Economic Dimensions of Inequalities in East Africa

East Africa’s wage profile: assessing the disparities

The following section draws heavily from a series of wage surveys published on www. wageindicators.org. The main attraction of these surveys is their consistent and comparable methodology used across four of the five East African Community countries. The table below summarizes the survey dates in each country and the number of wage earners interviewed.xiii

Table 1. Sample sizes and dates of recent wage surveys in East Africa

Country

Survey Dates

Wage earners surveyed

Tanzania November 15, 2011 – January 10, 2012

2,000

Kenya February 2012

1,515

Uganda May 15 – June 12, 2012

1,036

Rwanda October 27 – December 3, 2012

2,074

Country

Minimum wage

(hourly, local currency)

Exchange Rate

(local currency per US$ on Dec 31 2012)

Minimum Wage (hourly, US$)

Minimum Wage (monthly, US$)

Uganda (UGX)

894

 2,644

 0.34

 81.10

Tanzania (TZS)

385

 1,575

 0.24

 58.70

Kenya (KES)

20

 86

 0.23

 55.40

Rwanda (RWF)

100

 614

 0.16

 39.10

Burundi (BIF)**

20

1,525

0.01

3.10

Source: Wageindicators.org 

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iiSee World Bank classification here http://data.worldbank.org/about/country-classifications/country-and-lending-groups#Lower_middle_income    iiihttp://www.africaneconomicoutlook.org/en/countries/east-africa/burundi/ ivhttp://www.worldbank.org/content/dam/Worldbank/document/Africa/Kenya/kenya-economic-update-june-2013.pdf

vWorld Bank (December 2012), Kenya at work – Energising the economy and creating jobs. Kenya Economic Update Edition No. 7

viUNDP (January 2013), Kenya’s Youth Employment Challenge – Discussion Paper
viiAfrican Development Bank (March 2013), Rwanda – Skills, Employability and Entrepreneurship Programme (SEEP). Appraisal Report
viiiDaily News (Thursday May 30, 2013), Hotuba ya Waziri wa Kazi na Ajira Mheshimiwa Gaudentia M Kabaka akiwasilisha bungeni makadirio ya mapato na matumizi ya fedha kwa mwaka 2013/2014, para. 33

ixNational Bureau of Statistics, United Republic of Tanzania (November 2012), Employment and Earnings Survey – Analytical Report xhttp://www.africaneconomicoutlook.org/en/countries/east-africa/tanzania/

xiAfrican Development Bank (2012), African Economic Outlook 2012, Tanzania Country Report
xiiAfrican Development Bank (2012), African Economic Outlook 2012, Uganda Country Report

3.10

Source: Wageindicators.org and authors’ calculations. Exchange rates: www.oanda.com  

** Burundi’s official minimum wage was set at BIF 105 for rural areas and 160 for urban areas in April 1988. At the December 31, 2012 exchange rates, this would result in a monthly wage of US$ 2.0 for rural workers and US$3.10 for urban workers.

The lowest official monthly minimum wages across East Africa varies from $81 in Uganda to just $3.10 in Burundi with Tanzania ($59), Kenya ($55) and Rwanda ($39) falling in betweenxiv those two extremes.

It is worth noting that Burundi’s minimum wage was set through Ministerial Order Number 650/11/88 of April 30 1988 and it has yet to be updated. The poverty line in Burundi was calculated 18 years later in 2006 at 627 BIF per day or US$12.20 per month, implying that the country’s legislated minimum wage is four times lower than its official poverty line.

Similarly in Rwanda, the official minimum wage, unchanged for many years, is now five times lower than the recently updated national poverty line of $192 per month.

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Minimum Wages in East Africa

Country

Minimum wage

(hourly, local currency)

Exchange Rate

(local currency per US$ on Dec 31 2012)

Minimum Wage (hourly, US$)

Minimum Wage (monthly, US$)

Uganda (UGX)

894

 2,644

 0.34

 81.10

Tanzania (TZS)

385

 1,575

 0.24

 58.70

Kenya (KES)

20

 86

 0.23

 55.40

Rwanda (RWF)

100

 614

 0.16

 39.10

Burundi (BIF)**

20

1,525

0.01

3.10

xiiiSource: Wageindicators.org

xiv“The median wage is the middle of all observations within a defined category, e.g. all female workers. It should not be confused with the average or mean wage, which is the sum of all wages of the individuals divided by the number of observations. The median has the advantage that it is not overly influenced by small numbers of high earners.” www.wageindicator.org

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