Business News of Wednesday, 1 March 2017
The Institute for Fiscal Studies, a finance and economic think-tank based in Ghana, says the current practice, whereby expenditure on wages and salaries consumes an increasing share of revenue to the government, is not sustainable, especially given that the size of public sector employment relative to the labour force is declining.
Therefore, the rate of growth in wages and salaries of public sector workers should not be allowed to exceed the rate of revenue growth.
This should serve as a guiding principle during wage negotiations and when forecasting the wage bill for the budget, it noted in its Economic Policy Priorities for the new government, dubbed the ‘Policy Brief,’ a publication that has just been released.
According to the IFS, which is headed by Professor Newman Kwadwo Kusi, a thorough review of public sector employment should be undertaken, in order to right-size the sector, by getting rid of redundant workers.
This, they noted, will not only minimise the expenditure on wages and salaries and thus minimise the rigidities in the budget, but it will also increase productivity in the public sector.
“Public sector recruitment and the payroll system should be effectively managed. While the efforts are made to remove ‘ghost’ names from the payroll system is commendable, the government should ensure that ‘ghost’ names do not enter the payroll system in the first place, by constantly auditing the system,” they advised.
According to the publication, wages and salaries have been on the ascendency since 1993. “In normal terms, wages and salaries have seen sharp increases from 1993 to 2015.”
Wages and salaries increased from GH¢22.76 million in 1993 to GH¢142.28 million in 2000, and to GH¢3,182.53 million in 2010.
By the end of 2015, wages and salaries had increased to a whopping GH¢10,565.93 million. Again, what is more interesting is the behaviour of wages and salaries after the effect of revenue increases has been isolated, it noted.
On the war against corruption, the IFI has made a number of suggestions, and among them are that government must demonstrate a strong commitment to deal decisively with all forms of corrupt practices, irrespective of the status of the offender.
Government must ensure the early passage of the Right to Information Bill to promote open, transparent and accountable governance.
That government must eschew clientelism, patronage, cronyism and nepotism in the public sector.
The economic think tank further suggested the decoupling of the Minister of Justice from the Attorney General, with the former acting solely as the government’s lawyer, and the latter as a public prosecutor with total prosecutorial authority and independence.
The government should also establish an Anti-Corruption Commission to be manned by eminent persons with proven integrity, who should be given unfettered independence and authority to deal with all acts of corruption.
To support and strengthen governance-monitoring institutions like CHRAJ, EOCO, the Auditor General and Public Accounts Committee of Parliament with adequate financial resources and logistics to carry out their mandates effectively.