2018 Budget must create jobs – TUC

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THE Trades Union Congress (TUC) has challenged government to spell out more practical ways of creating sustainable jobs in the 2018 budget statement beyond the rhetoric.

According to the union, the greatest challenge now is how to create decent jobs for the millions who are desperately seeking jobs.

In proposals sent to government to incorporate into the 2018 budget and economic policies, TUC said stabilisation of the economy is necessary but not sufficient to deal with the unemployment challenge.

It noted that there is the need to get the economy on a higher and sustained growth path that creates decent employment.

According to the TUC, a disaggregation of current growth figures shows that economic growth is driven, primarily, by oil and gas, and mining.

It added that these sectors cannot be relied upon to address the unemployment challenge.

Economic growth and job creation
The union noted that in 2017, the focus of the budget and economic policy was primarily to stabilise the national economy.

“This has largely been successful, even though some level of fragility remains. Inflation has come down from 15.4 per cent in December 2016 to 12.2 per cent in September, 2017.

“The exchange rate of the Ghana cedi has been quite stable in the last few months.

“The fiscal deficit is declining. The Treasury bill rates have decreased, even though commercial banks’ lending rates remain high.

“In the first quarter, GDP growth was estimated at 6.6 per cent. The second quarter growth is estimated at 9 per cent, compared to 1.1 per cent growth recorded for the same period in 2016. These developments are very encouraging,” the union added.

Key points in the proposal are as follow:

Natural resources
The revenue from our natural resources should be used to support other sectors that have the potential to create large numbers of decent jobs. In our previous submissions, we have expressed support for government initiatives such as the ‘One District, One Factory’, and ‘Planting for Food and Jobs’, among other initiatives intended to create employment. These initiatives will help grow agriculture and manufacturing.

However, the initiatives cannot be successful unless we make fundamental changes in our economic policies.

Investors in these factories will first think of markets for their products.

The domestic and the West African sub-regional markets will be their first consideration, given the difficulty of breaking into the European and American markets.

Review of trade policy
A review of our trade policy will go a long way to support the ‘One District, One Factory’ and help create jobs.

It is also important that Ghana works with other West African countries to secure the West African markets for our industrial ambitions.

Economic Partnership Agreement
That is why Ghana should proceed with great caution in respect of the Economic Partnership Agreement (EPA).

Any unilateral action will undermine our interest in the sub-regional market.

High lending rates 
Other issues that need to be addressed in support of employment creation include lending rates. Commercial banks’ lending rates remain high even as government borrowings on the domestic money market decrease and Treasury bill rates come down.

Clearly, the traditional mechanism is not working.

We expect the budget statement to show clearly how government will bring down cost of borrowing.

High cost of borrowing hinders job reaction
It will be extremely difficult to create decent jobs in large numbers if the cost of borrowing remains so high.

The TUC fully supports government efforts to directly provide jobs in the public sector, especially when the private sector is unable to absorb a significant proportion of school leavers. 

Commends recruitment of nurses and teachers

The recruitment of trained nurses and teachers into the health and education sectors is commendable. We need more teachers and nurses across the country.

Sanitary officers in all cities
We also need sanitary officers and cleaners in all our cities and towns.

This can be an avenue for creation of large numbers of decent jobs for the youth.

Rapid economic growth
We expect government to use the 2018 budget to consolidate the gains in the last 11 months and to implement policies that will spur rapid economic growth and employment creation.

Up-to-date accurate information on employment 
We also expect government to resource the Ghana Statistical Service to provide up-to-date and accurate information on employment. 
Real-time statistics provide a better way to evaluate the impact of government policies and programmes on employment creation.

Earnings remain too low in Ghana
Earnings remain too low in Ghana, even by sub-regional standards.

The Single Spine Pay Policy (SSPP) boosted public service pay in the first three years of its implementation, albeit from a low base. 
In the last four years, however, the gains have been eroded, in real terms.

At the same time, complaints that the wage bill is absorbing more than half of the national revenue is getting louder.

Reconciling the two positions is critical for industrial harmony in the coming year and beyond.

Review of Single Spine Pay Policy
Government has recently constituted a committee to review the Single Spine Pay Policy (SSPP), among other functions.

The TUC welcomes the initiative because there are a number of outstanding issues with the SSPP that need further attention. 
For example, the pay point relativity has remained unchanged since 2010.

There are still huge overlaps across pay levels on the Single Spine Salary Structure (SSSS) which is not consistent with the SSPP.

Low national minimum wage 
The national minimum wage is still around US$2 per day for eight hours of work.

These levels of wages do not match the economic realities in the country.

We expect government to provide financial and material resources to the committee so that members of the committee can approach their work with utmost seriousness and provide a way out of the current situation.

Weak labour administration 
We have already drawn government’s attention to the weak labour administration institutions due, mainly, to lack of funds.

The Ministry of Employment and Labour Relations (MELR) and its agencies are among the least resourced institutions in the government machinery.

The TUC is committed to deepening and strengthening social dialogue.

We expect government to do its part by investing in the National Labour Commission, Labour Department, Fair Wages and Salaries Commission, and Factories Inspection Department.

A very significant proportion of labour disputes in the country can be avoided if these labour administration institutions were operating effectively.

Failure to strengthen institutions for social dialogue may mean more frequent strikes and other industrial disturbances.

Pensions reforms
For a very long time, Ghana has been grappling with low pensions. A very large proportion of pensioners subsist on a minimum pension of GH¢276.

In addition, a very small section of the workforce has access to pensions despite the introduction of the third-tier pension, intended to capture informal workers.

Low pension results from low earnings and poor management of pension funds. Enhancing salaries will, therefore, have substantial effect on pensions and welfare of pensioners.

Urgent reform of SSNIT
There is also the need to ensure that pension funds are managed efficiently.

Recent developments at the Social Security and National Insurance Trust (SSNIT) do not inspire confidence.

Obviously, there is the need to reform SSNIT to rescue it from the undue influence of government and party politics. 
The reforms should be designed to ensure that SSNIT focuses its attention exclusively on improving benefits for pensioners. Our proposals for reforms of SSNIT will be submitted to government shortly.

On the second-tier pension, we urge government to settle its indebtedness to the public sector schemes without further delay.

The non-payment of government contribution is jeopardising the schemes and undermining the sound reasons that informed the implementation of the three-tier pension scheme.

A continuous dialogue with the public sector unions should be a necessary part of any such arrangements.

Privatisation of strategic national assets
The TUC holds the view that privatization of strategic national assets is never in the best interest of Ghana.

The argument that private participation will help revive the fortunes of such companies is a denial of faith in the people of Ghana.

The NPP was elected with so much promise of solving the country’s problems.

It must not take the easiest route, especially when that route betrays national interests.

Governments are not elected to do the easiest things. Selling off state assets could be the easiest way around a problem.

But a dispassionate analysis of the challenges facing these state-owned companies will show that most of the challenges emanate from impediments erected by governments.

Electricity Company of Ghana (ECG), Volta River Authority (VRA), and Ghana Water Company Limited (GWCL) are very good examples.

We believe that if governments stop their interference in these companies, they will perform satisfactorily.

Economy on right track
Developments in the economy in the last 11 months indicate that we are on the right track.

2018 Budget must consolidate gains
The 2018 budget and economic policy must consolidate these gains and propel the economy onto a rapid growth path that can create decent jobs in both public and private sectors.

More workers are needed in education, health and sanitation sectors.

In the private sector, policy constraints on growth have to be addressed aggressively in this budget statement.

Policies that raise costs of doing business and renders the domestic private sector uncompetitive, even on the home market, should be removed completely.

By Elvis DARKO, Accra

ABOUT: Nana Kwesi Coomson

[email protected]

A Freelance Journalist, Entrepreneur and Philanthropist. Editor-in-Chief of www.233times.com. A contributory writer for Ghanaian Chronicle Newspaper. An alumnus of Adisadel College where he read General Arts. He holds first degree in Bachelor of Arts from the University of Ghana; Political Science (major) and History (minor). He has also pursued MSc Corporate Social Responsibility (CSR) and Energy with Public Relations (PR) at the Robert Gordon University in the United Kingdom. He is a 2018 Mandela Washington Fellow (YALI) who studied at Clark Atlanta University on the Business and Entrepreneurship track. His mentors are Rupert Murdoch, Warren Buffet, Sam Jonah, Kwaku Sakyi Addo and Piers Morgan

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