[ 2014-10-20 ]

Public wage bill drops from 73% to 57% - Mahama
President John Mahama has revealed that Ghana’s
public-sector wage bill has reduced from 73
percent since 2011, to 57 percent and still
falling.

According to him, the progressive reduction of the
wage bill can be put down to the payment of all
salary arrears that accrued after the migration of
various public sectors onto the single spine
salary structure (SSSS), as well as the payment of
all salary increments that resulted from the
implementation of the SSSS.

He explained to Ghanaian Journalists in London,
where he is visiting that the two factors,
conspired to balloon the wage bill.

“One of the major problems that has squeezed out
expenditure was the high expenditure on labour –
wages and remunerations. At the time I was sworn
into office, we have been implementing the single
spine salary structure and for the year 2011 and
2012, we were paying the increment that resulted
as a result of the single spine salary structure,
but also paying the arrears that came with it”,
he clarified.

He continued: “…Because if you remember at the
time they started the implementation of the single
spine salary structure, it was decided that the
issue of arrears should be delayed and that after
the migration has taken place, the arrears should
be paid and so for 2011, 2012, the bulk of the
burden on the wage bill was the implementation of
the single spine and the payment of arrears.

“Fortunately the payment of arrears have been
completed. There are no arrears outstanding under
the single spine and so you can notice that
progressively, the wage to tax revenue bill is
going down. It used to be 73 percent; today as I
speak to you, it’s under 60 percent: it’s come
to almost 57 percent. So wage-to-taxes is
progressively going down”, the President said.

He however noted that his government is looking
forward to beating the wage bill down further to
meet the standard set by the Economic Community of
West African States (ECOWAS), which he currently
chairs.

“The ECOWAS optimum - that is the benchmark for
ECOWAS - is 35 percent, so it means we still have
a lot of work to do to bring wage-to-tax revenue
down to 35 percent, which is the standard agreed
by ECOWAS…”

He said the more the wage bill reduces, the more
money will be available for other purposes.

“…And so as the wage bill goes down, it frees
up more money to be able to put into school
feeding, into free secondary education, into
paying statutory funds and so on and so forth, and
you are also aware that we are going into an IMF
programme. One of the things we are agreeing is
how to manage that wage bill, and so I believe
that as the wage bill goes down, we’ll have more
resources to put into other programmes that we are
coming up with”.

Source - Starrfmonline

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