Seth Terkper - Minister of Finance and Economic Planning

Salaries of members of the John Mahama administration would next year be slashed by 10 per cent as part of government?s commitment to reducing the country?s huge wage bill. This hint was dropped by the Finance Minister, Seth E. Terkper.

The wage bill is said to be adding to the country?s debt stock which has ballooned to GH?51billion from GH?9billion in 2009, when the NDC took over from the Kufuor-led NPP administration.

Mr Terkper, who announced this as part of the 2014 budget presentation in Parliament yesterday, said the policy was to lead the way in sacrificing for the better Ghana agenda.

According to him, the policy was a voluntary decision of ?President John Dramani Mahama, his Vice President, ministers and appointees to take a voluntary 10 per cent pay cut for 2014?.

He said the amount to be deducted by the Controller and Accountant-General would be paid into a fund to be dedicated to a special purpose ?Community-Based Health Planning Services? (CHPS) compounds, focusing on maternal and neonatal health.

PR Gimmick

However, the decision has received mixed feelings with some saying that it is a mere propaganda.

Critics say a mere pay cut was not enough, but the downsizing of the government, that is, reducing the number of appointees including that of ministers which presently stood at over 90 would be a better option.

The Minority New Patriotic Party (NPP) in Parliament described the move as a political gimmick and sheer propaganda.

According to the Minority Leader, Osei-Kyei Mensah-Bonsu, the amount to be deducted from the minister?s salary would be a ?drop in the ocean? as it would not impact much on the economy.

Mr Kyei Mensah-Bonsu lashed out at the Finance Minister for presenting a rehash of previous budgets.

In seconding the motion to adjourn Tuesday?s sitting to today, he described the content of the 2014 budget as ?uninspiring? after about three hours of presentation by the Finance Minister, Seth Terkper.

According to Mr Kyei Mensah-Bonsu, the ?alacrity? with which the Majority Leader, Dr Benjamin Kunbuor, moved the motion without touching on any specifics, was an indication of a dreary presentation.

He said the content was full of ?same old story?, citing issues of lantern, toilet, and school uniforms.

He charged the government to be realistic with Ghanaians and tell them the true state of the nation.

MP for Nhyiaeso in the Ashanti Region, Dr Richard Anane, described it as a public relations stunt.

The NPP MP said the amount to be realised from the pay cuts by the government appointees was so negligible it could only serve the government?s propaganda purposes.

Dr. Anane believed the President could have done more, if he was committed to tangible measures that would impact positively on the economy.

?If you take the average salary of a minister, it is about GH?8,000 a month. Now 10 per cent of that is GH?800. Even if we have a hundred ministers, you are saving GH?80,000 which is not much really,? he stated.

The former Minister of Roads said the President should order his ministers to, like MPs do, buy their own fuel.

That, he said, would save the state substantial amount of money.

GH?51bn National Debt

Ghana?s public debt has hit all-time high of about $23.5 billion or a little over GH?51billion under the ruling National Democratic Congress (NDC).

Mr Terkper, who announced the staggering figure during the presentation of the 2014 budget statement and economic policy of President Mahama, indicated that the stock of public debt (including government guaranteed debt) increased by 22.7 per cent from $19,150.78million ($19.15 billion) at the end of 2012 to a provisional estimate of $23,498.76million (approximately $23.5billion) at the end of September 2013.

The figures indicated that the governing NDC had borrowed about $4.34 billion in less than a year and it is expected to increase by the close of 2013.

Presenting the budget for a little over three hours, Mr. Terkper explained that as a percentage of GDP, Ghana?s public debt increased from 49.3 per cent at the end of 2012 to 52.0 per cent at the end of September 2013, leaving the country in a precarious financial state.

The astronomical debt portfolio of the country indicated that the Mills-Mahama administrations have added about $14.5 billion or GH?42 billion to Ghana?s total public debt in just five years.

The 2014 budget was on the theme: ?Rising to the Challenge: Re-aligning the Budget to meet Key National Priorities.?

Giving the breakdown of the debt, Mr. Terkper pointed out that the country?s external debt totalled $10,794.54 million at the end of September 2013, from the end of 2012 stock of $9,153.58million, constituting 45.9 per cent of public debt (24.6 per cent of GDP).

Domestic debt, he indicated, amounted to $12,704.22million (GH?24,900.3 million) as at end-September 2013, representing 54.1 per cent of public debt (28.9 per cent of GDP).

Mr. Terkper said the Government in 2013 took steps to restructure domestic debt with measures that included substituting portions of domestic debt with external debt (part of the 2013 Eurobond), and the issue of a seven-year domestic bond in August.

 By Awudu Mahama

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