Economic crisis making life unbearable for business folks - ICU

Majority of workers in Ghana are impoverished as their real incomes continue to shrink under the country’s economic crisis, the Industrial and Commercial Workers Union (ICU) has lamented.

Secretary General of the ICU, Mr Solomon Kotei told Business Finder that 60 per cent of Ghanaian workers are grappling with the increasing cost of living in the country.

The Union maintained that hikes in taxes, utilities and fuel prices among others had shot up the prices of every item on the market, making like unbearable for Ghanaians.

“Everything has doubled in price, however the salary of the Ghanaian worker has not doubled.”

According to Mr Kotei, “the Ghanaian economy itself is not doing well; if the economy was doing well, inflation would be held in check; if it was doing well we will see the cedi gain value; we will see our exports exceeding our imports but we are virtually importing everything, making our local currency weaker and weaker.”

The situation, the ICU boss lamented had brought labour to its knees and compelled them to devise alternative means of improving their lot.

In the past three to four years, Ghana’s economic indicators have deteriorated, even under a bailout programme with the International Monetary Fund (IMF).

Real growth slowed from 7.9 per cent in 2012 to 5.4 per cent in 2013, 4.0 per cent in 2014 and declined further to 3.7 per cent in 2015. Growth for this year has been revised downwards from 5.2 to 4.1 per cent on the back of volatilities in commodity revenues.

Inflation stands at 16.9 per cent (as at August 2016) while Ghana’s debt stock has ballooned from GH¢35.1billion in December 2012 to GH¢109.8billion in July 2016,

Employers had become mindful of productivity in relation to their costs of production and profit margins and so in “the past four years, most employers have not fared well,” laments Mr Kotei.

Most businesses, Mr Kotei noted have been making huge losses, adding that “if you analyse their balance sheets, you will notice the sale of assets; they are revaluing old assets and selling them off; these circumstances have reflected very harshly on the Ghanaian worker.”

Rather, “Ghanaian workers have experienced paltry increases in wages and what we've observed is that before any increases come there's a new tax regime out or a new review of tax policy coming out; we have petrol prices going up, utility tariffs going up.”

The ICU boss further laments that school fees and transportation costs have made matters worse for Ghanaians.

Other labour experts told Business Finder that in spite of the recent wage increments, majority of Ghanaian workers have had to look for extra income to shore up their mainstream earnings.

“Workers have had to cut their expenditure by the level of inflation to be able to survive the turbulent times; this means that anytime salary increments are made at levels below inflation, the individual worker loses,” one expert stated.

“Everything is tight everywhere and so to be able to survive the odds both workers and employers will have to find means of cutting costs or using other investments to shore up their earnings” said a Human Resource Consultant.

He added that most employers are at their wits end and have had to tighten their belts as their profits have declined drastically.

Some economists contended that employers are in difficult times as it costs more to produce a unit of goods and services in Ghana than in neighbouring countries.

This situation is worsened by the deteriorating economic conditions in the country, occasioned by a depreciating currency (GH¢3.95 to a dollar), high inflation and unreliable power supply.

“Unfortunately for Ghana and unlike its peers, productivity in the real sectors of the economy is not increasing and so under such circumstances the principle of ability of employers to pay is compromised,” they pointed out.