Gov’t slashes all appointee salaries by 30%

Source The Ghana Report

Ministers and Chief Executive Officers (CEOs) of State-Owned Enterprises (SOEs) are to contribute 30% of their salaries beginning April 2020 to government revenue to mitigate economic hardships in the country.

“Finally, Cabinet approved that Ministers and the Heads of SOEs to contribute 30 per cent of their salaries from April to December 2022 to the Consolidated Fund; We would like to thank the Council of State for their leadership in complimenting the Government on this policy,” Mr Ofori-Atta announced on Thursday, 24 March 2022.

The government is embarking on these measures due to economic challenges attributed to global occurrences, such as the COVID-19 pandemic and the Russia-Ukraine conflict.

But some experts have expressed opinions that better management of the country would have saved the country from adverse impact.

According to the Ghana Statistical Service (GSS), Ghana’s consumer price inflation hit 15.7 per cent year-on-year in February from 13.9 per cent in January this year.

In March 2021, the Finance Ministry indicated that the government had spent GH¢19 billion on the COVID-19 fight.

It also clarified that GH¢1.7 billion was spent on the COVID-19 Alleviation Programme (CAP1) and Emergency Preparedness and Response Plan.

There is pressure on the government due to rising public debt estimated to be GH¢351.8 billion as of the end of 2021, an increase by GH¢60.2 billion from the same period in 2020, according to the Summary of Economic and Financial data released by the Bank of Ghana in March 2022.

Meanwhile, total revenue mobilised within the period stood at 15.4 per cent of revenue, with tax rating registering a paltry 12.6 per cent of GDP, far below the regional average.

Even though crude oil supply bottlenecks have caused a surge in prices on the international market, the depreciation of the Ghana Cedi against other major currencies has worsened the situation.

In addition to the salary cuts, there will be a 50% reduction in fuel coupon allocations for all political appointees and heads of government institutions.

The new directive will continue till December 2022.

Mr Ofori-Atta believes these would help to generate revenues internally to help run the country’s economy.

These measures come on the back of the recent cabinet meeting at Peduase to deliberate on resolutions to help the ordinary Ghanaian.

Already, members of the Council of State have agreed to forfeit 20% of their monthly allowances up to the end of the year.

Although Ghanaians appear to be enthused about the move, the Minority in Parliament are of the view that the current crisis cannot be solved with just a 30% pay cut.

A Ranking Member on Parliament’s Finance Committee Dr Cassiel Ato Forson said the 30% pay cut is nothing but cosmetic.

“The elephant in the room is not just a 30% pay cut for government appointees. In fact, it is now time for us to cut almost a thousand workers at the Office of the President, all of whom are Article 71 officeholders,” he noted.

He believes the government should rather take advantage of the current crisis to merge some subvented agencies and ministries.

A Ranking Member on the Roads and Transport Committee, Kwame Agbodza also said government’s suggestion is not reasonable.

Mr. Agbodza said the best approach is “for government to cut its coat according to its size”.

For him, “the huge expenses we do at the seat of government can surely reduce and do some efficiency savings”.

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