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, PRESIDENT AND COMMANDER-IN-CHIEF OF THE DEFENCE FORCES OF THE REPUBLIC OF KENYA DURING 2013 LABOUR DAY CELEBRATIONS, UHURU PARK GROUNDS, NAIROBI, 1ST MAY, 2013 Ladies and Gentlemen, I am pleased to salute all Kenyan workers, wherever they may be, as we join the rest of the world in marking this years Labour Day. This is an important day when, as a country, we celebrate the contribution made by our workers to the growth of our economy and the development of our country. On this day, we also reflect on our performance in the labour sector and take stock of the opportunities we can exploit to create more job opportunities and improve the welfare of our workers. I take this opportunity to appreciate all Kenyan workers within our borders and in the diaspora for their contribution in national development. Your hard work has made Kenya what it is today and brought prosperity and dignity to our great country. Ladies and Gentlemen, We celebrate this years Labour Day at a time when our country is facing serious challenges in relation to labour and employment. At present, the number of new entrants into the labour market is about 750,000 annually, while the economy is only generating 500,000 jobs annually - most of which are in the informal sector. Today, we also have 21 percent national underemployment; 40 percent total unemployment and 70 percent unemployment among the youth. Clearly, unemployment and poverty remain the greatest challenges facing our country. The creation of productive, decent and sustainable employment opportunities will, therefore, be a central policy priority of my Government. In this regard, my Government will implement the National Employment Policy and Strategy for Kenya which was approved by the Cabinet last year. This policy outlines the strategic interventions to be made in key sectors of the economy that have high-potential for job-creation, income generation and poverty reduction. Through this policy, all major investments and projects in the country will be subjected to an employment creation analysis to determine their employment creation potential. In this regard, my office will require state departments to conduct analysis to determine the number of jobs that that they will avail to our youth. I call upon the National Assembly to expedite the enactment of the National Employment Policy into a sessional paper in order to set this process in motion.

Additionally, my Government will pay special attention to the Micro and Small Enterprise Sector which is a major player in the Kenyan economy in terms of employment creation and poverty reduction. The sector currently employs 9.3 million people, accounting for about 80 percent of the total Kenyan labour force and contributing an estimated 20 percent to the GDP. As one of our priorities, my Government will put in place and implement programmes and activities that will promote the further growth of the MSE sector. I am happy to note that the recent establishment of the Micro and Small Enterprise Authority is a major milestone towards giving the MSE sector legislative recognition and institutional framework to support its growth and development. As part of the commitment to employment creation, my Government will also place special emphasis on investing in our youth in order to ensure their employability. In this regard, we will seek to enhance collaboration and partnerships between training institutions and industry so as to ensure that the youth acquire skills that are relevant to the modern domestic and global labour market. I wish to emphasize that the economic, social and political pillars of our development blueprint - Kenya Vision 2030 - are anchored on the existence of a skillful, productive, competitive and adaptive human resource base. The attainment of this Vision hinges on the extent to which the country is able to plan and develop a human resource capable of responding to the rapidly industrializing and globalizing economy. This underscores the need for an integrated approach to our human resource development as we move to the knowledge and technology-driven economy of the 21st Century. Ladies and Gentlemen, Our country has recently witnessed a wave of labour strikes in both the public and private sectors. As a Government, we acknowledge the constitutional provision that all workers are entitled to certain rights; including the right to reasonable working conditions, fair remuneration and the right to be protected against discriminatory practices. Today, I wish to affirm that my Government will safeguard these rights in order for us to have a strong, motivated and productive workforce, which is the bedrock upon which we shall build our national prosperity. However, we must all remember that these rights carry with them certain responsibilities which require workers and employers to consult and negotiate in order to avoid industrial actions and ensure efficiencies in the labour market. Indeed, industrial actions are not only costly to workers, employers and the State but could also scare away both local and foreign investments. My Government is committed to ensuring harmonious industrial relations. In this connection, the Government is developing the Wages and Incomes Policy in order to adequately address wages setting in the country in line with our Constitution.

Further, my Government will give full support to the actualization of an alternative dispute resolution mechanism in order to speed up the resolution of disputes in the country. The alternative dispute resolution mechanism will supplement the current system involving the Ministry of Labour and the Industrial Court, which is congested; leading to delays and increased costs in settlement of labour disputes. I urge all stakeholders to adhere to the laid down machinery in dispute resolution. These initiatives should be cascaded down to our 47 counties where the majority of our workers are based. Ladies and Gentlemen, Due to the high levels of unemployment, Kenyans are increasingly seeking employment opportunities beyond our borders. While this provides employment opportunities and livelihoods to our people, we have also witnessed a number of challenges. My Government will conclude bilateral agreements with key destination countries to address these challenges, ensure orderly deployment of skilled personnel, protect Kenyans working abroad and ensure our foreign missions work to protect the rights of Kenyans working in their stations.

My Government has created a special unit to deal with matters of Kenyan workers abroad. I urge Kenyans working and living abroad to continue investing and putting their savings in Kenyas financial institutions. I assure my fellow countrymen that my Government is committed to protecting their rights and is working towards developing facilitative mechanisms and procedures for Kenyans seeking employment abroad. Further, guidelines on licensing of recruitment agencies and vetting of foreign contracts of employment have been put in place to protect Kenyans from possible exploitation. Fellow Kenyans, My Government is committed to expanding the scope and adequacy of social benefits to cover more Kenyans. We are committed to ensuring that the poor are cushioned and that all Kenyans live in dignity and are facilitated to exploit their capabilities for social and economic development. We will strengthen social security institutions in order to offer increased benefits and to ensure the formulation of an appropriate policy, legislative and institutional framework that will ensure the gradual actualization of the constitutional right to social security by all Kenyans. That is why I urge the National Assembly to also fast-track the enactment of the National Social Security Bill. The National Social Security Fund should not only be a guarantor of social justice in Kenya but also an engine of economic growth. By

using the funds raised from the pension contributions of millions of Kenyans, NSSF can invest in the housing, roads and infrastructure that our nation so desperately needs acting as the prime example of Kenyans investing in themselves and their childrens future. However, even while we implement these measures, Kenyans should bear in mind that ultimately, we need to increase real income, rather than nominal income, by diminishing the cost of living for Kenyans and ensuring that social security and pension schemes are well structured and beneficial to our people. I wish to emphasize that no economy can sustain high wages and salaries if it does not address the issues of productivity and national competitiveness. Currently, our national productivity and competitiveness are low by international standards. To address this challenge, my Government will implement a national productivity strategy to enhance and progressively measure our productivity and global competitiveness. Further, the culture of productivity and performance management target setting must be embraced. Furthermore, wage determination should be based on productivity, alongside other factors that ensure the welfare and morale of workers. In addition, my Government has commenced the identification of barriers to our national competitiveness. I also welcome the decision by the Ministry of Labour, COTU and Federation of Kenyan Employers to urgently mount a conference on labour productivity and national competitiveness. In conclusion, my Government will step-up measures to ensure that unskilled and other jobs that can be done by Kenyans will be limited to Kenyans. Additionally, in our budget proposals submitted to Parliament yesterday, Kenyans will notice deliberate and decisive strategies of my Government to significantly reduce the cost of basic commodities such as food and medicine. Finally, taking into account the needs of our lowest paid workers and cost of living while ensuring a conducive environment for investment and job creation, my Government has awarded a salary increment of 14 per cent on the minimum wages which should be implemented with immediate effect. Thank you and God bless you all.