News / Africa

Public Sector Strikes Test Ghana's Deficit-Cutting Mettle

Ghanaian President John Mahama addresses supporters in Accra, Dec. 10, 2012.Ghanaian President John Mahama addresses supporters in Accra, Dec. 10, 2012.
x
Ghanaian President John Mahama addresses supporters in Accra, Dec. 10, 2012.
Ghanaian President John Mahama addresses supporters in Accra, Dec. 10, 2012.
Reuters
Oil-rich Ghana's effort to slow rampant public spending may be undone by middle-class professionals demanding that a generous, 2010 wage policy be implemented in full.
 
The strikes — by doctors, professors and pharmacists — pose the sternest test for President John Mahama since he took office in January and raise questions over the course of economic policy in one of Africa's hottest frontier markets.
 
Mounting pressure for generous public sector wage rises in the newly oil-producing nation could make it tougher for Ghana to meet its target of trimming its fiscal deficit to 9 percent of gross domestic product this year, from 12.1 percent in 2012.
 
The International Monetary Fund last week urged Ghana to control its "ballooning wage bill" after salary costs jumped 47 percent in 2012, an election year. A shortfall in oil production helped push the fiscal deficit to twice the forecast level.
 
Concerns over the high deficit prompted ratings agency Fitch to downgrade Ghana's outlook to negative from stable in February and have raised concerns among economists and investors.
 
"If we don't get everybody to understand this is not a question of power-playing then the 9 percent the government has targeted for 2013 is not only not achievable but the financial markets will be rattled," said Joe Abbey, executive director of the Center for Economic Policy Analysis think-tank in Accra.
 
For decades, Ghana lagged behind its western neighbor Ivory Coast and regional giant Nigeria. Now it is attracting investors with a combination of oil, precious metals and cocoa, plus the political stability evidenced by successive peaceful elections.
 
However, the strikes come against a backdrop of energy shortages that have led to power rationing as domestic demand has boomed following the start of oil production in 2010.
 
After briefly appreciating early this year, Ghana's currency, the cedi, has also resumed a gradual slide against the dollar, while inflation has ticked higher in recent months, reaching 10.4 percent in March. The yield on the government's benchmark 2-year bond has ticked up to just under 17.5 percent.
 
The Ghana Medical Association (GMA) union said its strike was not motivated by a deal-me-in mentality to Ghana's oil wealth, which came on stream in 2010. It said the government had failed to properly implement its own salary review policy.
 
"Government has no respect for doctors and for healthcare delivery," said GMA president Kwabena Opoku-Adusei. "When it is work they say: 'It is an essential service.' When it is salary they say: 'It doesn't matter.'"
 
Pound of flesh
 
Union sentiment has been hardened by a recent decision to award members of parliament a hefty pay increase and by revelations of massive spending on elections last year.
 
Both factors make it harder for the government to hold its line in the face of union demands, according to the opposition National Patriotic Party (NPP).
 
"Now everybody is demanding their pound of flesh," said former minister and NPP communication director Nana Akomea.
 
Public sector doctors suspended outpatient consultations, the union said, causing hardship in a country of around 25 million whose medical system is already stretched.
 
"I'm not in favor of the strike, but if it will make the government pay attention then perhaps they have to go on with it," said Anita Afonu, an independent film maker based in Accra.
 
The strikes are rooted in government efforts to tackle disparities in public salaries in line with the 1992 constitution and to keep talent from joining the private sector.
 
In 2010, Ghana began a five-year migration of 480,000 public servants onto what it called the Single Spine Pay Policy. Police were the first group to switch and received a 240 percent rise because they were one of the most underpaid groups.
 
That fed expectations of comparable windfalls for others.
 
"The issue is that [the government] probably did not manage the public expectations properly," said George Smith-Graham, chief executive of the Fair Wages and Salaries commission.
 
The GMA said there are around 3,000 doctors who rank among the elite of Ghana's civil servants and merit a market premium payment. A senior medical specialist doctor earns around 5,000 cedis ($2,500), according to the wages commission.
 
The Ministry of Information last week said the strike was illegal and urged unions to abide by the decisions of the government's National Labour Commission and return to work.
 
Talks on Friday between unions, the wages and labor commissions and government representatives made progress, the Secretary General of Ghana's TUC, Kofi Asamoah, told Reuters.
 
Pay and pensions for doctors in Ghana is low by international standards, driving many to emigrate to the West.
 
"The young ones look at the old ones who have retired and they don't want to go that way," Opoku-Adusei said, adding there were many examples of respected doctors who "died like paupers."

You May Like

Hezbollah Chief Says Does Not Want War But Ready for One

VOA's Jerusalem correspondent reports that with an Israeli election looming and Hezbollah's involvement in Syria, neither side appears interested in a wider conflict More

Multimedia VOA SPECIAL REPORT: Despite Danger, Best US Minds Battle Deadly Virus

Scientists at America's premier biological research center race in military confinement to find effective drugs, speedier tests and a safe vaccine amid the deadliest outbreak of Ebola in history More

Kurdish Poet Battles to Defend Language, Culture

Kawa Nemir's work is an example of what he sees as an irreversible cultural and political assertiveness among Kurds in Turkey More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Egypt's Suez Canal Dreams Tempered by Continued Unresti
X
Heather Murdock
January 30, 2015 8:00 PM
Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Mobile Infrared Scanners May Help Homeowners Save Energy

Mobile photo scanners have been successfully employed for navigational purposes, such as Google Maps. Now, a group of scientists from the Massachusetts Institute of Technology says the same technology could help homeowners better insulate their houses and save some money. VOA’s George Putic has more.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid