Finance Minister, Seth Terkper, has disclosed that from 2015, the full implementation of the Single Spine Salary Structure (SSSS) will begin.
Since the implementation of the pay policy in 2010, Ghana has seen a number of labour agitations with some workers claiming the policy was causing distortions and variation in their salaries.
The Finance Minister stated that in a bid to stop the demands and agitations, the government is paying all arrears to enable it begin the even implementation of the policy.
Explaining to citifmonline.com, the Minister said government had to accommodate certain demands from the labour unions which were originally not in the plan.
He said the government had to give in to the demands of labour unions because the implementation of the policy in its current form caused the salary distortions.
Terkper on the Citi Breakfast Show on Monday also said: “We have cleared almost all the single spine arrears amounting to over GHC 2 billion, nearly GHC 3 billion.”
Government will miss its budget deficit target for 2014; a situation which has been attributed to the Single Spine Salary Structure (SSSS) and according to Mr. Tekpeh, the government over the last two years has been battling with the SSSS therefore, “we will be going back to managing hopefully a normal pay roll.”
Ghana ended its first round of discussions with officials from the International Monetary Fund (IMF) last Friday with an announcement of some targeted areas which will be captured in the bailout programme.
Some of the targeted areas included the removal of petroleum subsidies and the reduction of the high public sector wage costs.
The debate over the effect of the SSSS on government’s expenditure increased at the beginning of the year when the economy started experiencing major challenges.
While persons like the former Governor of the Central Bank, Dr. Mahamudu Bawumia are of the firm opinion that the pay policy has no effect on the economy and must be maintained, Minority spokesperson on Finance, Dr Anthony Akoto Osei has proposed the development of a 20 percent retrenchment plan to reduce the size of the public sector next year.
This, he said will help in the drastic reduction of the public sector wage bill.
The Finance Minister pointed out that the GHC 3 billion out of GHC 15 billion Ghana Revenue Authority (GRA) is quite significant therefore, from next year, “we will rather channel some of these resources into more productive sectors of the economy.”
He was certain that an IMF programme will help the government to strictly implement its policies to reduce the public wage bill and budget deficit as well.
Fitch Rating agency has however indicated that the IMF negotiations with Ghana will be “protracted” and while the Ghana government will be seeking an endorsement of its home-grown policies, the IMF may likely suggest a faster fiscal consolidation.
Fitch’s report also mentioned that Ghana will not be able to service its and the target of reducing its budget deficit will be missed.
But Terkper said it is unnecessary to be “splitting heads with the IMF about whether or not the deficit is going to be a certain number.”
He acknowledged that “this will not be the first time we’ve had differences with the IMF. At the same time…we should rather focus on why we are saying that we will not meet the target and then look at solutions to them.”
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