In a joint statement, the Ghanaian government and trade unions have announced an agreement to raise all public employees’ pay by 30% starting in 2023 as the nation works to cut its debt and control skyrocketing inflation.
A few months after hardship sparked street demonstrations in Accra that forced the government to request assistance from the International Monetary Fund (IMF), trade unions representing public service workers began negotiating salary increases with the government.
Previously named Africa’s shining light by the World Bank, the West African gold, oil, and cocoa producer is still experiencing its greatest economic crisis in a generation, with inflation hanging at a record high of 50.3%, the worst level in 21 years.
The local cedi also suffered a significant decline in value against the US dollar last year as government spending cuts and interest rates increases by the central bank failed to control inflation, which reached a new high of 54% in December.
Ghana secured a staff-level agreement with the IMF for a $3bn, three-year support package in December. But it needs to restructure its debt to access the funds.
The government launched a domestic debt exchange programme last month and later said it would default on nearly all of its $28.4bn of external debts. While the administration is in the restructuring process, the agreed 30 percent increase to base pay across the board for government workers, would be effective from January 1, 2023.