic. Last year, the government offered waivers on Value Added Tax, personal income tax and corporate tax. However, they were reinstated early this year. Other taxes put on hold such as VAT on liquefied purified gas will come into effect in July. The best gift for workers today, therefore, is tax waivers to cushion them against the vagaries of the pandemic.