Ghana’s planned 9% and 10% salary increases for public sector workers in 2027 and 2028 could push the government’s compensation bill to approximately GH¢109 billion.
This raises important questions about how the country will finance its growing wage obligations without putting additional pressure on public finances.
While the adjustments are expected to improve workers’ earnings, a finance professor at Andrews University in the United States of America, Prof. Williams Kwasi Peprah has drawn attention to the substantial financial commitment the arrangement will impose on government.
He argues that its sustainability will depend largely on revenue mobilisation, expenditure discipline and the elimination of waste.
Using the 2025 compensation budget of approximately GH¢90.8 billion as a reference point, the professor estimates that a 9% adjustment could push the wage bill to nearly GH¢99 billion in 2027. A further 10% increase in 2028 could raise the figure to approximately GH¢109 billion.
The professor of finance believes this increments are significant because the government would have to find additional resources to meet these commitments at a time when it must also finance infrastructure, education, healthcare, debt obligations and other competing expenditure demands.
Revenue mobilisation or expenditure cuts?
According to the professor, government must ensure that its revenue mobilisation efforts are strong enough to accommodate the rising wage bill. This means improving domestic revenue collection, strengthening compliance and expanding the resources available to finance public expenditure.
However, raising more revenue may not be the only solution.The professor argues that government must also examine its expenditure patterns, identify unnecessary spending and eliminate payments that are not justified.
He specifically points to the need to stop corrupt practices and prevent public resources from being spent on activities that do not deliver value.
Such savings, he suggests, could create additional fiscal space to accommodate salary increases without unnecessarily squeezing other critical public expenditure programmes.
The bigger fiscal test
Beyond the immediate cost, the new arrangement presents government with a broader fiscal balancing act. The government is faced with improving public sector workers’ earnings while maintaining expenditure discipline and protecting economic stability.
The professor believes the additional wage commitments could be accommodated within government’s fiscal capacity, but emphasises that revenue performance and spending controls will be critical.
Ultimately, Prof. Peprah says the challenge is not simply paying public sector workers more. It is finding a sustainable way to do so without creating new fiscal pressures, accumulating arrears or sacrificing essential public investments.
