Ex-NPP Deputy Finance Minister Reveals He Wanted 34% Pay Rise
Kweku Agyeman-Manu, a former deputy Finance Minister, has hit hard at the governing National Democratic Congress (NDC), saying it rushed in implementing the single spine pay policy, which is currently taking as much as 70 percent of government revenue.
According to Mr. Agyeman-Manu, the decision to implement Single Spine Salary Structure (SSSS), even though was initiated by the New Patriotic Party (NPP) administration, led by ex-President, John Agyekum Kufour, he, himself was shockingly against the initiative.
According to the Chairman for the Public Accounts Committee (PAC) of Parliament, President Kufuor rather endorsed a 34 percent increment in salaries and not the SSSS, since work on the latter was incomplete at the time Mr. Kufuor exited office.
He said, the decision to implement the SSSS was ill-advised, adding that, the current administration lacked ideas in reversing the negative impact the policy is having on the economy.
Speaking yesterday on Badwam on Adom FM, the Member of Parliament (MP) for Dormaa West in the Bono Ahafo Region, also denied the claim that the pay policy was endorsed in 2009 by the then President Agyekum Kufour ,shortly before exiting office.
He was reacting to the assertion by the Finance Minister, Seth Terkper, last Wednesday, during the meet the press series to the effect that, the poor state of the country’s economy is as a result of huge wages and salaries which needed to be paid.
Mr. Terkper said, the economy of Ghana was still facing liquidity challenges, with both revenue receipts and expenditure falling below targets, nine months into the year. The only exception is compensation for workers, which has overshot its target by 2.2 per cent.
Mr. Terkper said, total revenue and grants for the period amounted to GH¢11.90 billion, as against a target of GH¢14.15 billion. Although the figure was a shortfall of the target, he said, it was 13 per cent higher than what was recorded for the same period last year.
Mr Terkper, on Wednesday said, expenditure on wages and salaries totalled GH¢5,022.9 million, 2.2 per cent higher than the budget target of GH¢4,905.2 million. The amount was 17.1 per cent higher than the outturn for the same period in 2012.
The Minister revealed also that an amount of GH¢674.8 million had been spent on the clearance of wage arrears.
“The trend in the wage bill for the first eight months of the year is worrying, given that the 10 per cent 2013 wage increment for public sector workers is not reflected in the end of August wage bill,” he added.
Mr Terkper noted that compensation to public sector employees alone continued to take a very significant percentage (about 73.9 per cent as at the end of August) of tax revenue.
This, he noted, resulted in less revenue being available for other important expenditure items under the Goods and Services, as well as Capital components under the budget.
“Together with interest payments, it has also resulted in delays in payments to Statutory Funds and other transfers. Interest payment for January to August totalled GHC2, 972.2 million, 40.5 per cent higher than the budget target of GHC2, 115.5 million and 117.3 per cent higher than the outturn for the same period in 2012,” he added.
The Minister said of that amount, domestic interest was 43.6 per cent higher than the budget target and on a year-to-year basis, domestic interest grew by about 133 per cent, reflecting very high domestic borrowing in 2012 to finance the deficit and the high interest rate associated with it.
“The high expenditure on compensation to employees and interest costs, spending on items, such as provision of funds for orphanages and other social spending, such as school feeding, school uniforms, capitation grants and Livelihood Empowerment Against Poverty (LEAP), as well as payment to road contractors and other Government service providers had to be curtailed,” he added.