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Business News of Tuesday, 7 August 2018

Source: Nico van Staalduinen

OPINION: We must reduce large public sector workforce, Ken Ofori-Atta

Dear Mr. Ofori-Atta, I missed these great words completely in your presentation of the mid-year budget, I would go further than that:

1. We must reduce the size of government

2. We must reduce the size of parliament

3. We must cancel housing for public workers

4. We must cancel ex-gratia payments

5. We must withdraw government from any service that private sector can do

And I would add, don’t do it because of IMF terms but do it for Ghana and all Ghanaian citizens.

The need to reduce our large public sector work force is obvious, too many people are doing too little work, creating (artificial) full desk loaded with work that only moves when financially stimulated (bribed).

A person starting on time and really working 40 hours a week can move mountains.

I have never seen such inefficiency as in the Ghanaian public sector, indeed Mr. Minister lets clean that up.

It’s a huge task and it will probably make you lose the next elections but it’s really needed. Strikes, demonstrations, screaming, shouting and insults will rain down on you but try to enter Ghana’s history as the man that cleaned up the system. You will have my eternal support.

Further needs:

1. We must reduce the size of government: The size of our government is not only outrageous compared to the world but even if compared to Africa. Luckily we don’t pay Ministers and MPs salaries like in Kenya and Nigeria but still are these numbers really needed?

A minister has next to his allowances almost a double salary of directors at ministerial department, so replacing half of our ministers with department directors would save Ghana already a lot. On top of that these directors don’t receive ex-Gratia another huge saving.

We can and should start to reduce the size of our government.

Much larger economies have much smaller number of ministries but let’s compare Ghana to other similar economies.

Let’s be fair in comparing Ghana’s number of ministers. Ghana has 110 Ministers and that includes 12 regional Ministers who are in other countries called commissionaires or governors, making Ghana’s real number of Ministers and deputy Ministers 98.

Countries with about the same GDP like: Lebanon has 20 Ministers and deputies, Uzbekistan has 22 Ministers and deputies and Slovenia has also 22 Ministers and deputy Ministers.

Let’s compare Ghana to countries with about the same population: Peru has 32 Ministers and deputies, Malaysia has 44 Ministers and deputies, Uzbekistan has 22 Ministers and deputy Ministers and Australia has 24.

Ghana’s 98 Ministers and deputies compared to other African countries and let’s start with the most efficient African government is Rwanda with 36 Ministers and deputies. Lesser performers are having larger cabinets: The Democratic Republic of Congo 83, Kenya 84 and Nigeria has 52 Ministers and deputies.

Ghana’s 98 Ministers and deputies compared to some highest developed countries: Luxemburg 11, Switzerland 17, The United States 32, The United Kingdom 34, Netherlands 32.

So dear Minister there is plenty left to cut and start doing so by starting top-down.

2. We must reduce the size of parliament: 275 representatives of our constituencies are already a lot for our small economy. New regions and constituencies are being created and thus more members of parliament will be appointed.

Every MP gets a salary, allowances and ex-Gratia payments. Our first republic had only 104 seats in parliament, the second republic grew to 140 seats, the third republic reduced the number of seats of parliament to 104, and the fourth republic started the largest growth to 200 seats of parliament. President Kuffuor brought it to 230 seats and under President Atta-Mills the number grew to 275 seats in parliament some representing a larger area with mostly villages.

Compared to comparable countries in number of citizens (Uzbekistan 150, Colombia, 166 seats in parliament) Ghana could easily reduce their number of parliamentary seats. In economies with smaller populations about a 5 to 30 fold size of the economy (Netherlands 150 seats, Norway 169, New Zealand 120 seats of parliament) democracy is also working well. On top of that the functionality of a parliament is in many cases related to the size of smaller parliaments and dis-functionality is mostly mentioned in large parliaments.

Ghana has cost and economic size wise an oversized parliament and could easily go back to 150 seats, saving almost half of the current costs.

3. We must cancel housing for public workers: Government housing for public workers dates back to colonial times (after all the Brits were living temporarily in Ghana and needed a house) and to Socialism where the government is the provider.

The socialist countries have or are at the brink of collapse and former socialist / communist countries are moving away from offering housing to MP and Ministers. The prime Ministers of the Netherlands is renting a 2 bedroom apartment not far away from parliament and his office. He pays his own rent! Why can Ghanaian public servants not do the same, there a plenty apartments empty in Accra?

The former state owned houses and apartments can then be sold and the profits out of sales at a public auction will return in government properties.

4. We must cancel ex-gratia payments: the biggest nonsense ever is the payment of ex-Gratia to the President, vice-President, Ministers and members of parliament.

First of all you choose to be a politician and because of that you are a President, vice-President, Minister or MP, nobody forced you. Secondly, you are being paid whilst doing your job. Why does the state pay you when you leave? Get back to work, or go to SSNIT in case you are entitled to a pension when reaching the retirement age.

You see Mr. Ofori-Atta, there are much more easy saving to be made if you start cutting in your own (political) flesh and send the message to all Ghanaian citizen the: we started saving ourselves, now it’s your turn.

5. We must withdraw government from any service that private sector can do: Under our first President Dr. Kwame Nkrumah there was a need to start investing in industrial capacity and because of that many State Owned Enterprises (SOEs) were created and I agree at that time that was the best thing to do.

Today with open trade, open economies there is no need for SOEs in most sectors of the economy except for some strategic sectors of high importance to our independence and economic independence.

State owned companies like newspapers, alcohol and shoe producing companies and also railroads, Electricity Company and its network, purchasing companies, housing companies, architectural offices and others could all be privatized and monitored by the government. Also we don’t need a national airline but a national or international investor in an airline.

Already most of those are loss carrying and unable to compete with the private sector.

Other savings can be made in many sectors of society but I will keep that for another article but starting with “WE MUST REDUCE LARGE PUBLIC SECTOR WORK FORCE” is a good start for our Minister of Finance: Ken Ofori-Atta!