December 23, 2014

GHANA: Ghana Must Cut Phantom Workers for EU to Resume Budget Aid. The Government Payroll Drained About 70 Percent of Revenue Last Year.

Bloomberg news
written by Pauline Bax
Tuesday December 16, 2014

The European Union suspended budget support to Ghana and said it won’t resume the aid until the government eliminates so-called ghost workers from its payroll.

“It’s crucial to eliminate all ghost workers from the payroll,” William Hanna, the EU ambassador to Ghana, said in an e-mailed statement. “If the EU is to resume its budget support to Ghana, we must be sure that we are paying for real teachers and real health workers.”

The London-based Sunday Times reported on Dec. 14 that funds from the EU have been used by Ghana to pay government salaries, including those of about 20 percent of workers who can’t be accounted for. Finance Minister Seth Terkper didn’t answer his mobile phone and didn’t respond to two text messages sent today. Deputy Finance Minister Mona Quartey said yesterday she wouldn’t respond to the allegations until she had read the article.

Ghana is raising taxes and turning to the International Monetary Fund for help to curb a fiscal deficit next year that has remained near 10 percent of gross domestic product for the past three years. The government payroll drained about 70 percent of revenue last year. A slumping currency has fueled inflation, which soared to 17 percent in November.

International donors, including the EU and U.K., have pledged 1.6 billion cedis ($482 million) of grants next year, according to the budget Terkper submitted to parliament last month. That’s 4.8 percent of total revenue, according to the budget.

The cedi dropped 0.1 percent to 3.2151 per dollar at 2:27 p.m. in Accra. The currency has dropped 26 percent this year.

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