General News of 2014-05-09

Gov’t sacks workers, for IMF bailout

It has emerged that the government of President John Dramani Mahama is going to commence the mass retrenchment of public sector workers beginning next year, under a killer International Monetary Fund (IMF) bailout programme for the country.

The retrenchment exercise is under the dictates of the IMF – an idea the National Democratic Congress (NDC) government has already gleefully agreed with the Bretton Woods Institution to implement in exchange for the bailout.

The Trades Union Congress (TUC) has already kicked against any IMF bail-out in any form, suspecting that it could only be a Trojan horse because of its strict conditionalities.

Sources have hinted DAILY GUIDE that the proposed National Economic Forum by the Mahama administration would be used to push through the IMF proposals to give it legitimacy, after messing up the economy, especially in the events leading to the 2012 elections.

Investigations by DAILY GUIDE revealed that a policy document entitled, “Economic and Financial Policies for the Medium Term,” dated April 14, 2014 is going to be the blueprint for the retrenchment exercise which is likely to spark labour agitations soon.

The IMF, during its January visit to Ghana, warned of dire consequences if the country did not come out with a comprehensive report on the way forward for salvaging the economy.

That report is ready and it is with the IMF for review and possible implementation.

The report also mentioned the imposition of more taxes, including a possible hike of the current 17.5 percent Value Added Tax (VAT).

The document, which contains what the Mahama-led government describes as ‘Home-grown Policies,’ was formally submitted by the government to the IMF during the recent financial institution’s Spring meetings in Washington DC, United States.

On the issue of ‘Rationalization of government employees ,' paragraph 86 of the government’s medium term policy document pointed out that the retrenchment exercise was imminent.

“Consistent with the Single Spine Pay Policy (SSPP) objective of enhancing productivity of the public service, Government will undertake an exercise to rationalize public sector staff to ensure right-sizing of the public sector. This exercise may involve an option for voluntary retirement. A current situation analysis will be undertaken in 2014, the results of which will inform the form the rationalization will take. The actual rationalization of staff is expected to begin 2015,” the report said.

On the eve of May Day celebration, NDC General Secretary Johnson Asiedu Nketia warned workers that workers, if salaries were increased; and what was clear was that the NDC had already taken a decision to lay off workers even before wage negotiations were concluded.

However, the Finance Minister in his presentation of the outlines of the government’s ‘home-grown programme’ to Parliament just before the IMF Spring meeting, conveniently failed to mention government’s decision to lay off workers.

An economic expert (who wants to remain anonymous) asked, “Why is the government comfortable with sharing its detailed plans for the economy with the IMF while at the same time hiding such plans from the Ghanaian public?”

He articulated, “The desire by government to keep the people in the dark about the real state of the economy as well as its plans to address the on-going economic crisis caused by the 2012 election over- spending, can be seen by the apparent attempt by the Government of Ghana to prevent the IMF from publishing its assessment of the economy following the Article IV Consultations with the IMF this year.”

Information available to DAILY GUIDE, however, suggests that government has, for the first time in the country’s history, refused to grant the routine consent for the publication of the 2014 Article IV Consultations with the IMF; and the expert asked “why and what does the government have to hide?”

Based on its agreement with the IMF, the proposed National Economic Forum scheduled for next Tuesday at Akosombo is ostensibly to rubber-stamp the deal with the IMF and present it as a consensus document, so that in the event of public outcry the government will quickly say it was agreed at the Akosombo meeting.

Interestingly, the government in its policy document communicated to the IMF, had indicated that it had already adopted a medium term framework of policies and structural reforms to transform the economy (2014-2017) as stated in paragraph 1 of the document.

“The Government of Ghana has adopted a comprehensive stabilization and reform programme to correct the imbalances that have occurred in recent years and lay the foundation for transforming the structure of the economy and safeguard its positive medium term prospects,” the document emphasized.

“If the Government has already ‘adopted’ a set of policies and reforms to implement between 2014 and 2017 (including the retrenchment of workers) then what is the purpose of convening a National Economic Forum to deliberate on what to do?” the economic expert wondered.

“This development suggests that the Government is being disingenuous and that the supposed National Economic Forum is really intended to be a public relations exercise and provide a fig leaf for the NDC government to pursue its already decided policies such as the retrenchment of workers.

“Again, it is puzzling that the government can call stakeholders to a National Economic Forum when it is unwilling to share external assessments of the state of the economy with stakeholders,” the expert noted.