In a move aimed at easing the financial burden on public sector employees, the government has confirmed that a 10% salary increase will take effect from March 1, 2025.
The announcement, made by Employment and Labour Relations Minister Abdul-Rashid Pelpuo on Thursday, February 20, comes after weeks of negotiations between the government and Organized Labour, culminating in a deal that reflects the delicate balancing act of addressing workers’ needs while navigating Ghana’s strained economic realities.
“All institutions and organizations are urged to adjust salaries to reflect the 10% increment,” Pelpuo stated during a press briefing in Accra. The adjustment, he emphasized, is part of broader efforts to cushion workers against rising living costs, even as the government grapples with fiscal constraints.
The agreement follows a direct appeal from President John Mahama, who earlier this week urged labour leaders to temper their demands in light of the country’s economic challenges. Mahama’s intervention, framed as a call for shared sacrifice, appears to have paved the way for the deal, though some union members have privately expressed reservations about whether the increase adequately addresses their concerns.
The 10% raise marks a notable drop from the 23% salary hike approved in 2024, which was implemented to help workers cope with soaring inflation and economic instability. While the latest increase is lower, Pelpuo highlighted that it comes alongside a 10% boost in the national daily minimum wage, raising it from 18.15 Cedis to 19.97 Cedis. “All establishments, institutions, or organizations whose daily minimum wages fall below the new rate must adjust accordingly,” he stressed, adding that the new minimum wage will also take effect on March 1.
The announcement has sparked mixed reactions. For many public sector workers, the increase is a welcome relief, albeit modest. “Every bit helps,” said a teacher in Accra who spoke on condition of anonymity. “But with prices of goods still rising, it feels like we’re just treading water.” Others, however, view the 10% hike as insufficient, particularly in light of recent fuel price increases and the persistent depreciation of the cedi.
Economists have weighed in on the implications of the wage adjustment. While acknowledging the government’s efforts to support workers, some caution that the move could strain public finances further. “The wage bill is already a significant portion of government expenditure,” noted financial analyst Kwame Asare. “Without corresponding measures to boost revenue or cut wasteful spending, this could add pressure to an already fragile fiscal situation.”
The government, for its part, has framed the salary increase as part of a broader strategy to stabilize the economy while protecting vulnerable workers. Pelpuo reiterated the administration’s commitment to ensuring that “no one is left behind,” even as he called for understanding and patience during what he described as a “challenging period.”
As the March 1 implementation date approaches, all eyes will be on how effectively the new wage adjustments are rolled out across the public sector. For now, the deal represents a fragile truce between the government and labour unions, but whether it will be enough to quell growing discontent among workers remains to be seen.
In the meantime, Pelpuo’s announcement has set the stage for what promises to be a critical year for Ghana’s economy—and its workforce. With inflation still high and global economic uncertainties looming, the 10% salary increase may be just the first step in a longer, more complex journey toward recovery.
