TRALAC - Trade Law Centre

Kenya: 2,000 Jobs Lost in Textile Industry

Friday, 03 June 2005

Source: The Nation (Nairobi)

Manufacturers want a leeway for textile firms to peg wages on performance rather than the minimum wage set by the Government.

KenyaKenya Association of Manufacturers, the sector's umbrella organisation, said yesterday that the textile industry may collapse unless its labour costs are reduced.

Local textile firms are feeling the effects of the quota system scrapped by the World Trade Organisation in January. For the last three months 2,000 people have lost jobs, while at least six textile companies have closed their doors in the country.

The removal of the quota restrictions under the World Trade Organisation's (WTO's) 30-year-old Multi-Fibre Agreement (MFA) meant that poor African producers were no longer protected from stiff competition that the Asian mass producers pose.

Asian countries now enjoy unlimited access to the duty-free American market after the quotas were lifted on January 1.

After the expiry of the WTO quotas, most Asian companies which had invested in Africa to take advantage of the African Growth and Opportunities Act (Agoa), have pulled out.

Agoa provides duty-free access of African goods into the United States market. The association's chief executive, Betty Maina, told reporters in her office that wages form the largest cost for the industry.

At present Kenya's average costs for unskilled workers is Sh3,420, while that of competing suppliers, China and India, is Sh2,660, she said. When other social costs are added, this comes to an average of Sh4,940, said Ms Maina.

"This is compounded by the annual ceremonial increase in labour costs on May 1," she said, referring to Labour Day, when the minister announces minimum wage for the year. The situation is worsened by earnings not being pegged to productivity, while daily job targets are not met.

Ms Maina accused trade unions, saying they promote withholding of labour and under-performance, while seeking increases in over-time pay without a corresponding rise in their productivity.

The association also wants costs of hiring expatriate workers, and the time taken to comply with immigration regulations, shortened.



“AGOA Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Kenya’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.