Wage Setting in Collective Agreements in Sub-Saharan Africa

Abstract

Collective bargaining agreements (CBAs) play a pivotal role in shaping employment relationships within economic sectors. Negotiations involve worker and employer representatives, often with governmental involvement. This study examines the prevalence of supplementary financial benefits within CBAs in Africa and evaluates the influence of industry sectors on wage determination. Using data from the WageIndicator collective bargaining database, featuring over 2000 coded agreements from 67 countries, and a comprehensive desktop review, we quantitatively analyse more than 424 CBAs from 20 African nations. Notably, manufacturing comprises a third of the agreements, followed by agriculture, transport, and finance, while nearly 90% of these CBAs contain at least one wage-related clause. Approximately 60% of these clauses stipulate wage agreements through individual contracts, with sectoral and company-level agreements accounting for the remainder. Through logit and multinomial logit models, our analysis indicates that wage clauses are more prevalent in manufacturing, finance, and mining and construction sectors, but less common in public administration, defense, and education sectors across African countries. This study's unique focus on CBA content provides a foundation for future research, offering insights into how wage determinations within CBAs compare to achieving fair wages in Africa.

Keywords: Africa, Collective bargaining, WageIndicator, wage-setting, sectors of industry.