Government’s 2016 budget, expected to be presented to Parliament next month, must focus on employment creation to reduce the growing number of unemployed graduates in the country, the Trades Union Congress (TUC) has said in its Proposals for the 2016 Budget and Economic Policies of the Government of Ghana submitted to the Finance Ministry.
“The slow rate of employment creation, particularly for the youth, constitutes the greatest policy challenge facing Ghana today. A review of budget and economic policy statements for the last several years shows that the employment challenge has not received the needed attention in terms of resources committed to employment creation programmes.
“Government’s net employment freeze policy has worsened the situation. Even though health and education sectors are officially exempted from this policy we are aware that the Ministry of Finance either deliberately delays or even refuses to approve requests from the authorities in these two sectors to employ more education and health professionals, even when additional personnel are obviously needed in these two sectors,” the TUC said.
Besides the education and health sectors, the TUC believes that more people need to be employed by the government in other essential areas despite the net freeze on employment policy.
“Obviously, we need more teachers, doctors, nurses, police officers, fire officers, prison officers, immigration officers and other professionals in the public service. We also need more sanitary and environmental personnel to ensure that our cities and towns are clean. This is the responsibility of government.
“We, therefore, expect the 2016 Budget and Economic Policy to make the necessary provision for the commencement of the implementation of the National Employment Policy,” the Union said.
Given the several labour unrest that have occurred in the country in recent times, the TUC believes that government must commit resources to strengthening labour market institutions to avert future labour conflicts.
“We expect a significant increase in the allocations to these important labour market institutions in the 2016 budget. We urge government to invest in these institutions. Investments in these institutions, in terms of human and material resources, will enhance social dialogue among the social partners and reduce the tension on the labour scene especially as we enter an election year.
“The Ministry of Employment and Labour Relations, the National Labour Commission (NLC), Labour Department, and Department of Factories Inspectorate have the responsibility to work with trade unions and employers organisations to ensure a peaceful industrial relations atmosphere in the country. However, due to the lack of human and financial resources they are unable to perform this duty effectively. The frequent strikes and threats of strikes are a good indication of the collective weakness of these institutions,” organized labour said.
Below is the full statement
The Minister of Finance is expected to present the 2016 Budget and Economic Policy of the Government of Ghana to Parliament in November, 2015.
This Budget is being prepared against the background of a three-year IMF Extended Credit Facility (ECF) programme, the persistent power supply challenges, and the challenging global economic and financial environment.
Despite these challenges we believe, strongly, that if the Budget and Economic Policy for 2016 is designed to provide the right direction, Ghana can restore growth in the shortest possible time.
Our proposals focus on four main areas – employment creation, investment in labour market institutions, social protection for the poor and vulnerable, and support for the private sector.
EMPLOYMENT CREATION
The slow rate of employment creation, particularly for the youth, constitutes the greatest policy challenge facing Ghana today. A review of budget and economic policy statements for the last several years shows that the employment challenge has not received the needed attention in terms of resources committed to employment creation programmes. Rather, emphasis is placed on macroeconomic stability with the false assumption that the rate of employment creation will increase once we achieve macroeconomic stability. Experience in Ghana in the last three decades has shown that there can be reasonably high levels of economic growth without commensurate employment creation in the formal economy.
Government’s net employment freeze policy has worsened the situation. Even though health and education sectors are officially exempted from this policy we are aware that the Ministry of Finance either deliberately delays or even refuses to approve requests from the authorities in these two sectors to employ more education and health professionals, even when additional personnel are obviously needed in these two sectors.
We are told that investment in the education sector has increased substantially in the last few years, in terms of infrastructure. Improvement in infrastructure is important but the quality of education cannot improve by investing only in infrastructure without commensurate investments in human resources in the sector.
We were all ashamed when Ghana was reportedly ranked last in the OECD survey of quality of education in 76 countries. The pupil-teacher ratio in our primary schools remains very high compared to other middle-income countries. The poor quality of education will persist if the sector is denied the requisite number of professional teachers in the various subjects.
In the health sector, the doctor-population ratio is still around one to ten thousand (1:10,000) and nurse-population ratio is one to one thousand (1:1,000). These ratios are far lower compared to international standards of a doctor-to-population ratio of one to six hundred and middle-income average of one doctor to about 1,282. The nurse-to-population ratio is also lower compared to World Health Organization (WHO) minimum standard of one nurse to five hundred persons.
The Ghana National Fire Service has just about 7,000 fire officers. This translates into a ratio of one fire officer to over 3,500 Ghanaians compared to the internationally- recommended ratio of one fire officer to 800 citizens for effective rescue service. The Police Service has about 30,000 personnel which translate into one police officer to 800 Ghanaians. Admittedly, there has been some improvement in the police-population ratio but Ghana is still far below the internationally-recommended minimum ratio of one police officer to five hundred persons. The Prison Service, the Immigration Service, and other services are equally under-staffed. In the Kumasi prison, for example, there is one officer to 20 inmates compared to internationally-accepted ratio of one to four (United Nations Human Rights Council Report, 2014).
Obviously, we need more teachers, doctors, nurses, police officers, fire officers, prison officers, immigration officers and other professionals in the public service. We also need more sanitary and environmental personnel to ensure that our cities and towns are clean. This is the responsibility of government.
The aim of the National Employment Policy (NEP), which was launched earlier this year by H.E. President John Mahama, is to address these employment challenges.
We, therefore, expect the 2016 Budget and Economic Policy to make the necessary provision for the commencement of the implementation of the National Employment Policy.
INVESTMENT IN LABOUR MARKET INSTITUTIONS
The Ministry of Employment and Labour Relations, the National Labour Commission (NLC), Labour Department, and Department of Factories Inspectorate have the responsibility to work with trade unions and employers organisations to ensure a peaceful industrial relations atmosphere in the country. However, due to the lack of human and financial resources they are unable to perform this duty effectively. The frequent strikes and threats of strikes are a good indication of the collective weakness of these institutions.
For example, in 2014, the Labour Department was able to conduct inspection in only 139 establishments representing just about 0.3 percent of the over 50,000 formal establishments registered by Social Security and National Insurance Trust (SSNIT). In 2014, the National Labour Commission received 428 complaints from workers, group of workers, workers’ associations, trade unions and employers. The Commission was able to deal with just about half (216) of these labour-related cases.
The total allocation to the Ministry of Employment and Labour Relations in 2015 was ?43,787,365. The allocation to the National Labour Commission was GH?2,700,476. These are woefully inadequate.
We expect a significant increase in the allocations to these important labour market institutions in the 2016 Budget. We urge government to invest in these institutions. Investments in these institutions, in terms of human and material resources, will enhance social dialogue among the social partners and reduce the tension on the labour scene especially as we enter an election year.
SOCIAL PROTECTION FOR THE VULNERABLE
The Ministry of Gender and Social Protection is in the process of developing Ghana National Social Protection Policy. The Policy has been designed to ensure that all Ghanaians are guaranteed relief from destitution, to enjoy basic rights, and to afford everyone the opportunity to participate effectively in the social and economic life. The policy targets the following:
(1) “Chronically-Poor”(severely disabled persons, terminally-ill, unemployed and subsistence smallholders);
(2) “Economically at Risk”(food crop farmers, persons on the streets, internally-displaced persons, orphans, widows, the aged, and migrants); and
(3) “Socially-Vulnerable”(People Living with HIV/AIDS, tuberculosis sufferers, victims of domestic violence, homeless people, and female-headed households).
We are ready to support this great initiative because we believe that implementation of this policy can contribute immensely to the eradication of poverty in our society.
We expect Government to demonstrate its commitment to the implementation of this Policy in the 2016 Budget by allocating resources to all the relevant ministries and agencies to start the implementation of this important policy.
SUPPORT FOR THE PRIVATE SECTOR
The private sector in Ghana is at the brink of collapse due to a combination of factors including power outages, the high and ever increasing cost of borrowing, unstable currency, high inflation, and unfair competition from imports.
These macroeconomic and infrastructural constraints have adversely affected the ability of the Ghanaian private sector to grow and to create jobs. The business environment keeps deteriorating on daily basis. The business confidence index of the Association of Ghana Industries (AGI) dropped to 85.0 points in the first quarter of 2015 from 98 points in the fourth quarter of 2014.
We expect the 2016 Budget and Economy Policy to address these constraints with policies and programmes that are consistent with the objectives of National Employment Policy, the Ghana National Social Protection Policy and other social and economic policies in order to boost private sector growth and to enhance its ability to create decent jobs, particularly for the youth.
Specifically, we propose strategic interventions in the credit market to bring down the high cost of borrowing. This can be done in consultation with the banks. The banks must realize that squeezing the rest of the domestic private sector is hurting the Ghanaian economy.
We urge government to reform Ghana’s trade policy in ways that allow the domestic private sector to thrive. The unbridled trade liberalization policy has already done too much damage to the domestic private sector.
We also urge government to use its enormous purchasing power to boost demand for made-in-Ghana goods and services. Like the school feeding programme, government should consider making it compulsory for public sector institutions to buy made-in-Ghana goods.
CONCLUSION
Government’s Budget and Economic Policy for 2016 is a special one because it is expected to address very important social and economic issues that can potentially derail our economic and social progress in an election year. At the same time government is required to reduce its budget deficits in accordance with the ECF programme, among other conditions imposed by the IMF.
We believe that if the Budget addresses the four issues we have highlighted in this submission (i.e., employment creation, investing in labour market institutions, social protection, and support for private sector), it will provide the basis for a peaceful election year and a sustainable social and economic development beyond 2016.
Government must have the courage to abandon the policies that are suppressing economic growth, destroying jobs, widening inequality, and pushing many Ghanaians into severe poverty.
We stand ready to work with Government to implement policies that will boost employment in both the private and public sectors, restore growth, and protect the socially-vulnerable population in our society.
<<Print>>