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Ghana government to negotiate wages before drafting future budgets as bill hits $6.67b

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cediThe Ministry of Finance says it will undertake wage negotiations before drafting subsequent budgets.  This, it says will help reduce the level of agitations that arise as a result of the impact of budget presentations.

Speaking at a two-day seminar on an Analysis of the 2013 Government Fiscal Policy document, an Economist at the Ministry of Finance and Economic Planning, Dr. Joseph Kwadwo Asenso revealed that, the wage bill has increased from $2.348 billion to $6.67 billion and this happened before the implementation of the Single Spine Pay Policy (SPSS) which represents 63.8% of tax revenue.

And as measures to curb the SPSS from its current level, “the Ministry of Finance is to undertake wage negotiations before the budget is read, to enable the Ministry stay within the fiscal constraints of the budget,” he announced.

The 2013 Budget Advocacy programme which was organized by the Institute of Financial and Economic Journalists (IFEJ) with funding from Star Ghana was attended by 60 selected Journalists from Northern, Upper East and West, Brong Ahafo and Ashanti Regions of Ghana, some Civil Society Organisations, policy makers from the Ministry of Finance, Market Queens from the main Kumasi market, Officials from the Suame Magazine Industrial Development Organization (SMIDO) and research fellows at the Kwame Nkrumah University of Science & Technology (KNUST) in Kumasi.

The programme was aimed at teasing out key issues in the 2013 budget in order to inform the 2014 budget and also help add meaning to the budget through discussions, the Ministry says.

According to Dr. Asenso, government as much as it borrows externally, borrows internally too.

He cites shortfalls in corporate income taxes, shortfalls in grants, implementation of the Single Spine Pay Policy (SPSS) and higher spending as reasons for the fiscal slippage for the year 2012.

The Ministry also intends to implement market premium guidelines and speed up the migration of all Ministries, Departments, and Agencies of government onto the SPSS.

On his part, Mr. Opoku Afriyie, a Senior Economist and lecturer at the KNUST, however lamented government’s internal borrowing culture which he says is crowding out the private sector.  He said, this creates problems for the development of the economy.

He also laments the shortfall in government tax and describes it as very disturbing.  He said government has been going through economic reforms for the past 30 years to ensure efficiency in the system but wonders why this is not happening.  “We have to be serious in this country,” he advised.

He also wondered why the country continues in low productivity levels of public sector workers despite their large number.

According to Mr. Afriyie, it is not healthy to spend public funds on employees, saying public sector contributes less than half of the private sector but takes more from government coffers.

He asserts that, Ghana is now going through structural change where the service sector is overtaking other sectors of the economy (about 52%), urging that agriculture is employing more people than any other sector, it should be given more attention.

By Pascal Kelvin Kudiabor

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