Ex-Gratia Payments Send Economy Into ‘Comma’

Ghana’s economy is reeling under the GH¢63.25 million gratuity payments to ex-Members and current members of Parliament recently, the Minister of Finance, Mr. Seth Terkper, has disclosed.

According to him, the government was unable to meet demands by labour unions as a result of some payments and personal emoluments which have been effected in the last few weeks.

His comments followed the ongoing multiple industrial actions embarked upon by government workers over some of their entitlements on the Single Spine Salary Structure (SSSS).

The strikes threaten the economic framework of the country.  It has therefore become necessary to strategize a holistic approach to addressing concerns of labour through an industrial truce.

Admitting payment challenges, Mr. Seth Terkper highlighted liquidity issues, particularly, for the first quarter of 2013. These he attributed to a difficult fiscal year of 2012. But, economists attributed the difficulty to the depreciation of the Cedi with its undulating effect.

He spoke to Joy FM’s Super Morning Show yesterday on the challenges faced by government and the possibility of resourcing the agencies mandated to ensure the smooth implementation of the SSSS.

Mr. Tepker, however, said the Ministry of Finance, which makes the actual payments, welcomes the calls for an analysis of the Single Spine Salary Structure, admitting the difficulty the government has been confronted with in its implementation.

‘Last year was a difficult fiscal year and continual borrowing to pay the arrears will cripple us because you are depending on borrowing which comes with interests. Hence need for stake holders to come to some understanding to avoid a lump sum payments’, he emphasised.

On the issue of using government’s liquidity challenges as a ploy to deny workers their due, the minister told the Accra-based radio station that government was only asking for moderation with respect to payments.

‘We’re only asking for moderation with respect to payments; the impacts of the migration are diff therefore let’s manage it carefully because some workers are yet to be migrated and others are yet to be paid.

In labour negotiations, deferments of payment are usually as a result of inadequate funds, especially due to budgetary constraints especially from donors. This is what usually limits overall payments, according to the minister.

The government he said was eager to work towards an industrial truce, an initiative the President had already set into motion, noting President Mahama’s passionate appeal for striking labour to return to work while issues were sorted out as evidence.

Furthermore, Mr Terkper alluded to engagements that had been initiated for dialogue on short and long term framework as well as schedules to address the rampant labour agitations that have recently characterized the economy.