Pres, Ministers Agree On Pay Cut

President MahamaThe President, John Dramani Mahama, the Vice President, Kwesi Bekoe Amissah-Arthur, ministers and government appointees have decided to take a voluntary 10 per cent pay cut in 2014, to reduce the pressure on public sector wages.

The Minister of Finance and Economic Planning, Seth Terkper who announced this when he presented the 2014 budget to Parliament in Accra yesterday, said the decision was to demonstrate the spirit of partnership from the Ho Forum, which made a lot of recommendations on ways to control public sector expenditure.

The budget was on the theme, “Rising to the Challenge: Re-aligning the Budget to meet Key National Priorities”.

The Minister said proceeds realised from the pay cut of the President, the Veep and Ministers of State, would be used to construct specialised Community Health Programmes and Service (CHPS) compounds, to deal with maternal mortality and neo-natal health care.

The Finance Minister said the Single Spine Salary Structure (SSPP) is imposing severe strain on the economy but government, employers and Organised Labour were continuing negotiations on how to solve it.

“While acknowledging the positive aspects in retaining public sector staff and improving their productivity and incomes, the SSPP is imposing severe fiscal strain on the budget,” he said.

He said the social partners were committed to the removal of leakages and wastage in public pay administration, and  bring the wage bill to sustainable levels, to re-align the budget to national priorities.

“We believe we are of one mind in putting the development of our nation first and determined that public sector compensation should not put any further stress on the fiscal envelop,” he said.

On debt servicing, the minister said the reliance on short term domestic bonds to finance capital projects and the relatively high rates of interest had resulted in high debt servicing.

“Our main strategies include re-financing and extending the tenure of loans and bonds for financing the capital budget; implementing recovery schemes (e.g., escrows and on-lending) for commercially viable projects; and establishing a Debt Service Account, to provide certainty of interest and loan repayments,” he said.

He said the government had undertaken a thorough review of existing loans, and facilities and  decided on contracting new loans only on exceptional basis.

On the limit on new contracts, the minister said following the compilation of a comprehensive contract database, the government had decided to suspend the award of new major contracts in 2013, to enable the MDAs to focus on on-going projects.

New contracts, he said, were approved on exceptional basis only, and the database had greatly aided our shift from cash to accrual, or commitment basis for government accounts. By David Adadevoh

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