Time To Rethink Wages And Productivity—Prez Mahama
President John Dramani Mahama has bemoaned the effects of public sector pay reforms on the economy and said government was going bankrupt as a result of the rising wage bill.
He has therefore called for a rethinking about the level of wages in relation to national competitiveness and the related productivity issues.
Delivering the State of the Nation Address in Parliament Thursday, the President said about 60.9percent of the entire national revenue was used to pay public sector salaries last year.
This, he said was almost double the globally acceptable prudent level of between 13 to 35 percent.
“While we remain committed to boost the morale of public sector workers of Ghana whose incomes were low compared to their counterparts in the private sector, it is in that spirit that we undertook the salary rationalization with the view to enhancing fairness, productivity and motivation”.
“But we now face the challenge of ensuring that the effects of the public sector pay reforms do not constitute an unsustainable burden on public finances and on our macro-economic stability”.
The President said the rate of growth of the wage bill had reached a point where it was squeezing out critical investments in budgetary allocation of goods and services and capital expenditure.
“Unless we tackle this issue decisively, we may still reach a point where not much would be left to provide the much needed roads, bridges, schools, clinics and other infrastructure that our people need to develop our economy.
He said the issue was even more significant because, “as we struggle to tackle the wage bill thousands of public workers continue to make demands for wage increases and threaten work stoppage if we do not meet their demands.
“Mr Speaker, the meat is now down to the bones and it is now time for serious rethinking about the level of wages in relation to our national competitiveness and the related productivity issues. It is said to whom much is given, much is expected.
Minority walk out
The State of Nation address is in line with Article 67 of the Constitution, which mandates the President at the beginning of each session of Parliament to deliver a message on the State of the Nation.
The NPP minority walked out of the House minutes before the President entered the chamber to deliver his address.
They had announced on Wednesday they would attend and that the President would come to meet them in their seats.
But when the Speaker asked the leaders of the both sides of the House to accompany him to welcome the President, the Minority side got off their seats and brought out posters with the inscription, “Stealers”.
They subsequently walked out of the Chamber.
The NPP, following a petition at the Supreme Court contesting the results of the December 2012 elections, have boycotted all processes they believe weaken their petition in court, including boycotting the inaugural ceremony of the president, appointment committee sittings and debates in parliament engineered by the president.
Undeterred, the president delivered his much-anticipated speech to cheers and applause from the Majority side.
The address was hinged on creating opportunities for all with a focus on “putting the people first”, “strong resilient economy”, “expanding infrastructure” and “transparent and accountable governance”.
The President outlined his plans for the country with a promise to embark on a number of projects which will enhance and improve the quality of lives of Ghanaians.
Among the number of projects to be undertaken during the President's four year term in office are a social housing project in rural areas and the restructuring of the Tema Oil Refinery.
He stated that his government believed the people of Ghana were the country's most treasured asset and will be put first in his social development agenda.
He said the thrust of government's social policy and human development programme revolved around education, healthcare, social security and protection for the vulnerable, women, children, the aged and people with disabilities.
President Mahama said his government for the next year will ensure that Ghana witnesses socio-economic developments that are more progressive than in the last two decades.