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06.05.2005 Feature Article

Stop Rent-Seeking in Ghana

Stop Rent-Seeking in Ghana
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The aim of every political constitution is, or ought to be to obtain for rulers men who possess the most wisdom to discern, and the most virtue to pursue, the common good of society; and in the next place, to take the most effectual precautions for keeping them virtuous whilst they continue to hold their public trust- James Madison.

Rent-seeking as an economic term is not common in the Ghanaian parlance. However, this is the bane of the evils in our land. And our honourable President Kufour calls it perks. I have been troubled ever since reading the comment by the president that complains about perks to ministers and managers are unnecessary, it is rather an unfortunate comment. What are the ministers and managers or directors supposed to use their salaries for; if accommodation, transport and fuel, utilities, are free accompanied with health and entertainment allowances? I am asking because ordinary Ghanaians provide services to earn income to meet these needs. If at all there is any motivation in cash or kind, the subordinates (civil servants) will have to be attended to first. In my little leadership role in the recent past, the leader has to be a self motivator and rather inspire and motivate the subordinates. Rent-seeking is the right phrase for the word perks and is undesirable in all economies. It is evil and unbecoming of our honourable president and management in Ghana. I suppose there is some absurdity in management in Ghana.

Rent-seeking is actions by individuals and interest groups designed to restructure management policy in a manner that it will either directly or indirectly redistribute more income to themselves. As management policy redistributes a larger share of the income, more resources flow into rent-seeking. It is the widespread use of taxing, spending, and regulatory powers of government (management) that favour some at the expense of others. Rent-seeking moves resources away from productive activities. The output of economies with substantial amounts of rent-seeking will fall below their potential.

This evil is seen all around our management set up in Ghana. The perks of government officials, directors and board members are the bulk of total expenditure in almost every outfit in Ghana. In the midst of all kinds of boards of government and the private businesses, management consultants, the plight of the ordinary Ghanaian worsens per day. People are appointed to enjoy in the milking of the resources of Ghana; whilst the people they purport to serve become depraved year after year. It is only in Ghana that some one can earn as much as 200% of ones salary as allowance. And management is not ashamed to declare that our salaries are bad. Why not the other way round if the one deserves that much money and accordingly tax the one. Will our management experts help in solving this absurdity?. What has become of the realistic wages, the honourable president mentioned during his inaugural address in his first term of office? Is it not surprising that in parliament there has never arisen a disagreement when fixing the salaries and allowances of the parliamentarians?

It is an economic fact that every human being has the potential to be greedy and selfish; but it is amoral on the part of people put to pursue the common good of society to enrich themselves at the expense of the innocent and vulnerable. However, from the above quote of James Madison (Federalist Papers), all Ghanaians have a responsibility to take the most effectual precaution to keep them virtuous whilst they continue to hold their public trust. It is expressly clear that neither of the existing political parties is ready to improve the lot of the ordinary Ghanaian.

All Ghanaians remember the Greenstreet report that doled out so much to the last president and team. We know of similar benefits enjoyed by the directors and management of SSNIT, Bank of Ghana and VRA etc. One wonders if it is the HIPC Ghana that can offer so much to some officials. The recent VRA issue of Dr. Wireko Brobbey is mind boggling, considering the charges of ECG and the minimum wage of the civil servant. Nobody knows what our former parliamentarians received as End of Service Benefit, but it will be worthwhile to be in the public knowledge. There is too much rent-seeking and it has to cease forthwith. We are not against the rewarding of Ghanaians who serve the motherland, but were they fair in fixing it, compared to other staff in the same outfit. This siren is for equity to prevail in remuneration and benefits in Ghana. Then also this sector issue of rewarding workers will have to be revisited. Everyone employed plays a vital part of production in Ghana. If rent-seeking is eliminated, we may be able to mobilize some resources for infrastructure development.

In deciding the worth of the labourer, one has to differentiate between the use of the mind (book), skill (technology) and physical strength. The risk of work, number of hours, mobility and ingenuity/experience will have to be considered alongside the qualification or skill level or energy input. Allotting points and costing each point will help all. Ghana is ripe to pay per hour; this minimum wage issue will have to be revisited. And management must not be allowed to decide alone to avoid rent-seeking. If the one to be engaged is worth the salt, then bargaining fairly and openly will do some good. Whatever is good for the goose is good for the gander. The necessary allowances must be extended to the entire workforce. Otherwise bonuses based on quarterly or half year returns must be across board. Social security entitlements and end of service benefits must be included in the discussion. The ordinary worker in Ghana has suffered enough for our management. We all deserve better standards of living though not necessarily equal, better services and better infrastructures.

The right cause of action to halt the rent-seeking and exploitative management scheme is protest on the streets. I can assure you, our government and management are not eager to loose their hold, foregoing the benefits they enjoy, but we need not relent till we see the end of rent-seeking in Ghana. We need a new even-handed wage system in Ghana. Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

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