Ghana has one of the most inefficient public sectors in the world

Economist, Dr Nii Moi Thompson says Ghana has one of the worst public sectors around the world yet the country’s annual wage bill always exceeds what is budgeted.

This, he said, is because there are too many names on the government’s wage bill.

“We have one of the most inefficient public sectors in the world…we have the lowest average public sector wage as a show of GDP because there simply too many people on our wage bill,” he said on Good evening Ghana.

According to him, the ‘illegal’ names benefiting from the government payroll has highly contributed to the low wages of public sector workers.

“When I got into government, I had to go to ministry of finance to do biometric registration, I was horrified by what I saw… they were busing people in to Accra to come and get on the public payroll. So my own guess is that maybe between 20 to 30% of the people shouldn’t be there at all.”

Dr Thompson said whilst government has continuously exceeded the wage bill over the last 11 years, the country only exceeded its revenue for 3 years.

Addressing how the high wage bill affects revenue collection, he noted that “when the government is spending like that, it is actually undermining growth… because it is simply promoting consumption as opposed to promoting production”.

Even though the cedi has seen an appreciation in recent times, Dr. Thompson said the currency will return to a declining level if the necessary measures are not put in place to sustain it, advising that government should cut back spending.

“[Government] pumps about GH¢2bn into the economy every month in the form of salaries and goods and services…we hardly produce anything, so everything then is used towards imports.”

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