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Maintain freeze on public sector employment after IMF exit – Economist

The government has been warned to resist any temptation to lift the ban on employment into the public sector at the end of the International Monetary Fund (IMF) programme on April 2.

Speaking to Citi News, Economist at the University of Ghana, Dr. Ebo Tuckson said Ghana needs to move beyond government being the main supplier of jobs.

“We shouldn’t, once we leave, defreeze public sector employment because when we do that, then we inflate the wage bill. That is one of the main reasons for expenditures that normally cause us to run huge fiscal deficits.”

“We should rather provide the environment for the private sector to thrive; for the private sector to generate employment and jobs that the economy needs,” the lecturer said.

In 2015, the three-year loan agreement concluded between the Government and the International Monetary Fund (IMF) contained agreements to freeze employment in government departments except for those under education and health.

This was part of measures to stabilize the economy and effectively manage the public wage bill.

The agreement was also expected the government to limit the nominal increase in the total wage bill to no more than 10 percent.

Ahead of the election in 2020, Dr Ebo Tuckson also urged the government to be measured in its spending so it does not overrun the estimated budget for the year.

“If you look back over the fourth republic, with the exception of President Kufuor in his second election, where he was able to maintain the budget and not overrun it, all other government’s we have had have overrun their budget… The politicians, you know, when things heat up and things have to be done, that is when we sacrifice all these things and overrun the budget.”

IMF journey ends

The Executive Board of the IMF just approved the final disbursement of about US$185.2 million to Ghana.

The IMF Executive Board completed the seventh and eight reviews on March 20, 2019, under the Extended Credit Facility (ECF) supported arrangement.

The fund pointed out that, considering Ghana’s resolve to tackle difficult reforms, the Executive Board also approved the authorities’ request for a waiver of the nonobservance of a few program targets.

Ghana’s three-year arrangement was approved on April 3, 2015, for about US$925.9 million or 180 percent of quota at the time of approval of the arrangement.

It was extended for an additional year on August 30, 2017, and is to end on April 2, 2019.

The arrangement aimed to restore debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation while protecting social spending.

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