LABOUR-KENYA: Government Fires Striking Bank Workers

By Moyiga Nduru Reprint | | Print |

Moyiga Nduru

NAIROBI, Mar 4 1998 (IPS) - The Kenyan government’s decision to fire some 15,100 bank employees who have staged a strike, has only made the workers more defiant, and union leaders are now threatening to get other workers to join their cause.

Joseph Munyao, deputy secretary-general of the Central Organisations of Trade Union (COTU), said the dismissal would not dent the spirit of the striking workers in Kenya’s 58 banks.The government fired the workers late Tuesday.

He told cheering striking officials, who gathered at the Union’s headquarters at Solidarity Building here late Tuesday, that if the government refused to scrap the 22-percent tax on staff loans, the union will call for a nationwide strike involving all Kenyan workers.

Bank workers were off the job for a week in protest against the tax of staff loans. “Kenyans are already overtaxed. The 22- percent tax on staff loan amounts to double taxation,” said a bank official here.

He told IPS on Wednesday that all the banks in Kenya would remain closed until the demands of the workers were met.

Last week a statement, attributed to the Commissioner of Tax, Levi Wendo, said the 22-percent tax is far below what the Kenyan public is paying for commercial loans where the interest ranges between 30 and 35 percent.

“It is important to make it clear that this privilege is only being enjoyed by a small group of Kenyans. The tax system aims to ensure that all Kenyans with similar incomes, however earned, bear similar taxes,” said the statement.

COTU general-secretary Joseph Mugala told journalists this week that the tax dispute began in 1990 when the seven percent interest rate on the banking employees was imposed.

He said they appealed to President Daniel arap Moi who delegated the matter to the appropriate arm of the government to deal with it. Four years later, it was raised to 15 percent, he said. Again they approached Moi who referred the matter to the Attorney-General to see whether the tax could be scrapped. Nothing happened.

“Then, without any consultation, the tax was raised to 22 percent,” Mugala said.

The strike, which began on Friday, has paralysed all business activities in the country, prompting industrialists, businesses and community leaders, who are unable to withdraw or transact business, to call upon the government to resolve the crisis immediately.

But the Minister of Finance, Simeon Nyachae, said on Wednesday that he has no administrative power to waive the tax. A parliamentary Act is required to repeal it.

To break the deadlock, the chairman of the Kenya Chamber of Commerce and Industry, Kassim Owango, suggested this week that a committee — comprising bank and government officials — be set up to resolve the dispute.

He said the industrial action came at a wrong time when the country was going through a trying period due to the destruction caused by the El Nino rains and hardships arising from the suspension of loans by the International Monetary Fund (IMF).

The IMF suspended a crucial 205 million U.S. dollars aid package to Kenya late last year. IMF’s deputy director Goodall Gondwe, who is responsible for Africa, told journalists here last week that the Fund would only resume negotiations after Kenya’s annual budget in July.

He said the negotiations would depend on the Kenyan government fulfilling a number of conditions like closing tax loops and reducing its huge budget deficit from 3.9 to 2.4 percent of Gross Domestic Product (GDP).

As economists and politicians bicker over the bank crisis, COTU appears busy building bridges with other sympathetic institutions in the East African country.

On Wednesday, there were unconfirmed rumours that the workers at the Post Office Savings Bank, which enjoys an elaborate network in rural Kenya, were planning to down tools in solidarity with their colleagues in the traditional banking industry.

If that happens, millions — especially those in the rural areas where the majority of Kenya’s 30 million people live — will be severely affected.

George Nthenge, a former legislator who is now a businessman here, agreed. “If a man of my stature can feel the pinch, what about an ordinary Kenyan ?” he asked.

Nthenge said he had been carrying a letter in his pocket that he had written to his bank manager since last week. “I can’t reach my manager. I can’t access my account. I can’t withdraw from my bank account. And I can’t transfer funds. Everybody is losing,” he told IPS Wednesday.