The Trades Union Congress (TUC) has welcomed the NPP government’s honouring an agreement on the 12.5% increase in salaries for public sector workers on the Single Spine Salary Structure (SSSS) for 2017.
This was captured in the TUC’s proposals for the 2017 Budget statement and economic policy released this week. Commenting on the unemployment challenge which the TUC regards as the greatest, it notes that less than 2 million Ghanaians are engaged in formal employment out of the estimated 13 million in the working-age population.
“This means about 11 million are in the informal employment which is characterized by low earnings, poor health and safety standards and no access to social security”.
Therefore the TUC has proposed to the government to make job creation the main priority in its economic policy.
“We expect to see employment targets in the 2017 budget. Tax policies, investment policies, procurement policies, and trade policies should all focus on creating jobs for Ghanaians, especially the youth”.
“We expect measures that will bring down the cost of borrowing. It is impossible for businesses to expand and create more decent jobs at such ridiculously high-interest rates in the range of 30 to 40 percent”. At this rate, it notes, the business community is essentially working for the banks, and it is therefore not surprising that the banks in the country are the only businesses making profits”, the release states.
TUC believes appealing to the moral conscience of the banks to reduce interest rates has failed, and therefore, more effective policies are required, it reiterated.
TUC believes the high-interest rates reflect a general lack of trust in the system which makes borrowing and lending a very high-risk business.
“We need to restore trust in the economy. That means all institutions connected to the financial system, either directly or indirectly, must function effectively. The banks have often raised the issue of the cost of funds, which reflect the general lack of loanable funds (financial savings) compared to the demand for funds. The low savings rate itself reflects the low deposit rate paid by the banks”.
The TUC believes the national trade policy disadvantages the domestic industry and is not in sync with the national objective to develop the private sector for employment creation.
“The current trade policy is based on the erroneous view that open borders are good for economic growth because enterprises will have access to a larger world market”.
But there is enough evidence to show that this trade policy has ruined most of our local companies. There is no way to create export champions out of our domestic firms when they are beaten even on the domestic market, the release indicated.
TUC fully supports government’s “One District, One Factory” initiative because it will decentralise new investments away from Accra, Kumasi and Takoradi to other parts of the country. But this initiative may not be successful unless the national trade policy is re-calibrated to create room on the domestic market for emerging factories.
“We also urge the government to seriously consider sub-regional and regional markets. Ghana has to fully take advantage of the continental free trade area. We are more likely to be successful on the African terrain than elsewhere”.