NPP accuses government of job cuts, tariff increments under IMF agreement

The opposition New Patriotic Party (NPP) has yet again accused the ruling government of preparing the grounds to lay off some public servants after the 2016 elections as part of conditions under the International Monetary Fund (IMF) Extended Credit Facility.

Speaking at a press conference in reaction to the 2016 budget, Vice Presidential Candidate of the NPP, Dr Mahamudu Bawumia alleged that though government officials would not admit it if asked, a commitment by government to rationalize the size of the civil service was one of the conditions for the IMF programme.

He said the following was contained in paragraph 65 of the IMF agreement:

“Government will undertake, with the assistance of development partners, a comprehensive plan to rationalize the size and increase the efficiency of the civil service and allied services on the payroll. The related strategic plan will be ready in December 2015, the results of which will inform the actual rationalization of staff which is expected to begin in 2017.”

Dr Bawumia said the NPP is demanding “maximum transparency” from both the government and the IMF on the matter.

“The government is not being transparent on this issue. It is only because this government does not want workers to know the truth about what they have agreed to do before the election. We are therefore asking that the plan for the rationalization of the civil service be made public by both the government and the IMF in the spirit of transparency and accountability. “

Dr Bawumia also questioned the gap between preparation of the plan and commencement of implementation.

“If the plan for the rationalization of the civil service – which really means the layoffs – would be ready in December 2015, why wait for 2017 for implementation? Isn’t this reform supposed to help the struggling economy? Why the delay in implementing it if it is so good for the economy?”

The NPP Vice Presidential Candidate also accused government of committing to increasing utility tariffs under the IMF programme.

“The PURC’s [Public Utilities Regulatory Commission] purported consultations with the public on the utilities’ price increase, is simply a charade. They are as usual, throwing dust into the eyes of Ghanaians. They are committed to increases.”

The IMF on April 3, 2015 approved a three-year $918 million Extended Credit Facility (ECF) to Ghana. It noted that the arrangement under the ECF for Ghana is in support of the country’s medium-term economic reform programme.

The IMF outlines a summary of the programme it agreed on with Ghana as follows:

It says the government’s three-year economic reform programme seeks to support growth and help reduce poverty by restoring macroeconomic stability through an ambitious and sustained fiscal consolidation, a prudent debt management strategy with improved fiscal transparency, and an effective monetary policy framework.

Secondly, the programme foresees a pick-up in economic growth, starting in 2016, supported by expected increases in hydrocarbon production. Lower inflation and interest rates, combined with a stable exchange rate environment would help support private sector activity.

It also projects that increased oil exports and lower oil imports on the back of domestic gas production will support the improvement in the current account, which together with the surpluses on the financial and capital account will help build up gross reserves to a more adequate level over the medium term.

On agriculture, Dr. Bawumia said under the National Democratic Congress government under President John Mahama, the agriculture sector has declined because of the paltry budgetary allocation.

He pointed out that due to the decline in agriculture Ghana has been spending hugely on food imports

According to Dr. Bawumia, the provisional agricultural growth of 5.3 per cent in 2014, was on account of logging which had registered a growth of 16.5 per cent. He indicated that the NPP cautioned government then, to show greater commitment to agricultural growth.

“One of the reasons why agriculture is not doing well is because of the paltry budgetary allocation to the sector. In 2009, three per cent of the entire budget was allocated to agriculture. It climbed down to 1.9 per cent in 2012 and 1.03 per cent in 2013. In 2014 only 1.07 per cent of total budgeted allocation went to agriculture, out of the total of GH¢44 billion budget figure.”

He said for 2015 only GH¢484.3 million equivalent to 1.1 per cent is allocated to the two ministries of Food and Agriculture, and Fisheries and Aquaculture Development. In 2016 the total budget figure is GH¢50 billion and the allocations to the two ministries of Food and Agriculture, and Fish and Aquaculture sums up to GH¢554,208,420 which is equivalent to 1.1 per cent of the entire budget.

“All these paltry allocations have been made against the background of the Maputo declaration, which provides that governments in Africa must invest at least 6 per cent of their annual budgets in agriculture. Agriculture is stagnating and has since 2008 underperformed.

Real growth in agriculture tumbled from 7.4 per cent in 2008 to 7.2 per cent in 2009 through 5.3 per cent in 2010; 0.8 per cent in 2011; 2.3 per cent in 2012; five per cent in 2013; 4.6 per cent in 2014 and now the rock-bottom figure of 0.04 per cent for 2015. Indeed the crops sub-sector, the dominant factor in agriculture, experienced a negative growth rate, i.e. -1.7 per cent,” he said.

Dr. Bawumia pointed out that the stagnation in agriculture found expression in the importation of $1.5 billion of food stuff into the country in 2014 against a food import bill of $600 million in 2008. The import of fish, poultry, tomatoes, cooking oil, have all doubled between 2008 and 2015, he added.

He said the production of basic food staples (cereals, legumes, roots and tubers) have all been stagnating. The huge yearly vacillations in outputs and the rising imports of rice from 395,400 metric tons in 2008 to 543,465 metric tons in 2011 and over 600,000 tonnes in 2013 for which alone the nation spent $374 million (Ref. Pg. 11 of 2014 State of the Nation Address) testify to the escalating food insecurity in the country.

“Today, the country is on the brink of serious shortages in the supply of maize a major staple in the country. In 2012, crops grew at 0.8 per cent. In 2015 crop was projected to grow at 5.8 per cent, later reviewed to 6 4.1 per cent, it grew at -1.7 per cent which was 141.5 per cent short of what was anticipated to be produced! Production of meat and fish has not seen much growth.

Fish production grew by 5.7 per cent in 2013 but experienced negative growth of -5.6 per cent in 2014, that is almost 200 per cent short of what was anticipated and that is why in 2015 the target growth was set at a modest 1.9 per cent. There has been a steady increase in the importation of livestock and poultry products: from 128,000 metric tonnes in 2008, to 139,000 tonnes in 2011, $170 million in 2013 and $283 million on imported fish,” he said.

By Emmanuel K. Dogbevi & Emmanuel Odonkor