Friday, July 03, 2015


By William Yaw Owusu
Friday, July 03, 2015

The Trades Union Congress (TUC) has issued what looks like a ‘no confidence vote’ on the President John Dramani Mahama-led National Democratic Congress (NDC) government.

The General Council of the TUC at its 33rd Bi-annual meeting held in Tema from 25th and 26th June 2015, issued a damning verdict on the government’s performance after a Mid-Year review of the economic and social situation in the country.

Stunted Economy
Economic growth has slowed considerably and is expected to be around 3.5 percent in 2015, the lowest recorded growth in more than a decade,” its Secretary General Kofi Asamoah said in a release on Republic Day.

Inflation is rising faster than projected. In fact, for most basic products, the situation in our markets shows far steeper price increases than the headline inflation figures reveal.”

According to the labour union, the Bank of Ghana’s decision to raise its policy rate meant to curb inflation increased the costs of borrowing for domestic businesses rendered most of them uncompetitive even on the domestic market.

“The current account deficit remains large and growing. The national currency, the cedi, continues its downward slide against all major currencies in the world. These have imposed excessive economic and social costs on Ghanaians,” TUC said.

Ghanaians Suffering
They said “jobs are disappearing as domestic companies fold up or reduce operations to stay afloat. Most of our graduates have been without jobs long after completing their national service. With prices rising faster than incomes, the cost of living has become unbearable for the working people.”

Failing Interventions
According to the TUC, social intervention programmes like Capitation grants, School Feeding Programme, national youth employment programmes, Livelihood Empowerment Against Poverty (LEAP) and even the National Health Insurance Scheme (NHIS) intended to cushion vulnerable sections of the population are failing.”

Senchi vs IMF
The TUC accused the government of ‘jettisoning’ the Senchi Consensus after which it turned to the IMF for what it called ‘economic salvation’, saying “in doing so, government recognised that it faces a credibility crisis and that it needed the IMF to fix that crisis.”

“Foreign investors with short-term outlook would most likely be spurred by IMF programming to invest in short- to medium-dated government treasuries. But it is very unlikely for any investor to invest long-term in domestic production merely because of a three-year IMF bailout programme.”

They said “yet, Ghana requires long-term investment to grow the economy, to rebalance the current account, and to strengthen the cedi and, most crucially, to create decent jobs.”

Borrowed Credibility
The statement said the TUC is holding the view that Ghana cannot develop on what it called “borrowed credibility”.

“What will happen when the programme ends in 2017? How would the current programme resolve the perennial fiscal irresponsibility that has become the hallmark of governments in Ghana?” they queried.

“If past trends are anything to go by, then one would expect a return to the status quo where fiscal imprudence ushers this country into further fiscal austerity with or without the IMF-sponsored programmes.”

It called on the government to address “the governance and systemic policy failures manifested in pervasive corruption and impunity at the highest echelons of our society.”

IMF bailout
The TUC said that the IMF bailout programme will not change Ghana’s economic situation adding “in the last 16 years, Ghana has negotiated three different IMF extended credit facility programmes, similar to the current programme, and over 40 technical assistance programmes. These programmes have failed to address the vulnerabilities inherent in the Ghanaian economy.”

Real Wages
They served notice to the government that organized labour would not allow a further decline in real wages saying “given the general economic hardships prevailing in the country, the Council finds it unacceptable that government would agree to reduce real wages despite the sacrifices public sector workers are making, including accepting a cost-of-living allowance in 2013 instead pay increase.”

In particular, we will continue to resist unreasonable increases in utility and fuel prices and other such policies and measures that undermine our efforts to improve the living standards of the working people of Ghana and their families. Working people and ordinary Ghanaians cannot continue to absorb any further increases that lead to higher cost of living.

No comments: