9 January 2014

Ghana: Terkper Fails Truth Test

In his budget statement to Parliament House last November, Minister of Finance, Seth Terkper, claimed that as much as 70 percent of domestic resources are applied to pay workers in the public service under the Single Spine Salary Structure.

In other words, the Government of Ghana is blaming the implementation of the SSSS for its inability to carry out the party in power's development agenda, citing constraint on national resources by the migration of 99 percent of public workers onto the SSSS.

The Chronicle can report authoritatively that the Minister was only being economical with the truth, with his 70 percent wage bill mantra.

Sources at the Ministry of Finance and other top economists this paper talked to told The Chronicle that the total wage bill following the migration of 99 percent of public sector workers on the SSSS is merely 41 percent of internal resources available to the state.

According to Chronicle sources at the Finance Ministry and Bank of Ghana, the wage bill was even forecasted to dip to 35 percent of revenue by the end of 2013.

"While it is true that the wage demand under the SSSS has increased by about GH¢4.8 billion between 2008 and 2012, government revenue has jumped from GH¢4.8 billion to GH¢15.5 billion over the same period", a top economist with links to the Bank of Ghana told this paper.

He said the increase in national revenue over the same period was more than twice the increase in the wage bill and that by suggesting that wage demands under the SSSS could no more be sustained, the Finance Minister was not being sincere.

As President John Dramani Mahama celebrates his first anniversary on Tuesday, analysts are calling on the Head of State to call his Chancellor of the Ex-chequer to order, and prevail on him to abandon his apparent witch-hunt on beneficiaries of the Single Spine Salary Structure.

"SSSS is definitely not the cause of our economic woes. While it is true that the wage bill has increased following the implementation of the SSSS, proceeds in terms of taxes and other state ventures have more than doubled over the last five years, another financial expert told this paper.

"The seeds to economic disaster for the Mahama regime were sown in the GH¢8.7 billion over-expenditure incurred in the Government's desire to remain in power against all odds, as the nation went to the polls in 2012," another economist told The Chronicle.

At his lecture to mark the one year anniversary of the home-coming of former Vice-President Alhaji Aliu Mahama, Dr. Mahamadu Bawumia, 2012 running mate of Nana Addo Dankwa Akufo-Addo, said by the end of 2012, Government wage bill, with the implementation of 99 percent of the Single Spine Salary Structure was only 42.9 percent of domestic revenue.

"While government wage bill increased by some GH¢4.6 billion between 2008 and 2012, total government revenue also increased from GH¢4.8 billion to GH¢15.5 billion over the same period. The increase in domestic revenue by GH¢10.7 billion was more than twice the increase in the government wage bill," Dr. Bawumia, who was one-time Deputy Governor of the Bank of Ghana, affirmed.

"The acute fiscal difficulties the government is facing," according to the eminent economist, "is directly related to the deficit of GH¢8.7 bi9llion (12 percent of GDP) incurred in 2012. This massive over expenditure has left the government cash-strapped and unable to even finance statutory expenditure. Some workers have not been paid for 22 months."

Dr. Bawumia told his audience that available data showed clearly that the blame for the current economic difficulties lie in economic mismanagement and not over-bloated government wage bill.

"After all, workers did not decide to distribute V8 land cruisers and other goodies to try to win the 2012 elections; neither did workers decide on an unsustainable path of accumulation of public debt," Dr. Bawumia told his audience. The lecture was under the theme: "Discipline in economic management: The key to sustainable growth and prosperity." Just before Christmas, an obviously paranoid Finance Minister ordered a halt to a committee chaired by Mr. Paul Victor Obeng, which was looking into ways and means of encouraging state agencies which could raise their own finances to be responsible for meeting the wages of their staff.

Mr. Seth Terkper loses no opportunity to ram home the dubious assertion that government wage bill was threatening to derail the national economy in what observers belief is a propaganda stuff to buy time for a government reeling under economic austerity.

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