Business News of Tuesday, 8 August 2017
The Senior Minister Yaw Osafo Maafo has warned the country may be heading for trouble if the private sector growth is not supported to help curb the level of unemployment.
Accord Mr. Osafo Maafo the country has high level of youth unemployment which must be reduced with the private sector being supported to expand.
Speaking at the opening of the 2017 Ghana Economic Forum, Senior Minister, Yaw Osafo Maafo pointed out that the public sector could not employ anymore persons under the ongoing IMF US$918 million bailout package.
He pointed out that indeed the public sector was full and if the government had an option of laying off some staff, it will have done it.
“Today under the IMF programme the public sector is full and we need to create employment. The sector is full and indeed it is full. Perhaps we have to even lay some off. If it is full and in 2005 when I was the minister for education we had 8 universities, 6 public and 2 private universities but today as I speak you are aware that the polytechnics have all been converted into universities and so this means there are 20 universities in the public sector with several private universities.
So, ask yourself, where are the products of these universities. They will only find jobs if the private sector grows and we need to ensure that the private sector is helped to sustained or else we are heading for trouble as a nation,” he stated.
Mr. Osafo Maafo stated that; “It is for the government to make the money by supporting the private sector. That is the only way we can grow this economy.”
US$918 m bailout package
Government agreed to a US$918 million loan package with the IMF in April last year to offer balance of payment support and help achieve fiscal consolidation.
In the 3-year bailout programme, the IMF wants Ghana to reduce public sector wage bill to 35 percent of government revenue by 2017 as part of a plan to restore macroeconomic stability.
Wage bill ratio to tax revenue is 49.2%
According to the letter to IMF, government’s wage bill ratio to tax revenue is 49.2 percent as at the end of 2015.
To achieve the 35% wage bill ratio to tax revenue, government was to strictly enforce a net freeze on employment this year as well as downsize the public next year.
Some economic and social analysts say downsizing the public sector as contained in the three-year programme will lead to retrenchment as the public sector is believed to be over bloated with staff but the government rejected any suggestion of job losses.