Dr. Rashid Pelpuo
The base pay for public sector workers has been increased by 10%, following an agreement between government and organised labour.
The increment, which was announced yesterday by Minister for Labour, Jobs, and Employment, Dr. Rashid Pelpuo, takes effect from January 2025 to December 2025.
This is the second increment in wages of public sector workers in less than a year, following a 23% increment announced by the then New Patriotic Party (NPP) government last year to address the rising cost of living.
The minister has also announced an increase in the daily minimum wage from GH¢18.15 to GH¢19.97.
While the increment has been commended by sections of Ghanaians, particularly public sector workers, some are of the view that the move could have dire consequences on the economy.
Labour Consultant, Austin Gamey, has described the increment as excessive, warning that it could exacerbate inflationary pressures.
Speaking to Accra-based Citi FM, he argued that wage increments should ideally be tied to productivity, a practice he says Ghana has yet to fully adopt.
“The issue is base-pay, normally it should be based on productivity but we are yet to get there as a nation. We are so far not practicing the performance management system here in Ghana fully.
“The private sector responds well but the public sector doesn’t respond well. So, for fairness, the 10% is about the best for now. I would have preferred something else,” he stated.
Mr. Gamey also explained that even a 1% adjustment in public sector wages could push the economy into a higher inflationary bracket, ultimately affecting everyone, including the beneficiaries of the wage increase.
“I would have preferred it lower. Because even a 1% adjustment on the public sector wage takes us to another inflationary bracket, and that comes back to bite all of us including them,” he added.
BY Gibril Abdul Razak