Labour unrest major challenge to political stability

Accra, Nov 16, GNA - Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, on Thursday said labour agitation posed serious challenges to the economic and political stability of the country. "Government recognizes the legitimate agitations across board in the Public Services about the inequities in the administration of wages and salaries, however Ghana's current Public Sector wage bill of 9.5 per cent of GDP is twice as high as what obtains in other ECOWAS (Economic Community of West African States) countries such as Nigeria and The Gambia," he said.

Mr Baah-Wiredu, who was presenting the Governments fiscal policy Budget for 2007 at the Parliament House, said as a first step towards the implementation of the wages and employment reform programme, and in order to stem the tide of agitation and strikes, the distortions in the Ghana Universal Salary Structure (GUSS) have been removed.

He said it represented the first phase of the rational and comprehensive public sector pay structure that would be implemented under Phase II, to be completed sometime in 2007, which would involve assessment of job content together with the consequential placement of all public sector employees.

"The resulting pay increase will then be completed in 2008 and accordingly, the GUSS salary structure will be abolished in 2007". He explained with statistical data that the Public Service of Ghana was currently made up of 650,000 employees of which 350,000 were employed by 110 sub-vented organizations.

This year, the wage bill was estimated at A211 trillion or 40 per cent of Government's discretionary expenditures, while Government was projecting A213.2 trillion, which represented 66 per cent of total discretionary expenditure for 2007.

Mr Baah-Wiredu attributed that huge bill to the failure over the years by Governments to achieve a framework for rational discussion and decision-making over wages and salaries, which had led to a significant reduction in productivity in the Public Services.

"As a result, there are currently several different salary structures within the Public Services," he said stressing "it is now time to take a decisive and long lasting action to rationalise the public sector wage issue once and for all."

Consequently, the Government has decided to implement a new framework within which Public Sector salaries, wages, negotiations, grading and pay administration would be implemented.

Mr Baah-Wiredu said the Government outlined a comprehensive plan in the 2006 Budget Statement to phase in a pay reform programme over a three-year period for the enhancement of wages in line with increases in productivity as well as streamline the administration of payroll.

During 2006, two important consultations were held with participation from organized labour, private sector employers and the Government to find ways of addressing the problem of low wages and salaries.

A technical team has also been working to develop recommendations on wage and salary administration with the support of a Steering Committee made up of stakeholders.

He said the final results from the programmes would lead to the formulation of a comprehensive pay structure and system that would reflect; the linkage of the Public Sector pay structure with productivity, position and qualification.

It would also lead to the maintenance of a competitiveness of Public Sector incomes relative to the private sector; determination of the optimal number of workers to effectively and efficiently support the delivery of Public Services.

He explained that particular emphasis would be placed on the sub-vented organizations, with innovative incentives packages for employees, who would opt for early retirement and out placement.

Mr Baah-Wiredu mention other programmes to enhance the public sectors as the carrying out of job content and evaluation analysis; elimination of the assortment of non-cash monetary benefits and allowances through the introduction of monetization of non-cash benefits.

He said to demonstrate Government's continued commitment to the pay reform agenda, a Fair Wages Commission had been established with full time legally mandated responsibility to administer the new Comprehensive Pay Structure, maintain its integrity and ensure equity on an ongoing basis.

"With the establishment of the Fair Wages Commission (FWC), the mandates of existing institutions with similar roles such as the Central Management Board, Public Service Commission and the Appellate Body would be rationalised," he said.

He said the Government had tasked the Commission to deliver a detailed and holistic employment reform programme to be implemented over a three to five year period.

He said the Government in the 2006 Budget Statement outlined comprehensive measures to consolidate the various payroll systems into the Integrated Personnel and Payroll database.

The initiative is expected to be completed in 2007. "This consolidation would enable us to improve the monitoring of payroll expenditures and eliminate the incidence of ghost workers."

Mr Baah-Wiredu said the reforms would lead to a lean and more efficient Public Service and enhance productivity, which would include the mandatory installation of biometric clock-in technology in all public institutions.

He said to keep the fiscal targets on track, the Government would be looking for opportunities to eliminate public institutions that were no longer needed and to consolidate and streamline institutions whose activities overlap.

Decentralization and devolution would be stepped up to improve the efficiency of the Government, he said. 16 Nov. 06