Ghana risks a major social upheaval if the energy (power) crisis persists and the difficult economic environment does not improve.
Business owners say they have no other option but to lay off not less than 50 per cent of their employees by the end of this year as industry is hardest hit by the worsening power outages and other operational challenges.
The increasing job losses in the country will spell doom for the country, even in spite of the bailout programme with the International Monetary Fund (IMF), economic experts have said.
On edge, many businesses are compelled to cut cost to avert total shut down and the first casualty is labour. The latest to lament over the devastating effects of the power crisis is Blue Skies Limited.
The beverage producing company says it will lay off 1000 of its workers in the next few weeks if nothing is done to improve the erratic power supply in the country.
This is coming at a time the company which employs over 3000 people is planning to shut down one of its plants due to high production costs following the power crisis.
In the recent past, companies like Gold Fields Ghana and the Coca-Cola Bottling Company have announced plans to lay off over 400 of their staff. Over 500 jobs have already been lost due to the harsh economic conditions and the deepening energy crisis.
According to an IMF report issued recently, government will embark on a comprehensive programme to retrench public sector workers by 2017.
The plan is to increase the efficiency of the civil service and allied services.
The announcement of the said job losses in the civil service created some panic amongst workers as the Trades Union Congress has demanded full details of the outcome of negotiations between government and the Bretton Woods Institution.
Government has however been swift to ostensibly correct what it calls misinformation, saying there will be no job losses; rather “there will be rationalization.”
But some experts have wondered what difference exists between retrenchment and rationalization.
“Rationalization means moving people around into positions that are preferably more suitable in terms of qualification and will guarantee efficiency and it can result in people losing their jobs,” says one expert.
In the midst of the confusion, analysts are forecasting turbulent times for the country in the next two years if the energy crisis is not solved.
According to Dr Eric Osei Assibey of the Economics Department, University of Ghana, the country is heading into a crisis of joblessness, with its attendant societal and economic ills.
“We have a major problem of unemployment on our hands. We are bound to have more people idling about on our streets and this will adversely affect our revenues,” he laments.
According to him, the private sector which should be ready to absorb people who lose their jobs from the public sector is itself worse off.
“It appears there are more people losing jobs in the private sector now as a result of the power crisis and the unfavourable business climate and so there is no way the sector can take in public sector workers who will lose their jobs,” he adds.
Part of reasons for the downsizing of the public sector workers is the large wage bill.
The size of the country’s wage bill has been described as too large, taking up almost 70 per cent of the country’s revenues.
The IMF has recently warned that Ghana's ballooning wage bill, if untamed, will increase the country's debt to levels that will pose a risk to its transformation agenda.
The wage bill rose by 47 per cent last year following the implementation of the new pay policy for public sector workers that saw some salaries being doubled.
But experts maintain that the wage bill is not the problem, pointing out that the country’s wage bill has always been high, “taking over 50 per cent of national output and so the wage bill is not where the problem is; rather, government’s revenue has dwindled drastically over the last three years.”
This gives credence to concerns from analysts that the country has been spending more than it earns, culminating in the unduly high debt levels.
The experts say government must insist on efficiency in the public service; it must employ highly skilled staff and ensure that staff are routinely upgraded in skill in tandem with the dictates of world of work.
Government must remunerate and reward workers appropriately and provide good conditions of work (not monetary) but other incentives that will motivate them to give off their best
These will guarantee maximum and quality productivity from workers in the public sector and will be more sustainable than the IMF’s prescription.
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