Monday, December 07, 2015

PUBLIC SECTOR WORKERS TO BE LAID OFF

By William Yaw Owusu
Monday, December 07, 2015

It has emerged that the John Dramani Mahama-led National Democratic Congress (NDC) government has agreed to embark on a massive lay-off of workers in the public sector in 2017.

It forms part of the conditionalities attached to the International Monetary Fund’s (IMF’s) bailout programme which the government entered into last year.

This was disclosed by Dr Mahamudu Bawumia, the New Patriotic Party (NPP) vice presidential candidate for the 2016 general election, when reading the party’s response to the 2016 budget statement presented to parliament recently by the Finance Minister last week.

No Transparency
“Government has committed under the IMF programme to lay off workers after the 2016 elections. But they will not admit it today if you ask them. The fact, however, is that one of the conditionalities for the IMF bailout programme was a commitment by this NDC government to rationalize the size of the civil service.”

He said the plan to do this rationalization would be ready before the end of December 2015 and the implementation of the plan would begin in 2017 -   after the general election.

As a result, Dr. Bawumia said Ghanaians should demand what he called ‘maximum transparency’ from the government and the IMF saying, “If the plan for the rationalization of the size of the civil service (i.e. layoffs) would be ready in December 2015, why wait till 2017 for implementation? Isn’t this reform supposed to help this struggling economy?

“Why the delay in implementing it if it is so good for the economy?” he queried adding, “The government is not being transparent on this issue."

“It is only because this government does not want workers to know the truth about what they have agreed to do before the election in 2016. We are therefore asking that the plan for the rationalization of the size of the civil service be made public by both the Government and the IMF in the spirit of transparency and accountability.”

Tax Increases
Using the news conference to analyze the 7-year economic management record of the NDC and the alternative vision under an NPP government, Dr Bawumia, a renowned economist, said the minister of finance in preparing the budget, “unusually kept largely quite on tax increases.”

He asserted, “Upon a closer examination of the 2016 budget however, it is clear that many taxes have been imposed in the budget to further burden the already highly burdened Ghanaian business community and tax payer.”
He said the government had increased the capital gains tax from 15% to 25%; increased withholding tax on services from 5% to 15% and re-imposed excise duty rate of 17.5% on cider and beer. 

New Energy Levy
He said there is “a new Energy Levy for utilities. A new Mitigation Levy for utilities,” adding, “The hardships being imposed on Ghanaians are therefore continuing unabated in the 2016 budget.

“The increase in the capital gains tax also makes Ghana less attractive to investors. The 2016 budget is a continuing story of more taxes, more cuts in expenditure, more borrowing, higher utility tariffs, higher cost of living, less growth and more unemployment.”

Government Machinery
Dr. Bawumia said that the budget was not different from the 2012 election year in the way the government “has padded the allocation to office Government machinery.”

“The administration sector is the only subsector to have its allocation increased by 58.4% whereas some others had negative allocation. General Government services also had their allocations upped by 83.7% from the 2015 allocation.

“For all intents and purposes, these allocations are general election-related. For this NDC government, winning elections has always been more important than prudently managing the economy.”

In contrast, under the eight years of the NPP government - from 2001-2008 - taxes, loans and exports amounted to GH¢20 billion. The Mills-Mahama governments have had, in seven years, more than 10 times the nominal resources that the NPP had in eight years.

Economy In Trouble
Dr. Bawumia said that despite all the resources at the disposal of the NPP government, the economy is still in deep trouble.

“Government is in arrears with NHIS, GETFUND, DACF payments. They are also in arrears with payments to contractors. Government cannot pay teacher and nursing trainee allowances, payment of national service staff. Government is having trouble paying salaries of workers…”

High Indebtedness
Dr Bawumia noted, “The government has put Ghana in a state of high indebtedness as was the case under HIPC. Ghana’s debt to GDP ratio at the end of 2015 would stand at 74% (beyond the threshold for debt sustainability). Economic growth has slowed down to 4.0% this year, Ghana’s currency is the worst performing currency in Africa over the last
two years.”



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