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receive advantages. Restrictive Rules of Origin which did not allow foreign firms to participate in the PTA market have been suspended until 1992. (Under the suspended rules, goods produced by firms with more than 51 percent local ownership received 100 percent duty free treatment, while those from firms with between 41 percent and 50 percent got 60 percent preferential treatment. Exports from firms with between 30 and 40 percent local ownership received 30 percent preferential treatment.) Kenya is a signatory of major international trade agreements such as the United Nations Conference on Trade and Development, the General Agreement on Tariffs and Trade and the Lome Convention.
Protection of U.S. Intellectual Property
Kenya is party to several international agreements on intellectual property, including the Paris Convention for the Protection of Industrial Property, the Universal Copyright Convention, and the Brussels Satellite Convention. U.S. businesspersons are entitled to the benefits of these conventions, such as national treatment and "priority right" recognition for their patent and trademark filing dates. In spite of these agreements, pirated books, records, videos, and to a limited extent, computer software, find their way into Kenyan markets. Government inspection and existing laws are inadequate.
All Kenyan workers, save for central government civil servants, are free to join unions of their own choosing. There are at least 33 unions in Kenya representing approximately 350,000 to 385,000 workers (i.e. 3 percent of the country's total work force and between 20 and 25 percent of the 1.4 million people now estimated to have worked in 1990 in the modern wage sector). Except for the 150,000 to 165,000 member Kenya National Union of Teachers and four other smaller unions, all unions are affiliated with the Central Organization of Trade Unions (COTU). In recent years COTU has been firmly allied with President Moi and the KANU party. Workers, except for police, military, prison guards and members of the National Youth Service, can strike only if they submit a written report to the Minister of Labor who can forestall the strike by referring the case to mediation, arbitration or fact finding. Strikes by civil servants can also be preempted by Labor Ministry action.
The Right to Organize and Bargain Collectively
Kenyan labor laws give workers the right to engage in legitimate trade union organizational activities. Wages and conditions of employment are established in the context of negotiations between unions and management. The Government of Kenya, however, has promulgated wage policy guidelines limiting wage increases to 75 percent of the annual rate of inflation. The Trade Disputes Act makes it illegal for employers to intimidate workers. The government has yet to
decide whether labor laws will apply in the nascent EPZs.
The Kenyan Constitution proscribes slavery, servitude and forced labor. Under the Chiefs' Authority Act, however local authorities can require individuals to perform community services in the event of an emergency. There have been no reported instances of this practice in recent years.
Minimum Age for Employment of Children The Employment Act of 1976 proscribes the employment in any industrial undertaking of children under the age of 16. This enactment applies neither to the agricultural sector, where the overwhelming majority of the labor force is employed, nor to children serving as apprentices under the terms of the Industrial Training Act. Given the high levels of adult unemployment and underemployment, the employment of children in the formal wage sector in violation of the employment act is not a frequent occurrence.
The legal minimum wage for workers in the wage sector varies by location, age and skills. On May 10, 1991, the minimum wage was raised an average of 16 percent. Legislation limits the normal workweek for nonagricultural employees to 52 hours, although nighttime employees may be employed for up to 60 hours. The Factories Act of 1951 sets forth detailed health and safety standards; the Act was amended in 1990 to encompass the agriculture, service and government sectors. Health and safety inspectors attached to the Ministry of Labor's Directorate of Occupational Health and Safety Services are authorized to inspect factories and work sites if they have reason to believe that a violation of the Act has occurred, or upon receipt of a complaint from a worker. Recent amendments to the factories Act provide Directorate inspectors with the authority to issue notices enjoining practices or activities involving a risk of serious personal injury.
Rights in Sectors with u.s. Investment
Workers' rights in sectors with u.s. investment do not differ from other sectors of the economy.
(D)-Suppressed to avoid disclosing data of individual companies
U.S. Department of Commerce (unpublished)
Key Economic Indicators
(In Naira (N) or U.S. Dollars as Indicated)
1/ Sectoral composition at 1984 factor costs 2/ Registered unemployed only 37 Actual debt service paid Sources: Central Bank of Nigeria, IMF, IBRD, U.S. Department of Commerce, and U.S. Embassy estimates.
Nigeria is blessed with considerable human and material resources. Its active, enterprising population, estimated at 110-120 million, is the largest in Africa. Yet Nigeria is also one of the poorer countries in the world, with a per capita income of only about $300. Nigeria's agricultural sector, which accounts for about 40 percent of GDP and employs about two-thirds of the labor force, is dominated by small-scale subsistence farming. other important sectors of the economy are services, manufacturing, and government. The crucial petroleum sector provides Nigeria with about 90 percent of its foreign exchange earnings and over 80 percent of its budgetary revenue. While there is little direct spillover from the oil sector to the rest of the economy, its financial importance makes it a crucial determinant of the country's economic health.
Despite Nigeria's economic potential, its growth and development have been slowed by the misguided economic policy environment that prevailed through much of its history. The two oil shocks of the 1970s provided Nigeria with a sudden and unexpected influx of resources, as crude oil exports rose from less than $1 billion in 1970 to over the value of $25 billion in 1980, or the equivalent of some $40 billion in 1990 dollars. These resources were seriously mismanaged, however, leaving the economy vulnerable to the downturn in the world oil market that followed. Falling oil prices and Nigerian production caused a dramatic decline in Nigeria's oil exports, which hit a low of only $6 billion in 1986. Reduced exports led to large current account deficits, and by 1986, Nigeria's external debt had soared to $26 billion, or 104 percent of GDP.
Nigeria's initial response to its reduced income was to impose budgetary austerity and import restraints, but without any attempt to correct the economy's distortions. In July 1986, however, the government of President Ibrahim Babangida, who had come to power in an August 1985 coup, launched its Structural Adjustment Program (SAP), a more thoroughgoing attempt to revitalize the economy by reducing the role of the state and increasing reliance on market forces. Among the most ambitious of such programs in Africa, SAP featured a large devaluation to encourage domestic production and to reduce reliance on imports. Since 1985, the naira has been devalued by about 85 percent in real effective terms. Other notable measures taken under SAP have been the abolition of import licenses, commodity boards, and most price controls; a more open system of access to foreign exchange; privatization of many public enterprises; deregulation of the financial system; and liberalized policies on foreign investment.
Initially, SAP was accompanied by a conventional macroeconomic stabilization program, but fiscal policy over the five years of SAP has been uneven, with major relaxations of fiscal discipline occurring in 1988 and from late 1990 onward. Most fiscal revenue, consisting mainly of royalties and taxes from crude oil sales, but also including corporate income taxes and customs receipts, is collected centrally and then divided among the federal, state, and local governments on a 50/30/15 percent basis. (The remaining five percent is paid to a variety of special funds.)