Economically-weaken Ghana raises 30% salaries for public officials

• Ghana is seeing its worst economic downturn in a generation.
• The local cedi experienced a significant decline in value versus the US dollar last year.
• Government spending cuts and interest rate increases failed to control inflation.

As the nation battles excessive inflation and debt reduction, the government of Ghana and trade unions announced in a joint statement on Thursday that all public officials’ salaries would rise by 30% for 2023.

The producer of gold, oil, and cocoa in West Africa is seeing its worst economic downturn in a generation.

The local cedi experienced a significant decline in value versus the US dollar last year as government spending cuts and interest rate increases by the central bank failed to control inflation, which last month reached a new high of 54%.

A few months after hardship sparked street demonstrations that forced the government to request assistance from the International Monetary Fund (IMF), trade unions representing public service workers began negotiating salary increases with the administration in November.

The two parties reached an agreement on a 30% rise to base pay overall, beginning on January 1, 2023, on Thursday.

To eliminate the deficit, control inflation, and stop the depreciation of the cedi, Ghana’s government announced significant spending reductions in March, including a reduction in ministers’ salaries.

However, it also raised the cost of living allowance for government employees by 15% in July, emphasizing the effect that “global difficulties” have on people in general.

In December, Ghana and the IMF reached a staff-level agreement for a $3 billion, three-year support package. However, Ghana must restructure its debt in order to receive the funds.

The government said last month that it would default on nearly all of its $28.4 billion in external loans and that it had started a domestic debt swap program.

This week, it submitted a request to restructure its bilateral debt under the G20 common framework platform.

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