10% public sector wage hike excessive

Labour Consultant Austin Gamey has described the government’s recent approval of a 10% wage increase for public sector workers as excessive, warning that it could exacerbate inflationary pressures.

His comments come after the government announced the pay rise following successful negotiations between the Labour Union and President John Dramani Mahama, who personally engaged with union leaders to secure their support for the adjustment.

This latest wage hike marks the second increase in less than a year, following a 23% adjustment in 2024 aimed at addressing the rising cost of living.

While the move has been welcomed by public sector employees, Mr Gamey expressed concerns about its potential economic impact.

In an interview with Citi News, Gamey 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.

He further emphasised 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 stated.