The recent 3-year loan agreement concluded between the Government of Ghana, and the International Monetary Fund (IMF) contains agreements to freeze employment in government departments except for those under Education and health.
The agreement also expects Ghanaian authorities to limit the nominal increase in total wage bill to no more than 10%.
Currently, a number of workers’ unions have been calling for a review of their conditions of service.
The ceiling placed on how far government can go as far as salary negotiations are concerned, are certain to take negotiations over salaries between government and unions difficult.
Other conditions attached to the Ghana-IMF agreement are the elimination of subsidies on utilities and petroleum products whose implementation has already begun.
All these are expected to lead to saving of about 2% of GDP. The terms are contained in the 3-year arrangement under the extended credit facility report released in April 2015.
Government, therefore, has its hands tied as it negotiates with the various workers groups in the country.
It also has limited room has to the IMF is necessary to reduce Government’s debt burden, budget deficit and inflation.
The IMF document lists delayed or partial implementation of policies, a slower growth recovery if the electricity crisis is not addressed quickly.
It said negative commodity price shocks pose a risk to the IMF programme.
The IMF insists on the strict implementation of the measures outlined in the agreement in the run-ups to the 2016 elections.
Source: The Insight Newspare