Blog: Ethiopia projected as the fastest growing economy in Africa but lacks a minimum wage

June 14, 2017

Blog by Caroline Wahome

The World Bank on June 7, 2017 projected Ethiopia as the fastest growing economy in Africa. In a report, Global Economic Prospects: Sub-Saharan Africa, the bank predicted Ethiopia to be at 8.3 per cent followed by Ghana and Tanzania at 7.2 and 7.8 respectively. Does this forecasted growth, however, mean better living standards for its citizens? Ethiopia is yet to set a minimum wage for its workers.

As it is, Ethiopia is the second largest flower producer in Africa after Kenya with the export of cut flowers stated at $225 million according to a 2016 fiscal year reporting by the Ethiopian Horticulture Development Agency. The country has approximately 100 flower farms and over 180,000 employees of whom 85 per cent are women.

“We have been lobbying the government to set a minimum wage for 10 years now. They keep pushing and shoving us. They say they are not ready to discuss the issue of a minimum wage (for a decade now)”, says Tariku Shachachew the Secretary General, National Federation of Farm, Plantation, Fishery and Agro Industry Trade unions (NFFPFATU) through an interpreter. “They also give us excuses like, that if we set a minimum wage we might drive away investors as it will become an expensive affair. They say that we need to let the industry grow first then negotiate for a minimum wage.”

Ethiopia, like most countries with no statutory minimum wage, is characterized by a segment of workers who cannot meet their basic needs such as food, shelter and clothing. Flower farm workers in this horn of Africa country earn approximately $40 per month.

During the course of 2016, NFFPFATU ran a capacity development exercise for trade unions and workplace women’s committees, on collective bargaining skills and national labor laws. The aim was to improve the working conditions of women workers and to start a discussion towards the increase of wages for horticulture sector workers. The 90 people trained comprised women negotiators, and members of the union who were receiving refresher training, and resource persons who would further disseminate the knowledge and skills acquired.

NFFPFATU also had direct consultations with management of various farms on influencing improved working conditions and better wages for women in the horticulture sector. This has culminated in the drafting of a model framework collective bargaining document for unions as a benchmark for strong and concrete collective bargaining agreements. An effective collective bargaining process is one step towards ensuring fair remuneration for workers.

Despite these challenges, the floriculture industry has had some positives for the workers and for the country at large, as Tariku notes. “As a union, while we are happy that the sector is growing as we can see some indirect benefits: Job opportunities, infrastructure expansion due to farms operation in rural areas, high corporate social responsibility (hospitals and schools are built by farms where workers access for free; portable water facilities as well have been constructed by the farms) and foreign direct investment, this does not negate the fact that lack of a minimum wage is a big issue.”

Hivos East Africa advocates a living wage that is sufficient for workers and their families to decide for themselves how they choose to spend it on basic needs such as housing, transport, education and health care. The Hivos East Africa Women@Work Campaign is working with the NPPFATU with the objective of raising awareness on the rights of women workers in the sector; bringing key stakeholders together in an effort to step up stakeholder commitment to solving problems of women workers in the sector.

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