GHC8 billion spent on Single Spine since July 2010

• Posted on February 10, 2014
• by Nana Kwesi Coomson
• Comment

The Single Spine Pay Policy (SSPP) has cumulatively cost the country GHC 48 billion in additional expenditure on public sector wages since its implementation in July 2010.

The figure represents the cumulated extra spending on emoluments for the nearly 600,000 public sector workers who are on government payroll.

“The implementation of the Single Spine Salary Structure (SSSS) was said to be cost neutral, but our research has shown that since July 2010 there has been a divergence of GHC8 billion within the period and something needs, to be done about this,” the Minister of Finance, Mr Seth Terkper, said.

Addressing a section of the media on recent developments in the economy in Accra last Friday, the minister explained that the moratorium on public sector wages would affect only the category of workers already migrated onto the SSSS to lessen its impact on the budget.

The measure, he said, was part of the items discussed and agreed upon at the 2013.

He said next year salaries would be negotiated before the budget was presented to Parliament, saying, “The government will continue to dialogue with and engage stakeholders to take their views and inputs in all our policy actions.”

In 2010, the provisional outturn for recurrent expenditure was GHC8.05 billion to which wages and salaries contributed GHC 3.18 billion.

Last year, compensation of employees was budgeted at GHC 9 billion, out of which GHC7.46 billion was allocated for wages and salaries. The provisional outturn for the first three quarters of 2013 were GH$6.6 billion for compensation and GHC 5.88 billion for wages and salaries.

In 2011, expenditure on compensation was budgeted at GHC 7.09 billion, but the actual came to GHC 7.53 billion, out of which GHC 3.91 billion was on wages and salaries alone.

The 2014 budget, however, projects the compensation for public sector employees to rise to GHC 0.59 billion, out of which GHC8.97 billion would be spent on wages and salaries.

Resilient economy

Mr Terkper said Ghana’s economy, in spite of the short-term challenges, had performed well within seven and eight per cent over the past few years and remained resilient and an envy of many countries.

“We must be bold to tackle the volatilities before they worsen,” he said, referring to the recent measures announced by the Bank of Ghana (BoG) to check the value of the Ghana cedi.

“The medium-term prospects of the economy are bright. Growing at between seven and eight per cent of Gross Domestic Product (GDP) is okay, but we will not be complacent,” he stated.

The Finance Minister said the government would continue “to promote a stable and conducive environment for investments, adding, “We don’t want to impose hardships on businesses.”

Consequently, he said, the government was seriously tackling the fiscal deficit to reduce it from 12.5% in 2012 to 8.5%  in 2014 in order not to crowd out the private sector.

Stakeholder engagement

Some of the measures the government has put in place, such as the increase in the Value Added Tax (VAT) rate by 2.5 per cent and the roping in of certain services and companies hitherto exempted, as well as the removal of subsidies and upward revisions in utility prices, continue to hurt individuals and industry severely.

The Finance Minister said the government was engaging identifiable groupings and associations for their buy-ins.

“So far, we have met groups such as the Chartered Institute of Bankers, the insurance association and other trade organisations. The stakeholder engagements are still continuing,” Mr Terkper said.

He insisted that the time had come for Ghana to adopt best practices in government business and other in government business and other sectors of the economy, a reason for which the government was implementing the e-Government project, as well as the Ghana Integrated Management Information System (GIFMIS),to do away with antiquated practices.

Long-term measures

Mr Terkper maintained that the measures in place, including the BoG’s rules and the imposition of certain taxes and levies, were temporary but would be combined with long-term ones to make them resilient.

“In the long term, we have to increase output and exports. We will use irrigation, value addition and agro­processing, local content and diversification policies to increase our foreign exchange inflows by becoming net exporters,” he said.

He said, for instance, that the measures on textiles would intensify to ensure the return of the local manufacture of textiles to reduce the use of foreign exchange, while the coming on stream of gas to fire our thermal plants would make the country a net exporter of power.