Labour Consultant Austin Gamey, has revealed fears of the consequences of government’s decision to increase the salary of public sector employees by ten percent (10%).
According to him, this move may lead to a rise in inflation and and further burden the Ghanaian economy.
In an interview with Citi News following the announcement, Gamey said the pay rise was too high, saying a one percent (1%) increase in public sector wages could push the economy into a higher inflationary bracket.
“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 cautioned.
“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.”
Gamey further argued that public sector salary increments should be linked to productivity, a practice that Ghana has yet to fully implement.
“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 fully in Ghana.”
His remarks come after the government officially approved the 10% salary adjustment following negotiations between Organized Labour and President John Dramani Mahama, who personally engaged with union leaders to secure their support.
The pay rise, effective January 2025, is the second wage increment in less than a year, following a 23% increase in 2024 aimed at cushioning workers against economic hardships.
While the salary hike has been welcomed by public sector employees, economic analysts, including Gamey, fear it could fuel inflation and widen Ghana’s economic challenges.
