Health Workers Strike: Over but not Forgotten

UNCLAS ACCRA 001096

SIPDIS

SIPDIS

STATE PASS TO USAID, TREASURY D PETERS

E.O. 12958: N/A
TAGS: ECON ELAB EFIN SOCI GH
SUBJECT: Health Workers Strike: Over but not Forgotten

Ref: A) Accra 811


1. Summary: Health workers, with the exception of medical doctors,
called a nationwide strike over wages beginning April 30. The GoG
declared the strike illegal but with two exceptions, public
hospitals were reduced to a skeleton crew, or less, with little or
no service provision. The strike was called off May 9 when the
government agreed to a 30% wage increase. It is not clear how this
increase will be absorbed into the budget without further expanding
the already high fiscal deficit of 7% of GDP. Health workers along
with other public sector workers can be expected to continue to call
for increased wages. End Summary.


2. Health workers, with the exception of medical doctors, announced
a nationwide strike with effect from Monday, April 30 in spite of
government declarations that the strike was illegal and threats to
fire all workers. For the past 15 months, the Health Workers Group
(HWG),composed of the Health Services Workers Union, Health
Accountants Association, Allied Health Workers Association,
Association of Health Services Administrators, Government and
Hospital Pharmacists Association and Ghana Registered Nurses
Association, has been fighting for salary increases that would roll
back a 2005 salary restructuring. The 2005 restructuring resulted
in decreased pay for many of their members. The HWG represents
about 40,000 workers.


3. The strike brought health services in public hospitals to a
virtual halt in all but a teaching hospital in Kumasi, where workers
jointly decided to stay at their posts in light of the serious human
costs of the strike, and the maternity ward at Accra's Korle Bu
hospital, where mid-wives stayed on the job. A philanthropist
reportedly rewarded the mid-wives collectively with 250 million
cedis (about USD 26,000).


4. The health sector salary wrangles have a long history. In 1999,
the GoG started paying allowances to doctors, based on the number of
extra hours they worked, as a means of improving their incomes and
stemming the brain drain. The allowance known as the Additional
Duty Hours Allowance (ADHA) provided for payment of an allowance for
a fixed number of extra duty hours to all doctors, irrespective of
whether they actually worked overtime. The ADHA was extended to
cover all health workers in 2000. The ADHA system was tied to the
base salaries of healt workers, which meant that anytime there was
an increase, there was a corresponding increase in the allowance.
The ADHA wasnot a sustainable system and from its inception wa
beset with iscrepancies and abuses (e.g. ghostworkers).


5. Unable to sustain the huge financal burden of the ADHA, the GoG
abolished the system in 2005 and developed a new salary structure
that left doctors with pay packages more or less equal to what they
had under the ADHA system but left many others worse off by removing
the special allowances. Not surprisingly, the revised system was
poorly received and has resulted in a series of petitions and three
nation-wide strikes by health workers since then.


6. The labor unrest led to the appointment of an Appellate body to
review the proposed salary structure. It also has had the effect of
bringing the health workers, excluding doctors, together into a
unified coalition. It took the Appellate Body 15 months to produce
a report, which was presented to Cabinet on May 3. However, the
report had been leaked to HWG a few weeks ago and their
dissatisfaction with its content was a factor leading to the strike.
Salaries had been frozen since the Appellate Body was appointed,
adding fuel to the fire.


7. The HWG leadership met with GoG representatives on May 7 and 8
and decided to call off the strike after the GoG agreed to a 30% pay
increase for 2007 in lieu of the previously offered 10%. The
Chairman of the HWG, Mr. Raymond Tetteh, said he was satisfied with
the outcome for now but added that negotiations will continue.
Outstanding issues include the salary gap between doctors and other
health workers, including pharmacists, many of whom feel
particularly aggrieved in light of the central role they play in
healthcare for many Ghanaians. Tetteh is hopeful that what HWG
believes are unfair disparities will be taken care of by a new job
evaluation being carried out by the Fair Wages and Salary Commission
(which is reviewing all public sector wages as an initial step
toward broader public sector reform).


8. Comment: The health workers' strike was short-lived but the
underlying discontent has not been entirely wiped away by the wage
increase. We can expect to see continued efforts by health workers
to move overseas and there is still a strong resentment of the
perceived special treatment of doctors. In turn, non-health
professionals, such as teachers, can be expected to agitate for
increases at least as large as those given to health workers. The
2007 budget projects that the health sector will account for about
17% of the public sector wage bill. The total public sector wage
bill is already unsustainable at over 9% of GDP and the GoG is
struggling to keep inflation down and reduce the fiscal deficit,
which ballooned to more than 7% of GDP in 2006. Ghana's hard-earned
macro-economic stability could be undermined if it fails to control
the wage bill. However, the government's options are limited.
Heading into an election year in 2008, neither public sector layoffs
that would come with serious (and much-needed) public sector reform
or strikes over GoG refusals to increase wages are attractive
options. End comment.

Cheema