Ghana is not broke!

Government has dismissed suggestions that the recurring labour agitations and strikes by public sector employees for higher wages is an indication that Ghana is broke.

Various public sector employees like doctors, pharmacists and teachers have either embarked on strike or threatened to do so this year, prompting suggestions from analysts that the Ghana government is broke, and finding it difficult to meet its remuneration obligations to workers.

It is a worrying trend worsened by the migration of some public workers onto the Single Spine Salary Structure (SSSS), as government is saddled with the extra burden of finding more money to contain the demand of the new salary regime.

There are currently more than 400,000 Ghanaians on government payroll, according to data from the Controller and Accountant General’s Department, which some political opponents say the ongoing labour agitations serve as an indication that the government is ‘broke’ and therefore does not have enough money to settle the demand for higher wages by the several thousands of civil and public servants.

But Minster of Information and Media Relations, Mahama Ayariga says that is not the true reflection of the state of the economy.

Mr. Ayariga, who was interacting with a section of editors and senior journalists representing both public and private media houses, said Government is simply being prudent in managing the resources of the state and cannot simply yield to demands from workers at the expense of other equally important sectors of the country.

The minister said it is important for government to manage state resources judiciously to ensure equitable development of the country.

In his maiden State of the Nation Address on February 21 this year, President John Dramani Mahama warned of dire consequences for the economy if public-sector employees persist in their demands for higher wages.

“The wages are squeezing out crucial investments, and if we don’t do something soon, we’ll lack money for basic infrastructure and development,” he said.

The President expressed worry over the fact that, as government struggled to settle the wage bill, thousands of public workers were still demanding wage increases and threatening to strike if their demands were not met.

“The meat is now down to the bones and it is time for serious re-thinking about the level of wages in relation to our national competitiveness and related productivity matters,” he said.

The President disclosed that the challenges facing the country now is the misalignment of some budget items, such as emoluments, goods and services, capital expenditure and debt servicing.

According to the President, personal emoluments of the public sector contained in the budget had tripled in the past three years from about GH¢2.5 billion in 2009 to about GH¢8 billion this year.

“We now spend a staggering 60.9% of our entire national revenue to pay public sector salaries, nearly double the globally accepted prudent level of between 30 and 35%,” he said.

President Mahama further stated that “while we remain committed to boosting the morale of public-sector workers of Ghana, whose incomes were low compared to their counterparts in the private sector, it is in that spirit that the policy was undertaken to enhance fairness, productivity and motivation in the public sector".

He cautioned that Ghana was faced with the challenge of ensuring that the effect of the public-sector pay reform did not turn out to be an unsustainable burden on public finances and the nation’s macro-economic stability.

He appealed to them to recognise the need to ensure that it did not “constitute too big a strain on our economy".