[ 2015-04-24 ]

NDC Job Cut In 2017
It has emerged that the National Democratic
Congress (NDC) government has agreed to cut public
sector jobs in its latest dealings with the
International Monetary Fund (IMF) which has
decided to bail Ghana out of its economic mess
with US$918 million.

The Mahama-led government is said to have begged
the Breton Wood institution to shift the
arrangement to 2017 because of its political
implications, especially in an election year, and
the fund appears to have agreed.

Senchi Consensus

The government, prior to the deal, had organised a
national economic forum in June last year and came
out with what was termed ‘Senchi Consensus,’
which it later used as cover-up in seeking the
bailout.

The opposition New Patriotic Party (NPP) boycotted
the forum saying it was going to be used as a bait
to get them to endorse the harsh conditionalities
attached to the IMF loan, including job cuts.

Bawumia’s Prediction

Prior to the Senchi forum, Dr Mahamudu Bawumia,
who is the NPP vice presidential candidate for the
2016 elections, predicted massive job cuts but the
government conveniently claimed it was going to
the IMF to solicit its support in implementing
what it claimed to be ‘home-grown’ policies to
heal the ailing economy and vehemently denied the
bailout bit.

Dr Bawumia, a renowned economist cum banker, had
again said recently that the Mahama government was
only luring Ghanaians to retain it in office in
the December 2016 general elections so that it
would embark on the massive job cuts early 2017.

“My understanding is that government wants the
IMF agreement to delay the worker layoffs until
after the 2016 elections. I wonder why. I suppose
the message is ‘vote for me before I fire
you,’” he said in a 70-page paper he
presented at the Central University College,
Miotso in March.

‘Right-Sizing Exercise’

On page 17 of a document entitled, “Request for
a three-year arrangement under the extended credit
facility,” posted on the IMF website on April
21, the government had pledged to bring reform to
the Civil Service by forming a taskforce to make
recommendations to the government as part of the
“right-sizing exercise.”

“The government aims at bringing the wage
bill-to-revenue ratio down from 53 percent in 2014
to 35 percent over the medium term, in line with
the regional ECOWAS target,” the document said,
adding, “This will require wage restraint over
the full three-year programme period,
with increases consistent with expected
disinflation.

“The authorities will design a civil service
reform strategy during 2015 with the assistance of
development partners, which will aim at increasing
the productivity and rationalising the size of the
civil service. As part of this reform, the
government intends also to review the role of
subvented agencies.”

Also, the document gives details of Ghana’s
programme with the IMF, including the conditions
that the country is expected to meet before
further disbursements are made.

It said that Ghana should get its next
disbursement of 144 million dollars by July 15,
another one in November, if government meets
certain conditions. Even though the programme will
end in 2017, the last tranche will be advanced to
Ghana in March 2018.

Bailout Background

The Executive Board of the IMF in early April
approved a three-year arrangement under the
Extended Credit Facility (ECF) for Ghana in an
amount equivalent to SDR 664.20 million (180
percent of quota or about US$918 million) in
support of Ghana’s medium-term economic reform
programme.

According to the IMF, the programme aims to
“restore debt sustainability and macroeconomic
stability to foster a return to high growth and
job creation, while protecting social spending.
The Executive Board’s decision will enable an
immediate disbursement of SDR 83.025 million
(about US$114.8 million).”

The programme foresees a pick-up in economic
growth, starting in 2016, supported by expected
increases in hydrocarbon production, lower
inflation and interest rates and combined with a
stable exchange rate environment.

Source - Daily Guide

... go Back