The decision by Ghana’s National Tripartite Committee (NTC) to set the 2025 National Daily Minimum Wage (NDMW) at GH₵ 19.97 per day, representing a 10 percent increase over the 2024 rate, is drawing mixed reactions from business and labour segments. The increase came into effect on 1 March 2025.
The NTC, which brings together representatives from government, employers and organised labour, cited multiple factors in approving the adjustment: cost-of-living pressures, the need to maintain business sustainability and the goal of increasing employment. In its mandate under Section 113(1)(a) of the Labour Act, 2003 (Act 651), the NTC reviews the minimum wage annually.
The adjusted wage will increase the payroll baseline for many businesses, particularly in labour-intensive sectors such as retail, hospitality, services and light manufacturing. According to the communique, the rate applies to all establishments whose daily minimum wage falls below the new threshold.
A cost-analyst at an Accra-based business advisory firm noted that “a 10 percent rise in the minimum wage is manageable for well-capitalised firms, but for small and micro-enterprises already operating on tight margins the impact will be more acute.” They added that wage costs must be seen alongside other pressures such as energy, raw material cost inflation and foreign exchange volatility.
Through the lens of competitiveness, firms that rely on low-wage labour may respond through automation, outsourcing or reducing headcount growth. Some may delay hiring or shift labour-intensive tasks to the informal sector. This could blunt the intended effect of wage growth on employment.
From the labour side, the increase is welcomed but seen as only a partial response to rising living costs. At a June 2025 roundtable event, the Ghana Trades Union Congress (TUC) argued that the minimum wage remains inadequate for family support, and called for a move to a “living wage” model.
Deputy Secretary-General Dr Kwabena Nyarko Otoo was quoted as saying: “Minimum wage is currently 19 cedis … it focuses on the worker and not on his or her dependents. If we assume it is enough for him, what happens to his family and spouse?”
Labour’s call includes a demand for a new formula that links minimum wage increases to inflation, productivity and cost-of-living metrics rather than a fixed percentage each year.
The timing of the wage adjustment coincides with Ghana’s broader macro-economic recovery efforts. With inflation showing signs of moderating, the 2025 budget incorporated proposals to adjust the personal income tax-free threshold in line with the wage rise.
For example, the budget highlights that the tax‐free threshold is being raised to reflect the new minimum wage. However, higher wage floors also raise questions about fiscal sustainability, especially where public-sector salaries and welfare obligations rise. The government has signalled that wage policy will need to be matched with productivity gains and enforced compliance in the labour market.
Enforcement remains key to the policy’s success. The wage increase is only meaningful if workers actually receive the adjusted rate and if firms comply without downsizing. Historical reviews of Ghana’s minimum wage regime have pointed to weak compliance, particularly in the informal sector.
A 2017 paper by the Friedrich‑Ebert‑Stiftung (FES) noted that large swathes of workers in Ghana received wages below the official minimum and that enforcement institutions lacked capacity. That reality means the wage rise may deliver limited benefit unless paired with stronger labour inspections, digital payroll audits and incentives for formal employment. Businesses that remain informal or are unable to comply may push labour into non-compliant firms or restructure contracts to avoid minimum wage obligations.
For the wage policy to stimulate meaningful outcomes, several factors must align. First, the government and labour must establish a transparent, predictable adjustment mechanism (preferably multi‐year) that links wages to productivity, inflation and cost of living.
Second, businesses must adapt by investing in efficiency, skill development and value-added activity so that higher labour costs translate into higher output rather than margin erosion. Finally, the enforcement regime must close the gap between legal provisions and actual pay.
In practical terms, for a worker earning the new minimum wage of GH₵ 19.97 per day, assuming a 27-day month, that equates to roughly GH₵539.19 monthly, before allowances, overtime or bonuses. While the number is higher than the previous rate GH₵ 18.15), it remains low relative to urban living costs and suggests that minimum wage alone cannot deliver broad-based improvements in household welfare.
For policy makers and the private sector alike, the challenge is dual: to ensure wage policy supports decent livelihoods while preserving enterprise viability and employment growth. The 2025 minimum wage increase is a step forward, but the metric by which success will be judged is whether businesses remain competitive, informal employment shrinks and workers’ real incomes begin to rise.
