52% of Ghana’s revenue going to 700,000 workers – John Kumah
Deputy Minister for Finance, John Kumah, has said close to 52% of Ghana’s tax revenue is used in the payment of salaries and allowances to the over 700,000 workers in the country.
The Minister’s assertion is contrary to the popular view that worker compensation (salaries and allowances) consume over 70 percent of government’s total revenue.
Making the assertion on during an interview on Newsfile monitored by norvanreports, Mr Kumah noted that for 2021, some GHS 30bn out of the GHS 57bn tax revenue mobilized by the Ghana Revenue Authority (GRA) was in compensation (salaries and allowances) payments to workers.
Adding that, government was left with just GHS 27bn to cater for interest payments, amortization and statutory payments.
Speaking further in the interview, the Deputy Finance Minister stressed that government’s objective is to make the Ghanaian worker happy by giving in to demands for salary increments, but available resources at the moment do not allow government to do so.
Mr Kumah’s assertion is in relation to the ongoing strike action by labour unions who are requesting for a 19% hike in salary increments.
On Wednesday, April 20, the Trades Union Congress (TUC) pushed government to adjust workers’ basic salary to meet the rising levels of inflation, something they say is making it difficult for them to meet their basic needs.
The TUC noted that it was no secret that remuneration for many workers has been bad for many years, saying Covid-19 and the Russia-Ukraine crisis could not take the blame.
“That is so because a reduction in exchange rates results in a frequent rise in the prices of goods and services since most of these products are imported with foreign exchange. This phenomenon affects the value of workers’ remuneration.
“Inflation is another issue – the prices of goods and services are going up, so if salaries are not adjusted to reflect these phenomena, workers will continue to struggle. The job crisis did not start with Ukraine.
“It predates the Ukrainian war; it came before the Covid-19 and, therefore, we think it is not right to blame Ukrainian war and Covid-19 for every job crisis we have in this country,” he stated.
Also, speaking on the same show, the Director of Labour Research and Policy at the Trades Union Congress, Dr Kwabena Nyarko Otoo, disagreed with calls for workers to make sacrifices by annulling some allowances and accepting wage reductions amid the economic hardships.
There have been suggestions that, in view of the current economic difficulties facing the country, public sector workers should make some sacrifices to augment government efforts to revive the economy.
But Dr Otoo explained that with all the economic difficulties experienced, the labour sector has been the hardest hit with a decline in wage income by about 30 per cent in the last two years.
He contended that public sector workers have sacrificed much already with their acceptance of the 4% increase in wages in 2021 and 7% increment in 2022, while the inflation rate has gone up for the past two years.
According to him, making any more sacrifices again would be unreasonable for labour unions, particularly with the current increase in the general prices of goods and services.
“We have made huge sacrifices for the past two years. Cast your mind back 4% in 2021, 7% in 2022 and look at the inflation rate; what level of sacrifice do you want labour to make again.
“There’s nothing; we have gotten to the point where labour cannot reproduce itself; hence it is important that we stop the slide. To ask us for any more sacrifice is to be unreasonable with labour,” he said.
