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Business News of Friday, 26 February 2016

Source: Kasapa FM

Gov’t reduces wage to GDP ratio to 7.9% in 2015

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The President John Dramani Mahama has revealed that the net freeze on employment which was activated in some public sectors has largely helped to prop up the fiscal consolidation of the country.

The International Monetary Fund (IMF) last year urged government to continue its firm stance on containing the wage bill within the budget constraints amidst a worsening employment regime and renewed pressure from labour .

The government recorded positive reviews from the IMF after sticking to plans laid down by the Fund as necessary to address fiscal imbalances of the state and put the economy on a recovery path.

President Mahama delivering his State of the Nation Address in parliament Thursday, February 25 said the decision by government yielded positive results and contained overruns in wage bills.

“…The effect has been a reduction in the wage to GDP ratio from 8.9% in 2012 to 7.9% in 2015, and as a percentage of tax revenue, a reduction from 53.3% in 2012 to 43.6% in 2015.”

He claimed there has been a remarkable feat of migrating public sector staff onto the single spine salary structure.

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