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Single Spine arrears sap GH¢3bn in five years

Single Spine arrears sap GH¢3bn in five years

The government has finally washed its hands off the payment of arrears arising from the implementation of the Single Spine Pay Policy (SSPP).

The Finance Minister, Mr Seth Terkper, who mentioned this at the Graphic Business-Fidelity Bank breakfast meeting in Accra yesterday, said the arrears alone cost the country about GH¢3 billion.

The amount brings to GH¢11 billion the total expenditure the country has so far made in respect of the SSPP in the form of salaries, emoluments and arrears since its introduction in July 2010. 

Out of the GH¢11 billion (equivalent to about 55 per cent of total revenues and grants in 2014), the payment of wages and emoluments to the more than 600,000 government workers amounted to GH¢8 billion.

Implications on economy

The SSPP started in July 2010 as an improved pay policy to replace the fragmented pay schemes then used to pay government workers.
Its implementation was, however, met with a series of agitation from labour regarding the calculations and payment of emoluments, market premiums and arrears, among other compensation packages.

The completion of the payment of arrears under the scheme is, therefore, expected to help create fiscal space for the government to redirect finances into other competing areas, while helping to ease the labour unrest that the outstanding payments generated in the economy.

The development also shone some light of hope on the burdening public debt stock, which was reported at GH¢88.1 billion in March this year, the minister said at the meeting, which was chaired by the Managing Director of Unilever Ghana Limited, Ms Maidie Elizabeth Arkutu.

Avoiding the obvious

Already, Mr Terkper said, the government was wary of a situation where public sector pay would consume virtually all government revenues, leaving little or no revenue for competing national expenses.

"I think the fear here is also that we should be careful in our wage negotiations with public servants lest they take so much of the public purse that we have less money for other things or we borrow excessively for those other things, which is not the way forward for a nation like Ghana," the minister, who was the guest speaker at the meeting, said.

That caution, he said, informed the government's decision to step up negotiations with labour, resulting in a series of meeting held in Ho and Takoradi in the Volta and Western regions, respectively, at separate instances to help reach a consensus on convenient pay strategy for both sides.

While declining to disclose the outcomes of those negotiations, the minister said the position of labour was positive, something which he said was needed to help stabilise the astronomical increment in the public sector wage bill.

Although the introduction of the SSPP was praised as a good pay policy for public sector workers, it was heavily criticised for helping throw the country's budget, which is heavily dependent on donor support, off guard while fuelling growth in the public debt stock.

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