A University Don has directly asked President John Mahama to be bold and slash salaries of public sector workers to save the economy from collapsing.
Dr. Richard Amoako Baah, Senior Lecturer and Head of the political science department of the Kwame Nkrumah University of Science and Technology (KNUST) said on Saturday that President Mahama “has to lead the charge” and “take the bull by the horn”.
According to Dr. Amoako Baah, spending 70% of tax revenue on the public sector wage bill alone is untenable. He said even 40% of tax revenue on public sector emoluments “is too high” and so the current wage bill has to be reduced drastically.
“No doubt at all, you have to bring it down,” he stressed.
He, however, suggests the salary cuts must target mostly high level government officials and not the ordinary Ghanaian.
Dr. Amoako Baah said President Mahama must make Ghanaians understand that even though it is “a tough decision” to take, it is nonetheless a critical one which necessarily “has to be done”.
He advises that the salary cuts should be staggered until the Government feels the final amounts reached are sustainable.
“…We have to cut salaries next year by 10%, the following year 5% until we bring it down to manageable levels,” he counseled.
The 70% of tax revenue used for paying salaries is enjoyed by about 700,000 public sector workers.
Dr. Amoako Baah says since the implementation of the Single Spine Salary Structure, the salary of some high level public sector workers has “doubled” and in some cases, such as that of the Police, increased by as much 1000%.
He said the quantum leap in the salaries of Police Officers is what triggered other labour unions to begin clamouring for their migration onto the single spine salary structure.
According to him, he confronted late President John Mills, under whose tenure the new pay policy started, that it could not be sustained.
He said he found it befuddling that the government will keep raking out revenue from the productive sector and only use it for paying compensation.
International ratings agency, Fitch, recently attributed its downgrading of Ghana’s economy from ‘B+’ to ‘B’ to the country’s spiraling wage bill.
The World Bank and other donor partners, who recently withheld aid to Ghana, also cited, amongst others, the soaring wage bill for their action.
Dr. Amoako Baah, who was speaking on Joy FM’s news analysis programme Newsfile, said he wasn’t surprised Fitch has downgraded Ghana’s credit worthiness due to the rising wage bill.
