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

Missouri Town Braces for Possible Racial Unrest

Situation in Ferguson hinges on whether white police officer will be indicted for August shooting death of unarmed black teen; decision could come Monday More

Video Ukraine Marks Anniversary of 1930s Deadly Famine

President Poroshenko compares Soviet-era ‘genocide’ to current tactics of pro-Russia rebels in Ukraine's east More

S. Philippines Convictions Elusive 5 Years After Election-related Killings

Officials vowed to deliver justice as the nation marked the anniversary of the country's worst political massacre that left 58 dead, more than half media More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Marks Anniversary of Deadly 1930s Faminei
X
Daniel Schearf
November 23, 2014 4:32 PM
During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video Law Enforcement, Activists in Ferguson Agree to Keep Peace

Authorities in Ferguson, Missouri, say they have agreed with protest leaders to maintain peace when a grand jury reaches its decision on whether to indict a white police officer in the shooting death of a black teenager. Ferguson, a suburb of St. Louis, has been the scene of intermittent violence since the August 9 shooting intensified long-simmering antagonism between the police and the African-American community. VOA's Zlatica Hoke reports.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid