Govt To Announce New Salary Adjustments

The government is taking steps, to announce an upward adjustment in salary levels, to enable workers cope with the increase in the price of petroleum products.
This move, which is expected to be announced before the end of this month, would see the lowest salaried worker, benefiting from a 20% increment, while those on the higher scale, would benefit from only 4% of the increment.
Press secretary to the President, Mr Kwabena Agyapong disclosed this in an interview on Peace FM. According to him, Ministers, Deputy Ministers and government appointees would not benefit from the salary adjustment. He said this is to demonstrate to Ghanaians that, government officials are setting themselves as examples by tightening their belts.
The leader of the People’s National Convention, Dr Edward Mahama also told Peace FM that, the reduction in the percentage to be benefited by government appointees would not be fruitful, if they continue to use fuel virtually free of charge.

No Pay Rise for President And His Team After Petrol Price Increase

Accra Mail (Accra) -- "In order to show leadership in bearing this national burden, there will be no increment in salaries and allowances payable to members of the executive, that is the President, the Vice President, Ministers, Deputy Ministers, Metropolitan, Municipal and District Chief Executives and Special Assistants... Further, fuel and utility allowances for all government officials will be reduced."

The Minister of Energy, Albert Kan Dapaah made the announcement above last Friday when he announced a 90.4 per cent increase in the price of petrol. At an unprecedented press conference at the Ministry of Information, the Minister said a gallon of premium petrol would now sell at 20,000 cedis a gallon, up from 10,500 cedis. Diesel and kerosene would each sell at 17,500 cedis a gallon, marine diesel and pre-mix fuel would each sell at 16,000 cedis while LPG would go at 3,800 cedis per kilogramme. This is the first time in Ghana that a price hike has been so presented and painstakingly announced to probing media people.

"Future price revisions" the Minister said, "will be determined by the automatic price formula published in June 2001 and implemented by the National Petroleum Tender Board (NPTB). Mr Kan-Dapaah said the government had decided the immediate implementation of the automatic price adjustment formula based on full-recovery and the setting of an initial maximum integrated margin of five US cents for the oil sector.

In freezing the salaries and allowances of the executive, Mr Kan-Dapaah however said the Tripartite Committee was being tasked to agree a new minimum wage by the end of this week. "This will be at a level that will cover the expected impact but not such as to reverse the gains we have made in controlling and reducing inflation."

Already it is being speculated that the percentage increase in wages and salaries would be about 20 per cent.

Mr Kan-Dapaah said with the current crude price being 32 dollars a barrel and an exchange rate of 8,800 cedis to the dollar, the full recovery price, including debt servicing, should have been ?23,210 a gallon. This is made up of import parity, duties, levies (e.g. road development fund), distributors' margins and debt servicing.

The government has said the rising debt at the Tema Oil Refinery, the increase in crude prices and the sliding currency meant that it could no longer maintain the ex-pump price at that low level.

"At over 4.5 trillion cedis, and rising daily, the TOR debt has significant economic implications."

The government issued TOR Bonds for 976 billion cedis in 2001 and has also issued bonds to Ghana Commercial Bank to recover another 1.4 trillion cedis of TOR debt owed the bank.

"The financing of the TOR debt through the issue of bonds should be considered as a bridging operation, while the option of obtaining external financing on the international bond market is pursued. Significant cost savings would be made if the debt is parcelled and sold on the international bond market."

Mr Kan-Dapaah said government would seek to repay the TOR debt through any windfall gains that accrue in future and from increased operational profits that would result from a revitalised and reorganised TOR and proceeds from and the privatisation of TOR.