Timing of increase of base pay problematic – Economist

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Economist, Dr. Samuel Worlanyo, has described the timing at which government and Organized Labour agreed on increase in base pay for the 2023 financial year as problematic.

This was after government and Organized Labour had agreed on an increase of 30% in base pay for the 2023 financial year after a series of unsuccessful negotiations between both parties.

According to Dr. Worlanyo, the timing of the policy implementation at the first quarter of the year will take a huge toll on the government.

He added that the implementation should have been done at the second quarter of the year instead.

“…but I know definitely, because of the the shocks and the difficulties that we have in managing the fiscal economy, definitely rolling such a policy at the first quarter of the [year] is quite problematic.
I was thinking that such a move would have been done or rolled out in the second quarter. But anything before April is really going to be a major risk to the management of their local economy. [ the] government is really going to have a tough time in putting the economic together. In reality, things are going to get tougher, more difficult than anticipated.”

Dr. Worlanyo, also explained that even though the timing is inappropriate, the implementation was made with the need to maintain peace as consideration.

“They are not quite economic decisions strongly…. if you listen to [the finance minister] very well, he is talking about; there is a looming danger there is a looming instability and insecurity in Ghana, and for that matter, government is compelled to increase the salaries and wages just for peace to prevail and not necessarily, not that the government has planned and budgeted and has resources to do so.”

On 18th November, 2022, public sector workers demanded from government a 60% increase in the base pay on the Single Spine Salary Structure (SSSS) for 2023 .

The proposal, which was made by Organised Labour, was based on the 15% Cost of Living Allowance on the National Daily Minimum Wage and recent inflation surges.

After several meetings, both parties agreed on 30% increase on the base pay, taking effect from 1st January, 2023.

Story by: Deborah Yakohene | univers.ug.edu.gh


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