Widespread Strike Action Imminent as More Worker Unions Reject Pension Haircuts

Following Organized Labour’s announcement of strike action by workers over pension fund “haircuts” in the government debt exchange program, more unions have declared their support for the action, leading to fears of a widespread industrial action.

The Divisional Union of the Ghana Airports Company Limited (GACL) is the latest to announce its intention to strike.

A statement signed by the Divisional Chairman, Abdul-Issaka Bamba, on December 21, 2022, disclosed that all members will be hoisting red flags and wearing red bands, attire, and paraphernalia to work from December 22 to December 26, 2022, to register their displeasure with including pensions in the debt exchange program.

Mr. Bamba added that his workers would begin a strike action on December 27, 2022.

Similar calls for exemption of pensions from the haircut have already been made by other worker groups and bodies, including the Ghana Medical Association, the Ghana National Association of Teachers, and the Chamber of Corporate Trustees.

Additionally, the Trades Union Congress, the umbrella body of all worker unions, has announced an indefinite strike starting December 27, 2022, if the government does not reverse its decision to include pension funds in the debt exchange program.

“We are asking the government to exempt us from the debt exchange program. We have already told the world that if the government doesn’t do that, we will advise ourselves. We’re here today to share the news. The advice is simple: we have all agreed that because the government has refused to grant our request, we have decided firmly that all workers in Ghana are going to strike on December 27, 2022, and we will be on strike until our demands are met, the General Secretary of the Trades Union Congress (TUC), Dr. Yaw Baah, disclosed.

The government has launched a debt exchange program to help sustain its debt as part of the steps taken to revive the economy.

Launching the debt exchange program, the Finance Minister disclosed that Treasury bills will be exempt while the principal and individual bondholders will be “haircut.” He, however, indicated that institutional funds, which include pension funds and account for a significant portion of the government’s debt, will be subject to haircuts.

Mr. Ofori-Atta further implored all domestic debt creditors to participate in the program to facilitate board-level approval by the IMF, noting the establishment of a Financial Stability Fund (FSF) to cushion financial sector operators who might suffer any negative consequences from the program.

However, at the recent session to announce a $3 billion staff level agreement, the IMF stated that the modalities involved in the debt restructuring program are at the discretion of individual sovereign nations.