The Minister of Finance and Economic Planning, Dr Kwabena Duffuor, is asking Parliament to approve an additional spending of GH˘2.61 billion for the 2012 fiscal year.
This adds up to a total amount of GH˘17.5 billion money to be spent in 2012 for the implementation of the country’s development blueprint, the Ghana Shared Growth and Development Agenda (GSGDA).
Putting the request before the house in Accra Wednesday, Dr Duffuor explained that the supplementary estimates had become necessary due to certain changes that had occurred within the economy since January.
These include the bloating of public sector wage bill, which increased from about GH˘2.57 billion to over GH˘6 billion, increases in the world market price of crude oil and under-recoveries of ex-pump price of petroleum products.
Also, with over 99 per cent of public sector workers now migrated onto the enhanced salary structure, the government would incur additional costs for the rest of the year.
“Madam Speaker, the migration of public sector employees to the Single Spine Salary Structure (SSSS) is virtually complete, with about 99.3 percent of the workers now placed on the new structure. Payment of wage arrears resulting from the phased migration of employees to the new structure commenced in the first quarter, with the remaining amount of GH˘991 million expected to be paid by the end of July 2012,” the minister told parliament.
He added that besides the migration, there were salary arrears from January to April resulting from the 18 per cent increase in base pay and said the backlog would be paid between August and September.
“This is in addition to the base pay increase granted to public sector workers this year for which the arrears covering January to April will be paid in August. The additional cost of the pay increase is estimated at GH˘1.1 billion,” Dr Duffuor said.
Thankfully, he said, the country expected to make savings of up to GH˘512.50 million from ongoing payroll audit, which would be used to partially settle the salary arrears.
On fuel under-recoveries, the minister explained that the ex-pump prices of fuel products were adjusted upwards by an average of 15 per cent in December, 2011 to cover costs but they were not passed on to consumers and that the resultant under-recoveries amounting to about GH˘228 million for the period of January to May were paid from the budget.
The finance minister said increases in the country’s debt stock coupled with the depreciating value of the cedi meant that the country needed to pay more service debt costs.
“Accordingly, interest payment on our external debt for the remaining period of the year has gone up by GH₵11.45 million and on domestic debt by GH₵296.0 million,” he told the House.
Source: Samuel Doe Abordeppey
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