Think tank, IMANI Centre for Policy and Education, has proposed five priorities areas that it says the incoming administration must give special attention to.
According to the think tank, the five areas, which include the pension sector, taxation and the single spine salary policy, demand focus to avoid the outgoing administration’s mistakes.
“The new government must focus its attention [on the proposed areas] in order to avoid the mistakes of the past and to develop robust management systems to ensure the country’s social and economic development,” says IMANI.
The think tanks says it expects government revenue to rise to record levels in the coming months due to oil and gas production, especially with the oncoming $7bn ENI gas project and has admonished the new government, led by Nana Akufo-Addo, to devote the resources to improving basic healthcare, build productive livelihoods through private-sector led to job creation, deepen decentralise decision making, pumping water into neighbourhoods and building roads.
Below are the think tank’s proposed key areas:
1. Risk Analysis on all Government Projects
The presidency should not become the strategic hub for policy planning from a financial and technical point of view. Political accountability resides in the executive, and that is enough. At IMANI we concede that for most strategic projects the requisite expertise may be spread across multiple ministries, departments and agencies. The Cabinet Office can be strengthened and given powers that allow it to coordinate expertise across the civil service.
We have centres of expertise that could be asked to help government create a kind of ‘administrator general’ role in the cabinet to vet all proposed projects. It goes without saying that such a move can only succeed if it follows a strengthening of the Cabinet Office to ensure coordination across the technical, financial and political accountability functions of the executive.
2. Truly Reform the Pension Sector
Potentially, income from pension contributions is more sustainable than oil. For as long as people continue to work, there will continue to be pension contributions. Scheme trustees can invest funds in the private sector, real estate, listed equities and government treasuries. Pension sector reforms planned nearly seven years ago, are only now being implemented and not without problems. Certainly, things can be a little faster.
3.Determine an optimal level of taxation
What level of public spending is desirable for a developing country such as Ghana? Should the government spend one-tenth, one-third or half of the national income? The size of government expenditure is naturally associated with the ideal level of tax revenue.
Taxes are a necessary evil, but a generally accepted view is that they should not be a disincentive for profitable economic activity. In Ghana, however, a lot of industry captains and the labour force complain about the tax rates. The perception in the formal sector is that it bears too much of the tax burden to achieve the government’s revenue targets.
4. Avoid wasteful projects
Even though we all applauded the decision to go biometric in the last two elections, every objective observer knew we have already collected biometric details of citizens for the following purposes: national passports, the e-Zwich payments platform and the national identification system. It has been proposed that we do the same for voters’ ID cards, drivers’ licences and National Health Insurance Scheme (NHIS) cards. A harmonised system means you may even be able to use one card for multiple systems.
Even ignoring the inconveniences and inefficiencies, the monetary costs of deploying parallel infrastructure is no small matter. Let us assume the cost of the Electoral Commission system is the benchmark. A crude estimate of the total cost is a whopping $400m. We believe we can cut $250m off this figure through harmonisation.
5. Review the single spine salary structure for the civil service and consolidate salaries
Previous government’s attempt to quadruple the salaries of public sector workers through the single spine salary scheme has been a drawback to strengthening the private sector as an innovator. The single spine scheme may appear to bring relative peace on the labour front, but for how long? Simply, single spine is a diversionary tactic embraced first by the NPP and implemented by the NDC to sidestep critical issues since the structural adjustment period.
The fundamental logic of single spine is crooked. Wage harmonisation in the public sector betrays an arrogance of central planning rarely encountered in our tepid age of policymaking. There is no credible science that can, without descending into farce, establish equivalences between different job roles in different settings. The new government must continue the gracious attempt by the NDC government to wean off many productive government agencies the payroll. A few have been removed.
Finally, the new government should consolidate salaries for all civil servants. The government bleeds profusely from allowances paid to the middle to top level civil servants for many meetings, mostly needless ones. In 2016 alone, almost half of all funds set aside for wages and compensation, nearly Ghc14bn go into allowances.