Cotu to President Ruto: Here’s how to boost the economy
Cotu Secretary-General Francis Atwoli. The workers' union offered a five-point strategy for President Ruto to help get Kenya out of the current economic hole.
The umbrella workers union has offered a five-point strategy for President William Ruto to help get Kenya out of the current economic hole amid the soaring cost of living and heavy tax burden.
The Central Organisation of Trade Unions (Cotu) proposals, seen by the Nation, include restoring and sustaining investor confidence, building accountable institutions and zero tolerance to corruption. Others are embracing research and extensive stakeholder engagement.
In order to turn the country’s economic tide, the Francis Atwoli-led union says the government needs to swiftly restore investor trust. It says the current rate of capital flight is alarming.
“Enhanced investor confidence will attract both resources and expertise to Kenya thereby informing better decision making while providing the much-needed employment opportunities for the unemployed youth,” states the memorandum that was to be handed over to the President last week.
High cost of living
The country is currently grappling with a high cost of living while the Kenya shilling has depreciated heavily against major currencies, raising the cost of imports. Kenya, being a net importer, is therefore persistently in deficit and prone to external shocks.
“Kenya’s international trade balance continues to be negative, further weakening the shilling as more foreign currency is needed for imports,” said Cotu.
The union has also challenged President Ruto to crack the whip on run-away corruption. It cited cases where some enterprises are given priority when issuing government tenders and licenses, thereby reducing market efficiency and economic development.
“In fact, we believe that zero tolerance to corruption will completely turn Kenya from a borrowing country to a lending nation,” said Mr Atwoli.
President William Ruto with Cotu Secretary-General Francis Atwoli during the 58th Labour Day celebrations at Uhuru Gardens in Nairobi on May 1. The 2023 Labour Day celebrations recorded the lowest turnout in history, with many workers remaining indoors.
According to the document, corruption denies Kenya the much-needed employment opportunities that come with foreign direct investments.
“Kenya’s public procurement has been tainted with corruption cases where only individuals who bribe get government tenders thereby leading to inefficiencies in the market,” Cotu states.
Further, the union observed that high taxation continues to drain workers’ income, leaving them with little disposable income.
Unemployment
Linked to the high level of taxation is run-away unemployment, with several companies closing shop in Kenya and moving to neighbouring countries like Tanzania. The Federation of employers, for example, estimated that about 70,000 formal jobs were lost between October 2022 and November 2023.
The union notes that Kenya’s public debt continues to grow due to rampant borrowing by the government and calls for an end to this trend.
“How do we borrow to save an economy from being ruined by borrowing? Our scramble for debt is soon dragging our economy to its knees,” it says.
In the document, the union proposes that the government should embrace stakeholder engagement across all levels and fully implement the outcomes of such engagements. It cites the recent national dialogue committee report and asks the President to implement it.
