General News of 2014-04-04

Public wage bill grinding Ghana to a halt – Fiifi Kwetey

Government can’t continue sinking all its tax resources into paying salaries, Minister of State in charge of allied financial institutions, Fiifi Kwetey, has told XYZ News.

Mr Kwetey argues that continuing to sink about 70 percent of tax revenue into paying wages of about 650,000 public workers, robs other sectors of the economy of essential investment and resources.

“As I speak with you, all the goods and services to various ministries, departments and agencies have been slashed. Why, because the money is being used to pay workers,” Mr Kwetey said.

“Meanwhile you are paying the workers. Yet you are having to slash the goods with which they work. So effectively you are paying them even though they are not doing much work,” he argued.

According to the former Deputy Finance Minister, “it can’t continue.”

“Private Contractors are in arrears; why, because the money is being used to pay workers. It can’t continue. Infrastructure is suffering because of the same thing. So we need to confront this head on. The same way we needed to also confront issues relating to subsidies to petroleum, subsidies to utilities,” he suggested.

He warned that continuing to plough out tax revenues into labour without raking back commensurate productivity bodes ill consequences for the economy.

“We can’t as a country, continue expecting the government to use tax to constantly make things cheap for us. No. When you do so, what you’re doing is that, you’re running away from the important infrastructural investment you need to make in order to have consumption today. And any nation that is overly obsessed with today’s consumption absolutely goes down because you cannot continue to live in today while refusing to do the investments that you need to make for tomorrow.”