Audio By Carbonatix
The Centre for Policy Analysis (CEPA) has urged the government to tactfully combine fiscal discipline with stimulus economic policies in its bid to build on a sustained macro-economic environment.
In that regard, it has called on the government to fast-track the implementation of the Single Spine Pay Policy (SSPP) before Election 2012, as delayed implementation could prompt labour unrest, pile up the public sector wage bill and in effect destabilise the entire macro-economic environment.
The Executive Director of CEPA, Dr Joseph L.S. Abbey, was speaking during the launch of the centre's latest publication on the Ghanaian economy dubbed: ‘Ghana Economic Review and Outlook, 2012’, with ‘The state of the Ghanaian Economy (Marking the first full year of the oil era)’, a companion volume, in Accra on Tuesday.
Dr Abbey said a lagged implementation of the SSPP had the tendency of pushing the public sector wage upward.
The implementation of the new pay policy, which started early this year, has so far swallowed over 41 per cent of the country’s total revenue generated within the period, a situation the government said had, “constrained its spending in other areas”.
Although the government promised in its 2012 Budget and Economic Policy that it would “continue the implementation of the SSPP to its logical conclusion,” the Executive Director of CEPA wanted speedy action on the matter.
“We at CEPA would like to urge stakeholders in the SSPP implementation to do all it takes to finish up with the process before we enter election,” Dr Abbey said.
Such a call, he said, was premised on the centre’s belief that; “a delayed implementation will cause agitation on the labour front, leading to wild promises by politicians during the campaign”.
Such promises, according to him, would put more pressure on the government's wage bill, come 2013.
Dr Abbey also wanted the government to redirect its attention from engineering job creation through infrastructural development to empowering the country's small and medium enterprises (SMEs) sector.
He explained that the advancement of technology had made infrastructure construction capital intensive, to the disadvantage of manual job creation for the populace.
Touching on monetary policy for the years ahead, the CEPA boss said, “The challenge for monetary policy in the oil era is to strike a sustainable balance between the objectives of accelerated growth with jobs and gradually bringing down the inflation rate from the upper end of single-digit rate to the middle.”
According to him, Ghana’s gross international reserves (GIR) - a measure of the country's external assets that are readily available for the payment of imbalances - could remain at the current level of just about three months of import cover.
And should that happen, Dr Abbey warned, “that could signal the early stages of the Dutch disease, which in full bloom will destroy the non oil sector”.
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