Graduates from tertiary institutions contemplating securing employment in the public sector should begin to look elsewhere, as the Government of Ghana has been compelled to freeze public sector employment, at least for two years. The freeze on "a net hiring in the public sector", except for teachers, nurses and doctors is part of the condition for the Government securing a $300-million loan from the International Development Association (IDA) of the World Bank to support the 2009 budget. Net hiring freeze means that the number of public sector workers which currently stands about 600,000 can never be exceeded at least up to June 30, 2010. According to the Financial Agreement covering the loan between the Government and the IDA, from now, replacement of staff can only take place for the dead and those retiring. The agreement also enjoins Government to complete an employment audit and eliminate ghost workers from the payroll of the Ghana Health Service. Similarly the Minister of Finance and Economic Planning and the Head of the Civil Service are required by the agreement to approve all employment decisions of the various Ministries, Departments and Agencies (MDAs). The virtual freeze on employment is in sharp contrast with the National Democratic Congress' (NDC) manifesto which had the creation of jobs for Ghanaians as one of its mantra and for which Ghanaians voted them to power. Contributing to the debate on the Finance Committee of Parliament's Report on the loan agreement last Friday, the MP for Sunyani West, Hon. Ignatius Baffour Awuah, contended that it was because of this loan that recruitment into the Ghana Police Service was recently suspended, an assertion which was denied by the Majority side. The Report says, "recognizing the economy's critical challenges this year, government has requested for a frontloading of the annual 3-year Poverty Reduction Support Credits (PRSCs) to support the 2009 budget requirements. The loan captured as the "Economic Governance and Poverty Reduction Credit (EGCPRC)" is being contracted "to support actions which would contribute to the attainment of the 2009 Budget objectives, protect the poor during the adjustment and to begin addressing the structural causes of fiscal imbalances as well as create conditions for inclusive growth when Ghana begins to realize oil revenue." It has a zero interest rate, a grace period of 10 years and a repayment of period of 25 years excluding the grace period. A Deputy Minister of Finance in the New Patriotic Party (NPP) regime, Hon. Kwaku Agyeman-Manu, told Public Agenda that while the terms of the loan is good, the conditions attached will severely constrain "growth, wealth and job creation. It seeks to maintain low wages, reduce government expenditure and subsidies". He argued that though in the long run the loan would lead to macro-economic stability, the living standards of the poor will remain unchanged. Hon. Agyemang-Manu, who is also the MP for Dormaa West disclosed that "it is for some of these conditions attached to these loans that motivated the NPP to go to the capital market to raise funds for investment for accelerated growth. He said although the interest rate was a bit high they had the freedom to invest in areas that promoted growth. He said in anticipation of oil revenue inflows in 2010, the past government thought of moving economic and social infrastructure in a manner to create jobs. "We didn't want to have the Nigerian experience where when oil revenue started coming in they realized that they were not prepared in certain areas, for example, they had to import teachers from other countries." Presenting the Report early on the floor of the House, the Finance Committee Chairman, Hon. James Klutse Avedzi, noted that Ghana's stable macroeconomic environment enjoyed over the last few years had come under severe stress, mainly due to domestic and external shocks. Ghana, he recalled, suffered an energy crisis in 2006/7 period and as a result of drought, which led to a shift from the reliance on hydro to thermal power generation at a time crude oil prices adversely affected the economy. Again, the global food crisis in 2008 also impacted negatively on most Sub-Saharan African countries including Ghana. The country's inflation and exchange rates were thus adversely affected by the soaring crude oil and food prices of the 2006/7 period and the current global financial crisis. The debate on the loan agreement was to continue Monday, July 6. Source: Public Agenda