Uhuru declares 12 percent increase in minimum wage

President Uhuru Kenyatta's Labour Day speech

President Uhuru Kenyatta on Sunday declared a 12 percent increase in the minimum wage bill, effective May 1, 2022.

This will see an increase in basic minimum daily wage from between Sh13, 572.90 and Sh230, 627.45 to between Sh15, 201.64 and Sh258, 302.24 for people living in Nairobi, Mombasa and Kisumu counties.

This is in a bid to cushion Kenyans against the rising cost of living occasioned by Covid-19 and external economic factors.

The president made the declaration on Sunday at Nyayo National Stadium where he presided over the International Labor Day Celebrations.

He explained that this is part of efforts by the government to offer relief to Kenyans at the height of the Covid-19 pandemic, which included reducing Pay as You earn (PAYE) and Value added tax (VAT) on essential products in order to avail more income to workers across the country, to cushion citizens from the effects of the pandemic.

“The recovery from effects of Covid-19 , which was witnessed through loss of live, jobs, and salary cuts, have been slowed down by events such as ongoing geopolitical conflict between Russia and Ukraine,” said President Kenyatta.

In 2018, the president announced a five per cent increase on the minimum wage, which saw the minimum wage for the unskilled employee in the agricultural sector reviewed to between Sh6,736.30 and Sh7, 779.45 for herdsmen, watchmen and stockmen. 

Skilled and semi-skilled employees will see their minimum monthly wage rise from between Sh7, 689.85 and Sh9, 870.85 to between Sh8, 611.68 and Sh11, 055.35.

During the celebrations, the president stated that other projects such as kazi mtaani, that was also set up to cushion Kenyans, saw over half a million young people benefit from it. 

“Despite the fact that some had lost their jobs, the kazi mtaani initiative allowed the youth to form 1, 266 youth groups. Of these groups, 1,025 have benefitted from commercial loans and affirmative action funds,” said the President.

He explained that statistics from World Bank have indicated that Kenya will have the most productive workforce on the African continent by 2036 should the country continue on its trajectory.

“We are the third largest skilled workforce of all foreign workers in the USA. That phenomenon is replicated across the globe, with Kenyans driving ICT, education, healthcare, construction, tourism and hospitality in countries far away from Kenya. As we recognise our Kenyan workers, I also recognise and honour our Kenyan workers in the diaspora. Today they are one of our biggest resource,” said the President.

“When I took the oath of office, Kenyans in the diaspora used to remit approximately Sh117 billion back into our economy every year. Today, they remit approximately Sh375 billion each year into our country. This contribution has been created by ordinary Kenyans driven by what is right about our country,” he added.

He explained that the rising costs of fuel, which he blamed on the war between Russia and Ukraine, could have been worse, disclosing that the government has in fact paid subsidies to cushion its people.

“Many do not know that Kenya is one of the few countries that has cushioned its population against rising cost of fuel. In fact, our prices of fuel - diesel, petrol and kerosene - are among the lowest in our part of the continent. If today we had not protected our consumers, our petrol prices would have been approximately 173 per litre for petrol. But in order to cushion our people, the government has had to pay 29 shillings per litre as subsidy in order to keep the prices at the level they are,” he said.

He added that the government has further subsidised diesel prices by Sh40.2 shillings per litre, to bring it to Sh125.5 from a projected Sh165 if no intervention was made.

“It is, therefore, a mistake for some people to take advantage of the subsidies to hoard and sell fuel at a higher price outside the country, and anyone caught doing it will be held accountable,” he added.

The President also called upon the private sector to make readjustments to sustain the wellness of the labour force and to keep them happy during hard times.