ICU worried over increasing wage bill

Government’s 2021 first quarter budget was silent on provisions made in respect of fresh recruitments into the public sector, the Industrial and Commercial Workers Union (ICU) has observed.

ICU’s Secretary-General, Mr Solomon Kotei, who praised the government for the recruitments was, however, concerned about a bloating wage bill, leaving little or no resources to finance developmental projects.

“If over 70 percent of revenue generated will go into payment of public sector emoluments then there is cause for worry,” he told this reporter in an interview.

Finance Minister, Ken Ofori Atta, last week sought parliamentary approval to expend some GH¢27.4billion from the Consolidated Fund for the first quarter of 2021.

The Ministry of Health (MoH) last week announced it had received financial clearance to recruit some 22,063 health professionals into the public health service delivery agencies.

This adds up to some 93,724 staff, including university graduates, College of Education graduates, non-teaching and replacement staff.

The absorption of some 100,000 graduates of the Nation Builders’ Corp (NABCo) is set to swell the wage bill even further.

Though the Union is largely private sector biased, “we believe whatever happens in the public sector impacts the private sector.”

Revenue for 2020 was projected to decline sharply from an estimated GH¢67.1 billion in the 2020 Budget to GH¢53.7 billion (20 percent decrease) according to Mid-Year Budget review and supplementary estimate.

Expenditure, on the other hand, was projected to rise by about GH¢11.8 billion, from an estimated GH¢84.5 billion (13.7 percent increase) in the 2020 Budget to GH¢96.3 billion.

The increase in expenditure was largely due to measures that were introduced to mitigate the impact of the pandemic, with little changes by way of cost rationalisation or realignment of previously budgeted items.

This fall in revenue is perhaps no big surprise given the adverse impact that the pandemic has had and continues to have on businesses and economic activity generally, thereby reducing tax revenues.

Wages and Salaries was projected to amount to GH¢22.9 billion and constitute 26.7 percent of the total expenditure.