President Akufo Addo says has instructed asked the Minister for Employment and Labour Relations to liaise with Social Security and National Insurance Trust (SSNIT) and the National Pensions Regulatory Authority (NPRA) to bring finality to all outstanding issues in the next three (3) months.
Addressing workers on 2019 May Day celebration at the Blackstars square in Accra said the Ministry of Finance has arranged for the payment of GH¢200million and a bond of GH¢700 million towards the retirement of the arrears owed to SSNIT. This the President noted will leave arrears of GH¢800 million which will be included in next year’s budget.
The President stated “In much the same way that we should build trust between workers and the new private pension companies, it is equally important that there is trust between workers and the state established SSNIT. I am informed that the Ministry of Finance has arranged for the payment of GH¢200million and a bond of GH¢700 million towards the retirement of the arrears owed to SSNIT. This will leave arrears of GH¢800 million which will be included in next year’s budget.”
Nana Akufo Addo encouraged social partners, employers and enterprise owners to comply with existing pension regulations and support their staff to contribute to pension schemes.
“We should all spread the news about the importance of pensions and the structures in place to ensure transparent and effective management of pension funds” he noted.
Below is the Speech By President Akufo-Addo At The 2019 May-Day Celebration Parade
I am happy to have the opportunity to be amongst you again on this special day, the third of my presidency, that is set aside to celebrate work and workers across the globe. Today is the international day of solidarity for all working people. Ghanaian workers, ayekoo.
I do not think we exaggerate if we say that work is at the centre of all human life and human existence. We spend the first twenty or so years of our lives preparing for work, we then spend the next thirty to forty years in formal work and, if we are lucky, we spend the last twenty or so years in retirement. The quality of this period of retirement depends very much on how we manage the time we spend in work.
I know I state the obvious, but I do want to make the point that I do not need to be persuaded about the importance of work and the circumstances in which we work. I also want to reiterate the fact that we are all in it together, whether it is in management, or government, or on the shop floor. The project of our existence succeeds if we work together, and we pull together.
Our nation Ghana, at 62, remains very much a work in progress, and lots of things remain to be done to improve upon the quality of our lives in all three stages: the period of preparation towards work, the period during which we work, and the period during which we take a deserved rest from work.
The lopsided nature of things in our country is demonstrated by the statistic quoted eloquently in the speech by the General Secretary of the Trades Union Congress, that is the workforce in our country is estimated at about 13 million, and those in formal work number about 1.2 million. The government of Ghana employs about 600,000 of this number, and more than 80% of all government revenue is spent on the remuneration and conditions of service of those of us in this group. Very few of us among the 600,000 on the government payroll are satisfied with our circumstances, and I am sure we have all heard some of the main sources of unhappiness among the litany of complaints read out by the representative of organized labour.
In the 28 months that it has been my honour and privilege to be president of our country, I have been as candid as possible with the people of Ghana, even if sometimes, the truth has been unpleasant. Let me try and bring out a few well-known facts of our condition.
I believe there is some consensus on what we all want for ourselves and for our country; we want a healthy, educated and skilled population, we want well-paid and satisfying jobs, and we want a well-developed network of infrastructure in the country. In 62 years, we have not managed our affairs to enable us have the money to deal with the serious deficit in our infrastructure development without borrowing money. I suspect that, even if we spent 100% of all government revenue on remunerations for the 600,000 or so people on the public payroll, there would still be dissatisfaction with conditions from some people.
Ladies and gentlemen,
I believe it is time we face reality and start asking ourselves some of the difficult questions. Development remains our collective responsibility and aspiration. Should we continue to pay greater attention on improving the conditions of the few who are in jobs, or should we concentrate on creating the atmosphere for more jobs to be generated? For years, we all said many public officials were pushed into corrupt practices because they were so badly paid. Salaries and conditions of service have been improved for many, and we have not seen the equivalent improvement in the quality of the work they do.
This year, the theme for our May Day celebration is “Sustainable Pensions for all: the role of Social Partners”. The theme takes us to what I identified as the third stage of our work-centered existence. It assumes we have acquired the skills needed for the life of work, and we have jobs and can look forward to a time of satisfying retirement. Everyone knows the critical contribution of labour to the production process, economic growth and sustained development. It is important that the dignity of labour is maintained throughout retirement.
The passage of the National Pensions Act, 2008, ushered Ghana into a new pension regime characterized by a three-tier pension scheme. As we all know, this scheme is made up of a Basic National Social Security Scheme (Tier 1), an Occupational Pension Scheme (Tier 2), and a Provident Fund and Personal Pension Schemes (Tier 3). Currently, pension fund assets are reported to have grown from GH¢5.1 Billion (representing 6.75% of GDP) in 2012 to GH¢20.8 Billion (representing 10.1% of GDP) in 2017. Fund assets have, therefore, kept growing since the implementation of the three-tier pension scheme. This has provided an opportunity for private sector pension operators or companies to thrive. In 2018, the National Pensions Regulatory Authority (NPRA) registered and licensed 30 Corporate Trustees, 77 Pension Fund Managers and 17 Pension Fund Custodians.
This rapid growth in total pension assets can be attributed mainly to increased private sector participation in the pension sector, the availability of sound investment guidelines, and an independent regulatory body (NPRA) that oversees and ensures compliance with good practices. In addition, Tier 3 offers opportunities for workers in both the formal and informal sectors to make voluntary contributions. This is a most welcome innovation into our pension regime. Indeed, formal sector workers who contribute to Tier 3 schemes have an added advantage in that their pension obligations are deducted before tax.
I look forward to all Ghanaian workers recognizing the importance of pensions, and gaining confidence in the sector. The current system gives the individual worker the opportunity to have absolute control over his or her pension through effective and transparent management. As I told you last year, over three billion cedis (i.e. GH¢3.1 billion) of pension funds, funds that had been outstanding for six years, and about which TUC had been loudly complaining, were transferred in 2017 from the Temporary Pensions Fund Account (TPFA) at the Bank of Ghana to the appropriate occupational pension schemes. Pension Fund managers and trustees have a lot of work to do to build and retain the trust of workers. For many people, this is all new and unchartered territory and there are understandable anxieties that must be assuaged by working with the highest level of diligence and honesty in managing the resources entrusted to them.
I acknowledge that there are unresolved issues with the Social Security and National Insurance Trust (SSNIT) and the NPRA. I have asked the Minister for Employment and Labour Relations to liaise with SSNIT and NPRA to bring finality to all outstanding issues in the next three (3) months. In much the same way that we should build trust between workers and the new private pension companies, it is equally important that there is trust between workers and the state established SSNIT. I am informed that the Ministry of Finance has arranged for the payment of GH¢200million and a bond of GH¢700 million towards the retirement of the arrears owed to SSNIT. This will leave arrears of GH¢800 million which will be included in next year’s budget.
We will build a robust economy and a prosperous society, when we put in place a sustainable pension scheme for all workers. For far too many of our people, the end of their lives is marked by poverty. Too many people either have no pensions at all or have inadequate pensions to match the needs of old age. In the informal sectors of the economy, especially, most people work without any thought to pension coverage, and when they no longer have the strength to work, their lives become miserable.
Our societies have changed, old people can no longer, regrettably, count on their children to look after them in their old age. I hope and pray that we never lose the Ghanaian values of accepting responsibility for and looking after our old people, but that should not stop us from organizing things to ensure independence and dignity to the old during retirement.
Since about 90% of workers operate in the informal sector, we must focus our attention on extending access to that sector in compliance with the National Pension law. At the moment, Government efforts are on course to establish a Cocoa Farmers Pension Scheme. This trend would be extended to other worker groups in the informal economy.
Fellow countrymen and women,
Another way of widening the pension base is, of course, to reduce unemployment. We are working on an economic transformation agenda through the various job creation initiatives such “Planting for Food and Jobs”, “One-District-One-Factory”, “Industrial Stimulus Package”, “Planting for Export and Rural Development”, private sector support schemes, which are all beginning to bear fruit, and should soon start reducing unemployment and provide opportunities for citizens to work, earn higher incomes and contribute to their pensions.
A year ago, I made special mention of the importance of the TVET sector in equipping our young people for the world of work. I promised that we would back the talk with action. I am glad to be able to report that we have made important progress. We have funding for 21 State of the Arts TVET centres. Parliamentary approval has been given for all 34 NVTI centres to be upgraded, retooled and curricula improved and teachers trained. It also includes the building of two new foundries and two machine making factories, and the completion of NVTI headquarters. We have also got parliamentary approval for all 10 Technical Universities and Technical Institutes to be re-equipped, retooled and rehabilitated.
In other words, ladies and gentlemen, we know the areas of sustainable job creation, and we know that we need well trained technicians to build our country. We are making realistic and effective efforts to ensure that we produce those that generate work and pensions.
I also wish to encourage our social partners, employers and enterprise owners to comply with existing pension regulations and support their staff to contribute to pension schemes. We should all spread the news about the importance of pensions and the structures in place to ensure transparent and effective management of pension funds.
Ladies and gentlemen, government is determined to consolidate further the relations between the social partners, in the post IMF era. That is why on 18th April, 2019, Government signed a landmark social partnership agreement with Organised Labour represented by the Trades Union Congress, the Ghana Employers’ Association, and Government, represented by the Ministries of Finance and Employment and Labour Relations, to provide a medium for building a sense of cohesion, trust, self-management, frank and open discussions to champion the course of development towards realising the vision of a Ghana Beyond Aid.
Government is committed to a new social contract that promotes social dialogue in economic management and in the making of public policy. It is also to assure you, our workers and businesses, that you are our true development partners, and your ideas are critical in my Government’s model for economic management and development.
I will soon inaugurate a Social Partnership Council with equal representation from the three social partners. I am very confident that this new approach to economic management and public policy-making will foster even greater cooperation and trust among our Partners. Together, we can achieve a more stable economy, peace at the labour front and prosperity for the good people of Ghana.
Before I conclude, there is one important matter I have to address. At last year’s May Day Celebration in Kumasi, I informed Organised Labour and the country about my intention to establish a multi-stakeholder Committee to develop a Charter and a strategy for the vision of “Ghana Beyond Aid”. The Committee, chaired by the Senior Minister, has the Ministers for Finance, Planning, Local Government and Rural Development, Employment and Labour Relations, Monitoring and Evaluation and Information as members.
Trades Union Congress (TUC)’s own Secretary General, Dr Yaw Baah and Vice Chair, Mrs Philomina Sampson are also Members. The leadership of Association of Ghana Industries, Private Enterprise Federation, Ghana National Association of Teachers, Ghana National Chamber of Commerce and Industry and National Union of Ghana Students (NUGS) among others also played important roles. The Committee has worked tirelessly to produce a Charter and a Strategy Document, which will guide our march towards “Ghana Beyond Aid”, and I am happy to outdoor this document today. On behalf of the people of Ghana, I wish to thank the “Ghana Beyond Aid” Committee for the good work done.
Ghana Beyond Aid is setting our nation on an irreversible pathway of prosperity. With the blessing of the Almighty, and our collective effort, we will march boldly from poverty to prosperity so that we can create the Ghana our forefathers envisioned, the current generation aspires to have, and our posterity will be proud to inherit – a Ghana which is self-sufficient and prosperous, governed according to the rule of law, respect for human rights and individual liberties, and the principles of democratic accountability, the Ghana of our dreams.
I thank you for your attention, and congratulate all workers on this occasion for their hard work over the past year, and crave your continuous support in the national development effort.
Long Live Ghana!
Long Live the Workers of Ghana!
May God bless us all, and our homeland Ghana, and make her great and strong.
I thank you for your attention.