Exclusively Revealed: No Money for Teachers, Doctors or Nurses

…….. As Workers get Poorer under NDC

The promise to teachers, and soon to nurses, doctors and other civil servants of seeing a substantial increment in their take-home pay as promised by the Mills-Mahama led NDC administration seems to be little more than a pipedream.

The Independence Day promise that ‘this Government will not shortchange teachers’ could be described as just another in the litany of broken promises.

Documents and analysis made available to the New Statesman reveal that there is no extra money for the implementation of the Single Spine Salary Structure. In fact, the money made available to extend the SSSS to both education and health workers this year is nearly GH¢2 billion short. Thus to pretend to implement it and offer promises of allowances to keep aggrieved workers calm will only amount to shortchanging them.

According to analysis made by an Accra-based think tank, Government knew fully well that it was making no budgetary provisions for the extension of the SSSS to teachers, nurses and doctors, and yet it went ahead to implement it all the same, blaming the expected shortfalls on some dubious computer error.

According to a document prepared by the Ministry of Finance and titled “The Ghana 2011 Budget Strategic Paper”, which has been sighted by the New Statesman, Government knew the cost of implementing the single spine system this year would set it back GH¢5.3bn while making budgetary provisions of merely GH¢3.7bn for total emoluments.

That Ministry of Finance document, which was used to prepare the budget reveals,“based on an assumption of the 2010 budget pay point relativity of 1.8% and a base pay of GH¢3.76, the 2011 single spine salary is projected at GH¢5.29 billion.”

It goes on to say,“This cost does not include other costs, such as payment for market premium, performance bonuses and additional salary related expenditures such as pensions and gratuity. The cost of the implementation of the SSSS is understandably very high calling for the need to ensure its sustainability.”

The document further reads, “Some of the medium term measures include the rationalization and standardization of allowances and benefits which are not part of the SSSS should be undertaken as a matter of urgency to ensure such allowances are negotiated to reasonable levels. In the interim, no new rates or allowances should be approved.”

DANQUAH INSTITUTE

According to the Danquah Institute, which made this known to the public, “The budgetary allocation for wages and salaries for 2011 amounted to GH¢3,733,500,000, a 9.8% increment from the 2010 figure of GH¢3.4 billion which corresponds to government’s decision to increase salaries by 10% across board. So in which envelop is the extra funds required to implement the SSSS?”

This shocking revelation first came to light through the Executive Director of the Danquah Institute, AsareOtchereDarko (alias Gabby) on Peace FM, an Accra based radio station, on Wednesday 16th March 2011 and in a subsequent interview with this paper.

Gabby wondered why the Ministry of Finance would only allocate GH¢3.7 billion as budgetary allocation for wages and salaries when it had calculated, along with the Fair Wages and Salaries Commission it would cost GH¢5.29 billion to implement the SSSS for 2011.

“According to these figures released by the Ministry, it can only point to one thing. Government has no extra money to implement the SSSS as it has embarked on this year and as such doctors, nurses, teachers and other civil servants should forget about getting any substantial pay rise,” Gabby stressed.

He added, “To continue pretending there is anything in there for any of the workers left is to prosecute a huge deception on the Ghanaian worker who has seen his pay dwindling in the last few years.”

PACT WITH IMF

According to DI, what is happening now to the pay of the Ghanaian worker is only an implementation of a policy pact between the Government of Ghana and the Bretton Woods institutions, namely the World Bank and the International Monetary Fund in 2009.

The suppression of Ghana’s wage bill from 2009, when the NDC assumed the reins of government, has, therefore, been a deliberate policy being implemented by the Mills government.

“They said that the wage bill of Ghana’s public sector, which stood at over 11% of GDP was far higher than the African average of 6% and therefore needed to be brought down. In fact, the last three budgets have shown a consistent attempt to reduce this and with the consequence of impoverishing the Ghanaian worker,” the DI man argued.

Gabby revealed that this policy of government is contained in a World Bank document titled ‘International Development Association Program Document for the Economic Governance and Poverty Reduction Credit In The Amount Of US$300 Million To The Republic Of Ghana’ which was prepared on the 15th of June 2009.

“According to Paragraph 11 of the document, the NDC Government and the World Bank complained about the size of Ghana’s public sector wage bill. They were determined to bring it down. They were complaining about ‘huge deficit’ and wrote: ‘In particular, public expenditures grew rapidly to reach almost 42 percent of GDP (from 38 percent in 2007 and 35 percent in 2006, including arrears repayments), as a consequence of substantial increases in public wages, capital expenditures, energy subsidies and debt service.’

This stance by the Minister of Finance, who was at the time focusing predominantly on the unusually high inherited fiscal deficit, made it look as though it was such a great sin on the part of the NPP to increase the salaries of public sector workers, including teachers and nurses.

DR DUFFUOR’S DOCUMENT

Dr Duffuor’s document, which fetched him the $300m in two tranches, reads: “In 2008, the wage bill increased by 38 percent reflecting a 20 percent overall wage increase (against an inflation rate of 15 percent), an 8 percent increase in staff, and a 6 percent grade inflation.”

He said that most of this expansion [in Ghana’s public sector payroll] came from substantial wage increases in the recent past, as well as an expansion in the number of subvented agencies’ employees.

“The document, signed by the Minister of Finance, Dr Kwabena Duffuor, further went on to say at paragraph 82: ‘The public sector in Ghana faces a number of challenges. At over 11% of GDP, Ghana’s public sector payroll stands as one of the largest ratios in Africa, where the average is at about 6%. The wage bill is a heavy burden on the country’s budget, representing 49% of Government revenue in 2008’”, Gabby added.

In order to reduce this huge deficit, the NDC decided to stop employing people in the public sector and, lastly, to reduce the pay, in real terms, of workers

The stage was set to clamp down heavily on the pay of civil servants and other public sector workers. Dr Duffuor blamed the NPP, higher employment and improved salaries of workers for the significant increases in public sector payroll.

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