Gov't to Peg Wages On Output

By Evelyn Kwamboka, The East African Standard (Nairobi), 7 August 2002

Productivity will now be used to determine workers' wages, the Government has revealed.

This will be determined by a centre that is set to start its operations today. The centre will enable the Government to set and restructure its wages pegged on productivity.

The Permanent Secretary in the Ministry of Labour, Mr Joshua Terer, said the centre would require Sh135 million to accomplish its three-year work plan.

The centre is a partnership between the Government, Federation of Kenya Employers (FKE) and the Central Organisation of Trade Unions (Cotu).

The centre will help our nation to amicably realise its noble ambition of alleviating poverty and becoming a newly industrialised country, he said.

Terer said this during the official opening of the National Productivity Centre for Social Partnership workshop in a Kwale hotel. He said the Government had allocated provisional funding for the implementation of the activities spelt out in the productivity plan.

He called on FKE and Cotu, stakeholders and donors to start remitting their contributions according to a Cabinet memorandum that sought to establish the centre.

The centre, which will initially be located at the Kenya Industrial Research and Development Institute (KIRDI) in Nairobi, will have a budget of Sh45 million a year. Terer said productivity improvement has become more important considering changes taking place in the economic and business environment world-wide.

The growth and decline of economies can be traced to the changes in productivity. Kenya has no option but to join the rest of the world in promoting productivity, he said.

He said international competition for jobs had intensified, adding that there was need for freer movement of capital that will create work opportunities

He said the main concern for the country is to be competitive in the international markets, while generating remunerative and quality jobs at the same time.