THE HOMEGROWN SOLUTION AGENDA: PART 3 - By Marricke Kofi Gane

Dear Mr. & Mrs Ministers,

Its me again, continuing from where I left off. You see, all in all, one of the biggest areas we could, as a nation, recover our public financial health is – Reduced Public Spending or Cost Cuts. You see, in Public Financial Management (PFM) one thing is clear – Government always needs to spend money. The question is “how can these spendings be financed in a manner that does not hurt us in the short or long run?” and the answers are (1) By creatively generating local revenue in the forms of e.g. taxes, pension contributions, investments etc (2) By Debt. Alternative to all of this, and on the other side of the equation, we can (3) Cut down on Public spending altogether. Let's be Frank. In fact, lets also be Francis: (1) We haven't really been creative around our local revenue generation mechanisms and (2) We have not been very disciplined with our debts – I think Government keeps forgetting that in the long run – the citizen always pays for everything

Sadly however, the only feasible solution, seems to be the very one that is a Taboo to the current and most past Ghanaian governments – Cost reductions/ Austerity measures/Reduced Public Spending. This is the last resort. CUT DOWN PUBLIC EXPENDITURE in the most obvious area where savings can be made the most – PAYROLL (32% of 2014 Budget Expenditure) and ASSET USE (16% of 2014 Budget Expenditure). Redundancies and Discriminatory use of Public Assets are needed ASAP. I think the government knows this and that the process will mean a huge cutback on its public staffing and its greatest fear is how to deal with such large staff cutbacks. Well, let's look at it this way – keeping and paying large numbers of inefficient staff in Public sector (which is non-value-adding) is simply equal to diverting limited Public Funds from the productive areas of the economy where value could have been added. I suggest here a few random considerations:

1. Let us consider whether some public services or operations (e.g. basic data capture/recording processes on citizens or businesses) can be centralized rather than having the same processes separately carried out in more than one government department;

2. Consider whether or not certain Ministries or public Departments can be merged rather than remain standalone simply because they have traditionally been separate – it's time to rethink the old order and make business cases for how our ministries and departments are structured.

3. Divest/Privatise some of the Government's service delivery units to the private sector and let them deal with the most efficient ways of managing the inherited staff (of course within the Ghana labour frameworks)

4. Hire an external firm to carry out (i) Employee headcounts in every government department and to use the detail to update the PayMaster General's records (ii) Efficiency Audits to identify non-value adding assets, positions, processes, procedures, to justify a cut down of costs and to redirect savings into more cost-effective reorganisations – especially the use of technology to reduce manual processes.

5. Offer voluntary redundancies or in lieu of redundancies, early exit payments, pay-freezes for at least a medium 5-year timeframe with an option to voluntarily retire within that timeframe at a pro-rata of the original redundancy package. For those who take on voluntary redundancies, recover their voluntary exit payments pro-rata, if they get re-employed in the public sector within 12 months.

6. Coordinate with other fragile states around Ghana like Liberia, Sierra Leone, etc which are only now rebuilding their Governance and offer them staff transfers (with tax incentives for such staff) to offer their expertise to these governments with say, none or half taxes on repatriated income

7. Instead of “Dry-redundancies” – identify or create an industry that can be sustained by international export markets (e.g. bio fuel farming, Carbon-trading plantations, call-centres for foreign companies, low-profile manufacturing using publicly patented technologies or knowhow etc) and train redundancy candidates to be absorbed into these “engineered” industries.

8. For potential redundancy candidates less than 10 years to their retirement ages – offer full early retirements. And for those more than 10 years away, offer a cheaper extended paid leave (e.g. 6 months) instead of several years of service redundancies.

9. Or better still, as has been trialled in different formats in different countries, I would suggest getting budget setting powers from parliament to cut down and set ceilings on departmental budgets during budgeting stage, thereby forcing ministers to choose between maintaining operational costs and cutting down staff, or maintaining staff and re-organising operational efficiencies.

10. If all else fails, maintain current public staff levels with percentage reductions across board all salaries, from president to garden boy, as an offer, the alternative rejection of the offer being a compulsory redundancy.

Yes, some of these approaches and random thoughts may be out-of-the-box; but the truth is, the problems of our public finances themselves cannot be contained in a box, so it at least makes sense that their solutions also live outside the box.

Marricke Kofi Gane
(Previously Charles Kofi Fekpe)
[email protected]