[stop-imf] Ghana: IMF - Pay Increase Must Not Exceed 4%

[Robert Weissman]

*www.ghanaweb.com: General News of Saturday, 2 July 2005*

*Pay Increase Must Not Exceed 4% -IMF*

Workers demanding 30%-50% =97 Civil/Public servants betrayed

Strike actions imminent

The J. H. Mensah Oversight Committee of Cabinet at its meeting held on
June 7, 2005 observed that the negotiating process now taking place
between the Government and its employees could reach a point of deadlock
leading to industrial unrest in the coming weeks unless the Government
adopted a different strategy.

According to the Committee, the agenda has been to deal with pay
increases which were negotiated to the point of agreement in 2004 but
whose implementation was halted. The promise had been given to make it
up in Fiscal Year 2005.

However, the first outcome of this year=92s pay round is that by the end
of June, all the affected workers would have received pay at rates
higher than what they were receiving in 2004 by a factor of 18-19%. This
constitutes the =93reversion=94 element in the present negotiations. The
second part of the agenda is to negotiate the quantum of another set of
pay increases for Fiscal Year 2005 itself.

According to the J. H. Mensah Oversight Committee, the approved budget
for Fiscal Year 2005 provides for a maximum of 25% increase in the
Government wage bill. That ceiling has been incorporated as a critical
Government of Ghana undertaking with the IMF and the World Bank for the
year 2005.

The Oversight Committee recommended that out of the overall ceiling of
25% allowed for pay increases in the budget, a small margin of about
2%-3% has to be held in reserve for special adjustments in pay that may
have to be made for special groups of public servants. It means that
approximately, the Government=92s best offer in the second round of
negotiations cannot go beyond an across-the-board increases of 2%-4% to
make a total increase of around 20"-22% on last year=92s wage bill.

The Oversight Committee lamented that as against that limit, the Unions
and Associations are putting forward very large initial claims (30%-50%)
for fresh wage increases for Fiscal Year 2005. The political and Public
Relations background to those demands is that 2005 is the year of 50%
increase in petrol prices, which has fed into a steep rise in the cost
of living, etc, the Oversight Committee reported.

The Oversight Committee felt that it was hardly possible to negotiate
amicably between those claims and the 2%-4% margin available for
Government representatives to offer under the overall 25% ceiling.

The Oversight Committee therefore suggested that in order to meet the
undertaking to the IMF and the World Bank for the year 2005, the
Government should negotiate by offering increases of 2%-4% margin this
year and agree that any difference in the negotiated pay increase for
Fiscal Year 2005 would be implemented in Fiscal Year 2006.

In other words, the same trick that was played on the workers last year
that is making it impossible for any serious increases to be paid this
year is to be played on them again this year too!

The Oversight Committee also noted that the practice of Heads of
Institutions leading Collective Bargaining negotiations with their
workers was unhealthy as they invariably ignored the political aspects
of their negotiations.

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*Source*: Palaver