Living within, not beyond our means (2)

BY: Dr Charles Wereko Brobby / Daily Graphic / Ghana

Whether tagged fiscal indiscipline (as per the purists) or physical indiscipline (according to “Mr Documents”), the value is the same.  The combined effect of chopping our money “waa waa” and the greed and cluelessness of those chopping is the unfolding tragic comedy of our country, Ghana, which can provide material for several of Uncle Ebo’s plays.

Following the Bank of Ghana’s dusted off and constantly ‘clarified’ measures, the cedi has paused to take a much needed water break on its long run, and the perpetrators have started cheering as if the marathon race is over. Not a bit. 

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Those who mark the performance of the donors that our President keeps begging to come and solve our problems have told us ‘plain, plain’ that we must do two things now. Firstly, we must cut the cost and living expenses of the public sector and, secondly, stop borrowing more money to feed the excesses of the “greedy bastards”.      

Having railed against the GH¢8.9 billion deficit for 2012, do Ghanaians know that the deficit for 2013 was the same GH¢8.9 billion and similar or slightly larger deficits are planned for 2014 and 2015? According to my purist brothers, these matters, budget deficits, are ‘normal’ for economies like our own. What matters though is what you do with the borrowed money... 

If we are spending more than 70 per cent  of our national cake on wages and attendant costs for public servants, reducing this amount drastically must be the prime area for immediate action by the government. Applying the time-worn manner of the best leadership being derived from example, the President of Ghana must take the initiative of trimming down the costs of those he has chosen to work with him to deliver on his promises to us.

Now, this is where I get very irritated about the current debate about the size of presidential staffers and whether this or the previous administration was guiltier of excess or not. The irritation is compounded by the fact that the list produced is a hoax and deliberately obfuscated to score political points, instead of tackling the problem at hand.  

A quick glance tells you immediately that almost all the leftovers still perching at the Castle are not included in the list. Well, well, well. Whether their names are there or not, they are being paid, housed, ‘vehicled’, fuelled, ‘allowanced’ and enjoying all the basics of those whose names appear on the list.  

The President has told Parliament and the people of Ghana that these folks are surplus to his requirements; therefore, the first action is to cut off their umbilical linkage to the Consolidated Fund of Ghana.

After this, the President now needs to take a critical look at the numbers of those he has appointed under the various powers given to him and trim them down in a manner consistent with what the benefactors have to do when they go hot also.  The global Ben Dotse Malor,  the smoothie  Ayariga, the feisty and combative Ofosu-Kwakye and the triple-mastered MM must be more than enough to tell the President’s story to us. He must, therefore, put a stop to people he has appointed into seemingly productive positions being used as complements and supplements to the men from Manpoliwaawa, 

Never mind whether or not the other lot were more wasteful; we have a problem that needs fixing now, and John Dramani Mahama is the one in the seat now.  The President needs to take a critical and urgent look at the size of ministers and related hangers-on and cut and trim their size according to what the national cake can support and leave some of the money for productive value–addition.  

Whilst the President is taking the lead in trimming the size (and more importantly the running costs) of all ‘the President’s men’ ( fully disclosed), he will provide the impetus for Seth Terkper to continue down the path that has all the party big wigs clamouring to have his head and hands removed from the management of the public purse.

First of all, Mr President, tell your folks Terkper is going nowhere; that he enjoys your full support in every action being taken to plug the leakages. (though I have my own issues about his accountancy approach of piling on more taxes where greater efficiencies and lower costs can be achieved)  

Issue one of your commander-in-chief directives in which you also tell the party folks to stop sending call cards with “please assist” to every harassed and ‘frightened public sector boss who has been turned into an employment agency to make jobs happen when there are no vacancies.’   

When you have put the Jubilee House in order and the party folks under a leash, you can now tackle the bloated size of the civil service.  The way to do it is not to start cutting or freezing salaries, given the reality that total cost of one presidential staffer to the nation is probably more than 20-30 folds the remuneration of an average civil servant. 

I do not have the numbers but I am sure that more than 25,000 civil servants retire each year. In this time of austerity, please reinstitute and enforce the oft repeated directive that the refilling of each and every vacancy that occurs must be justified on its own merits. Yes, SSSS costs a lot but we need to attract the best talents into our civil service if we are to increase the productivities per delivered economic output to levels comparable with those from whom we beg all the time.          

I don’t have the space, but I can point the President to other places which produce a whole lot more than we do with far fewer poseur and no doers. Now, this is one area where I will agree with him when he begs our benefactors to come and show us the way.      

Last but not least, the Governor of the Bank of Ghana must stop lending money to the government just to waste on the unproductive lifestyle of the governors.  Insist, even at the peril of your job, that you will not allow them to borrow, borrow and borrow. 

Raising interest rates simply adds to the woes of the private sector which we all tout as the engine of growth and the avenue to create more than 90 per cent  of the jobs we need for our people.  

Mr Governor, it is not my place to teach you about quantitative easing and the policy of keeping interest rates low to stimulate economic growth through consumer spending and increased business output. Please allow my impertinence to recommend that you consult the actions of Messrs Bernanke (US Federal Reserve) and Mervyn King ( Bank of England) on why they kept interest rates around 0.5  per cent  for so long and what the benefits were.

Mr President, cutting down on wasteful and non -productive  expenditure and getting a better balance between the proportions of our national income that pays people to do tee and that which catalyses wealth creation is the most pressing and urgent action you must take to ensure that our dear nation begins to live within, not beyond our means.     

It all sounds so simple, and yes, it is all so simple. Stripped of the obfuscating jargon of fiscal, physical, macroeconomics, inflation,interest, discipline and indiscipline, what we need to do is not rocket science but good old common sense. 

‘Breaking News’ 

“Ghana’s rating of B1, negative outlook, is constrained by the ongoing weakness in the government's fiscal position due to ongoing spending overruns on the public-sector wage bill, high interest costs and the clearance of payment arrears.”…..   the fiscal deficit for 2014 will come in well above the government target of 8.5 per cent  of GDP and could reach double digits for the third year running on account of optimistic revenue projections. Domestic debt-servicing costs in 2013 were almost 40 per cent  above the government's budgeted level and now consume 20 per cent of government’s revenues- Moody’s Agency assessment 2 days ago ( February 17, 2017). 

Click here to also read part one of this article

The writer is Chief Policy Analyst, Ghana Inst for Public Policy Options, (GIPPO)

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