The agreement between the government and Organised Labour on a 15 per cent Cost of Living Allowance and the implementation of the policy that gives the Bank of Ghana (BoG) the right to purchase any amount of gold mined in Ghana are some of the leading stories in the Ghanaian press on Friday.
The Graphic reports that the government and the Organised Labour have agreed on a 15% Cost of Living Allowance (COLA)
This takes effect from July 1, 2022 and will be paid at a rate of 15 per cent of base pay.
The negotiations between the government side and Organised Labour concluded on Thursday evening.
This was made known at a press briefing in Accra on Thursday evening, July 14, 2022.
The Organised Labour had demanded a 20 per cent COLA but it was slashed by five per cent to 15 per cent.
Workers in the educational sector for instance embarked on an industrial action on July 4, 2022 in relation to the COLA.
The Secretary General of the Trade Unions Congress (TUC), Dr Anthony Yaw Baah, after the signing of communique called on education sector workers who embarked on the industrial action last week to mount pressure on government for the COLA to go back to work.
At a press briefing on Thursday evening, the Minister of Employment and Labour Relations, Ignatius Baffour Awuah, said “at the end of the negotiations they came up with a common communique.”
The communique was signed at the press briefing by Mr Ignatius Baffour Awuah, the Minister of Finance, Ken Ofori-Atta, Dr Yaw Baah for TUC, Benjamin Arthur for the Fair Wages and Salaries Commission (FWSC) and Perpetual Ofori-Ampofo, President of the Ghana Registered Nurses and Midwives Association (GRNMA).
The newspaper says that the Vice-President, Dr Mahamudu Bawumia, has disclosed that the government has started implementing a policy that gives the Bank of Ghana (BoG) the right to purchase any amount of gold mined in Ghana.
After the central bank had purchased the gold at world market prices, the mining companies could export the remainder, he added.
“Ultimately, once we accumulate enough gold, future borrowing and our currency can be backed by gold. This will stabilise the cedi long term,” Dr Bawumia stated when he launched two new high level information technology programmes at the Accra Business School at Baatsona, Thursday afternoon (July 14, 2022).
The Vice-President said the first right of refusal given the BoG to purchase gold mined in the country was backed by law to deepen the gold purchase programme the BoG started to build up the country’s reserves.
He was explaining the reasons that forced the country into talks with the International Monetary Fund (IMF) and measures outlined to transform the economy to make it resilient to withstand shocks.
The Ghanaian Times reports that the International Monetary Fund (IMF) says its initial discussions with the government centred on developing a comprehensive reform package to restore macroeconomic stability and anchor debt sustainability.
According to a statement issued by the IMF, progress was made in assessing the economic situation and identifying policy priorities in the near term.
“The discussions focused on improving fiscal balances in a sustainable way while protecting the vulnerable and poor; ensuring the credibility of the monetary policy and exchange rate regimes; preserving financial sector stability, and designing reforms to enhance growth, create jobs, and strengthen governance,” the statement said.
The International Monetary Fund (IMF) team led by Carlo Sdralevich that visited the country to assess the prevailing economic situation after the government requested support has concluded its evaluation exercise.
“The IMF acknowledged the challenging situation in which the country finds itself, Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment. The fiscal and debt situation has severely worsened following the COVID-19 pandemic. At the same time, investors’ concerns have triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs,” the statement said,
“In addition, the global economic shock caused by the war in Ukraine is hitting Ghana at a time when the country is still recovering from the COVID-19 pandemic shock and with limited room for manoeuvre. These adverse developments have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation,” it said.
“We reaffirm our commitment to support Ghana at this difficult time, consistent with the IMF’s policies,” the statement said.
The statement said the IMF staff would continue to monitor the economic and social situation closely and engage in the coming weeks with the authorities on the formulation of their Enhanced Domestic Programme that an IMF arrangement could support and with broad stakeholders’ consultation.
The newspaper says that the Institute of Economic Affairs (IEA) has called for a pragmatic approach rather than an ideological approach to resolve the problem of high inflation which has become a perennial national problem.
It suggested a strong collaborative effort between the government and the Bank of Ghana to address the issue.
Proposing a new approach to address the rising inflation which hit 27.6 per cent in May 2022, the economic think tank, said the government should consider eliminating or reducing numerous fuel taxes and levies, among other measures.
Speaking at a roundtable discussion on “Rethinking Inflation Management in Ghana”, Director of Research, Dr John Kwakye, said the government must act with BoG to mitigate the effects of major drivers, which, according to inflation figures, include food, fuel and transport.
“Indeed, GSS has been at pains to point out main sources of Ghana’s inflation, with a view to guiding policymakers in taking appropriate remedial measures. For food, this is time to release some of reserves in the Bulk Strategic Stock, if any, to augment supplies Government should also access ECOWAS strategic stock, if available, to supplement domestic supply,” he pointed out.
Further, it said “government should provide temporary subsidy for staples like maize, rice and bread to ease the burden on low-income consumers. Even IMF, which is known not to be a fan of subsidies, has called on Governments to provide food subsidies to cushion effects of high prices on their citizens”.
Again, it noted that “for fuel, the government should use some of its windfall earnings from higher oil prices of about $120 as against the budget estimates of about $60 to cushion domestic pump prices. This is time to activate the Energy Sector Stabilisation Levy Act (ESLA), meant to accumulate tax funds to cushion future shocks. The government should also reduce some of the numerous fuel taxes and levies.”
GIK/APA