A Senior Advisor to the Minister of Finance, Dr Samuel Ashong, has appealed to public sector workers to be moderate in their demand for a huge raise in wages in the coming years.
That, he said, would provide the government with the needed fiscal space to implement the appropriate measures that could help salvage the country's economy from the ravages of the coronavirus (COVID-19) pandemic.
Speaking at the opening of a virtual seminar on the 2021 Budget and Economic Policy Statement last Wednesday in Accra, Dr Ashong observed that the government did not have enough money in its coffers to meet demands for pay increment hence the need for public sector workers to be modest in their demand going forward.
The Post Budget Seminar 2021, organised by the Ghana National Chamber of Commerce and Industry (GNCCI) and other corporate firms, created a virtual platform for captains of industry, members of the business community, investors as well as policy makers to discuss and understand issues highlighted in the government's 2021 budget.
It was on the theme, “2021 National Budget: Prospects for Recovery, Resilience, and Competitiveness for Private Sector Growth”.
With normalcy expected to return in 2024, Dr Ashong stated that public sector workers needed to brace themselves for a while for the government to rescue the economy from the effect of the pandemic.
“If you look at the budget, COVID-19 is not expected to abate until the end of 2023 and we are all looking to tighten our belts for a while and so, people should not be expecting huge wage increases in the course of the next few years.20
“This is because the government does not have enough money to support such demands,” he said.
Tax on consumption
The senior advisor observed that the budget that was presented on March 12 deliberately directed taxes on consumption instead of production.
He said that was necessary to help revive businesses, sustain them and create new jobs for the people who had lost their jobs as a result of the COVID-19.
“If there are no businesses, there will be no employment and, therefore, we need to protect businesses and that is why the government only put taxes on consumption rather than production.
“This will enable businesses to be revived, employ people, get them working for them to contribute their quota to the national coffers,” the advisor added.
Delivering sound economy
The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, in a speech read on his behalf, stated that in spite of challenges faced in 2020, the government needed to deliver a sound and stable macroeconomic condition.
Within the context of delivering a sound and stable economy in the midst of the challenges, he said the intention of underpinning the macroeconomic framework of the 2021 budget was to ensure that coming out of the pandemic, the government would be able to generate enough resources to help support implementation of its programmes.
To that effect, he said, the budget was to carefully initiate expenditure revenue measures to help put the country's fiscal finances on a sustainable path.
He added that the budget had been crafted to ensure that enough primary balances would be generated to return the economy to a positive trajectory in the medium term.
The President of the GNCCI, Mr Clement Osei-Amoako, stated that this year's national budget was unique in the sense that it came on the back of a global pandemic that disrupted every aspect of human life and business activities, as well as shutdown of some national economies across the world.
He said the budget created an implicit bias for measured expectations.
“Business reaction to the 2021 budget has been mixed on accounts of introduction of new taxes, upward revision of existing taxes, and COVID-19 support initiatives”.