TUC rejects IMF policies
The Ghana Trades Union Congress (TUC) has stated that Ghana does not need the International Monetary Fund (IMF) to successfully implement policies that will change the economic fortunes of the country.
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“We need strong and bold leaders who can formulate and implement appropriate made-in-Ghana policies,” it said, stressing that “we are ready to work with the government to implement such home-grown policies but not IMF-sponsored policies.”
This was contained in a statement signed by the acting Secretary-General, Dr Yaw Baah, in response to the government’s 2015 Budget Statement and Economic Policy to Parliament last Wednesday.
It said that the TUC would issue a more comprehensive analysis and assessment of the budget after fully studying its contents.
Senchi Consensus
It said given the challenges the economy had faced in the current fiscal year, the TUC expected the 2015 Budget to be radically different from the IMF-sponsored policies of the last 30 years that brought the economy almost to the brink.
“We expected the budget to fully reflect the Senchi Consensus as basis for economic transformation. But we regret to note that government policies have remained stealthily unchanged. We do not believe that the same policies that nearly led to the collapse of our economy can solve our economic and social problems, especially the excruciating poverty that has afflicted over seven million of our compatriots,” it said.
The statement said despite the huge employment challenge, the budget, in a typical IMF tradition, had no target for employment creation.
“We are not surprised that the Minister of Finance boldly announced that the net employment freeze in the public sector will continue. We insist that government has to create more jobs in some of the public services, with special reference to education, health, sanitation and security sectors,” it stated.
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State institutions
The statement said the TUC had taken note of the proposal to strengthen state institutions such as the Factories Inspectorate Division, expand the Livelihood Empowerment Against Poverty (LEAP) programme, the plans to address the current power crisis, as well as the proposals to support private sector development, introduce progressive free secondary education and improve governance, including dealing with corruption.
The statement described the proposals as laudable except that “they are not new and we do not find any new ideas and measures in the budget that would make these interventions work this time”.
It, therefore, called for specific and more radical measures to change course.
SSSS
It expressed worry that the government continued to blame the Single Spine Pay Policy (SSPP) for all that had gone wrong with public finances.
It said the TUC maintained its position that the relatively large public sector wage bill was due to the irregularities in pay administration and the corrupt practices going on in some state institutions.
“The minister mentioned the efforts that were made to conclude negotiations of public sector pay increase before the budget was presented to Parliament. We expect more efforts to be made towards the conclusion of the negotiation of both the national minimum wage and the single spine salary structure before the end of the year so that implementation can start in January 2015,” it said.
Assurance
The TUC assured the government and the good people of Ghana that “we will support the implementation of all policies we consider appropriate for the country and resist all measures and policies we consider inimical to the social and economic development of Ghana.”
VAT
It expressed surprise that the government proposed an imposition of 17.5 per cent VAT on petroleum products, given the already high prices of fuel.
“We would like to appeal to Parliament to reject this proposal because of the negative effects it will have on cost of living,” it stated.
IMANI position
In a preliminary comment on the budget, IMANI Ghana, a think tank, said the raft of taxes on real estate, financial services, key utilities such as petroleum products and the extension of the stabilisation fund, among other measures, might significantly affect the outcomes of these events.
“The real test will be in making prudent use of these additional resources even if the idea behind the hike is to reduce the humongous debts which have now passed sustainable levels,” it said.
It stressed the need for the government to declare a moratorium on all the current projects and also list all the projects it was currently funding and submit them to a “Value for Money” review; saying that value for money audits should not take more than three months to be completed.
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IMANI said the government must also conduct an immediate compilation of all fiscal responsibility related rules in existing legislation “and ask the government of Ghana to comply with them in order to control borrowing and expenditure,” it said.