According to TUC, the private sector has a profit motive and may compromise the process to maximize profit.
“There are many private sector that are failing including banks which we are paying for. So where comes the idea that the private sector can do better than the public sector,” Director of Research at the TUC, Dr. Kawbena Nyarko Otoo questioned at a Post 2019 Budget Forum organized by the Union in collaboration with the Friedrich-Ebert-Stiftung foundation.
Government in the mid-year budget statement mentioned that it is considering outsourcing the national payroll system to a private company to ensure effective management of the system.
This, the Finance Ministry said is to reduce the wage bill which as at 2017 stood at 45 percent of total tax revenue.
The ratio of wage bill to national tax revenue dropped from 70 percent in 2010 to 45 percent in 2017, however, it still remains one of the largest expenditure of government’s items besides debt servicing.
Government is currently targeting to reduce the figure to 35 percent by the end of 2019.
The Finance Ministry is hoping to achieve this by deleting all ‘ghost’ names from the payroll system.
However, Dr. Nyarko Otoo said privatizing the payroll system is not the solution to Ghana’s high wage bill.
“This idea that every problem in the public sector can be solved only by privatizing for us is neither here nor there. Controller and Accountant General has little competence to payroll administration and so a separate unit can be created within the Finance Ministry while the Controller and Accountant General focuses on the key role of paying public sector workers, ”Dr. Nyarko Otoo noted.
Over 34,000 ‘ghost’ names were deleted from the payroll in 2012.
In 2017, 27,000 names were deleted from the payroll data of SSNIT pension earners.
In another exercise, a little over 23,000 names were suspended from the payroll as the individuals could not be accounted for.
By Nana Oye Ankrah/Citibusinessnews.com/Ghana