‘Gov’t will continue to implement bold economic measures’

It was the cumulative overrun in the wage bill of over 1.9 billion Ghana Cedis, in addition to over GH¢3.00 billion overrun in arrears for 3 years in a row, that prevented government from paying all its obligations on pensions, contractors and expenditures to run government services smoothly.

The situation was worsened by factors such as the gas supply disruptions and fall in gold and cocoa prices.

Finance Minister Seth Terkper made the disclosure on Wednesday when he presented the 2015 Budget Statement to Parliament in Accra, which has as its theme, ”Transformational Agenda: Securing the Bright Medium Term Prospects of the Economy”.

He indicated that the Government will continue to implement the on-going expenditure measures that it had been vigorously pursuing under the Home-Grown Policy towards the building of a stronger economy.

The measures include Government’s fiscal stance to negotiate public sector wages within budgetary constraints to ensure the sustainability of the Single Spine Pay Policy.

He said Government was also mindful of the signal and pressure that public sector base pay could have on the private sector’s application of the minimum wage.

“In with another decision reached at the Ho forum, we worked hard to complete negotiations on wage adjustments for 2015 before the Budget but could not achieve this goal”, he explained.

Mr Terkper further made known the intention of Government to continue the policy of net freeze on employment into all sectors of the public services, excluding education and health, and non-replacement of departing public sector employees in overstaffed areas.

“We will continue to implement the existing price adjustment mechanisms for utility tariffs and fuel prices which as noted earlier, has eliminated the spectre of long queues for fuel”, he said, adding that as the gas supply situation improved, it was expected that consumers will also see the benefits of the utility price adjustments.

On inflation, the Finance Minister said price pressures had been largely contained, with Consumer Price Index (CPI) inflation generally below targets in advanced economies, and that in emerging market and developing economies, inflation is projected to decline to 5.5 percent in 2014, down from 5.9 percent in 2013.

The figure remained broadly unchanged in 2015, largely on account of the softening of commodity prices, particularly food commodities, which have a high weight in the consumer price index baskets for these countries, he added.