‘Single Spine Is Government’s Headache’
A Professor at the Institute of Statistics, Social and Economic Research (ISSER) at the University of Ghana, Legon, has described the Single Spine Pay Policy (SPSS) as a headache of the government, since it puts pressure on financial resources.
Professor Augustin Fosu, who is a former deputy official at the UN university, Wilder Helsinki, Finland, said the SSPP, which had escalated the wage bill, drained the government of revenue which could have been invested in other areas rather than being used to pay higher salaries to workers.
The man, who is ranked among the leading economists in Africa, was speaking at a macroeconomic and development workshop in Accra, organised by the University of Ghana and hosted by ISSER. It was on the theme “Macroeconomic reforms in Ghana’s economic development since the 1980s.”
The economist said as a result of the SSPP, which was implemented early 2012, the government was unable to employ more people and this had shot up the unemployment rate.
He explained that the wage bill “seems to be crowding out other important areas that equally needed investment such as health, water, ports, power, good communications facilities, among other infrastructural provisions.”
Professor Fosu was worried that the high wages which workers now enjoyed under the SSPP were not linked with productivity.
“There would be nothing wrong with the demand for higher income, if it made people more productive. But are people more productive than they were? I don’t blame them because we have put the cart before the horse.
“It was as if all of a sudden manna was falling from heaven. People did not have to do anything extra for the extra income,” he said.
The new pay structure increased government wage bill from about GH¢2 billion to more than GH¢7 billion by the end of 2012.
Since the implementation of the policy, several groups have embarked on strikes because of wage discrepancies
On how the government could cure the ‘headache’, he said, “it was a tough one. Not much can be done in the current situation.”
However, he recommended that some procedures or mechanisms could be put in place to lessen the burden on the government.
“The Government can reduce peoples’ real income by increasing the inflation rate, getting people to be more productive and also taxing them,” he said.
Professor Fosu, who took the participants, including students, lecturers, representatives of government institutions and private sector players, through the economic reforms by governments since the 1980s, noted that “Ghana had generally improved its economic performance since the economy was liberalised in the early 80s.
Yet, he said it was important to focus on removing some infrastructural constraints. “We must ensure that power generation and distribution is reliable, roads and ports are reliable and also addressing the inadequate water supply problem as well as the congested telecommunication system.”
He said it was also important that the government created a conducive environment for private companies to thrive while political and economic stability was also key to achieving growth.