Business News of Tuesday, 19 February 2013
The Trades Union Congress (TUC) says Ghana’s number-one policy challenge has to do with employment creation.
That is why in all its submissions as inputs to the country’s annual budgets, it has always proposed that Government genuinely involve the key social partners in employment policymaking and implementation, the TUC said.
“It is only through a genuine social partnership and social dialogue that we can deal with the employment challenge,” it said among a raft of proposals for consideration in the 2013 budget. It said it does not believe that structural transformation of the economy can be achieved when Government’s economic policy is stuck perpetually in a state of so-called “Stabilisation and Fiscal Consolidation”.
The Union also criticised the inflation-targetting policy of the Bank of Ghana (BoG), because “that policy framework treats job-creation as a residual outcome of macroeconomic policy”.
This position, it said, is informed by a number of reasons: First, the past three decades of macroeconomic stabilisation has succeeded in bringing annual GDP growth of about 6 percent; but this growth has not changed the structure of the economy in any significant way.
“After almost three decades of consistent GDP growth, the country’s exports continue to be dominated by gold, cocoa beans and timber.”
Second, according to the TUC, the policies that have been implemented with the aim of achieving single-digit inflation have hindered a potentially high economic growth -- which is a prerequisite for a significant rate of job-creation and poverty-reduction.
Third, the Union said there is no empirical basis for the extreme policy-obsession with single-digit inflation, especially when the negative effect on employment-creation is so obvious.
“We challenge Government to explain to Ghanaians how the single-digit inflation policy has helped Ghana’s employment policy objectives all these years.”
The TUC argued that given the huge economic and social infrastructure deficit that confronts the country, single-digit inflation can only be achieved at the expense of growth.
It said the TUC attaches importance to its inputs into the annual national budgets because this forms the basis for government expenditure on important socio-economic sectors, including expenditure on workers’ pay and conditions of service, as well as social services such as health and education.
It was through such policy inputs that the TUC impressed upon government to exempt minimum-wage earners from payment of personal income tax -- which positive impact on poverty reduction among low-income earners is obvious, it observed.